Time to lower home prices
Property developers should consider this step to lure back buyers
WHEN a property boom here ends, the first casualty is usually home supply. Sure enough, the Government put a stop to new land sales early this month, as it did in the last two downturns, making it as good an indicator as any that a property slump had arrived. Developers have also been cutting supply throughout the year, pushing back en bloc redevelopments and putting some launches on hold indefinitely.
But though reducing supply is necessary to prevent the market from collapsing, it is clearly inadequate as a cure at this point. No land plots have changed hands for months, new launches have slowed to a trickle - and yet buyers are still not biting. Property ads have dried up and showflats are starting to resemble ghost towns. When sales came to a standstill this year, developers blamed the financial crisis and government policy actions, such as the removal of the deferred payment scheme. But house hunters pointed to just one reason: Home prices are still too high.
The economy has shrunk for the first time since 2001, mass retrenchments are on the cards, and monthly sales of new homes have plummeted so much that experts warn total sales this year could reach an 18-year low. Yet private home prices - at least according to the Urban Redevelopment Authority’s (URA) price index - have not dropped by much. Prices are already falling, pushed down by smaller developers squeezed for cash and individual home sellers anxious to offload their units.
A boutique condominium in the Novena area reportedly gave significant discounts - from over $1,300 psf down to just under $1,000 psf - after the financial crisis hit hard in October. At soon-to-be-completed developments such as City Square Residences in Kitchener Road, prices have fallen from a high of over $1,000 psf last year to less than $800 psf for some units in recent months. Lowering prices will bring buyers back into the market. Many have been waiting on the sidelines since early last year, when prices starting shooting up beyond their means. Evania, a 35-unit condo in Upper Paya Lebar, moved 15 units last month after dropping prices from nearly $900 psf in March to just above $600 psf. That’s a whopping 30% discount!
Source : Straits Times - 31 Dec 2008
For sale: 1,181 new HDB flats of all sizes
Flats in Choa Chu Kang, Punggol will be offered under built-to-order plan
THE Housing Board is bringing down the curtains on a busy year with one more sales exercise - this time for 1,181 flats in Choa Chu Kang and Punggol. It is offering everything from studio apartments to five-room flats, with prices ranging from $58,000 to $428,000.
The second project - Punggol Regalia - is at the junction of Punggol Field and Punggol Place and near the future Punggol Town Centre. It offers premium flats with 546 four-room and 183 five-room units, priced from $252,000 to $428,000 each. They are around $33,000 to $86,000 cheaper than similar resale flats nearby of about six years old, said the HDB. The HDB has said it will ramp up supply to around 4,000 units over the next two years to meet surging demand. Source : Straits Times - 31 Dec 2008
Medium- to long-term prospects for S’pore property sector still strong
Singapore’s commercial and residential property sectors will remain attractive to investors in the medium to long term. Property watchers told Channel NewsAsia that is because of Singapore’s status as an international financial hub.
2009 looks set to be a difficult year by all accounts, but market watchers said property investment fundamentals here remain strong. As global financial institutions cut costs, they are likely to move operations out of expensive cities in the US and Europe to Asian countries such as Singapore, where the cost of doing business is cheaper. For example, Singapore’s corporate tax rate is 18 per cent, compared to 29 per cent in the UK and 40 per cent in the US. And this could spur demand for office space in financial centres like Singapore, presenting investment opportunities for the commercial property sector.
Christopher Fossick, managing director, Southeast Asia, Jones Lang LaSalle, said: “Financial institutions are growing, in many cases from hundreds to thousands of jobs here in Singapore. The bigger these institutions become, the more real estate they need.” But there are opportunities in the residential market as well. The closing gap between debt servicing and rentals, as well as falling valuations in 2009, could see many investors looking for a good deal.
Eugene Lim, associate director, ERA Asia Pacific, said: “For example, those in district 9, 10, and 11, they tend to be more elastic, the prices. So when the economy is not doing too well, the prices come down quite a lot, especially amongst those who have, for example, bought from the developer and then now need to sell to raise cash flow. They are prepared to cut losses.” Observers said Singapore’s property market will offer rich pickings to investors who have their eyes on long-term returns.
Source : Channel NewsAsia - 30 Dec 2008
DTZ expects 2009 to echo property price plunge of 2008
Prime district property prices fall by 20%; similar decline seen in 2009
Prices of condominiums and apartments in the prime districts have fallen by more than 20 per cent in 2008 on a year-on-year basis, says DTZ. DTZ is also forecasting a further decline of 15-20 per cent for this segment of the market in 2009. Based on its preliminary analysis of official data, DTZ said that prices of non-landed freehold private homes in the prime districts fell by 14 per cent quarter-on-quarter (qoq) in the fourth quarter of 2008.
Overall average prime prices fell 21.6 per cent year-on-year (yoy) to $1,160 per square foot (psf), below the level of $1,200 psf registered in Q207. The fall in prices follows dismal developer sales in October and November with only 112 and 192 units sold in the primary market respectively, compared to the monthly average of 444 units sold in the first nine months of the year. DTZ said that based on caveats lodged, preliminary data from URA’s REALIS showed that the number of transactions in the year is only about 35 per cent of last year’s 38,100 units.
DTZ said that average monthly rents of prime non-landed homes decreased in Q408 by 9.4 per cent QoQ or 9.2 per cent yoy to $4.36 psf. Outside the prime districts, rents held up better with an increase of 2 per cent yoy, despite a fall of 1.2 per cent qoq.
The extent of price corrections is still uncertain but Nomura has already adjusted its forecasts. In March, it forecast average prices in the luxury sector to fall by 32.3 per cent from the 2007 peak over 2008-2010 - 16.9 per cent in 2008, 10.3 per cent in 2009 and 9.3 per cent in 2010. It now expects luxury prices to fall 43.8 per cent from the peak, and mass residential prices to fall 32.1 per cent as yields move out by an additional 25-50 basis-points.
