Apparently, the reason to relocate to Singapore was in the interests of his daughter's education. They are expected to send her to the Singapore American School.
Monday, 2 April 2012
Jet Li's Singapore Bungalow
Apparently, the reason to relocate to Singapore was in the interests of his daughter's education. They are expected to send her to the Singapore American School.
The attraction of British Colonial black and white Bungalows
Expatriates have fallen hard for Singapore’s famous black and whites, with about 70 per cent of the stately bungalows owned by the Government rented out to foreigners. They have become a popular pick among executives and professionals looking for something different amid the high-rise life here.
Singapore Land Authority (SLA), which handles rentals, has almost 500 of the homes available for lease. They are allocated through a tender process. Like other state properties, they have an average lease of two years, though many tenants opt to extend their terms.
RealStar Premier Group managing director William Wong owns property around Singapore but has lived with his family in a single-storey black and white in Seletar’s Piccadilly Circus neighbourhood for almost 41/2 years. ‘It’s like a ‘little England’, with some of my neighbours having tree houses in their gardens. The house is very near to nature and there’s a lot of space. When I saw these houses, I thought they’d be a great place for my kids to run around and play,’ he said. The rents can be surprisingly afford-able as well, with Mr Wong noting that leases on black and white homes ‘in this neighbourhood range from $6,000 to $7,000 a month; it’s very attractive. Normal landed homes of a similar size can cost up to $20,000 a month’. The SLA said rents depend on location and prevailing market conditions, but bargains can be had by those eyeing less centrally located properties.
Last month, a black and white bungalow in Seletar with a land area of 2,260 sq ft was leased for $3,571, or $1.58 per square foot (psf) per month. A normal semi-detached 3,200 sq ft home in the same area is offered for a rent of $7,500, or $2.34 psf per month. But people expecting to snag a black and white in more central areas like Nassim Road or Orange Grove Road should be prepared to pay a premium.
A two-storey example at 10A Goodwood Hill near Orchard Road has a guide rent of $20,000 a month, which is at the higher end of the price spectrum. Tenders for that house ended yesterday and it is likely the final rent will be even higher. A recently leased black-and-white in Winchester Road in the Alexandra neighbourhood had a $14,000 guide rent but attracted a top offer of $18,500 a month.
The homes are characterised by their black and white finishings, spacious grounds and colonial ambience. They were built by the British from the late 19th century to before World War II, to house military officers, High Court judges and other members of the colonial society’s great and good.
Black-and-white properties, which can be found in areas like Bukit Timah, Alexandra Park, Orange Grove Road and Seletar Road, are regularly made available for rent, with details listed on the State Property Information Online website at www.spio.sla.gov.sg
Fewer PRs buying Landed Homes
The number of permanent residents (PRs) buying landed homes in Singapore fell in 2011, as tough measures discouraged them from entering that segment of the real estate market.
According to latest figures released by DTZ Research, PRs acquired 109 landed homes in 2011, down 53.6 percent from the 235 homes purchased in 2010. This means that PRs only contributed 3.4 percent of total transactions in the landed housing market last year, compared to the 5.4 percent share in the preceding year.
It is now harder for PRs to acquire landed property in Singapore, as strict criteria under the Residential Property Act prevents them from acquiring such a property type if they already own a condo unit. The government tightened the rules last year and at the time, Law Minister K. Shanmugam said that the number of approved applications was expected to decline by more than half.
Meanwhile, many experts believe the PR share in the landed housing market is being hit by two forces – the tougher criteria for obtaining approvals and the government’s tighter immigration policy.
Chua Chor Hoon, Research Head at DTZ Asia Pacific, said that while tougher criteria cuts down the number of PR buyers, the number of PRs in the country also fell by 1.7 percent year-on-year, or around 9,000 as of June last year. This came on the back of lengthened residency requirements for PRs and stricter eligibility requirements for obtaining homes.
William Wong, Managing Director of RealStar Premier Group, noted that the number of PRs viewing landed homes dropped by more than 50 percent, possibly due to their awareness of the tighter regulations.
“While PRs used to get approval for landed property of 13,000 sq ft to 15,000 sq ft in the past, they are being advised to buy smaller homes of about 10,000 sq ft now,” he said.
