Job situation starting to look up

More employers expect to hire, but some sectors still languishing

WHEN the recession hit Singapore earlier this year, information technology (IT) and engineering firm PBA Group, like other companies here, froze hiring.

But PBA started hiring again two months ago, and at a higher rate than before the recession.

‘We actually went into more aggressive recruitment after the recession,’ PBA’s regional general manager, Mr Derrick Yap, told The Straits Times.

He cited employees’ lowered salary expectations and the need for PBA to allow enough time to train employees for a potential market upturn ahead as the main factors for this move.

‘Previously, many individuals’ asking salaries were unrealistic because they were benchmarked against companies such as banks. We couldn’t afford to give them that much,’ he said.

‘I feel that the market could be picking up by the end of the year, so I wanted to hire people and train them in time to prepare for that. We intend to work with them for the long term,’ Mr Yap said.

PBA is not the only company whose hiring seems to be picking up, although the big picture remains uncertain.

A wider tentative trend appears to be emerging. Many employers remain cautious but the employment situation in general is starting to look up.

The most recent Manpower Employment Outlook Survey, released quarterly, reflected an about-face in the net employment outlook for the coming three months.

The reading shot up from minus 43 per cent for second-quarter hiring to a positive 5 per cent – indicating that there are more employers who expect to increase hiring than those who expect to cut headcount further in the third quarter.

‘There has definitely been an improvement over the past few months,’ said Mr Josh Goh, assistant director of corporate services at recruitment firm GMP. ‘Instead of contract positions which were very common over the past few months, we are seeing more permanent positions…It shows that clients are more confident of hiring.’

His optimism was echoed by Ms Andrea Ross, managing director of recruiting firm Robert Walters: ‘Companies’ second quarter results have been positive, creating a positive sentiment in the market place.’

Sectors in demand

SECTORS of the economy that are recovering include finance and accounting, information and technology, engineering, health care and retail, experts said.

Mr Andrew Chan, chief executive of TMS Asia Pacific, a hospitality and tourism recruiter, added: ‘There are definitely still opportunities in the marketplace for job seekers…especially in the service industry, in anticipation of the two new integrated resorts.’

Languishing sectors

BUT some industries are still in the doldrums, such as shipping and semiconductors. Also, workers with highly specialised skill sets are still finding it difficult to secure positions.

In the semiconductor industry, ‘especially if you are from the production side, you will have difficulty’, Mr Goh said.

‘And in the engineering sector, certain niche workers may face more challenges landing a job…For these workers, their skill set is very ‘niche’ so it’s hard.’

And even though the number of available jobs has inched up of late, competition has also climbed.

Machine manufacturer Makino Asia did not freeze research and development (R&D) hiring during the downturn, and has seen applicants for these positions rise by up to 40 per cent in the past few months.

‘We are more selective now because everyone counts. Applicants have to be outstanding and a lot more prepared,’ said Mr Lim Poh Leng, Makino’s human resource section manager. Makino has employed more than 10 new R&D engineers since January.

Mr Goh said that GMP was ‘seeing an increase in job applications over the last six months compared to before the recession, for every advertised job’.

‘In the past, there were so many opportunities out there, and those holding jobs were also unlikely to apply. The pool has got wider now,’ he said, adding that it was still unclear whether the worst was now over.

Cautious outlook

MS ROSS agreed that the employment situation is not out of the woods yet. Of the apparent employment upturn, she said: ‘This may be a short-term effect and it may dip again.’

The founder and managing director of NeXT Career Consulting Group, Mr Paul Heng, cited Seagate’s recent announcement that it will lay off 2,000 workers.

‘Companies still remain cautious about hiring extra staff, because from a business perspective they don’t know what will happen in the future. They also are continuing to fire people. Is the worst over? Far from it, and that’s the understatement of the year.

‘Job seekers need to take unconventional approaches and not rely on jobs that are in the open market, that are publicised, but also try to find jobs in the hidden market.’

Source: Straits Times, 10 Aug 2009

Banks woo home-buyers in new ways

Lenders offer innovative and varied products, moving away from old strategy of using low interest rates

THE recent surge in HDB and private home sales has seen a pick-up in the pace of lending among banks, which have come up with new and innovative loan products to lure home-buyers.