Source : Business Times - 30 Dec 2008
Retail rents expected to fall in 2009
Retailers likely to be cautious in expansion, rents may undergo corrections to reflect the gloomy outlook
RENTS for prime retail space in Orchard Road could fall by as much as 13 per cent in 2009, while rentals at suburban malls are expected to ease by about 3 per cent, property analysts here said. Cuts in consumer spending will be the key threat to rental rates. But rents will also come under pressure from the 3.2 million square feet of new retail space expected to come onstream next year - close to half of which will be along Orchard Road.
Source : Business Times - 27 Dec 2008
Private properties looking attractive
What to look out for when hunting for that perfect condo or house
THE recession has resulted in a 25-per-cent fall in private- property prices from their market peak, and with prices expected to dip further next year, there may be opportunities to pick up some bargains. Here are 10 tips to keep firmly in mind.
1 CONSIDER LANDED
The executive director of HSR Property Group, Mr Eric Cheng, feels that if buyers are willing to fork out $1.2 million to $1.3million for a condominium, they should consider buying landed property instead. Due to land scarcity in Singapore, there is always more demand than supply for landed property, which is not the case with condos, said Mr Cheng.
2 INSTALMENT RESERVE
Mr Cheng said it is important to invest within your means. Have a reserve of at least one year’s worth of instalments in case of shocks, like a loss of income.
3 LEASING OR LIVING?
Mr Arvin Sylvester Lim, division director of Century 21 SHL Realty, said it is important to be sure if you plan to live in the property or rent it out. If you are making it your home, the equation is simple: Find something that you like and can afford. If you are looking to invest and rent out, do your research to see if there is good demand in an area, and if the rent will be enough to cover the instalment payment and still allow a profit.
4 DON’T WAIT TOO LONG
While one should hold back until one finds something ideal, Mr Lim does not encourage overspeculating on trends. “Buying a house is not like buying a car. The moment you drive the car…the value drops, but with property the value can go up or down,” he said. Even though prices are expected to fall further, “a home is a must”, Mr Lim said. He advises against pegging buying one to unpredictable market movements.
5 MAKE OFFERS FAST
Buyers who bought too many properties or can’t afford to keep up with payments, given the weak economy, will be selling off their investments now, said Mr Shannan Govindarajoo, marketing manager at ERA. He suggests you start looking and making reasonable offers as he thinks more buyers will be entering the market, which could mean prices for these “must-sell” properties may rise.
6 CHECK MASTER PLAN
Look at the Urban Redevelopment Authority’s master plan and invest where the Government is pumping in money, said Mr Govindarajoo. For instance, he thinks those interested in the Marina area should strike now, as prices are down by 40 per cent, compared to last year’s. Mr Lim said investing in property in that area will reap great returns when the integrated resort is ready as “a lot of the management staff will be living there, so rentals will be high”.
7 SHOP FOR A LOAN
Banks are now becoming more cautious with making home loans and how much they are willing to lend, said Mr Govindarajoo. He advised shopping around for a good home loan first, so that you do not commit yourself to a seller before knowing how much you have to work with.
8 PRICE VS VALUATION
Check the valuations of the property you are considering at different banks to make sure you’re getting a good deal, said Mr Govindarajoo.
9 OLDER CONDOS
Mr Parthiban Sadagopal, a Prop- Nex realtor, suggests buying a condo “between seven and 10 years old in the outskirts”, like Pasir Ris or Tampines. Judging from the trend seen after the 2003 recession, such condos are good buys for living in and investment, as you could hope to buy one at $400,000 to $500,000 now and sell it for up to $800,000 when the economy picks up. Renting it out could fetch $3,000 a month as well.
10 DISTRICT 15
Keep your sights on the East Coast area of District 15, said Mr Cheng, as prices there are unlikely to dip drastically. Good schools, malls and eateries add value, making it a good option for those who feel prime locations are too expensive. Meyer Road, Ceylon Road, Telok Kurau and Crane Road are some of the best places to buy a house, according to him. Mr Govindarajoo agrees, saying District 15 is “evergreen”.
Source : AsiaOne - 26 Dec 2009
Property market now shows classic signs of downturn
Analysis of Q3 caveats by DTZ points to new trends relating to subsales, foreign buying, HDB upgraders
THREE classic signs of a Singapore property downturn have emerged in the third quarter - a slide in subsales and foreign buying, but a bigger share of HDB upgraders in the private home buying pie.
Property consultancy DTZ’s analysis of caveats for private home purchases shows that total subsales of non-landed private homes fell 8 per cent to 473 units in Q3 from the previous quarter. The number of subsale purchases involving units priced at least $1,000 psf fell 24.2 per cent quarter-on-quarter to only 213 transactions, accounting for 45 per cent of overall subsales of non-landed private homes in Q3, against 54 per cent in Q2 2008.
The number of foreign buyers (including permanent residents) of private homes (both landed and non-landed) slid 6 per cent quarter-on-quarter to 903 in Q3. Also, these buyers made up 22 per cent of total private home deals in the quarter, down from 25 per cent in Q2.
DTZ senior director (research) Chua Chor Hoon said: ‘A large proportion of foreigners buy for investment. Hence when prices are falling, there is less interest. Furthermore, with economies and property markets slowing down all over the world, many of the foreigners have been affected back home and they may pull out their overseas investments.’
HDB dwellers tend to make up a bigger proportion of private home buyers during a property downturn. ‘Many of them are buying for owner occupation. Some may be sitting pretty on gains on their existing HDB flats which they bought directly from the HDB some years ago.
Source : Business Times - 2 Dec 2008
Property no longer a safe asset
Real estate used to be the ultimate all- weather asset class, with low correlation to volatile stocks and unexciting bonds. But in today’s debt-starved market, property is not the safe haven it once was.
Trusted property market tenets have been deformed by an acute shortage of debt and a worldwide souring in economic fundamentals, leaving the sector in a deep rut - awash with equity and rich with discounts but bereft of buyers. Before, property rental income could rise even if values fell and as one regional market sagged, another flourished. But now, property market misery is universal and many of the world’s biggest investors are standing on the sidelines.