According to latest figures released by DTZ Research, PRs acquired 109 landed homes in 2011, down 53.6 percent from the 235 homes purchased in 2010. This means that PRs only contributed 3.4 percent of total transactions in the landed housing market last year, compared to the 5.4 percent share in the preceding year.
It is now harder for PRs to acquire landed property in Singapore, as strict criteria under the Residential Property Act prevents them from acquiring such a property type if they already own a condo unit. The government tightened the rules last year and at the time, Law Minister K. Shanmugam said that the number of approved applications was expected to decline by more than half.
Meanwhile, many experts believe the PR share in the landed housing market is being hit by two forces – the tougher criteria for obtaining approvals and the government’s tighter immigration policy.
Chua Chor Hoon, Research Head at DTZ Asia Pacific, said that while tougher criteria cuts down the number of PR buyers, the number of PRs in the country also fell by 1.7 percent year-on-year, or around 9,000 as of June last year. This came on the back of lengthened residency requirements for PRs and stricter eligibility requirements for obtaining homes.
William Wong, Managing Director of RealStar Premier Group, noted that the number of PRs viewing landed homes dropped by more than 50 percent, possibly due to their awareness of the tighter regulations.
“While PRs used to get approval for landed property of 13,000 sq ft to 15,000 sq ft in the past, they are being advised to buy smaller homes of about 10,000 sq ft now,” he said.
Sentosa Cove bungalow goes for record S$39m
The new record beats the previous high of S$36 million for a Paradise Island bungalow back in 2010. That price translated to S$2,403 psf on a 14,983 sq ft land area, according to a report by The Business Times.
Comparatively, the latest deal for the property at Cove Drive is S$2,448 psf, based on its 15,929 sq ft land area. Sentosa Cove residential properties have a 99-year leasehold tenure.
The completed bungalow, which includes five bedrooms, an entertainment room and a spacious living area, was sold by a Singaporean to an Indian buyer, with Newsman Realty representing the seller.
Sentosa Cove is the only area in Singapore which allows non-PR foreigners to acquire a landed home, subject to approval from the Land Dealings Approval Unit (LDAU).
Meanwhile, on mainland Singapore, another high price is said to have been set at a Good Class Bungalow Area (GCBA) involving a vacant plot at Jervois Hill. The agreed price for the 15,120 sq ft freehold site is said to be S$31 million which works out to about S$2,050 psf, a new record for the area.
The buyer is apparently applying to become a Singapore citizen.
Since the Chinese New Year period, property hunters have been returning to the bungalow market after initially stagnating when the additional buyer’s stamp duty (ABSD) was introduced in early December.
Banks must provide Borrowers with Mortgage Fact Sheets
The fact sheet aims to help potential borrowers get the basic information regarding mortgages, such as the repayment schedule and loan quantum.
The sheet will include notes informing the borrower that the bank reserves the right to charge for extra payments if the value of the property drops. Customers will also be informed that monthly repayments could rise if interest rates climb.
For example, the monthly repayment on a 20-year, S$1 million mortgage may rise by around S$1,500 if the interest rate edges up from two to five percent.
Banks are also mandated to provide fact sheets whenever there are changes to the proposed facility’s key features. This can be in printed, written or any electronic form, with the bank keeping a copy of it.
Moreover, the bank is required to obtain a written self-declaration from the borrower, which states that he has received the fact sheet prior to signing the mortgage agreement.
Consultants feel that the latest safeguards will also protect the interests of banks.
Meanwhile, Lui Su Kian, Head of Deposits and Secured Lending at DBS Bank, said that “mortgages are a long-term commitment... and customers should be aware of how the loan type will fit into their lifestyle and how interest rates are determined, as this will have a direct impact on their monthly budget.”
Foreigners 'own 30% of Thai land'
Thailand’s Auditor-General Siracha Charoenpanij revealed yesterday that 30 percent of land in the kingdom (pictured) is owned by foreigners.
Speaking at a seminar on disguised legal transactions and foreigners’ land ownership in Thailand held by the Senate committee on economic, commercial and industrial affairs in parliament, he expressed concern that more needed to be done to prevent foreigners from using nominees to own land.