Compared to the first quarter, the second quarter saw the number of approvals more than doubled, said Mr Gregory Chan, head of consumer secured lending at OCBC Bank.

‘We continue to see double-digit growth in sales, with a 30 per cent quarter-on-quarter increase in new mortgages as of Q2 2009,’ said Mr Dennis Khoo, general manager of retail banking products at Standard Chartered Singapore.

Banks are introducing more variations in their loan products, not only to seize market share but also, in part, to avoid the old ‘How-low-can-you go?’ war of interest rates.

‘The best mortgage is not necessarily the one with the lowest interest, but the one that best suits a customer’s needs,’ said Ms Sherry Leong, business head for home financial services at Citi Singapore.

‘We consider it important to offer product innovation and differentiation along with good after-sales service that is relevant to our customers’ needs.’

The Straits Times surveyed seven lenders and found many variations of the traditional fixed- or floating-rate mortgages. They include loans that allow changes in loan tenures, offer loyalty discounts, and even a few that earn interest like a savings account.

For example, United Overseas Bank’s latest HomePlus loan allows customers to earn the same interest rates on their deposits – of up to 75 per cent of their outstanding loan amount – in a separate bank account.

According to UOB, customers have the option of using the interest earned to offset their loan’s interest.

Promotional rates for UOB’s HomePlus are now at 1.5 per cent for the first year, 2.99 per cent for the second and 4.5 per cent for the third. But depending on the deposit amount maintained in an account with the bank, an implied interest rate on the home loan can be as low as 1 per cent in the first year and up to 3 per cent in the third year, said UOB.

StanChart’s MortgageOne Optimizer also comes with an offset feature where customers can use the interest earned on their deposits to reduce the interest payable on their home loans.

‘It is a smart money manager that

optimises the deposits and mortgage loans of home-owners…automatically optimising returns by using the lowest interest-earning deposit accounts to offset the highest interest-paying loans,’ explained Mr Khoo from StanChart.

Aside from an interest-offset feature that helps customers pay down their home loans faster, Citi’s Home Saver is also an index-linked home loan that offers customers one of the widest selections of index tenures in the market, ranging from one month to three years.

With that, customers have the flexibility to switch from one tenure to another when the loan hits its maturity date, enabling them to react periodically on when to fix or float their interest rates, depending on their view of market trends.

‘For instance, clients can take advantage of the low one-month Sibor now and then change to a 12-month Sibor later when they feel that interest rates are likely to rise, thereby fixing the rate on their instalments for that period,’ explained Citi’s Ms Leong.

‘Conversely, a client who has chosen a six-month Sibor initially can switch to a one-month Sibor if he believes that interest rates could ease in the coming months.’

However, traditional heavyweights in the home loans market such as DBS Bank, OCBC and Maybank say plain vanilla loans with low fixed or floating rates linked to Sibor, or SOR, continue to remain popular, especially in today’s low interest rate environment.

One particular feature in DBS’ fixed- rate loans is the flexibility – which is usually not available for fixed-rate packages – of allowing customers to partially pay for their loans at any time within the period.

While DBS offers customers more freedom in managing their home loan, HSBC introduced a special feature to keep their customers banking with them.

‘We are the only bank to reward customers for keeping their home loan with us by giving them a loyalty discount, in the form of a year-on-year decrease in the interest rate spread charged,’ said Mr Sebastian Arcuri, head of personal financial services at HSBC Singapore.

‘This benefit is also ‘portable’, giving customers the flexibility of carrying forward their loyalty discount to a new property when they finance it with us.’

HSBC says there is also no lock-in period for its loyalty home loan packages, so customers are not tied down.

HSBC’s Sibor-pegged loyalty packages also come with a year-on-year decrease in the interest rates spread charged in the first three years, unlike conventional home loans, which typically see interest rate spread rise over the loan tenure.

————————————————————————
UOB’S HOMEPLUS:

Allows customers to earn the same interest rates on their deposits in a separate bank account.

Customers have the option of using the interest earned to offset their loan’s interest.

CITIBANK’S HOME SAVER:

Offers customers one of the widest selections of index tenures in the market, ranging from one month to three years.

With that, customers have the flexibility to switch from one tenure to another when the loan hits its maturity date.