‘Things are going to be a difficult for quite a while,’ Robert Houston, chairman and chief executive of of ING Real Estate Investment Management, told Reuters. ‘Everyone wants to know when the bottom of the market is. I have a good record at calling these things and all I’m prepared to say is that we haven’t reached it yet.’ Like the majority of its peers, ING has slowed the pace of its real estate investments in recent months, refusing to gamble capital when the only thing it feels sure of is that property prices worldwide will continue to fall.
Source : Business Times - 2 Dec 2008
Half of Marina Bay Sands retail space taken up
Singapore’s Marina Bay Sands integrated resort will unveil details of plans for its retail space after the Chinese New Year in January next year. Recent reports said its parent company, Las Vegas Sands, is facing financial difficulties. But the Singapore firm remains confident about prospects for its retail business. The S$5.4-billion Marina Bay Sands project is still being built. When completed, it will have 800,000 square feet of retail space which can house about 300 stores.
The resort said half of that space has already been taken up, and will feature over 30 brands that are new to Singapore. David Sylvester, vice president, Retail Development Asia, Las Vegas Sands, said: “We will have a lot of leading-edge retail… It will be a mixture of European, some American brands, some Japanese, some Korean.” Marina Bay Sands said it would start marketing campaigns to attract more retailers to lease shops at the resort from February next year. These efforts will include trade shows and talks in Europe.
However, there are currently no plans to adjust rentals to match the slowing economy, and Sands remains positive about the future. “Obviously, there have been a lot of concerns about the economic environment globally, but everybody has been very positive on the Marina Bay Sands because by the time we open, we are talking about end of 2009. We’ve got to think that things will turn around by then,” said Mr Sylvester.
Source : Channel NewsAsia - 4 Dec 2008
Life after DPS won’t be crippling for developers
Study shows they can weather even 20% default rate by buyers under scheme
A NEW report, which looks at the potential impact if buyers who bought homes under the deferred payment scheme (DPS) choose to walk away from their deals, concludes that developers are not likely to be too badly hit even under a 20 per cent default scenario. The report by DBS Group Research captured the impact of defaults in projects expected to get their Temporary Occupation Permit (TOP) in 2009 on developers’ earnings, operating cash flow, net gearing and interest cover. For this analysis, analyst Adrian Chua covered two default scenarios: 10 per cent and 20 per cent of all DPS units defaulting. Both scenarios assume the developers do not resell the default units within the year.
But among the developers, the smaller players would be more impacted in terms of proportional decline in earnings and interest cover, the report concludes. It investigated the impact of defaults on six developers - CapitaLand, City Developments, Ho Bee Investment, Keppel Land, UOL Group and Wing Tai. Developers dispute this view. Developers DBS Research spoke to have maintained the likelihood of default risk is low, given that speculation in 2006-07 did not reach the property bubble levels of 1995-96, the firm said in the note. The research note concluded that while a 20 per cent default is not likely to hurt developers too much, the effect of DPS defaults is just one of a few challenges facing the developers in 2009.
Source : Business Times - 4 Dec 2008
Waiting for the storm to hit…
Going by past recessions, it could take nine more months before prices fall
FOR first-time flat seekers like Mr Neo Tze Siang, the economic downturn was meant to provide some respite from HDB prices pushed skyhigh by the property boom last year. But despite the raft of job cuts and the gloomy economic forecasts trotted out, HDB prices are showing few signs of sliding. “We hear about private property prices falling substantially but the current prices of new HDB flats do not seem to reflect the market realities. When the tide goes down, you would expect all ships to move down. But it seems that new HDB flats are not part of the ocean,” lamented Mr Neo, a 28-year-old salesman.
According to industry players, the wait could be at least another nine months - if prices do come down at all - no thanks to the slew of foreigners and private property downgraders eyeing the HDB rental and resale markets respectively, which indirectly pushes up the prices of new HDB flats. Said Dennis Wee Group director Chris Koh: “Whenever you have a recession, the first to be hit would be the private property market. So, a lot of people will start downgrading from private homes to HDB flats.”
And in the first nine months of the year, HDB’s resale price index rose 12.4 per cent, rising by 4.2 per cent in the third quarter. Reiterating how HDB “followed the market and moved prices downwards” in the aftermath of the Asian financial crisis a decade ago, a HDB spokesperson reiterated that the Government “remains committed to ensure that HDB flats are affordable to the vast majority of our citizen families, especially young married couples and the lower-income households”. Source : Today - 4 Dec 2008
Eyes on demand as govt keeps land supply in check
Analysts hope for measures to boost buying, such as stamp duty rebates
THE government yesterday kept the lid on the supply of state land for development. All eyes in the market now are on what measures the state will come up with to stimulate property demand.
The Ministry of National Development (MND) has decided not to add any new sites to the Government Land Sales (GLS) Programme for first-half 2009. The slate for the first six months of next year - comprising entirely reserve list sites, as previously announced - consists of a total 38 sites. These 38 land parcels can potentially yield about 7,920 private homes, 512,000 sq metres gross floor area (GFA) of commercial space and 5,160 hotel rooms.
Giving an update on land supply in January-June 2009 from government agencies, outside the GLS Programme, MND said there will be no new supply of private homes and a reduced supply of commercial space. Welcoming the latest announcement from MND, a spokesman for the Real Estate Developers Association of Singapore said: ‘This further confirms to the market the authorities are mindful of market conditions at the moment and (we) do not need to add further uncertainties.’
JP Morgan analyst Chris Gee said: ‘It’s less of a supply side situation right now. The issue is what can be done to help stimulate demand. All eyes are turning to the Budget statement in January.’ He reckons temporary exemptions on stamp duty and property taxes could be possible measures.
