Hours after announcements last Friday that two residential property curbs would be eased, major real estate developers City Developments, CapitaLand and UOL Group led gains on the Straits Times Index, surging at least 4 per cent.

An index of 44 Singapore real estate companies – the FTSE ST Real Estate Index – rallied to its highest point since July 2015, reported the Business Times.

The jump in property stocks comes just after the Government announced “calibrated adjustments” to property cooling measures.

Two rules, the seller stamp duty and total debt servicing ratio (TDSR), were relaxed from March 11.

But even before this boost to the sluggish property market was announced, property stocks have already been on the rise.

According to a Singapore Exchange (SGX) report last month, the SGX Real Estate Developers & Operators Index has returned 12.4 per cent in the 2017 year through to Feb 13, outperforming the broader STI’s 8.2 per cent gain.

On a 12-month basis, the Index has returned 34.7 per cent, compared to the STI’s 22.5 per cent.

The report also noted that real estate management and development stocks have led the real estate sector in the first six weeks of this year, which is a turn from 2016, when Real Estate Investment Trusts (REITs) led the sector.

And there are bargains to be found in the sector.

The price-to-book (P/B) ratio of the FTSE ST Real Estate Holding & Development Index (which has a comparatively long history of metrics) is currently at 0.71x.

SGX noted: “The FTSE ST Real Estate Holding & Development Index P/B ratio spent much of 2016 near or below 0.66x, one standard deviation below the long term average P/B of 0.83x. With the rally over the first six weeks of 2017, the P/B ratio has since moved up to 0.71x, which is still some 17 per cent below the long term average of 0.83x.”

The upbeat response of property stock investors are a stark contrast to the reactions of many analysts and perhaps even property buyers.

PhillipCapital analysts Peter Ng and Tan Dehong think that the easing of these two rules were unlikely to uplift sales in private housing units, as they think that the 60 per cent TDSR framework and Additional Buyers’ Stamp Duty (ABSD) are the property cooling measures that would lead to a “meaningful boost” to take-up rates.

The ABSD is levied on Singaporean owners of at least one residential property, and foreigners and permanent residents buying residential properties.

DBS analysts agreed that the direct impact on the property market would be marginal, but they think that the Government’s move could have the “signalling effect” of a change in policy stance, which would lead to expectations of further relaxations ahead.

In a report on Monday, they wrote: “Such expectations will definitely have an indirect impact on prices, although the market will also have to consider the potential ‘cooling’ effect of higher interest rates ahead.”

The Government, too, has reiterated that the current set of property market measures remain necessary to promote a sustainable residential property market and financial prudence among households.

In a press release last Friday, it pointed out that demand in the private property market remains firm, due in part to the low interest rates and continued income growth.

Explaining why the ABSD and LTV limits will be retained, the spokesman said: “While the growth in outstanding housing loans has moderated, it is prudent for households to further build up their financial buffers to protect against future interest rate increases or any losses in income.”

But the analysts have upgraded their ratings for some property stocks, in anticipation of further relaxation to property cooling measures.

Analysts from PhillipCapital think that the earliest the 60 per cent TDSR framework and ABSD will be unwound is 2018 in view of the peak supply in properties between 2017 and 2018, as well as the rising interest rate environment.

“We have upgraded our sector weighting to ‘Neutral’,” they added.

OCBC analyst Eli Lee thinks that the timing of the easing of property curbs was not a complete surprise.

He said: “The Singapore Government has over the last three cycles a near unbroken record of actively reviewing property legislations against its goals of price stability, and historically began reversing curbs after homes prices had dipped between 8 per cent to 17 per cent from the peak.

linheng@sph.com.sg

This article was first published on March 16, 2017.
Get The New Paper for more stories.

Demand for new private homes recorded a third straight strong month in February as developers sold 977 units – a hefty jump from 382 units sold in January.

Even more striking: Last month’s sales were more than treble the 303 units sold in February last year.

The strong showing came despite only one new condominium project being launched last month. The sales also came before last Friday’s surprise announcement of tweaks in property cooling measures.

In all, 550 units were put on the market last month, compared with just 108 in January. The Clement Canopy – the best-selling project last month – sold 207 units at a median price of $1,343 per sq ft.

Executive condos (EC) also did well, selling 329 units, a jump of 78.8 per cent from January. Sol Acres at Choa Chu Kang Loop was top among the ECs with 82 units sold at a median price of $782 psf.