The law in Thailand prevents a foreign entity from holding more than 49 percent of any land. However, since 2002 a foreigner is allowed to purchase a maximum of one rai (1,500 sq m) of land in Thailand for residential purposes if they bring at least US$1 million (S$1.26 million) into the country.
Siracha said, “Right now more than one third of land in Thailand is owned by foreigners,” adding that according to research most of the land in foreigners’ hands is in coastal resort areas.
According to a report in The Nation, National Institute of Development Administration (NIDA) lecturer Piyanuch Potawanich suggested the launch of the Asean Economic Community in 2015 would lead to more foreigners using nominees to own Thai land, especially Singaporeans, who the report said were smart, had money and needed to invest for profit. She urged the introduction of laws to punish nominees and deport any foreigners who break them.
Several industry watchers have already ridiculed the claim that 30 percent of Thailand’s land is owned by foreigners.
Andrew Batt, Regional Group Editor for PropertyGuru, said; “It’s simply unbelievable to suggest that one third of land in the country is owned by foreigners. Thailand is a huge country, and the widespread use of legal loopholes to circumvent the country’s land laws just isn’t happening.”
Batt added that with the news yesterday that Indonesia is mulling a relaxation in its foreign property ownership laws, Thailand should perhaps be doing more to make ownership easier rather that making it more unattractive.
Developers' bids for sites indicate Falling Home Prices
With concerns over a possible drop in private home
prices of up to eight percent this year, many developers are becoming
more cautious on how much they are willing to pay for private home
sites.
Deciding on the prices to offer for a plot on sale, developers need to take into account the possibly lower home prices into their sums.
According to a BNP Paribas report, which analysed about 100 government land sale bids from 2007 to last month, developers are lowering their bids on land sites because of the uncertainty on whether prices will hold up by the time they would have to sell the project.
When bidding for a site, developers consider the break-even figure – meaning how much they will pay for the project, taking into account the costs of building it as well as other finance, administration and marketing costs, plus a little extra in terms of profits.
The report revealed that beginning in mid-2011, the difference between developers’ expected break-even price and existing selling prices widened to 19.8 percent, way above the mean of 12.1 percent.
The 12.1 percent mean represents the profit margin which developers have achieved on average. The eight-percentage point difference likely reflects developers’ efforts to guard against possible increases in selling prices.
Chong Kang Ho, an analyst at BNP Paribas, noted that a similar pattern was observed in Q2 2008 before home prices tanked and when margin buffers widened in the same manner.
Deciding on the prices to offer for a plot on sale, developers need to take into account the possibly lower home prices into their sums.
According to a BNP Paribas report, which analysed about 100 government land sale bids from 2007 to last month, developers are lowering their bids on land sites because of the uncertainty on whether prices will hold up by the time they would have to sell the project.
When bidding for a site, developers consider the break-even figure – meaning how much they will pay for the project, taking into account the costs of building it as well as other finance, administration and marketing costs, plus a little extra in terms of profits.
The report revealed that beginning in mid-2011, the difference between developers’ expected break-even price and existing selling prices widened to 19.8 percent, way above the mean of 12.1 percent.
The 12.1 percent mean represents the profit margin which developers have achieved on average. The eight-percentage point difference likely reflects developers’ efforts to guard against possible increases in selling prices.
Chong Kang Ho, an analyst at BNP Paribas, noted that a similar pattern was observed in Q2 2008 before home prices tanked and when margin buffers widened in the same manner.
ABSD the main cause of drop in foreign purchases
December’s property cooling measures have indeed affected non-permanent resident (PR) foreigners buying in the private housing sector.
According to The Straits Times, foreigners bought 385 units in November 2011, covering new sales, resales and subsales, which translate to a 16 percent slice of the entire market, excluding executive condos (ECs).
But figures dropped to just 53 and 96 units in January and February respectively, reducing their market share to only 6.5 percent, based on Savills analysis of data from the URA (Urban Redevelopment Authority).
Back in 2010, foreign buyers held a 12 percent share of the market, which rose to a record 17 percent last year.
Experts attribute the steep drop in foreign purchases to the 10 percent ABSD (additional buyer’s stamp duty). Foreigners may have had hesitations as to whether Singapore would remain an attractive investment destination despite the cooling measures.