HSBC:

Rewards customers by giving them a loyalty discount in the form of a year-on-year decrease in the interest rates charged.

There is also no lock-in period for its loyalty home loan packages, so customers are not tied down.

Source: Straits Times, 10 Aug 2009

En bloc debate, HK style

Territory’s discussion holds up a useful mirror to practices in Singapore

WHEN land is scarce, your right to live in your home ends when your neighbours sell theirs.

This logic applies not just to Singapore – which defied expectations by recently producing its first collective sale offer since the recession took hold – but also to Hong Kong, which is now deep in debate over proposed changes to its compulsory property sale rules.

On the surface, the operative concept in both cities is the same: Urban renewal is expensive, and private capital speeds up the process. The government lends a hand by allowing an estate to be sold even if the sale does not get the unanimous approval of all the owners.

But Hong Kong and Singapore differ in the weight each accords to minority owners. Singapore requires an 80 per cent consent for a sale of a property at least 10 years old, and a 90 per cent approval for a development less than 10 years old.

Meanwhile, Hong Kong has maintained a 90 per cent threshold since the 1990s, with a tribunal giving the final go-ahead after considering a host of factors, including the property’s age and state of repair.

The Hong Kong administration has recently proposed that the threshold be lowered to 80 per cent – but only in cases where all but one unit has been acquired by one party, and where the development is at least 50 years old.

A observer may think this is just a case of laissez-faire Hong Kong playing catch-up, but the territory’s deliberations on the matter actually hold many lessons for the Republic.

For starters, Hong Kong remains protective of minority rights. Even if the proposed change is passed, it would still be harder for the majority of owners in a Hong Kong estate to push though a sale, compared with those in Singapore.

And yet, the opposition to the proposed change in some quarters in Hong Kong has been fierce. The change, they say, is tantamount to a subsidy for developers as it would mean that they would not need to entice as many home owners with a good sale price.

One South China Morning Post reader declared in a letter published on Aug 3: ‘The powers to compulsorily take away private homes are a draconian statutory provision that should be vested only in government – and used only for a defined public purpose. Making a profit for developers is not a public purpose.’

The language is refreshing, considering the tendency here to cast in a negative light those opposing an en bloc sale.

At times, they are made out to seem as greedy home owners holding out for more money, or eccentric seniors unduly attached to their property, or simply stubborn people who will not let their neighbours get on with their lives elsewhere.

Some here may point to Singapore’s public housing programme, where upgrading works are passed with a 75 per cent vote. If the majority can rule in public housing, why can’t it rule in private estates?

But that is hardly a parallel, given that public flat owners who have their homes renovated via a majority vote get to keep their homes whether they approved the upgrade or no. Private home owners have no such comfort.

Another interesting point about the Hong Kong debate is that it gives weight to environmental concerns.

The proposal notes that the normal working life of reinforced concrete buildings – during which they are unlikely to require major repairs – is assumed to be 50 years. Consequently, it sets 50 years as the minimum age for a building which may be subject to a compulsory sale application under the relaxed guidelines.

Given the huge amount of energy and material that erecting a building requires, this safeguard reduces the likelihood of unnecessary demolition waste.

In Singapore, money is by far the biggest measure used to determine whether a collective sale can go ahead.

The Strata Titles Board, which gives such sales the final nod, takes into account the transaction’s sale price, the method of distributing the sale proceeds and the relationship of the buyer to any of the unit owners.

Objections to the sale have to be couched in the language of dollars and cents. The minority owner has to suffer a financial loss or be unable to redeem the mortgage against his home in order for the sale to be called off.

The potential loss of built heritage or good architecture is not a consideration. Neither is the environmental cost of demolishing a building that is in good working condition.

There are mitigating factors of course.

Singapore has a pro-active conservation authority which keeps a look-out for historically and architecturally valuable buildings, and adds them to its protected list. This may lessen somewhat the need for stringent collective sale rules to protect urban heritage.

Singapore is also two-thirds the size of Hong Kong. This means the Republic has a smaller buffer of land and cannot afford to leave decaying buildings untouched for long.

Still, the debate in Hong Kong does hold up a useful mirror to our practices, whichever way that debate pans out.

It has been 10 years since the laws were amended here to allow a private estate to be sold without the unanimous consent of all its owners.

