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Gloomy property market outlook for Singapore in the next 2 years

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Author: Ravi Philemon

With lower growth in 2019 than in 2020, Colliers International predicted a gloomy property market outlook for Singapore in the near future. Andrew Haskins, Colliers’ Executive Director of Research in Asia, outlined the key market trends and sector forecasts based on macroeconomic data and geopolitical factors for its Annual Report titled ‘Asia Market Outlook 2019’.

The report in quoting Colliers’ US chief economist Andrew Nelson noted that “despite years of talk in financial markets of “decoupling”, prospects for the world’s largest economy, the United States, are still the key determinant of macro-economic prospects for Asia. And all is not well in the US. While the US has enjoyed 110 consecutive months of positive growth since emerging from the Global Financial Crisis of 2008–2009, below the surface there are signs that a slowdown is starting to take hold.”

Singapore’s gloomy property market outlook may be affected by the declining macro-economic prospects of the US.

With the not-so-positive outlook for the US economy, Singapore’s property market is set to be affected said Colliers’ report.

First-time home buyers can avoid common and costly mistakes

Despite the gloomy property market outlook here, Singapore remains Asia’s firmest office market said the same report.

“In 2018, average prime grade office rent in Singapore rose 15% to SGD9.43 (USD7.0) per sq foot per month as vacancy tightened to below 6%. Demand drivers were broad-based, with flexible workspace operators, technology and professional services firms continuing to expand their footprint.
In 2019, with a lower but benign real GDP growth forecast of 2.5%, we think demand will stay firm; and the government’s push to promote technology, innovation and R&D will help feed growth in the market. We expect reduced new CBD Grade A office supply over 2019–2021, with annual expansion averaging 2% of stock, and the continued tightening of vacancy should support rental growth.
In addition, average prime rent is still competitive versus other major centres, being only about one-half of the level of Hong Kong and 60–65% of the level of Tokyo. However, with a higher base for comparison and new office space outside the CBD, we expect rent growth in 2019 to slow to 8%.
Our “Top Locations” research highlighted Singapore as Asia’s #3 location for Finance occupiers, and #2 location for both Tech occupiers and Law tenants. Singapore benefits from its strong reputation as a source of talent, from political stability and strong regulation, from pro-business government policies, and from high scores on human factors. With rental affordability still good, we expect Singapore’s high popularity to persist.”
gloomy property market

Image credit: Pixabay

The report further added that despite the gloomy property market here, Singapore logistics market is starting to stabilise as it absorbs the supply influx of 2017 and the first half of 2018. Taking a hard look at the retail sector here, the report said that rents on Orchard Road should rise 1–2% in 2019.

“Over the first nine months of 2018, Singapore retail rents edged down 2.2%. We expect the overall retail property market to continue finding its footing in 2019 with landlords seeking the optimum trade mix and digitalisation of their malls.
Besides the continued challenge from e-commerce, we expect noticeable new retail space supply in 2019 (equivalent to 3.0% of current stock), spread out over the central region (excluding Orchard Road), city fringe and suburban areas. Supply should taper off significantly from 2020.
In 2019, we expect ground floor retail rents in prime shopping centres along Orchard Road to rise by 1–2% YOY, due to the lack of new stock in Orchard Road, while prime floor rents in suburban Regional Centres should stabilise.”

HDB dwellers percentage continues gradual downward trend, shows latest Annual Return

The report however cautioned that conditions in retail property remain uncertain with existential threat to traditional retailing from continuous growth in e-commerce. Predicting ample new supply of retail space in several cities, the report said rent growth will be either mildly positive or mildly negative in Singapore. The report added that landlords and tenants however, face the long-run challenge of putting experience, entertainment and digital connection at the heart of their retail offering.

Despite the gloomy property market outlook in Singapore, attractive opportunities remain here, especially where occupier demand is strong said the Annual Report. It noted that demand from institutional investors for Singapore property assets still looks firm, and that shortage of high quality buildings available for sale is probably a greater constraint on investment volumes than any concern about macro-economic outlook or valuation.

Colliers still sees attractive opportunities in investment property markets in Singapore and especially highlighted the investment attractions of office assets in here. Besides the office markets, it also pointed to the potential of logistics assets, and of business and industrial park assets.

How to Secure a Home Loan Quickly

If you are to keen invest in properties before the home price growth escalates, but are ensure of funds availability for purchase, our mortgage consultants at iCompareLoan can set you up on a path that can get you a home loan in a quick and seamless manner.

