Archive for July 29th, 2007

The Fat Man

Recently I have been speaking frequently with my landlord. I’ve had a few problems in the apartment – multiple shattering light bulbs, issues with the kitchen, and other general maintenance.

To help with these problems, she sends a guy over here to try to help fix them. We’ve attempted to fix the kitchen lights together, but neither of us were able to so an electrician is coming tomorrow.

Anyway, what I find amusing is that my landlord used to refer to this guy as her “friend.” i.e. she would say, “I will call my friend to help u fix up 2morrow.”

Recently she has started referring to him as her “fat man.”

“I cbeck with the eletrician and if he’s available, I ask my fat man to standby.”

Admittedly, the man is rather large.

I don’t know whether to laugh at her calling him “my fat man” repeatedly or feel awkward about receiving such politically incorrect messages.

Political incorrectness is usually funny.

Prices rising across the board in property market

From Straits Times – July 28, 2007:

“Private homes the biggest winners, but HDB resale prices also up 3 per cent

By Joyce Teo, Property Correspondent

THE property boom is now ringing across the country, with all segments, including the HDB market, recording rising prices.

The biggest winners were private homes, with prices up 8.3 per cent in the April to June quarter. This is on top of a 4.8 per cent increase in the first three months of the year.

The number of new homes sold hit a record 5,129 units in the second quarter, 7 per cent up on the first quarter.

Landed homes, which have not moved much over the past year, also sprang into life and registered price rises of 7.1 per cent, up from 2.9 per cent in the first quarter.

And resale prices in the HDB market rose 3 per cent, up from a 1.25 per cent rise in the first quarter.

‘The benefits of the improving economy are now being seen more widely across the board, demonstrated by the mass market increases and a higher number of HDB upgraders,’ said property firm Jones Lang LaSalle’s regional managing director, Mr Chris Fossick.

Government figures also show that demand is pushing up private home prices in most parts of the country.

Prices in central Singapore, the city fringes and suburban areas rose between 7.2 per cent and 8.1 per cent in the second quarter.

‘The even performance across all regions…is a positive as it implies that there is now greater uniformity in wealth creation across all segments,’ said Ms Tay Huey Ying,of property consultancy Colliers International.

The wealth of data released yesterday by the Urban Redevelopment Authority (URA) – it included new information on housing rentals and office rents – also revealed some notable developments in the roaring market.

One was the bigger jump in prices of completed homes over uncompleted ones.

In the central core region – where the most expensive housing is found – prices of completed homes rose 8.5 per cent, compared with 7.1 per cent for uncompleted ones.

Usually, glamorous launches of prime homes attract higher prices than completed ones. But the huge number of displaced en bloc sellers looking for a roof over their heads has boosted demand for existing property.

Consultants said that because of strong leasing demand – in part contributed by owners and tenants displaced by en bloc sales – completed properties have become more attractive for investors, too.

Indeed, rents have been soaring, with some owners demanding a doubling of rent or more – and getting it.

The new figures have also cast more light on property speculation. In the second quarter, owners’ sales of uncompleted homes amounted to less than 10 per cent of the total deals done.

But there was a hike in the prime central core region, where such sales accounted for 19.4 per cent of deals done. This is up from 12.4 per cent in the first quarter.

By contrast, in the second quarter of 1996 – when speculation was rife – subsales accounted for about 28 per cent of all deals.

On the supply side, 43,018 – mostly flats but with about 3,000 houses – will be built between now and 2010, the URA said. About 76 per cent of these will be completed in 2009 and 2010.

Overall, private home prices are now about 18.5 per cent below the 1996 peak and at a level similar to that in the second half of 1994.

Also yesterday, the HDB released more information on sales, including median resale prices, rental data and the amount of cash-over-valuation (COV) that buyers are paying.

It shows, for example, that the median COV for a five-room flat can reach $60,000 in Bukit Timah town, but is zero in Woodlands.

Private homes: Rents up 10.4% in 2nd quarter

From Straits Times – July 28, 2007:

“Big hike due to slew of collective sales, but still 21% lower than 1996 high

By Fiona Chan, Property Reporter

ALL private home owners have good reason to celebrate these days, but landlords should really pop the champagne – while their tenants should drown their sorrows.

Rents rose at an unprecedented rate in the April to June period, outpacing home prices which were far from sluggish.

Official figures showed yesterday that rents jumped 10.4 per cent in the quarter, trumping the 7.6 per cent rise in the first three months of the year. They are now 31.2 per cent higher than a year ago.