Source : Business Times - 5 Dec 2008
Costs up, but S’pore far cheaper than rivals
WITH inflation and fluctuating exchange rates, Singapore has leapt 27 places up the global rankings of the world’s most expensive cities to live in. The consolation for the Republic is, its regional rivals have seen costs balloon far more astronomically. Will all this make Singapore a more attractive option for expatriates and international companies setting up base here?
Singapore International Chamber of Commerce chief executive Phillip Overmyer said multinational companies were now “trying to understand what would happen after the economic crisis”, and how to serve emerging markets after the turmoil dies down. “With the lower cost of living in Singapore, it will encourage companies to put its analysts here, such as market researchers and R&D personnel,” he said. “It would support companies to use Singapore as regional headquarters for Asia.”
The Singapore expat community, said Mr Overmyer, is different than it was ten years ago, when the expats held top positions in companies. “Increasingly, the expats tend to be here for the learning experience and in mid-level positions with less generous packages,” he said. “But if Singapore remains relatively less expensive, we would still be more attractive.”
Source : Today - 5 Dec 2008
URA plan draws strong interest
THE Master Plan 2008 - an ambitious blueprint setting out Singapore’s physical development for the next 10 to 15 years - has attracted plenty of attention from the public. Its exhibition received more than 200,000 visitors over the past six months, and about 300 submissions have been made - 80 per cent of them online - according to the Urban Redevelopment Authority (URA) yesterday.
It contains ambitious schemes to transform Jurong East, Kallang and Paya Lebar into sub-metropolitan hubs of offices, hotels, education and entertainment centres, parks and homes. Some of the feedback included calls for the allocation of space for activities in Paya Lebar Central. The Station Plaza in front of the Paya Lebar MRT station and the plaza space next to the civic centre at Geylang Serai were cited as possible venues.
Feedback on the Leisure Plan was generally positive, including comments from members of the public that they were excited about the 150km round-island route, added the URA. Suggestions were also made on ways to enhance Jurong Lake District to improve transport with people movers and river taxis.
Source : Straits Times - 6 Dec 2008
Best Asia-Pac property bets
TOKYO, Singapore and Hong Kong have emerged tops in the Asia-Pacific in a recent ranking of cities with the best property investment prospects for 2009. They were placed first, second and third respectively as investors shifted their attention from emerging cities to mature markets, the survey by America’s Urban Land Institute (ULI) and PricewaterhouseCoopers (PwC) showed. Shanghai, which was ranked first in last year’s survey, fell to fifth place this time around. Beijing fell from sixth to 12th place and Ho Chi Minh City from eighth to 13th. Survey respondents said 2009 is the time to be ‘picky about markets and partners’, ULI and PwC said in the report, which was released here yesterday.
In recent years, many investors who had been elbowed out of deals in major Asian cities by core funds or highly leveraged private equity players sought refuge in secondary locations or products in an effort to find value. In today’s environment, however, investors are again focusing on prime assets in major locations. At the same time, projects in secondary markets or even in less well-positioned prime areas are more likely to run into problems, especially as slowing growth lowers demand for commercial properties. Respondents were also asked to rate cities according to their riskiness. Tokyo, Singapore and Sydney were the three markets seen as least risky.
In Singapore, the strongest buy and hold recommendations were for the hotel sector - 65 per cent of respondents advised holding, 24 per cent recommended buying and only 9 per cent suggested selling. The residential rental sector was also a strong ‘hold’ (65 per cent). But 23 per cent recommended selling and only 11 per cent advised buying. Singapore’s office sector was rated a ‘hold’ by 54 per cent of respondents, while 23 per cent advised buying and 21 per cent recommended selling. For the industrial/distribution property sector, 52 per cent of respondents gave ‘hold’ recommendations, 34 per cent advised buying and 13 per cent said ’sell’.
The survey, based on 180 respondents ranging from global investors, property developers and brokers, looked at the investment and development prospects of 20 metropolitan markets in the Asia-Pacific region. ‘Asia shares the same liquidity crisis that the rest of the world is facing,’ said Stephen Blank, ULI’s senior resident fellow for finance. ‘Financial institutions - whether international or national, regional or local - are reluctant to extend credit as deleveraging reduces balance sheet lending capacity.’ And for Singapore, besides the credit squeeze, another problem is the seemingly generous pipeline of development projects which may be completed during a period of sagging interest from foreign business investors, said PwC tax partner David Sandison.
Source : Business Times - 6 Dec 2008
More than 70% of Park Central @ AMK sold
Mainboard-listed United Engineers has sold more than 70 per cent of its first public housing project, Park Central @ AMK, which is being developed by its subsidiary Greatearth Developments. All four-bedroom and penthouse units are sold out. The developer received more than 2,300 applications or four times the number of units available for sale when submissions closed in August. The 578-unit estate is the third Design, Build and Sell Scheme (DBSS) project in Singapore.
Source : Channel NewsAsia - 11 Dec 2008
S’pore expected to be first Southeast Asian country to recover
Singapore may be the worse-hit Southeast Asian country in the current economic crisis, but it could well be the first economy in the region to rebound, according to economic forecaster Thierry Apoteker. A jump in US consumer confidence in November is just one of the indicators that could signal signs of a global recovery next year. Consumer confidence index rose in November to 44.9, up from 38.8 in October which was the lowest on record. Coupled with signs of liquidity tensions loosening up, it is suggested that banks may start lending to corporations soon which could put the US on a recovery path.
“We have the initial tentative signs that this is taking place. The spreads between money market rates and the fed rates have declined substantially. Not yet to the normal zone but substantial, compared to the rates of 300 basis points that we have seen after the Lehman collapse,” said Dr Apoteker.
Increased spending in the US and Eurozone would translate to an increase in demand for exports from Asia. And while global trade numbers may pick up, Dr Apoteker expects a slower growth rate of between 4 and 5 per cent, as opposed to the almost 10 per cent growth in 2006. He added that he expects the US and Eurozone to see signs of recovery in the second quarter of 2009, with Asia following suit in the third quarter.