The slew of policy changes may have also dampened demand, said Mr Ku Swee Yong, Chief Executive of International Property Advisor.
He added that some of his Malaysian clients plan to invest in commercial space or smaller homes that have lower prices to avoid the stamp duty or pay a lower fee.
Meanwhile, Tan Kok Keong, Research and Consultancy Head at OrangeTee, noted that the ABSD was clearly the main cause, given that no other major issue came in between November and February.
However, some experts hope the decline will only be a temporary lull as foreign purchasers adapt to the higher tax. Alan Cheong, Director of Research and Consultancy at Savills, said foreign demand will eventually move up in due time.
According to The Straits Times, foreigners bought 385 units in November 2011, covering new sales, resales and subsales, which translate to a 16 percent slice of the entire market, excluding executive condos (ECs).
But figures dropped to just 53 and 96 units in January and February respectively, reducing their market share to only 6.5 percent, based on Savills analysis of data from the URA (Urban Redevelopment Authority).
Back in 2010, foreign buyers held a 12 percent share of the market, which rose to a record 17 percent last year.
Experts attribute the steep drop in foreign purchases to the 10 percent ABSD (additional buyer’s stamp duty). Foreigners may have had hesitations as to whether Singapore would remain an attractive investment destination despite the cooling measures.
The slew of policy changes may have also dampened demand, said Mr Ku Swee Yong, Chief Executive of International Property Advisor.
He added that some of his Malaysian clients plan to invest in commercial space or smaller homes that have lower prices to avoid the stamp duty or pay a lower fee.
Meanwhile, Tan Kok Keong, Research and Consultancy Head at OrangeTee, noted that the ABSD was clearly the main cause, given that no other major issue came in between November and February.
However, some experts hope the decline will only be a temporary lull as foreign purchasers adapt to the higher tax. Alan Cheong, Director of Research and Consultancy at Savills, said foreign demand will eventually move up in due time.
Geylang sees boom in Home launches
According to a report by The Straits Times, nearly 1,900 new residential units across over 25 developments are expected to be completed over the next three to four years, and many of these units will be shoebox apartments, which is a new trend for Singaporeans, expats and investors.
These new private homes will range from less than 400 sq ft to approximately 600 sq ft, and many agents are confident that these small units will remain popular due to their location.
“Location-wise, going to the CBD (Central Business District) is five to seven minutes' drive. With the upcoming Paya Lebar commercial hub, this whole Geylang, Kallang area will be between the CBD and the hub,” said a property agent.
However, the main challenge is Geylang's seedy reputation. The report said that there were concerns that units in the area would draw a wrong crowd.
“I have had clients ask me why all the rooms (in Geylang units) have attached bathrooms. You could read more into that, in the sense that they may be used as serviced apartments, dormitories or budget hotels,” said Colin Tan, Research Head at Chesterton Suntec International.
He noted that banks may be unwilling to lend to investors due to the seedy reputation of the area.
“In official red-light areas, some banks won't want to lend their names to such projects, because they are considered high-risk,” he said.
“Second, you are not sure if the activities that occur in those units are legal or not. Another concern is the reputation of the bank; it may not want to be associated with such properties.”
Singapore luxury property continues to attract Ultra-Rich
Done in collaboration with Citi Private Bank, the report surveyed 4,000 individuals who have an average net worth of US$100 million (S$125 million).
The respondents cited Singapore as the fifth most favoured location for a second home, after the US, UK, France and Spain. As far as quality of life is concerned, Singapore came in second after London.
The results reflect a growing shift in focus towards the East, where ‘centa-millionaires’ (with assets of at least US$100 million) (S$125 million) are growing fast. At the same time, Singapore is ranked the fifth most important global city after London, New York and Hong Kong, while Shanghai and Beijing took eighth and ninth spots respectively.
Looking at a 10-year period, respondents expect Singapore to stay in fifth place, but Beijing and Shanghai will likely climb to third and fourth spots respectively.
The report added that property is still the most favoured asset for high-net-worth individuals with a 31 percent portfolio share, while equities and bonds each have a 31 percent share. In the Asia Pacific, property holds a higher portfolio share at 31 percent, while equities and bonds take 24 percent and 16 percent respectively.
