News Update - 2 July 2012

RESIDENTIAL MARKET

Housing agents get more time to take tests

A REPRIEVE has been given to housing agents who have not passed mandatory exams to be registered by the Council for Estate Agencies (CEA).

The regulatory body said last Friday that the deadline has been extended to the end of next month, but this applies only to agents who have sat the tests at least once and failed.

The previous deadline was last Saturday.

The exams, comprising mostly multiple-choice and some short- answer questions about practices and laws in real estate, are taken by agents with provisional licences.

Such agents were granted a temporary permit because they were already active agents with more than three property transactions sewn up when the CEA came onto the scene in 2010.

Those who have not taken the tests, however, have had their registrations expire and can no longer practise.

CEA director of regulatory control Chan Mun Kit said that the tests are necessary to ensure that agents can serve consumers professionally.

He added that the agency is 'mindful' that a small group of agents need help, and it has been providing assistance.

Measures include sending agents who might not be fluent in English to bilingual courses organised by the Institute of Estate Agents.

The tests, however, are still conducted in English.

Mr Chan said that the CEA has introduced a special test for agents with a weak command of written English or do not have the required minimum of four GCE O-level passes, where the short-answer questions are replaced by multiple-choice ones.

But in exchange for a slightly easier paper, these agents would need to clock more training hours.

Source: The Straits Times – 2 July 2012

LIVING LARGE: Bigger homes making a comeback after shoebox craze

LARGER-SIZED homes seem to be making a comeback, with upgraders leading the charge, amid tentative signs that the craze for shoebox units may be subsiding.

New figures show the median size of all new non-landed homes sold rose to 79 sq m in the second quarter, well up from 65 sq m in the three months before.

The market share of tiny shoebox units of 50 sq m or less sold also fell from a peak of 28 per cent to 23 per cent in the same period. Still, this second-quarter figure remains higher than the 20 per cent for the whole of last year.

While it is too early to say interest in smaller homes is definitely fizzling out, experts say cooling measures such as the additional buyers' stamp duty and sellers' stamp duty of up to 16 per cent might have put a dampener on investor demand for shoebox units.

These units have been popular among investors owing to their affordable price point - typically less than $1 million.

The interest in small units will always be there, especially if the current trend of reducing average family size persists and home owners continue to look for affordable smaller apartments.

It also depends on developers' supply and pricing strategy; if prices are kept at an affordable quantum, investors will continue to view this as an attractive form of investment in view of the prevailing financial crisis.

ERA Realty key executive officer Eugene Lim said buyers might be increasingly attracted to the value proposition of larger homes.

He said the per sq ft price of small homes can be up to 15 per cent to 20 per cent higher than that of larger ones even within the same project.

'The shoebox market seems to be taking a breather as people are more cautious now due to what is being said,' he added.

For instance, National Development Minister Khaw Boon Wan last month said the Government is monitoring the trend of shoebox units and would consider additional regulations, if necessary.

The bumper supply of completed shoebox units expected over the next few years has also been highlighted in recent reports.

Source: The Straits Times – 30 June 2012

Joo Chiat waking up to new buzz

CHANGE is under way in Joo Chiat that could transform the sleepy, heritage-rich neighbourhood over the next few years.

Once noted for its sleazy nightlife, Joo Chiat has become far quieter since a vice crackdown, but new buildings and a changing demographic promise to revitalise the area. Several old houses and walk-up apartments have been giving way to new developments over the past decade despite some sites being gazetted for conservation.

Smaller boutique condos of fewer than 100 units have been springing up.

Joo Chiat is also a hotel enclave with many existing outlets and a new one earmarked for the historic old police station site.

The advantages of Joo Chiat projects are their freehold tenure and accessibility to the city. The place is also near amenities like East Coast Park and Parkway Parade mall, and CHIJ Katong Convent and Tao Nan School.

Older flats have been going for between $700 and $1,200 psf against primary sales at $1,000 to $1,600 psf. At such prices, homes at Joo Chiat are among the more affordable ones in District 15, cheaper than those closer to the sea front such as along Meyer or Amber roads.

Source: The Straits Times – 30 June 2012

OFFICE MARKET

CBD vacancy rates dip with demand from smaller firms

DEMAND for central city office space from mainly smaller enterprises drove down vacancy rates in the second quarter although tenants are still cautious.

Vacancy rates in the Central Business District (CBD) fell from 11.5 per cent in the first three months of the year to 10 per cent in the three months to June 30.

But the rebound has still left rates below the levels recorded in the first half of last year when vacancies were at 4.4 per cent.

The biggest squeeze on space was in the City Hall/Marina Centre, Orchard Road and suburban markets where Grade A vacancies dropped to ultra-low levels of below 2 per cent in the quarter.

A dearth of project completions after Marina Bay Financial Centre Tower 3 was finished earlier this year.

There is also more shadow space - the excess room tenants lease to sub-tenants to reduce rental costs - but at least the rate of growth is slowing.

Such space is expected to increase by over 60 per cent by the end of the year and potentially add a full percentage point to Grade A vacancies.

In the past three months, shadow space expanded to 474,000 sq ft from 439,000 sq ft in the previous quarter.

However, better numbers in certain areas do not indicate a turnaround for the sector as some financial tenants continued to give up excess space during the quarter, a trend that is likely to continue this year.

Prime rents in Marina Bay and Raffles Place slipped, partly due to landlords offering rent holidays in leases.

Marina Bay rents fell 7 per cent to a monthly average of $10.40 per sq ft (psf) while those in Raffles Place dipped 3 per cent to $9.20 psf.

Prime office rents in Orchard average $9 psf a month and are now right on the heels of those in Raffles Place, a level not seen since 2004.

Source: The Straits Times – 30 June 2012