And although Singapore will be hit by slowing trade, its strong asset base and robust financial sector will boost its economic recovery. “What’s very interesting is that the other transmission mechanism – both on the asset market and the financing mechanism in Singapore – is pretty strong, much stronger than most. “We’ve done an exercise of mapping the banking systems of all the Asian countries to look at where the strengths and the weaknesses are, and you might be interested to know it is rated 1 to 64 in binary ranking. “Singapore is the only country, apart from Japan and Korea, to have a number one ranking. The financial background is very strong, so as a trading outpost you will be very badly affected, but you will be the first to recover after that.”
Source : Channel NewsAsia - 11 Dec 2008
High-end projects take a knock, suburban condos edge higher
High-end prices fall 12-28%, while mass market projects climb 1-7%: study
Fresh data on home transactions compiled by Credo Real Estate confirms that prices of high-end housing projects have fared far worse than suburban condo prices between second-half 2007 and second-half 2008. Credo’s study shows that average prices of high-end projects generally posted declines, ranging from 12 to 28 per cent during the period. In contrast, the average prices of units in selected projects in the mass market generally rose 1 to 7 per cent.
This is partly due to differing buyer profiles in the two segments. ‘Suburban condo buyers usually make their purchases for their own use and less as a tool for investment or speculation, unlike buyers in the high-end segment,’ Mr Singh says. ‘Prices are not a perfect science at the high-end due to the profile of the rich and foreign buyers who make up a good proportion of demand. They’re less price sensitive and the products are less homogeneous; if there’s something they like, even if it is priced at a premium, they’re quite happy to buy it,’ Mr Singh says.
Credo’s sample looked at Four Seasons Park condo, Ardmore Park and Cairnhill Crest in the Orchard Road belt, which showed average transacted prices fell 27, 12 and 17 per cent respectively in H2 2008 over H2 2007.
At Sentosa Cove, Credo’s sample basket comprised The Azure, The Berth and The Oceanfront condos. The declines were 22 per cent for The Azure and 28 per cent for The Oceanfront. In the city centre, the average price at Marina Bay Residences fell 17 per cent to $1,985 psf in H2 2008 with five deals done. At The Sail @ Marina Bay, the average price slipped 14 per cent to $1,811 psf, with 42 deals in H2 2008. In the mid-priced segment - defined as the low-$1,000 psf price range - One Amber, Sky@Eleven and The Tessarina - saw average transacted prices fall 19, 21 and 17 per cent respectively.
However, suburban Singapore demonstrated greater price resilience. Average transacted prices of eight of nine projects studied in the west, east and north posted 1 to 7 per cent gains in H2 2008 over H2 2007.
Source : Business Times - 11 Dec 2008
4-room flat sold for record $495,000
NEWSPAPER vendor Goh Wee Kiat, 48, refused to budge on his price when he put his four-room Housing Board (HDB) flat up for sale six months ago despite the softening property market. His persistence reaped dividends when the flat, in Marine Parade, was sold for a staggering $495,000 in late October. That is $65,000 above valuation. It was a record price paid for such a four-room flat in the area, and it came as a surprise to industry watchers, considering the quiet property market and bleak economic climate.
In September, another four-room flat in that same ‘lucky’ block located at Marine Terrace was sold for a then-high of $490,000. Both flats are about 33 years old. ‘I know that flat prices here are good because of the view and location. That was why I was quite stubborn about my price. And I dared to ask for a high price because my unit is also on a high floor.’These buyers are willing to pay a forward price, where they pay a premium, because they think the price of the flat will appreciate in the future.’
Source : The New Paper - 12 Dec 2008
Private residential launches on the up…
… as prices of high-end private properties move down
PRIVATE home launches and sales were up last month after a dismal October. The number of private residential units launched more than doubled from October’s 159 to 382, and units sold increased from 118 to 192, according to the data released by the Urban Redevelopment Authority (URA) yesterday. Analysts said the jump in units launched reflects developers clearing stock and testing sentiment.
“I wouldn’t jump to the conclusion that the holding power of developers is beginning to wane,” said Mr Karamjit Singh, managing director of Credo Real EstateGiven that financial markets were less volatile last month, he said developers could be launching units to “test the waters”, and to see how receptive the buyers are right now. “In the next three to four months, if banks are more eager to lend and developers lower their prices psf, this combination could spur the buyers back into the market,” said Mr Ku Swee Yong, director of marketing and business development from Savills Singapore.
Source : Today - 16 Dec 2008
Tuesday, January 27, 2009
Property News Upfront - Nov 08
Launches of private homes in Oct drops almost 80% on month
Only 159 private homes were launched in October this year - the lowest in more than a year.
The slide of almost 80 per cent from the 767 units launched in September is due to poor economic conditions, and the technical recession that has hit Singapore. About 194 units launched in August 2008, during the traditionally slow market in the seventh lunar month.
The central region made up almost half the new launches in October, at 74 units. The number of
new homes sold in October also fell to 112 units from 373 a month ago.
Homebuyers stayed out of the market in October as confidence was shaken by financial turmoil and news of job cuts. And buyers were only willing to spend on properties that offered value for money. “Price is a factor in today’s market. Projects priced well in very good locations have a strong take up,” said the head of research and consultancy at Jones Lang LaSalle, Chua Yang Liang.
Analysts expect the housing market to stay weak. Dr Chua said: “This pendulum effect we see in
supply and demand will continue going into next few months as developers try to ascertain what the demand is. Buyers being sensitive to market news will continue to fluctuate in their behaviour.” Analysts also say new home sales could hit lows not seen since the 1997 Asian financial crisis. Source : Channel NewsAsia - 17 Nov 2008
Home loans harder to get as prices fall
Check if bank can meet unit’s valuation to avoid overpaying for the property. A couple of telling anecdotes illustrate the unexpected glitches that home buyers can face as property prices start to fall. A Spring Grove condominium unit owner was denied the chance to take advantage of lower interest rates by refinancing his devalued property without coughing up more hard-earned cash.