In addition, 57 percent of ultra-rich individuals are planning to boost their residential property portfolio.
Higher possibility of new property curbs, says expert
Compared to two months ago, the possibility that the government will
implement a sixth round of cooling measures is now much higher,
according to a report by The Business Times.
However, such measures will likely come in Q2 2012, according to Png Poh Soon, Head of Consultancy and Research at Knight Frank.
“A few months doesn't really constitute a trend so naturally, the government will look - it may take one to two quarters to observe if this is a sustainable trend or if (the spike in sale volumes) is short-term,” said Png.
Recent data from the Urban Redevelopment Authority (URA) revealed that a total of 2,413 private homes were sold in February, excluding executive condominiums (ECs). This reflects an increase of 29 percent month-on-month and more than double the figure seen over the same period last year.
If ECs were included, the number soars to 3,138 units, 51 percent higher than the 2,077 units recorded in January.
Given the strong buying sentiment, the likelihood of a new round of cooling measures has increased. Over the last few years, a series of curbs have been introduced; the most recent being the ABSD (additional buyer's stamp duty) which took effect last December.
“When the sixth round comes in, it could be a refinement of the existing five rounds of cooling measures, or it could be something drastically new. The way I look at it, it's likely a tightening of existing measures,” noted Png.
“The market is actually in mixed flux. The resale market is quite dead, (but) new sales are doing very well. Is this (a sign of) a very stable and sustainable market? This is a question many people are interested in.”
However, such measures will likely come in Q2 2012, according to Png Poh Soon, Head of Consultancy and Research at Knight Frank.
“A few months doesn't really constitute a trend so naturally, the government will look - it may take one to two quarters to observe if this is a sustainable trend or if (the spike in sale volumes) is short-term,” said Png.
Recent data from the Urban Redevelopment Authority (URA) revealed that a total of 2,413 private homes were sold in February, excluding executive condominiums (ECs). This reflects an increase of 29 percent month-on-month and more than double the figure seen over the same period last year.
If ECs were included, the number soars to 3,138 units, 51 percent higher than the 2,077 units recorded in January.
Given the strong buying sentiment, the likelihood of a new round of cooling measures has increased. Over the last few years, a series of curbs have been introduced; the most recent being the ABSD (additional buyer's stamp duty) which took effect last December.
“When the sixth round comes in, it could be a refinement of the existing five rounds of cooling measures, or it could be something drastically new. The way I look at it, it's likely a tightening of existing measures,” noted Png.
“The market is actually in mixed flux. The resale market is quite dead, (but) new sales are doing very well. Is this (a sign of) a very stable and sustainable market? This is a question many people are interested in.”
Govt imposes additional tax for private property
The government has implemented additional cooling measures intended to curb excessive investment in the property market.
From today, foreigners and corporate entities will have to pay an additional 10 percent ‘Additional Buyers Stamp Duty’ (ABSD) , the government said in a statement issued last night. The extra levy will be three percent for Permanent Residents (PRs) purchasing a second home, as well as for Singaporeans buying their third residential property.
In a joint statement, the Finance and National Development ministries said the move is to promote a sustainable residential property market where prices move in line with economic fundamentals.
“We have always had open markets and must keep them that way,” said Finance Minister Tharman Shanmugaratnam. “However, the reality is that investment flows into our property market are now larger than before, and unlikely to recede as long as interest rates remain low. The additional stamp duty should help cool investment demand, and avoid the prospect of a major, destabilising correction further down the road.”
The ABSD will apply in addition to the existing buyer's stamp duty on property purchases, which will be applied at the following rates: one percent on first S$180,000 of purchase consideration or market value of the property (whichever is higher), two percent on the next S$180,000 and three percent for the remainder.
In the case of a joint purchase by Singaporeans who each already owns property, the ABSD of three percent will apply as long as one of the purchasers already owns two properties. Singaporean first-time buyers and upgraders, and buyers of HDB flats will not be affected by the new measure.
The Real Estate Developers Association of Singapore (REDAS) said it was disappointed at the lack of consultation, adding that the measures came as a surprise as the current market outlook is uncertain.