In the most recent property peak in 2007, 111 estates changed hands for $12.4 billion, according to property consultancy CB Richard Ellis.

As the Republic braces itself for the next en bloc wave, it could also cast its eye beyond its shores for clues as to how else it might reshape the Singapore skyline.

Urban renewal, after all, is far from being only a numbers game.

Source: Straits Times, 10 Aug 2009

Slowdown in residential and commercial construction in first half of 2009

SINGAPORE: Analysts said residential and commercial construction projects in Asia have taken the brunt of this economic slowdown.

And with banks and developers still hesitant in committing to such projects without market momentum, experts said these sectors will continue to drag down the Asian construction market.

Government spending has kept the regional construction industry going with public sector projects while private construction projects have been hard hit.

According to construction data firm BCI Asia, residential construction spending across Asia declined by eight per cent on-year, to an average of US$4.8 billion.

Spending on retail and exhibition projects fell by 10 per cent in the same period to US$1.3 billion.

In contrast, spending for infrastructure construction jumped 80 per cent to US$4.8 billion.

Experts said construction for residential and commercial projects will remain slow for the rest of 2009 as developers take their time to re-enter the market.

Philipp Rode, general manager, BCI Asia, said: “Developers actually go through a phase of re-tendering, starting to slowing do the projects again, maybe on a different scale. Maybe they are asking for a different design. That also means they may have smaller units rather than bigger units.”

But it won’t be a completely quiet time for the sector.

With a lack of new projects, observers say new work can be found in upgrading existing buildings.

Louis Lee, director, BCI Asia, said: “What are they going to do about the existing buildings that they have? How are they going to compete? I guess this is where retrofitting will come in handy and this is where they come in to compete.”

Analysts said the quiet commercial and retail construction scene is likely to affect the strong private sectors in developed economies like Hong Kong and Singapore the most.

But experts said that Hong Kong will take the bigger hit. Lacking mega projects like Singapore’s Integrated Resorts, Hong Kong’s construction sector will have little to keep it busy beyond the end of the year.

Source: Channel News Asia, 10 Aug 2009

More boutique hotels in S’pore can spice up hospitality sector: analysts

SINGAPORE: Industry watchers said the boutique hotel sector in Singapore is under-penetrated.

They said there’s room for at least another 10 new ones to spice up the local hospitality scene and to attract more niche travellers looking for something different.

Take a shower right in the middle of the room just a few feet from your bed is what you get to do for about S$385 per night in a basic executive room at Singapore’s latest boutique hotel, klapsons.

The most expensive room, the premium suite, costs US$850 or S$1,225 per night.

Since its soft launch in June, the 17-room hotel, located in downtown Singapore, has attracted bookings from some 250 corporate clients.

Located at 15, Hoe Chiang Road, klapsons will open officially in October.

It took developers three years to put the hotel together.

Initial plans include building a 17-storey commercial development but developers decided to build a four-storey boutique hotel instead due to the downturn.

klapsons’ owner said the building is designed in such a way that more levels can be added at any time.

Adrian Lee, director, klapsons The Boutique Hotel, said: “Right now you have the run-of-the-mill five-star hotel or the other extreme. There’s nothing that fills the gap in the middle which we see ourselves fit very nicely.”

The hotel expects to break-even on its US$7 million (S$10 million) investment in less than seven years.

Another boutique hotel, Naumi which has 40 rooms said it’s banking on leisure travellers for the September Formula One race in Singapore and year-end holiday-makers.

Hament Rai, “Even in these challenging times, we’ve been lucky to be surviving on 80 per cent occupancy. However, we had to compromise 20 per cent of our average room rates to achieve these goals.”

But due to economic uncertainty, Naumi has also shelved plans to expand. It previously said it will open two more boutique hotels in Singapore in the next three years.

As for Quincy which opened in June, it has seen an average of 77 per cent occupancy with 48 per cent of their guests repeat visitors.

Observers said there will be no shortage of business for boutique hotels like these, if they offer value in their services.

Loi Hp, CEO, Tourism Management Institute, said: “They provide very personalised service and they’re unique in terms of room design. And they’re normally located in areas where there’s a heritage background. So in a way, there are still people who want that kind of personalised service and they’re willing to pay for it.”