The owner had to make up the shortfall because the reduced value of the Grange Road unit meant the bank could not extend a large enough loan. Another buyer had to cancel his purchase recently after he learnt that banks’ valuation of the property was less than what he was supposed to pay.
Amid poor demand and falling prices, banks are sticking to lower property valuations in
anticipation of further price falls. ‘OCBC Bank engages independent, third-party valuers to determine the open market value of properties and there has been evidence of a fairly strong downward trend in property valuation,’ said its head of consumer secured lending Gregory Chan. Source : Sunday Times - 16 Nov 2008
About 50 homebuyers walked away from deals in October
But trend not likely to escalate as it was a month when bourses tanked
THE number of private homes returned to developers shot up last month on the back of a sharp dive in confidence due to the stockmarket crash.
Homebuyers returned 50-odd units to developers in October, compared with 10-plus units each in the preceding month and in October last year. The figures were estimated by BT from statistics on developers’ sales released by the Urban Redevelopment Authority (URA) yesterday. The figures exclude executive condos.
October also saw developers launching and selling the lowest number of private homes since URA started making monthly housing sales data available in June last year. Developers sold 112 private homes in October, down about 70 per cent from 376 units in the preceding month and 80 per cent below the 566 units sold in October last year. The 159 private homes developers launched last month was also 79 per cent lower than September and 75 per cent below that in the same year-ago period. Source : Business Times - 18 Nov 2008
Long term measures to help HDB mortgage defaulters
The Housing and Development Board (HDB) will continue to keep tabs on flat owners who default on their HDB mortgage payments. It stressed that long term measures to help these owners manage their mortgage payment is the best solution, and that compulsory acquisition of the flat is a last resort.
As of October 2008, some 33,000 flat owners owed HDB arrears of three months or more. They
make up less than 8 per cent of the 420,000 households with outstanding HDB loans. Giving this
update in Parliament on Tuesday, Parliamentary Secretary for National Development Mohamad
Maliki Osman said home owners should buy within their means.
But he recognised that there are some who are affected by the economic downturn and one option for them is to downgrade to a smaller unit. More 2 and 3-room HDB flats will be coming on stream next year to cope with the growing demand for smaller flats. Source : Channel NewsAsia - 18 Nov 2008
Retail rents flattens as consumer spending slows
The dip in consumer spending due to the economic downturn has caused concerns among many
retailers who are paying top dollar for retail space. Market watchers said they do not expect any
rental growth in the 4th quarter, but some retailers may be holding out for concessions.
Orchard Road, Singapore’s prime shopping district, is set to welcome four new malls next year -
ION Orchard, 313@Somerset, Orchard Central and The Mandarin Gallery.
The four-storey Mandarin Gallery will have 130,000 square feet of retail space, with rental rates ranging from S$12 to S$60 per square foot. About half of the space has been leased.
The landlord said it will find ways to help tenants cope with the tougher business climate, but it said cutting rents may not be best thing to do. OUE said it will try to woo shoppers to the mall with brands that are new to the Singapore market.
Many tenants along the shopping belt are locked in to their rental rates for up to three years, with the option to negotiate new deals thereafter. Analysts said high-end retailers tend to have the upper hand during such negotiations compared to mass market retailers.
“If the landlord feels that this tenant is important, if it’s a part of the mall’s image that he is trying to build up, he may be a bit more flexible in the rental negotiations. And it’s not just rentals, it could be other terms or incentives like rent-free periods,” said Nicholas Mak, director of Consultancy & Research at Knight Frank. Tan Huey Ying, director of Research & Advisory at Colliers International said: “It depends on when the economy is going to recover. But if the two integrated resorts were to proceed and open as scheduled, then I think there is some likelihood that the market may see a revival in the second half of 2010 or the first half of 2011.”
Source : Channel NewsAsia - 19 Nov 2008
Funds waiting to grab cheap Asian properties
They are raising funds for direct property investments in the region as values slide
AS property values in Asia slide, hedge funds, private equity funds and pension funds are waiting in the wings to swoop in on good buys, according to KPMG’s global head of real estate, Jonathan Thompson. ‘We’re aware that some (hedge funds and private equity funds) have been raising money for distressed situations,’ Mr Thompson told BT.
Investors have been on the lookout. Just last month, Merrill Lynch completed fundraising for its
Asian Real Estate Opportunity Fund, collecting some US$2.65 billion to invest in real estate assets and companies.
Reuters also reported on Wednesday that AMP Capital Investors is trying to raise up to S$2.9
billion for direct property investments in Asia. The Australian fund manager hopes to purchase
Japanese shopping malls at a bargain as falling sales hit retailers and credit tightening squeezes
landlords. Industrial buildings and offices beyond the main financial district in Singapore are other potential targets.
Pension funds are also showing more interest in Asian real estate, said Mr Thompson. According to him, these investors are drawn to growing economies with a structural shortage of properties. The economies would also have to be politically stable, with transparent and sound regulatory systems. ‘(Singapore and Australia) are the easiest countries to invest in,’ he said. Across Asia, Mr Thompson believed that ‘the fundamentals for real estate are better than they are in Europe or America’. But because of the global economic slowdown and tighter credit, property values in Asia will continue to fall. Source : Business Times - 22 Nov 2008
Private home rents may fall 15%
Selling prices of top-end units could drop by up to 22% in months ahead
PRIVATE home rents in Singapore are set to drop by up to 15 per cent next year, as the reality of a slowing economy hits home. Property consultants say landlords are expected to become more flexible, given factors such as ongoing job cuts. ‘The quarters ahead should, however, see a more entrenched rental decline as demand weakens in the face of a global economic slowdown,’ said the report.
Given that the full force of the financial crisis erupted in mid-September, the rental property market has yet to feel the full impact, Savills Singapore said. In terms of top-of-the-market rents, known as prime rents, it expects a fall of 7 to 13 per cent next year. Another consultancy, Knight Frank, is projecting a bigger fall of 10 to 15 per cent in average islandwide rents next year. ‘Some landlords are already cutting rents to retain tenants. We may see more aggressive cuts by landlords if more multinational companies cut their headcounts,’ said Knight Frank’s director of research and consultancy, Mr Nicholas Mak. Next year, landlords in prime areas will have to contend with even more competition as more condos are completed. ‘Those who have advertised for a few months are willing to lower their asking rents but many others continue to hold on to the same asking levels.’