Colin Tan, Head of Research at Chesterton Suntec International, writing in TODAY, said: “Already people are asking me whether the new measures will induce a price correction? It really depends on the reaction of developers and how much of the current purchases are investment buys. If the majority of buyers have been investors, the measures have the equivalent effect of a sudden price increase of 3 percent or more on the market.”
Andrew Batt, Regional Group Editor of PropertyGuru, said the latest round of cooling measures which were introduced earlier this year had an immediate impact, and market watchers and analysts will be paying careful attention to the market over the coming days and weeks.
Bartley Gove Apartment, terrace houses sold for S$74.1m
Located in District 19, the combined freehold site has a total land area of 65,305 sq ft. It is zoned for residential development with a gross plot ratio of 1.4 and a maximum building height of five storeys under the 2008 Master Plan.
“This land price rate sets a new benchmark for low-rise residential land in District 19, reflecting developers' continued confidence in the residential market evidenced by the healthy sales figures at nearby projects such as Casa Cambio and Bartley Residences,” noted Tan Hong Boon, Deputy Managing Director at Credo Real Estate, which brokered the deal.
Credo said each apartment owner will likely receive between S$1.25 million and S$3.24 million from the sales proceeds, while the owners of the terrace houses will gain between S$2.34 million and S$4.76 million.
Launched jointly in the en bloc sales market in February, Bartley Grove Apartment has a land area of 55,286 sq ft with an indicative price of between S$62.35 million and S$64.04 million, while the three houses have a combined land area of 10,019 sq ft and an asking price of between S$10.65 million and S$10.96 million.
URA revises guidelines for strata landed housing
According to market watchers, the move will effectively close a loophole which has allowed foreigners to buy strata landed homes in such projects without gaining approval from Singapore’s Land Dealings Approval Unit (LDAU).
However, foreigners may still buy strata landed homes in condos which have already been approved by the URA.
“In recent years, there has been an increase in the number of condominium proposals comprising a mix of strata landed and apartment units within the same development,” the URA noted.
Some of the projects that have ‘condo’ status but feature strata landed homes include Thomson Grand, d'Leedon (pictured) in the Farrer Road area, Woodhaven in Woodlands, Archipelago at Bedok Reservoir and euHabitat at Jalan Eunos.
Developers have included these strata landed homes in their condo projects in response to strong demand from foreign buyers, without the need for LDAU’s approval.
Meanwhile, foreigners who wish to buy any other type of landed homes, such as units in pure strata landed housing developments, must secure approval from the LDAU.
To get approval, foreign buyers need to fulfil certain criteria that include being a permanent resident (PR) and significantly contributing to Singapore’s economy. However, with tighter controls imposed since last year, the number of approvals for PR buyers will likely decline.
S'pore among favourite cities of the super-rich
London took top spot in the ranking, followed by New York, Hong Kong and Paris.
The survey assesses the importance of key cities to HNWIs based on the state of world affairs, opportunities for wealth creation, economic risks and political stability.
When asked for their views on leading cities in 10 years' time, the respondents kept Singapore, London and New York in their current spots.
Beijing and Shanghai were viewed as the fastest-growing, reflecting the impact of the flourishing economies of the East. They were deemed to be the third and fourth most important cities in 10 years, knocking Paris and Hong Kong down the list.
HNWIs are keen on investing in prime residential and commercial properties in these top global cities because they are viewed as "safe havens" for long-term investments or as second homes, Knight Frank said.
"If you look at property investment, most of the HNWIs' attitudes have changed ... for the longer-term perspective and a longer holding period," said Mr Png Poh Soon, head of consultancy and research at Knight Frank.
"Nobody wants to make a loss. So certainly people are concerned about the impact of the market," he added.
Despite cooling measures, experts say luxury property prices here will remain resilient due to the continued interest among the global super-rich in Singapore properties.
The survey was conducted on 4,000 individuals worth an average of US$100 million (S$126 million) each.
Luxury properties in S'pore, HK 'most sought after by the super-rich'
Both markets are known as "super prime" destinations for the rich to buy properties worth at least US$20 million (S$25.14 million) each.
This is among the findings highlighted in The Wealth Report 2012, released by property consultancy Knight Frank and Citi Private Bank on Friday.
Knight Frank says HNWIs view residential and commercial properties located in prime locations as "safe havens".
These properties are acquired for long-term investments or as second homes.