Our consultants have close links with the best lenders in town and can help you compare Singapore home loans and settle for a package that best suits your home purchase needs. Find out money saving tips here.

Whether you are looking for a new home loan or to refinance your existing one, the Mortgage broker can help you get everything right from calculating mortgage repayment, comparing interest rates all through to securing the best home loans in Singapore. And the good thing is that all our services are free of charge. So it’s all worth it to secure a loan through us.

For advice on a new home loan.

For refinancing advice.

 

The post Gloomy property market outlook for Singapore in the next 2 years appeared first on iCompareLoan Resources.

How Much Straits Times Index Stocks does Temasek Own?

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https://www.drwealth.com/wp-content/uploads/cropped-drwealth-favicon-32×32.jpg Author: Alvin Chow

We know that many of our blue-chip stocks are partially owned by the Singapore Government sovereign wealth fund, Temasek Holdings. In fact, there are plenty of investors who find comfort in investing in Temasek-backed companies. I was curious to find how many of 30 Straits Times Index (STI) stocks had Temasek as a major shareholder. […]

Shutdown is starting to hurt Trump’s financial deregulation agenda

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The U.S. government shutdown over President Donald Trump’s call for Congress to fund a wall he promised to build on the U.S.- Mexican border is threatening another campaign pledge to make rules easier to navigate for banks and corporations.
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Home based business financing can be challenging but not impossible

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Author: Ravi Philemon

Home based business financing may be challenging but not impossible

By: Hitesh Khan/

Running a home-based business can be a profitable and enjoyable way to make a living. But before you consider applying for home based business financing to expand your business, it is important to have an ironclad idea, some form of collateral, investors (in some cases) and a long-term plan for success.

1. Pull a copy of your credit report. A lender will not grant a small business loan to any potential borrower with poor credit.

Credit scores are major considerations on personal loan applications. The higher your score, the better your approval chances.

home based business financing

Image credit: PxHere

A credit score is a number that the lenders consider for home based business financing.

It is a joint effort between all the major lenders here, where data about consumers’ credit history is pooled together and aggregated. Within the aggregated data, lenders would have access to records that show the number of accounts that you have across different banks, and your payment history.

After crunching the available data, each account holder is then assigned a credit score. This indicates how good or bad of a risk you might be to the lender as a customer. The higher the number (up to 2,000 and AA rating), the better your credit score.

Although the the exact weightage of how your credit score is calculated isn’t public knowledge, the factors that the Credit Bureau of Singapore (CBS) uses in determining your credit score is.

Factors like usage patterns of loan facility (e.g. if you have been making large purchases or transactions lately); your recent credit account activity (The number of credit facilities an account holder has is considered by banks as liabilities as they may perceive that you are over-extending yourself); and your account delinquency data, or how you have fared as a customer (this means where possible, always avoid making late or partial payments for your facilities).

Other factors considered by CBS include your credit account history, or how long you have been a customer (factors like if you have you been a loyal customer of your bank since you received your first credit card from them); how much available credit do you have (your credit score is affected by the number of accounts you have with various banks in Singapore); and enquiry activity of how many organisations have asked about you (having too many enquiries might indicate to banks that you could be taking on more debt than you should).

2. Collect all of your documents and do a self-analysis. Put yourself in the lender’s shoes – decide how strong a credit risk you are. Positive attributes of a successful business loan borrower include strong assets (house, investments), existing investors (either angel investors or venture capitalists), strong cash-flow from an existing business or other career and a unique business idea with a clearly defined customer market.

3. Research lenders. If you do not have the time to do research, seek the services of a loan specialist for your home based business financing. The loan specialist is not a direct lender but instead contracts with private lenders to provide small business loans to consumers. A prospective lender is looking for a profitable loan and will scrutinize your application quite carefully.

Be sure to provide the loan specialist your present personal bank statements, business bank statements and a clear one-page report on the thrust of your home-based business, its prospective customers and your ideas for long-term sustainability and growth.

Mortgage Broker Singapore – Should I use one?

4. Make sure your documentation is all in place. Although it varies slightly from lender to lender, a small business loan package usually comprises several documents, including a loan agreement, a promissory note and some form of guarantee and surety agreement.

The loan agreement will contain what are commonly known as “representations and warranties” of the borrower. These provisions serve as your promise to the bank that you’ve complied with certain conditions. The bank will ask you to affirm, that you’re authorised to bind your business to the loan terms. You may also be asked to deliver your business’s financial reports for review, either annually or quarterly, for a term specified in the loan agreement.