A renovated 1,650 sq ft unit at Pinewood Gardens at Balmoral Park is now available at $6,000 a
month or $3.64 per sq ft - already lower than most other done deals at the development - but a
potential tenant is willing to take it at only $5,000 a month or $3.03 psf, she said.
Source : Straits Times 21 Nov 2008
Savills sees over 20% drop in luxury home prices
Announced forecast for period ending 2009 grimmest yet by any consultancy
Savills Singapore is predicting price drops of more than 20 per cent in the next five quarters for
high-end and super-luxury private homes. This would follow declines of 14.3 per cent and 12 per
cent respectively for these two segments in the first nine months of 2008 from the peak in Q4 last year.
The forecast is probably the grimmest announced by a property consultancy here - although some rival firms BT spoke to yesterday said that privately, they have similar estimates. Research analysts at stockbroking houses/banks have already been making downbeat pronouncements, predicting declines of about 30 per cent or more for luxury home prices byl end-2009.
In its report yesterday, Savills said that the high-end and super luxury segments are more vulnerable to the deteriorating global investment climate. The average capital value for high-end (non-landed) residential homes fell to $2,065 per square foot in Q3 2008, 4.6 per cent lower than the preceding quarter and 14.3 per cent below the Q4 2007 peak of $2,410 psf.
In the super luxury league, the average capital value slipped to $3,240.40 psf in Q3, down 5.2 per cent from the preceding quarter and 12 per cent lower than the Q4 2007 figure.
The fundamentals of the mid-tier and mass-market segments are stronger today than during the Asian Crisis downturn, partly due to Singapore’s more open immigration policy, Savills said.
However, Savills expects rental demand drivers to weaken in coming quarters. Savills’ residential leasing head Patrick Lai says: ‘The inflow of expats is expected to slow down, although we’re still seeing an influx of foreign talent into Singapore, particularly in the healthcare, pharmaceutical, R&D and logistics industries.’
Source : Business Times - 21 Nov 2008
REAL ESTATE AGENTS: Downgraders, bargain hunters are
main clients
THE real estate industry is keeping its head above water as a result of bargain hunters attracted to the falling prices and home owners downgrading to smaller, cheaper properties.
The higher number of sales transactions has translated to better pickings for property agents. Major agencies contacted say they have had better sales for lower-end housing in the last three months.
PropNex’s stable of 5,000 agents sold more than 400 condominium units in the price range of
$1,000 per sq ft or less in that period, up a quarter from the preceding three months.
Sales of HDB flats and low-end landed houses have also jumped 10 per cent.
HSR Property Group, the largest agency here with 8,500 agents, is selling about 2,500 flats and
low-end condo units a month - 5 per cent more than three months ago.
At Dennis Wee Properties, sales - particularly of three and four-room flats - are ‘going strong’.
Two recent launches from the housing board also saw brisk activity, with applicants outnumbering the number of available flats by more than 10 times.
The rise in number of transactions for lower-end units more than makes up for the fall in that for high-end properties, said industry experts, who cite an average 7 per cent drop for that sector.
The downturn has made for good times for agents.
The executive director of HSR Property Group Eric Cheng said in good times, new agents join the industry because they think it is easy to make a quick buck. The pie is split among more people. ‘But in a downturn, the number of agents falls and each tends to earn more,’ he added.
Mr Ryan Tan, 40, for example, has sold 12 properties this month, up from five last month. His
clients are moving from prime areas to the suburbs, with many saying they need the extra cash.
His clients would know what it is like to be in the shoes of teacher C.Y. Leow, 51, who sold her
five-room private apartment in Somerset two months ago after losing $150,000 in Minibond
investments - money that was to be her retirement nest egg. She and her family will move into a
five-room Bishan flat next month- a move that nets her about $750,000.
PropNex chief executive Mohamed Ismail said the business seems recession proof. ‘At the end of
the day, everyone needs a roof over their heads. An agent will always have a job in any market.’
Source : Straits Times - 24 Nov 2008
S’pore govt will not implement measures to stimulate property
sector
The Singapore government will not introduce measures to stimulate demand or prop up prices
artificially in the property sector.Speaking at an industry event on Wednesday, National
Development Minister Mah Bow Tan said such efforts are not sustainable.
Developers are feeling the heat from the economic downturn, credit crunch and poor consumer
confidence, and many new project launches have been shelved. To boost property demand, some
developers hope the government could relax some of its policies, such as reviving the Deferred
Payment Scheme, reducing the development charge rate and introducing property tax exemptions. Source : Channel NewsAsia - 26 Nov 2008
Buyers paying less cash for HDB resale flats
Some deals may be done at valuation but no drop in prices; big flats moving slowly
THE private home market is at a standstill and prices have fallen as the global financial crisis scares buyers away. Yet, the HDB resale flat market remains active and prices are still fairly strong. However, there are increasing signs that this segment of the market is no longer immune to the economic slowdown. ‘In view of the current sentiment, HDB resale flat valuations should stay flat going forward,’ said Mr Lim. ‘So if COV is coming down, prices will eventually come down.’
Prices, however, will not plunge as there is a large base of potential buyers, he said.
Within the HDB market, the segment for small flats will likely be busier than the one for bigger
flats. Already, property experts say the market for bigger flats - five-room flats and executive flats - have started to slow down. ‘In challenging times, homebuyers tend to spend less by falling back on what is deemed a safer and more affordable housing option’ than private homes, according to a recent ERA study.