This is the highest quarterly and yearly growth since the Government made rental data public, said property firm Knight Frank. It is also the first time private home rents have shown double-digit growth in a quarter, it added.

Rents this year have gone up 18.7 per cent, compared to only 14.1 per cent in the whole of last year, added consultancy CB Richard Ellis.

More important, rents rose across the board, according to new Urban Redevelopment Authority (URA) figures yesterday.

Although the core central region still led the pack with a 12 per cent jump over the first quarter, the rest of Singapore was not far behind.

Rents in the city fringe areas went up 10 per cent while those in suburban districts were just behind with a 9.4 per cent rise.

Knight Frank’s latest data shows that homes in the East Coast, Thomson and Bishan areas saw rents rise by 10 to 12 per cent, matching the pace in the prime districts.

But while landlords enjoy the bubbly, their tenants are far from happy with surging rents becoming a source of concern among foreign companies bringing in growing numbers of expats.

To help tenants get a better idea of the market, the Government yesterday released data on median home rentals, breaking it down for the first time by project.

This allows potential tenants to compare median rentals – that is, the level at which half the rentals are higher and the other half lower – of individual condominiums.

The figures showed that The Pier at Robertson, for instance, commands a median monthly rental of $6.30 per sq ft (psf), or $3,150 for a 500 sq ft unit. At the other end of the spectrum, Neptune Court has median monthly rentals of $1.56 psf, or $1,560 for a 1,000 sq ft apartment.

This new data is available on the URA website. The agency also took pains to point out that while median rents overall rose to $2.17 psf per month, there were ‘a significant number of properties which were rented out at below $1.50 psf per month’.

Also, while rents are soaring, they are still some 21 per cent lower than the 1996 high, said Knight Frank.

The key reason for the rental rebound is the slew of collective sales, said experts. And as more and bigger estates are torn down, rents can be expected to surge further as displaced owners and tenants look for hew homes.

Similarly, private home prices are set for a good run.

They jumped 8.3 per cent in the second quarter to hit a level not seen since 1997. But what raised eyebrows was that prices of non-landed homes in the city-fringe areas outpaced those in red-hot prime districts.

Even in suburban areas, prices climbed 7.2 per cent – well above the 2 per cent rise in the previous quarter.

Perhaps most significantly, prices of completed homes rose more than those of uncompleted ones for the first time in at least two years.

This is a sign that the strong price rebound is due to genuine buying demand, said property consultants. Traditionally, prices of uncompleted homes tend to lead price increases because more people want to buy new homes.

Singapore Global Ranking

Straits Times compiled a few statistics to emphasize that Singapore is ranking high in various categories.

  • #2 in the world for nightlife and dining according to the Global Country Brand Index.  #1 is Italy and #3 is United States.  I find this interesting as young locals (20 – 30-somethings) frequently talk about how the nightlife here sucks and how there is tons more to do in other cities.  I have always disagreed with this – Singapore has very diverse nightlife options.
  • 3 local restaurants in world’s top 100 – British magazine “Restaurant” ranked Iggy’s 60th, Les Amis 83rd, and My Humble House 94th.  I rank Sing Ho Chicken rice #1 because I can get garlic-flavored rice and delicious steamed chicken for 3 bucks, but I suppose I am probably using a different criteria than “Restaurant” magazine…
  • 8th in top 10 travel destinations list – Ranked by the World Economic Forum, whose Travel & Tourism Competitiveness Report checked out 124 territories
  • 17th Most Livable City – Ranked by British lifestyle magazine “Monocle”
  • 34th in quality of living – Best among Asian cities.  This was ranked by Mercer Human Resource Consulting

Not too shabby for such a small country, eh?

Rents here too high? Not so, say expats

Gee, if I were a managing director or head of a company, I might be just as out-of-touch as the people interviewed in this article are.

*see below article for update

From Straits Times – July 29, 2007

“Though rents are rising, expats say housing here is more affordable than in many major cities

By Melissa Sim

MR CHARLES TIDSWELL, 34, managing director for South-east Asia at IT company Facilitate Digital, pays about $3,000 for his 1,100 sq ft apartment at The Legend in Bukit Timah Road. When he was in Hong Kong, he paid $4,500 for a 900 sq ft apartment. He moved here in 1998. ‘You could say that Singapore’s prices are possibly 10 years behind those of Hong Kong’s,’ said Mr Tidswell. — ST PHOTO: WANG HUI FEN

SINGAPORE and Hong Kong are keen competitors in most things but when it comes to rent, there is only one winner.

Ask Mr Jason Longley, the regional manager of an insurance company. A year ago, he was paying $8,500 a month to rent a 900 sq ft apartment in Hong Kong’s prime Peak area.