Generally, it’s a good idea to get the loan documents ahead of time so you have a chance to review them for a couple of days before you sign them. Most lenders won’t have a problem sending advance copies of the documents, but they will generally only do so if they’re specifically asked.

The documents can be somewhat complex – which is why you may need an independent loan specialist to help you understand what the fine print means.

Close look at small business loan documents now could save you headaches later

5. Make sure that all approved loan offers meet your original needs. Obtain copies of all approved small business loans and compare the final terms to your original idea.

Make sure the capital sufficient home based business financing to fund your start-up.

Make sure you can make the monthly payments and make sure the business idea is still viable. For example, if another business owner has entered the market you had hoped to penetrate with a similar idea, you’d be wise to revisit your business plan before accepting any loan funds. If it seems as though your customer market is still there, proceed with the loan. However, if your plan is in jeopardy due to the new business, it’s best to refuse any loan and go back to the drawing board.

How to Secure a Personal Loan Quickly

If you have limited capital and are searching for a personal loan to expand your business, the loan consultants at iCompareLoan can set you up on a path that can get you a it in a quick and seamless manner. Our loan consultants have close links with the best lenders in town and can help you compare various loans and settle for a package that best suits your needs. Find out money saving tips here.

Our Affordability Tools help you make better property buying decisions. iCompareLoan Calculators help you ascertain the fair value of a property and find properties below market value in Singapore.

If you are looking for a new home loan or to refinance, our Mortgage brokers can help you get everything right from calculating mortgage repayment, comparing interest rates all through to securing the best home loans in Singapore. And the good thing is that all our services are free of charge. So it’s all worth it to secure a loan through us for your business expansion needs.

Contact us for advice on a new home loan.

Contact us for home loan or refinancing advice.

The post Home based business financing can be challenging but not impossible appeared first on iCompareLoan Resources.

Fed’s Kashkari says big banks are safer now than before the financial crisis

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Fed’s Kashkari says big banks are safer now than before the financial crisis


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Neel Kashkari, president of the Federal Reserve Bank of Minneapolis and a critic of big banks, on Wednesday said the biggest U.S. banks are “unquestionably” safer than they were before the 2007-2009 financial crisis.

The mortgage industry isn’t ready for a foreclosure crisis created by climate change

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As extreme weather events become more frequent in places where borrowers might not have flood or fire insurance, the risk of foreclosure rises. Some now predict that the nation could face a climate-related inspired housing crisis.
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Century Warehouse sold collectively for $48.5 million

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Author: Ravi Philemon

Knight Frank announced on Jan 14 that Century Warehouse, an exclusive freehold industrial “B1” development along Pasir Panjang Road, has been sold collectively for S$48.5 million to a private investment company. The sale is S$8.5 million less than the initial asking price of S$57 million when the property was first put up for sale in October last year.

Century Warehouse is an 8-storey freehold industrial warehouse with basement carpark, comprising 35 strata units with a total strata area of 56,539 sq ft. The development sits on a site with an area of 2,824.4 sqm (approx. 30,402 sq ft) and is regular with a frontage of approximately 35 metres onto Pasir Panjang Road, and average depth of 82 metres.

According to the 2014 Master Plan, Century Warehouse is zoned “Industrial (B1)”, with an allowable Gross Plot Ratio of 2.5.

Century Warehouse is nestled within an exclusive industrial enclave, surrounded by industrial developments such as Interlocal Centre and OC @ Pasir Panjang, as well as multi-concepts stores such as tech-enabled grocery and dining destination habitat by honestbee and homegrown craft spirits distillery, Brass Lion Distillery.

The property is within walking distance to both the Pasir Panjang and Labrador MRT stations and enjoys easy access to major arterial roads and expressways such as the West Coast Highway and Ayer Rajah Expressway.

century warehouse

Image credit: Knight Frank Singapore

The sale price of S$48.5 million for Century Warehouse translates to a unit rate of S$858 psf on the existing strata area, or land rate of S$638 psf ppr.

Tuan Sing Holdings’ wholly-owned subsidiary, Asiaview Properties, owns 31 out of the 35 strata units at Century Warehouse, and close to 90% of the strata area. It therefore stands to receive S$42.4 million in proceeds from the sale. The rest of the 4 strata units are owned by third parties. All the owners (100%) gave their consensus to sell the property.