Among the key factors that the super-rich consider when choosing a location for their second home are lifestyle (67 per cent), investment (55 per cent), safe haven for capital (40 per cent), education (12 per cent) and tax (6 per cent).
The report also highlighted that property investments occupy a large portion in the investment portfolio of the global HNWI.
Some 23 per cent of the portfolio consists of properties - the highest proportion compared with any other asset.
The proportion increases to 31 per cent in the investment portfolio of the super-rich in the Asia-Pacific region, which suggests that Asian HNWIs have a greater penchant for property investments.
The next most popular asset of global HNWIs are equities and bonds, with each accounting for 21 per cent in the investment portfolio.
This is followed by gold, making up 3 per cent of the portfolio.
The survey was conducted on 4,000 individuals with assets worth about US$100 million each.
Residential properties emerged as the most favoured type of investment among HNWIs last year.
Some 76 per cent of the respondents said they were keen to purchase residential homes compared with other property classes.
Office and retail properties are the other preferred types of properties for investment, coming in at 59 per cent and 31 per cent respectively. VENUS HEW
Making sense of the Singapore Residential Price Index
Every month, when the National University of Singapore (NUS) releases flash estimates for its Singapore Residential Price Index (SRPI), there will always be at least one reporter who will be feeling perplexed as to how he or she should read the indices. Are property prices heading upwards, downwards or trudging sideways?
Compared to the Urban Redevelopment Authority's (URA) quarterly price index, the SRPI is a lot more volatile as it is compiled on a monthly basis. It is also confined to completed non-landed properties.
The SRPI basket tracks the prices of 370 private residential projects (excluding executive condominiums) located across 25 postal districts here that were completed between October 2001 and September last year.
It is hard to analyse the numbers especially if the discussion is confined to indices for just two months. In the latest release, the figures are flash estimates for last month against finalised or revised figures for January.
It does not help that property prices are a lot more stable than they were compared to a year ago. As a result, it is not uncommon to find indices moving in opposite directions on alternate months and sometimes diverging within the same month.
The latest numbers ...
The SRPI release on Wednesday showed prices of completed properties softening by 0.8 per cent last month compared with the previous month. In particular, small apartments islandwide (up to 506 sq ft) and the Central Region (excluding small units) - comprising districts 1 to 4 and the prime residential districts of 9, 10 and 11 - saw the greatest decline, down 0.9 per cent month-on-month.
The sub-index for Non-Central (excluding small apartments) also appears to have finally caved in to negative sentiment, falling 0.6 per cent on a monthly basis.
Are we headed for a buyers' market over the next few months, a theory put forward by some analysts?
There is a real danger of reading too much into the numbers if we were to focus solely on data for just two months.
Instead, I find the accompanying chart on the NUS website (http://www.ires.nus.edu.sg/webapp/srpi/default.aspx) much more useful as it shows trends for the past few months stretching as far back as 2001.
My own interpretation of the chart is that prices of completed properties for the Central region are clearly on a downward trend. There is a small hint that prices of small apartments may follow likewise but the evidence is not as clear. As it covers small apartments in all locations islandwide, it could be a net effect of small apartments in Central and Non-Central areas. As for completed properties in Non-Central areas, prices look to be flattening out quite nicely.
The shoebox question
Another interesting feature I noted from the chart is that prices for small apartments significantly underperformed the market during the trough periods in 2004/2005 and in 2008/2009.
Investors of shoebox apartments or small apartments may want to take a closer look at this chart. The pattern could repeat itself in the next downturn. If it does, it is best to swiftly unload such properties before it reaches the bottom. The problem is, a significant proportion of private homes bought over the past year or so are small apartments.
Going forward, the consensus is that trends observed for completed properties in Central areas last month are likely to be repeated in the coming few months but opinions are not unanimous for small apartments or properties in Non-Central.
Is the recently introduced Additional Buyers' Stamp Duty (ABSD) responsible for the problems faced by properties in Central areas?
I doubt so because the ABSD was only imposed recently whereas the problems facing that particular niche market were already evident for more than a year.
As I pointed out in an earlier commentary, I feel it is because almost all of these properties were bought under the differed payment scheme. As such, changing market conditions had no impact as there was protection from the market for as long as they were under construction. Almost all of these properties would have been completed by now or would be completed within the next few months.
