Kaeden Ong

Pros and cons of subletting, lease buyback scheme

Posted by Kaeden Ong on 27th August 2014 in Blog

Singaporeans aged 55 and above who live in HDB addresses have two options if they want to monetise their property, said experts quoted in the media.

They can sublet their unit but this option is only available to those with a room to spare, while those with other living quarters can rent out the entire unit.

For instance, 65-year old Madam Han Siew Lan has been leasing out her four-room flat in Bukit Merah since 2011, after she shifted to her daughter’s five-room flat in a neighbouring block. At the moment, she gets around $2,900 per month.

“Each month, I use about $700 to $800 for my daily expenses. The rest, I use to buy insurance or save,” she said.

According to one property portal, the median rent for a four-room HDB flat stands at $2,400, while the median rent for a bedroom was $650 last month, said the housing board.

Renting out a whole flat gives a return of between six and eight percent. “This is very high considering private residential rental returns are only in the bracket of two to perhaps four percent,” said ERA Realty Network’s Key Executive Officer Eugene Lim.

However, only 10 percent of seniors take up this option due to the lack of a spare room, privacy and security concerns, as well as having ample cash.

Another option is the lease buyback scheme, which has been extended to four-room flats from just three-room or smaller flats previously. But seniors who wish to apply should have met the CPF drawdown age of 63, and their flats should have a remaining lease of 70 years.

After applying, the flat’s value will be determined by a professional and then the owner will retain the 30-year lease, while the 40-year lease will be sold to HDB. So far, only 797 households have taken up the scheme since it was introduced in 2009.

“The two main concerns is firstly, your flat will no longer be allowed to be sold in the open market. If you do not need the flat anymore, you will have to sell it to HDB. Secondly, you will not be able to bequeath your flats to your successor,” explained Lim.

Currently, seniors own about 293,000 HDB flats, of which 72 percent have three or four rooms.

Credits: Property Guru

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Kaeden Ong

Next big thing in Singapore property

Posted by Kaeden Ong on 14th June 2014 in Blog

Catch a glimpse into the future development of Singapore. That’s what an upcoming public enrichment seminar jointly organised by property agency ERA and the RIA School of Real Estate promises to do.

Taking place this Sunday (8 June) from 2:30 to 4:30pm at the Hersing Hub Auditorium in Toa Payoh, noted property expert Marcus Chu who is ERA’s Chief Operating Officer will discuss the impact of URA Draft Master Plan 2013 and the Government Land Sales (GLS) Programme for the first half of 2014.

Not only will consumers learn about the implications on the property market, but potential investors can get insights into how they can tailor their investment strategies to leverage these plans.

Participants can register online to confirm their attendance and there is a registration fee of $18.

Credits: Property Guru

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Kaeden Ong

Market expects a price correction soon.

According to PropNex, developers are likely to take on a cautious front and time their launches, keeping in mind that it is a buyers’ market now and there is general expectation of a price correction.

Also, expect developers to continue minting a high proportion of small units in projects to keep quantum prices within reach of TDSR-constrained buyers. Due to the various restrictive cooling measures, investors may feel no great urgency to buy—as they wait for a more attractive entry point.

Mr Mohamed Ismail, CEO of PropNex Realty commented:

“Existing launches are still fairly muted compared to pre-TDSR days as buyers are increasingly selective with regard to their buying decisions. However, the good sales performance of Rivertrees and RiverBank in the mass market segment, and Hallmark Residences from the high-end segment (last month) could signal that underlying demand for real estate investment is still present. Potential buyers could be waiting for good bargains to come, so the key is to find the right price point at which buyers are comfortable with”.

Credits: Singapore Business Review


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Kaeden Ong

Big discounts for condos unlikely despite increased supply

Posted by Kaeden Ong on 14th April 2014 in Blog

SINGAPORE: Some 850 private residential homes will be launched in an upcoming project in Queenstown next month.

Another close to 1,000 units can be expected from two other projects located near Tanglin Road and the Tiong Bahru area.

But despite the increase in supply, property watchers said they do not expect developers to offer big discounts to attract buyers.

Instead, developers are likely to intensify marketing efforts, as in the case of Commonwealth Towers condominium, near Queenstown MRT station.

The 99-year leasehold project will be launched early next month, but sales agents are already handing out brochures at its site.

Prices are expected to range from S$1,500 to S$1,600 per square foot.

Ku Swee Yong, CEO of Century 21 Singapore, said: “For now, because interest rates are still very low, the holding power of developers is good. So the price war is not that apparent yet.