Mr Tan Boon Leong, Executive Director and Head of Industrial, Knight Frank Singapore, said:“We received encouraging response during the marketing of the property. Prospects recognised that with the recent opening of habitat by honestbee and Brass Lion Distillery in the immediate vicinity, this is not your conventional industrial enclave.”

Mr Ian Loh, Executive Director and Head of Investment and Capital Markets, added: “Knight Frank is pleased to have represented the owners of Century Warehouse for this transaction. We received a broad range of enquiries for the property – from owner-occupiers, boutique developers and investment funds. Looking ahead, we expect continued demand for both commercial and industrial investment opportunities in 2019.”

En Bloc Sales Process Singapore – A Definitive Step-by-step Guide

With the winding down of the success of residential en bloc sales, commercial properties are now trying to join in the bandwagon. Many commercial en bloc sale attempts fail because the asking prices are often too high. Two critical factors affecting the success of commercial sites going en bloc are pricing and location. Older commercial buildings especially, may see a need to catch the current wave as an exit strategy as their rental yields come under pressure due to competition from newer commercial buildings.

The biggest gainers following the new property cooling measures is likely be owners of strata portfolio of offices and shophouses approved for commercial use. The property cooling measures affected almost all categories of buyers and is predicted to achieve its intended objectives of cooling demand and moderating price growth.

One report said investors looking for alternatives to park their money in the wake of property cooling measures, would divert their attention to the strata office and shophouse markets as they are not subjected to this round of purchase or sales restrictions/encumbrances.

Mortgage Broker Singapore – Should I use one?

Commercial properties such as Century Warehouse may be bought under personal name, but total debt servicing Total Debt Servicing Ratio (TDSR) will apply on the individual’s income on such purchases. To buy a commercial or industrial property under company name, total debt servicing ratio TDSR also applies on the individual director’s income if the company is an investment holding company or an operating company that is loss-making or does not have sufficient cash flow to servicing the repayment.

To buy a commercial or Industrial property under company name where the company is well established with an existing operating business with strong financials, TDSR may be waived on the individual. However director is usually required to become personal guarantors of the loan the company undertakes. Hence this may affect the director’s other purchases, such as for buying a residential property, due to the loading from the TDSR for guaranteeing a loan.

Some banks even advertise 100 to 120% loan. This is due to a combination of working capital as well as commercial/industrial property loan, but this only applies to company with strong cash flow position. Commercial property is different from residential property and the considerations are more complex and varied, though the payoff may be worthwhile for discerning investors.

How to Secure a Commercial Loan Quickly

Are you planning to purchase a similar prime commercial redevelopment site but unsure of funding? Don’t worry because iCompareLoan mortgage brokers can set you up on a path that can get you a commercial loan in a quick and seamless manner.

Alternatively you can read more about the Best Commercial Loans in Singapore before deciding on your purchase.  Our brokers have close links with the best lenders in town and can help you compare Singapore commercial loans and settle for a package that best suits your commercial purchase needs. Our services are also very personalised and tailored to the unique needs of the buyers.

Whether you are looking for a new commercial loan or to refinance and existing one, our brokers can help you get everything right from calculating mortgage repayments, comparing interest rates, all through to securing the final loan. And the good thing is that all our services are free of charge. So it’s all worth it to secure a loan through us for your next purchase.

If you need advice on a new commercial loan  or Personal Finance advice.

If you want to speak to our trusted Panel of Property agents.

If you need refinancing advice.

The post Century Warehouse sold collectively for $48.5 million appeared first on iCompareLoan Resources.

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Newton Lodge launches en bloc sale with $44 million price tag

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Author: Ravi Philemon

Newton Lodge, a 16-unit collective sale site at Newton Road, has been launched for sale by sole marketing agent, JLL.

Newton Lodge is conveniently located some 400 meters from the Novena MRT station and the Novena commercial cluster. Major developments around the Novena area have been underway, as the government targets to transform the area into Singapore’s largest healthcare hub by 2030. When completed, Health City Novena, spanning across 17 hectares, is said form an entire ecosystem revolving around health services, medical research and education, integrated with commercial, leisure and public community spaces.

The freehold 21,409 sqft site is zoned ‘Residential’ in the 2014 Master Plan with an allowable gross plot ratio (“GPR”) of 1.4. The property may be redeveloped into a low-rise apartment project comprising of up to 27 units with an average size of 100 sqm per unit. Subject to approval from the authorities, Newton Lodge may also be suitable as serviced residences or a custom-built co-living development. If approved for serviced apartments, Newton Lodge could potentially house around 50 to 60 rooms which could be rented for a minimum seven-day stay.