Now he rents a 1,400 sq ft flat at Leonie Hill off Grange Road for just $5,500.

Mr Longley, 35, said Singapore’s cheaper rent was a key factor in his decision to relocate: ‘I definitely saw rent as a huge expense in Hong Kong.’

It also helps put into perspective the growing complaints about rising rents.

Urban Redevelopment Authority figures out last Friday showed that residential rents rose 10.4 per cent in the April to June quarter and are up 31.2 per cent over the past 12 months.

But expats and agents told The Sunday Times that Singapore rents are still cheaper than in cities such as Hong Kong, Tokyo, London and New York.

A new survey by ECA International, a human resource consultancy, showed that rents here were 45 per cent less than the average price in Tokyo and 40 per cent less than in Hong Kong.

Singapore was the eighth most expensive place to rent a three-bedroom flat in Asia and 15th most expensive in the world – below Hong Kong, Tokyo, New York and London.

Investment banker Timothy Rice, who moved here last August, can testify to that.

Mr Rice, 27, pays $1,400 for a 350 sq ft studio in Kelantan Lane, near Bugis Junction. He said such a flat in an equivalent London location would still cost about the same figure – but in pounds. That is about $4,300.

Mr Masamitsu Kawasumi, 44, chief bank representative of the Development Bank of Japan, arrived here last month and was struck by the rental gap between Tokyo and Singapore.

Tokyo’s hip Roppongi area, with its many clubs and restaurants, has rents of about $13 per sq ft. Orchard Road’s $6 psf seems like a bargain.

Mr Thomas Preben Hansen, 32, chief executive of a listed marine firm, has lived in Shanghai and London: ‘Rents had become very cheap since 1997, and still have some catching up to do.’

He anticipated the rent squeeze and so bought a flat in Ewe Boon Road, off Bukit Timah Road, when he arrived in May.

A rental squeeze is exactly what Ms Isabelle Scali, 30, is bracing herself for. The public relations manager thinks Singapore is relatively more costly than London.

She pays $1,800 – nearly half of her salary – for a 1,200 sq ft flat at Sunshine Plaza off Prinsep Street.

In London, she said she spent just a third of her salary on a 700 sq ft studio flat in Balham, southwest London.

Ms Scali, who has signed a two-year lease, said rental costs will determine if she stays in Singapore.

Mr Rajesh Malkani, 43, who lived in Hong Kong for 13 years before moving here in 2005, said: ‘I don’t expect Singapore’s prices to reach Hong Kong levels because there is still land here. But I do expect them to go up.’

Mr Malkani, the global head of sales and business development at Standard Chartered, rents a 4,000 sq ft bungalow in Sunset Place. He would not reveal his rent but said it would get only half the space in Discovery Bay, which he feels is a comparable site in Hong Kong.

Given the decade-long property slump here, Mr Simon Smith, a senior director at Savills Asia Pacific, thinks rents will keep rising for the next one to three years.

But Mr Rice is not complaining: ‘Compared to Hong Kong, New York, London – Singapore is still cheap,’ he said.

Additional reporting by Teh Shi Ning

Follow-up – a commenter on the Straits Times wrote this very valid point:

“Yesterday p6 of the Straits Times has a seriously misleading comparator table labelled ‘World Highest Apartment Rentals’. Why is it misleading? Well the ST took no account of the purchasing power parity (PPP) between the markets. Instead it took price in each market and converted directly to SGD. This is extremely poor economic reporting and low brow journalism. Take, as an example London (rental USD5,901) and Singapore (rental USD3,364). The article maintains that the London apartment is more expensive. On what grounds, except for absolute dollar terms is this true?
To demoinstrate my point – if you take the median monthly wage in London (USD5,796). Compare this with the median monthly wage in Singapore (USD1,333) (from MoM). Now divide the salary by the relative rentals 5,796/5,901, gives 0.982 for London. For Singapore 1,333/3,364, gives 0.396.
This shows that, relative to earnings and in the context of its own market environment (0.982/0.396), Singapore properties are nearly 2.5x as expensive as in London. In fact if you were to do this exercise you would find that Singapore is the most expensive place of all your cities for rental prices.
How can the ST have such poor quality economics journalists? If Singapore continues in this stae of denial it will have an unbreachable gulf between HDB and private property. What kind of state thinks it is beneficial to have 2 completely distinc markets – one for real people and the other for the tiny percentage who can afford to rent properties bought by offshore investors whose money may have questionable origin. How does this really help Singapore’s economy?”