Most boutique hotels said their main growth markets are in Europe and America, with a proportion of guests coming from Australia.

These are usually well-travelled executives who are willing to pay five-star rates for a different hospitality experience.

Source: Channel News Asia, 10 Aug 2009

Prices at The Claymore reach $2,160 psf

The most coveted address among the traditional prime residential districts is district 9, in the neighbourhood of Claymore Road and Claymore Hill, Ard more Park and Draycott Park and in the vicinity of the American Club and Tanglin Club, just off Orchard Road. Luxury condominiums in both existing and new developments in that area have soared above $2,000 psf in the last two months — which is pretty much back to the levels seen in 1Q2007, near the peak of the recent boom.

At The Claymore, prices are at the levels prior to the Lehman Brothers collapse last September. Last month, a 19th-floor unit in one of the twin towers changed hands for $5.79 million, or $2,160 psf. This is the fourth time the apartment has changed hands in the last 14 years, and it’s the highest price achieved to date for that particular unit. According to URA Realis, the previous owner purchased the unit in early 2005 for $3.2 million ($1,194 psf). Prior to that, it changed hands in September 2000 at $3.45 million ($1,287 psf). In May 1995, the 2,680 sq ft apartment was sold for $3.7 million ($1,380 psf).

The last time a unit at The Claymore changed hands above $2,000 psf was in May 2008, when a 17th-floor apartment was sold for $6.8 million ($2,537 psf). At the peak of the market in July 2007, a 13th-floor apartment was sold at $8.55 million, or $3,190 psf, which set a record for prices achieved at the condo.

Built in the mid-1980s, The Claymore on Claymore Road is one of the few condos sitting on a sizeable freehold site that have not been put up for en-bloc sale. Units in the development are large, with three-bedroom apartments at 2,680 sq ft and four-bedroom apartments at 3,348 sq ft. In early 2007, market rumour was that the owners in the condo had intended to go for a collective sale with an indicative price of $1 billion, but the plan was subsequently aborted.

Next to The Claymore is Hong Leong Holdings’ 85-unit luxurious apartment development, the Tate Residences, which is close to completion. Units there have been changing hands in the sub-sale market at $2,150 to $2,500 psf in the last two months. For instance, a 13th-floor 2,185 sq ft apartment sold for $5.24 million, or $2,400 psf, in early July. Prices today are pretty much back to levels seen in sub-sales done in 1Q2007, which were from $2,391 to $2,545 psf.

Even at Wheelock Properties’ Ardmore II, which is also close to completion, a 2,024 sq ft unit changed hands in a sub-sale at $4.7 million ($2,329 psf) in early June, and word on the street is that the most recent sub-sale for a unit in the freehold luxury condo was done at $2,600 psf, although the caveat has yet to be lodged.

A short distance away is Draycott Eight, a 99-year leasehold, 136-unit luxury condo by Wing Tai Holdings that was completed in 2005. Most recently, a 15th-floor, four-bedroom apartment of 2,896 sq ft was sold for $6.3 million, or $2,176 psf, in a resale. In June, a 1,173 sq ft, two-bedroom apartment on the sixth floor of one of the blocks was sold for $2.23 million ($1,900 psf). Multiple units at Draycott Eight were sold at $2,600 psf in December 2007. And, in April last year, a third floor, four-bedroom apartment was sold in the resale market for $8.3 million, or the top price of $2,867 psf in terms of price psf achieved for the development.

At the corner of Tanglin and Grange Roads is Grange Residences, completed in 2004. Since May, units in the 164-unit development by Wheelock Properties have been changing hands in the resale market at $2,000 psf and above. Most recently, a 2,583 sq ft apartment on the eighth floor of one of the two towers was sold for $5.35 million ($2,071 psf). At the peak of the market, from the mid-2007 to mid-2008, units changed hands for as high as $2,791 psf.

Elsewhere, at the newly completed 545- unit RiverGate condo located at Robertson Quay, which offers amazing views of the Singapore River, the most recent transaction was that of a 3,918 sq ft apartment on the 39th floor. It was sold for $7.37 million, or $1,880 psf. This is pretty much back to the peak-level prices seen in 3Q2007.

Source: The Edge, 10 Aug 2009