“Co-living, a contemporary form of shared housing, is more commonly found in cities such as Hong Kong, China, India and the US, catering to young and mobile occupants. It provides an affordable, high-density living solution with shared and modern spaces that bring together like-minded individuals. Co-living spaces appeal to single, young professionals who are looking for freedom, flexibility and a community,” said Mr Karamjit Singh, Senior Consultant at JLL.

“The concept of sharing private and HDB apartments with unrelated tenants is common in Singapore, which is informally a form of co-living. However, professionally-run and organized co-living concepts to the levels of the co-working phenomenon is still in its infancy stage in Singapore, and is expected to grow especially with high stamp duties payable for home purchases by foreigners in Singapore,” added Mr Singh.

“Purchasers who wish to develop an entire building for co-living spaces or short-term accommodation should find Newton Lodge’s central location, project size and price quantum attractive. Not only would a boutique-sized project be more manageable, a smaller community of like-minded residents may also result in more meaningful social engagements,” adds Mr Singh.

The vendors are expecting a minimum of $44 million for Newton Lodge, which reflects a land rate of $1,468 psf ppr at GPR 1.4.

Should the purchaser factor an additional 8 per cent bonus gross floor area for balconies and communal areas, the reserve price translates to a lower rate of approx. $1,359 psf ppr. Development charges are not payable for the redevelopment.

The tender for Newton Lodge closes on 26 February 2019 (Tuesday) at 2.30 p.m.

Mr Paul Ho, chief mortgage consultant of icompareloan.com, said the sale should be concluded with minimal delay and maximum benefit to the owners.

En Bloc Sales Process Singapore – A Definitive Step-by-step Guide

Collective sale process takes 20 to 30 months to complete and during this time, the owners typically do not have sufficient funds for down-payment and their CPF OA funds are tied up in the property, hence they cannot buy a new condominium early.

By the time the transaction is completed in 20 to 30 months later, the property prices would have already moved  up 10 to 20 per cent. This is already evidenced by sellers of older estate asking higher prices. Hence if the process takes 20 months to 30 months, owners may need to consider the cost of a replacement unit by that time, else they may want to hold up a higher selling price.

newton lodge

Mr Ho pointed out that the rules are quite onerous and stringent and is governed by the Land Titles (Strata) Act – section 84A. Over the years, additions and amendments by the Ministry of Law to the en bloc law have made the collective sale rules even tighter.

Good property agents – qualities to look for

He said that many of the home owners who refinanced their home loans to fixed rate home loans or those with 2 years locked-in or 3 years locked-in period will incur full home loan redemption penalty. This penalty is usually 1.5% of the loan amount. This tends to affect those who have bought their properties in recent years as their loan size tends to be bigger and their corresponding home loan redemption penalty higher.

Mr Ho suggested that if one’s home is at risk of en bloc, the owner could consider a home loan where there is no locked-in penalty, but instead entails a higher housing interest rate cost. The next best option is to look for packages with a waiver of locked-in penalty due to sale of property. Such owners may contact a mortgage broker to assist them to find such packages with waiver of locked-in penalty.

How to Secure a Home Loan Quickly

Are you planning to invest in properties in the Newton area but ensure of funds availability for purchase? Don’t worry because iCompareLoan mortgage broker can set you up on a path that can get you a home loan in a quick and seamless manner.

Our brokers have close links with the best lenders in town and can help you compare Singapore home loans and settle for a package that best suits your home purchase needs. Find out money saving tips here.

Whether you are looking for a new home loan or to refinance, the Mortgage broker can help you get everything right from calculating mortgage repayment, comparing interest rates all through to securing the best home loans in Singapore. And the good thing is that all our services are free of charge. So it’s all worth it to secure a loan through us.

For advice on a new home loan.

For refinancing advice.

The post Newton Lodge launches en bloc sale with $44 million price tag appeared first on iCompareLoan Resources.

Economist Ed Lazear: The stock market is the best economic indicator and it’s signaling caution

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Economist Ed Lazear: The stock market is the best economic indicator and it’s signaling caution


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“Given the volatility in the market,” Lazear argues, “probably a few weeks worth of patience is not a terrible thing at this point” from the Fed on interest rates.