Once the buyers received their keys, they have to make a decision on whether to re-sell or take out a loan. The moment this is done, the protection the property used to receive is lifted. The softening of prices for this market segment is due to the unravelling of this market rigidity - the effect of investors who have chosen not to lease or occupy but to re-sell.
Going forward, there are more market rigidities to be unravelled. These would apply to properties bought after the introduction of sellers' stamp duty last January and the ABSD in December.
For the next three to four years at least, any weaknesses in private home prices would not come from these properties but mainly from properties bought before last year.
Colin Tan is the head of research and consultancy at Chesterton Suntec International.
Compared to the Urban Redevelopment Authority's (URA) quarterly price index, the SRPI is a lot more volatile as it is compiled on a monthly basis. It is also confined to completed non-landed properties.
The SRPI basket tracks the prices of 370 private residential projects (excluding executive condominiums) located across 25 postal districts here that were completed between October 2001 and September last year.
It is hard to analyse the numbers especially if the discussion is confined to indices for just two months. In the latest release, the figures are flash estimates for last month against finalised or revised figures for January.
It does not help that property prices are a lot more stable than they were compared to a year ago. As a result, it is not uncommon to find indices moving in opposite directions on alternate months and sometimes diverging within the same month.
The latest numbers ...
The SRPI release on Wednesday showed prices of completed properties softening by 0.8 per cent last month compared with the previous month. In particular, small apartments islandwide (up to 506 sq ft) and the Central Region (excluding small units) - comprising districts 1 to 4 and the prime residential districts of 9, 10 and 11 - saw the greatest decline, down 0.9 per cent month-on-month.
The sub-index for Non-Central (excluding small apartments) also appears to have finally caved in to negative sentiment, falling 0.6 per cent on a monthly basis.
Are we headed for a buyers' market over the next few months, a theory put forward by some analysts?
There is a real danger of reading too much into the numbers if we were to focus solely on data for just two months.
Instead, I find the accompanying chart on the NUS website (http://www.ires.nus.edu.sg/webapp/srpi/default.aspx) much more useful as it shows trends for the past few months stretching as far back as 2001.
My own interpretation of the chart is that prices of completed properties for the Central region are clearly on a downward trend. There is a small hint that prices of small apartments may follow likewise but the evidence is not as clear. As it covers small apartments in all locations islandwide, it could be a net effect of small apartments in Central and Non-Central areas. As for completed properties in Non-Central areas, prices look to be flattening out quite nicely.
The shoebox question
Another interesting feature I noted from the chart is that prices for small apartments significantly underperformed the market during the trough periods in 2004/2005 and in 2008/2009.
Investors of shoebox apartments or small apartments may want to take a closer look at this chart. The pattern could repeat itself in the next downturn. If it does, it is best to swiftly unload such properties before it reaches the bottom. The problem is, a significant proportion of private homes bought over the past year or so are small apartments.
Going forward, the consensus is that trends observed for completed properties in Central areas last month are likely to be repeated in the coming few months but opinions are not unanimous for small apartments or properties in Non-Central.
Is the recently introduced Additional Buyers' Stamp Duty (ABSD) responsible for the problems faced by properties in Central areas?
I doubt so because the ABSD was only imposed recently whereas the problems facing that particular niche market were already evident for more than a year.
As I pointed out in an earlier commentary, I feel it is because almost all of these properties were bought under the differed payment scheme. As such, changing market conditions had no impact as there was protection from the market for as long as they were under construction. Almost all of these properties would have been completed by now or would be completed within the next few months.
Once the buyers received their keys, they have to make a decision on whether to re-sell or take out a loan. The moment this is done, the protection the property used to receive is lifted. The softening of prices for this market segment is due to the unravelling of this market rigidity - the effect of investors who have chosen not to lease or occupy but to re-sell.
Going forward, there are more market rigidities to be unravelled. These would apply to properties bought after the introduction of sellers' stamp duty last January and the ABSD in December.
For the next three to four years at least, any weaknesses in private home prices would not come from these properties but mainly from properties bought before last year.
Colin Tan is the head of research and consultancy at Chesterton Suntec International.
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