“There may be sellers willing to give a little bit of discount. But overall, for the better-placed units, for the higher floor units with unblocked views, developers will still expect market-related prices.”

Credits: Channel NewsAsia

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Kaeden Ong

World’s first $1m virtual property

Posted by Kaeden Ong on 29th March 2014 in Blog

Singapore-based game developer Planet Arkadia is offering investments in what is believed to be the world’s first million dollar virtual property.

The company is offering players of the Entropia Universe game the chance to invest in 200,000 deeds priced at US$5.00 each – or PED 50 which is the in-game currency.

This innovative offering has been launched in direct response to player demand for more opportunities to invest. According to the company, the ‘Real Cash Economy’ has been developed over a 10-year period, providing a solid foundation for the virtual economy as all in-game currency ‘PEDs’ are transferable to US$ at a fixed rate of 10 PED for each dollar.

Importantly, the company added, participants are able to withdraw their earnings back to their real life bank accounts at any time.

“Arkadia Underground has been highly anticipated within our Arkadian and Entropia Universe communities, especially now we have the ability for every player to earn revenues with such a low barrier to entry,” said David Dobson, Chief Executive Officer of Arkadia Studios.

“Every player can now participate in Arkadia’s vibrantly growing economy which has enjoyed a quadrupling of activity year-on-year for three years. Where else can you make investments where you can also jump in to play for fun and be rewarded on so many levels?”

The company was founded in 2010 and is supported by Singapore’s Media Development Authority according to its website. Entropia Universe is the world’s largest ‘Massively Multiplayer Online Real Cash Economy’ game

Credits PropertyGuru

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Kaeden Ong

S’pore 3rd most exp in Asia for luxury apartment rentals

Posted by Kaeden Ong on 11th March 2014 in Blog

S’pore 3rd most exp in Asia for luxury apartment rentals

Singapore remains the third most expensive city in Asia and seventh most expensive in the world to rent a high-end three-bedroom apartment, human resource consulting firm ECA International said in a new report.

Rents for an unfurnished three-bedroom apartment in sought-after areas averaged US$5,630 (S$7,200) per month, the survey found.

The city was ranked eighth and ninth on the global list in 2013 and 2012.

“Ongoing demand for high-end properties saw rental prices in Singapore rise by around 4 per cent over the year,” said Lee Quane, Regional Director of ECA International, Asia. “This is up from the 3 per cent increases seen both last year and the year before that, cementing the city’s position among some of the most expensive locations for renting in the world,” he said.

However, rental prices for a high-end three-bedroom apartment in Singapore are still around just half that of renting an equivalent property in Hong Kong. Despite rents there falling for the second consecutive year, Hong Kong remains the most expensive location in the world to rent a high-end three-bedroom apartment.

Rents for an unfurnished three-bedroom apartment in a sought-after area of Hong Kong average US$11,440 per month. With a high population density and a consistently limited supply of property, average rents in the territory have long been significantly more expensive than other high-profile cities.

Across the region, the average rental price for a high-end three-bedroom property averages US$3,600.

The largest rent increases in Asia over 12 months were observed in Jakarta, which is now ranked 8th in Asia and 30th globally. The cost of renting a three-bedroom apartment went up by 15 per cent, driven by Indonesia’s continued strong economic performance and increasing demand from expatriates.

Kuala Lumpur ranks 16th in the region and 103rd globally. Rental prices there increased seven per cent over the year. In Bangkok, (12th in the region and 51st globally) rents rose just two per cent.

China has presented a mixed picture. Increases in rents were fairly muted over the year in Shanghai (ninth globally) and Beijing (17th) as the Chinese economy slowed and neither city saw rises greater than three per cent.

Demand has nevertheless remained strong in the cities of Shenzhen (110th globally) and Suzhou (122nd), where rents have risen nine per cent on average in the 12 months between surveys.

While most locations in the region have seen rent increases in home currency terms, the pattern of increases is not as consistent when rents are converted into US dollars for comparison.

For example, in Tokyo, rents increased by approximately six per cent between surveys when measured in local currency, largely as a result of confidence returning to residential markets after it had fallen following the earthquake in 2011.

However, a weaker yen has meant that the cost of renting a three-bed high-end apartment actually fell by about 15 per cent when converted into US dollars.

Depending on how companies provide housing or allowances to their expatriates, major currency movements can have a big impact on costs. Companies need to consider this carefully when designing their expatriate housing policy and packages.

This same trend was also observed in locations in Pakistan as well as the Indian cities of New Delhi (43rd globally) and Bangalore (127th). In both countries, currencies have depreciated significantly against major currencies, pushing down rents in US dollar terms.

Credit Asia One

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