Analysts cheered the upbeat numbers, saying that they reflected significantly better market sentiment than this time last year.

“There is a greater sense of confidence in both developers and buyers,” said Mr Ong Teck Hui, JLL’s national director of research and consultancy. He also noted that of the 977 private homes sold, 770 were from previously launched projects.

“Buyers are not just attracted by newly launched projects, but also drawn to those launched previously, reflecting a more broad-based improvement in demand,” he said.

“The recent easing of the seller’s stamp duty and the total debt servicing ratio would be a favourable enhancement on a market that is already on a buying uptrend.”

However, Mr Desmond Sim, head of CBRE research for Singapore and South-east Asia said the sales were driven by “buyers favouring projects with units priced at a palatable quantum”. He added that even with the recent tweaks, “taxes surrounding acquisition have not changed and will continue to remain a barrier”.

xinen@sph.com.sg

This article was first published on March 16, 2017.
Get The New Paper for more stories.

Rents for condominiums rose in February from January, the second straight increase month on month after a period of falling rents. However, Housing Board rents lost ground, the estimates by SRX Property showed.

The 1.1 per cent uptick for private apartments was within analysts’ expectations as more expatriates arrived in the early part of this year, which led to more leasing demand, said Mr Ong Kah Seng, director at R’ST Research.

Prime areas saw a rise of 1.2 per cent in rent, while city fringes and outlying areas recorded an increase of 0.8 per cent and 1.2 per cent respectively, according to SRX Property. But rents fell 3.8 per cent compared with February last year, and were down 18.1 per cent from their peak in January 2013.

Rental volume for February slid 1 per cent from January, but jumped 12.6 per cent in year-on-year terms.

“The silver lining here is that rents have fallen to attractive and affordable levels for tenants,” Mr Ong said. This may nudge tenants to stretch their budgets a bit more this year for bigger living spaces.

The SRX Property estimates showed a slip in February rents for HDB flats from the previous month by 0.8 per cent, with rental prices falling 1.3 per cent in mature estates and 0.3 per cent in non-mature areas. Year-on-year, rents were down by 4.8 per cent from February last year, and 13.4 per cent from their peak in August 2013.

The rental volume, however, increased by 1.2 per cent with an estimated 1,477 HDB flats rented in February, compared with 1,459 units in January.

Year-on-year, the volume slumped by 12.4 per cent.

There will be a continual tussle for tenants, which will lead to more aggressive rental cuts by owners, Mr Ong said, adding that rents this year are expected to fall further.

By early next year, rents will definitely better match tenants’ budgets, he said.

rupsk@sph.com.sg

This article was first published on March 16, 2017.
Get The New Paper for more stories.

A Singaporean boat captain has been charged in a Tanjung Pinang District Court, seven months after he was first arrested for trespassing in Indonesian waters.

Ricky Tan Poh Hui was at the helm of the Malaysia-flagged vessel, the Seven Seas Conqueress, on Aug 20 last year, when he was stopped by the Indonesian navy – purportedly in waters off Bintan island.

Tan’s three-member crew and nine passengers, mainly recreational anglers from Singapore, were released 12 days later, but the 45-year-old captain has remained in the custody of the navy ever since his arrest.

He is the second Singaporean boat captain after Shoo Chiau Huat from the vessel MV Selin, to have been detained for such an extended period in Tanjung Pinang by Indonesian authorities.

Yesterday was the first time Tan appeared in court to face charges for entering Indonesian waters without permission, and failing to maintain navigational equipment on board his boat, which is required under Indonesian shipping laws.

The equipment in the second charge refers to the automatic identification system (AIS) of a vessel, which tracks its position at sea.

Prosecutors said yesterday that the AIS of the Seven Seas Conqueress was “not functioning” when naval officers were inspecting the boat after it was stopped.

Tan did not take a plea but in a bid to expedite the hearing, his lawyer asked the court to proceed to hear evidence from witnesses.

Captain Azi Wardana, the commander of the naval patrol that first spotted the Seven Seas Conqueress on radar, told the court that the vessel was detected in Indonesian waters off Bintan and claimed Tan had tried to evade the navy by attempting to return to Singapore waters.

He also accused Tan of lying to his officers once the boat was stopped.

“At first (Tan) said the ship was damaged, but it could be operated and was later brought to Tanjung Pinang,” said Mr Azi.

A member of Tan’s crew, however, testified that their boat had broken down earlier.

“The boat’s engines had stopped and we drifted at sea for about an hour,” said Mr Agus.

Tan denied that he had tried to evade the naval patrol and said the AIS on the Seven Seas Conqueress was never turned off.

“I did not try to escape when approached by the navy,” Tan told the court. “And the AIS was always in the ‘on’ position.”

The hearing resumes next week.

MFA disputes charges

The Ministry of Foreign Affairs (MFA) yesterday disputed the charges against boat captain Ricky Tan Poh Hui.

A ministry spokesman said in a statement issued after the hearing that the Seven Seas Conqueress, its crew and passengers were detained by the Indonesian authorities in Singapore waters off Pedra Branca.

He added that Singapore has strongly protested against the Indonesian government’s actions.

“We have emphasised that there is no basis for Indonesia’s detention of the vessel, its crew and passengers, nor for the continued detention of and purported charges brought against Mr Tan,” he said.

“In addition, Singapore officials have communicated repeatedly with the relevant Indonesian authorities, at both the national and provincial level, to seek the immediate release of Mr Tan and the vessel, as well as the termination of any purported investigations against him.”

MFA said that it immediately sought consular access to Tan once it learnt of his arrest, but that was granted only on Jan 24.

“MFA will persist in our efforts to secure the immediate release of Mr Tan and the vessel.”

tkchan@sph.com.sg

Read also: 
Singaporean boat captain detained in Indonesia
Indonesia detains 2nd S’porean ship captain

This article by The Straits Times was published in The New Paper, a free newspaper published by Singapore Press Holdings.

The job market last year was the bleakest in years, especially for degree holders, according to employment statistics released by the Ministry of Manpower (MOM) yesterday.

The ministry’s Labour Market Report 2016 was consistent with its preliminary data released in January.

There were more layoffs, which have been rising since 2010, with 19,170 last year compared to the 15,580 in 2015.

Professionals, managers, executives and technicians (PMETs) formed three-quarters of all residents made redundant in the fourth quarter of last year, said MOM.

Unemployment also rose, with the annual average unemployment rate last year rising to 2.1 per cent overall, up from 1.9 per cent the year before, making it the highest since 2010.

MOM said the number of degree holders who were long-term unemployed last year – meaning they could not find work for at least 25 weeks – was highest since 2004 at 1 per cent, up from 0.8 per cent in 2015.

Experts said this trend was not surprising, given Singapore’s weak economic situation.

Human resources expert Paul Heng told The New Paper that the high number of unemployed degree holders stemmed from the high number of layoffs.

The founder of NeXT Career Consulting Group added: “With our economy not doing so well and a lot of retrenchments ongoing, it means more people, including degree holders, lost their jobs on a whole.

“This doesn’t mean that degree holders are being targeted. It just means more jobs are being dispensed with.”

Overall, more residents – 17,000 – were long-term unemployed last year. This represents 0.8 per cent of the resident labour force, up from the 0.6 per cent that had remained constant for the past five years.

National Trades Union Congress (NTUC) assistant secretary-general Patrick Tay noted in a Facebook post that the labour market had softened last year, reflecting economic uncertainty.

“As anticipated, we see more mature PMEs… being affected by this,” he said.

“This is consistent with the report stating that workers aged 50 and above and those with degree qualifications were more affected. Those in their 30s were not spared.”

HELPING JOBSEEKERS

But he said he was heartened by MOM’s announcement last week that the Adapt and Grow programme will be enhanced, and NTUC’s latest Pivot initiative to help jobseekers return to the workforce.

Mr Heng said it was vital for workers to continually upscale.

“Employment can be an illusion. You may have a job today but not one tomorrow,” he said.

“What’s more important is your employability and having the relevant skills, so that in the event something happens, you are still able to find a job.”

The ratio of job vacancies to jobseekers fell to 0.77 in December last year.

It was the third quarter of decline, with the number of vacancies falling to a four-year low of 47,600.

But there was a silver lining from MOM’s latest report – there was stronger employment growth for locals, with 11,200 more having jobs by the end of 2016, compared to a growth of just 700 in 2015.

This article by The Straits Times was published in The New Paper, a free newspaper published by Singapore Press Holdings.