It also noted that HDB resale flat sales volume was steady in 1997 when the Asian financial crisis
began. The following year, when retrenchments rose, sales volume actually shot up by 57 per cent to 49,618 units. ‘Many people were downgrading from private properties to HDB flats,’ explained Mr Lim. - MR EUGENE LIM, associate director of ERA Asia Pacific
Source : Sunday Times - 30 Nov 2008
Only 159 private homes were launched in October this year - the lowest in more than a year.
The slide of almost 80 per cent from the 767 units launched in September is due to poor economic conditions, and the technical recession that has hit Singapore. About 194 units launched in August 2008, during the traditionally slow market in the seventh lunar month.
The central region made up almost half the new launches in October, at 74 units. The number of
new homes sold in October also fell to 112 units from 373 a month ago.
Homebuyers stayed out of the market in October as confidence was shaken by financial turmoil and news of job cuts. And buyers were only willing to spend on properties that offered value for money. “Price is a factor in today’s market. Projects priced well in very good locations have a strong take up,” said the head of research and consultancy at Jones Lang LaSalle, Chua Yang Liang.
Analysts expect the housing market to stay weak. Dr Chua said: “This pendulum effect we see in
supply and demand will continue going into next few months as developers try to ascertain what the demand is. Buyers being sensitive to market news will continue to fluctuate in their behaviour.” Analysts also say new home sales could hit lows not seen since the 1997 Asian financial crisis. Source : Channel NewsAsia - 17 Nov 2008
Home loans harder to get as prices fall
Check if bank can meet unit’s valuation to avoid overpaying for the property. A couple of telling anecdotes illustrate the unexpected glitches that home buyers can face as property prices start to fall. A Spring Grove condominium unit owner was denied the chance to take advantage of lower interest rates by refinancing his devalued property without coughing up more hard-earned cash.
The owner had to make up the shortfall because the reduced value of the Grange Road unit meant the bank could not extend a large enough loan. Another buyer had to cancel his purchase recently after he learnt that banks’ valuation of the property was less than what he was supposed to pay.
Amid poor demand and falling prices, banks are sticking to lower property valuations in
anticipation of further price falls. ‘OCBC Bank engages independent, third-party valuers to determine the open market value of properties and there has been evidence of a fairly strong downward trend in property valuation,’ said its head of consumer secured lending Gregory Chan. Source : Sunday Times - 16 Nov 2008
About 50 homebuyers walked away from deals in October
But trend not likely to escalate as it was a month when bourses tanked
THE number of private homes returned to developers shot up last month on the back of a sharp dive in confidence due to the stockmarket crash.
Homebuyers returned 50-odd units to developers in October, compared with 10-plus units each in the preceding month and in October last year. The figures were estimated by BT from statistics on developers’ sales released by the Urban Redevelopment Authority (URA) yesterday. The figures exclude executive condos.
October also saw developers launching and selling the lowest number of private homes since URA started making monthly housing sales data available in June last year. Developers sold 112 private homes in October, down about 70 per cent from 376 units in the preceding month and 80 per cent below the 566 units sold in October last year. The 159 private homes developers launched last month was also 79 per cent lower than September and 75 per cent below that in the same year-ago period. Source : Business Times - 18 Nov 2008
Long term measures to help HDB mortgage defaulters
The Housing and Development Board (HDB) will continue to keep tabs on flat owners who default on their HDB mortgage payments. It stressed that long term measures to help these owners manage their mortgage payment is the best solution, and that compulsory acquisition of the flat is a last resort.
As of October 2008, some 33,000 flat owners owed HDB arrears of three months or more. They
make up less than 8 per cent of the 420,000 households with outstanding HDB loans. Giving this
update in Parliament on Tuesday, Parliamentary Secretary for National Development Mohamad
Maliki Osman said home owners should buy within their means.
But he recognised that there are some who are affected by the economic downturn and one option for them is to downgrade to a smaller unit. More 2 and 3-room HDB flats will be coming on stream next year to cope with the growing demand for smaller flats. Source : Channel NewsAsia - 18 Nov 2008
Retail rents flattens as consumer spending slows
The dip in consumer spending due to the economic downturn has caused concerns among many
retailers who are paying top dollar for retail space. Market watchers said they do not expect any
rental growth in the 4th quarter, but some retailers may be holding out for concessions.
Orchard Road, Singapore’s prime shopping district, is set to welcome four new malls next year -
ION Orchard, 313@Somerset, Orchard Central and The Mandarin Gallery.
The four-storey Mandarin Gallery will have 130,000 square feet of retail space, with rental rates ranging from S$12 to S$60 per square foot. About half of the space has been leased.
The landlord said it will find ways to help tenants cope with the tougher business climate, but it said cutting rents may not be best thing to do. OUE said it will try to woo shoppers to the mall with brands that are new to the Singapore market.
Many tenants along the shopping belt are locked in to their rental rates for up to three years, with the option to negotiate new deals thereafter. Analysts said high-end retailers tend to have the upper hand during such negotiations compared to mass market retailers.
“If the landlord feels that this tenant is important, if it’s a part of the mall’s image that he is trying to build up, he may be a bit more flexible in the rental negotiations. And it’s not just rentals, it could be other terms or incentives like rent-free periods,” said Nicholas Mak, director of Consultancy & Research at Knight Frank. Tan Huey Ying, director of Research & Advisory at Colliers International said: “It depends on when the economy is going to recover. But if the two integrated resorts were to proceed and open as scheduled, then I think there is some likelihood that the market may see a revival in the second half of 2010 or the first half of 2011.”
Source : Channel NewsAsia - 19 Nov 2008
Funds waiting to grab cheap Asian properties
They are raising funds for direct property investments in the region as values slide
AS property values in Asia slide, hedge funds, private equity funds and pension funds are waiting in the wings to swoop in on good buys, according to KPMG’s global head of real estate, Jonathan Thompson. ‘We’re aware that some (hedge funds and private equity funds) have been raising money for distressed situations,’ Mr Thompson told BT.
Investors have been on the lookout. Just last month, Merrill Lynch completed fundraising for its
Asian Real Estate Opportunity Fund, collecting some US$2.65 billion to invest in real estate assets and companies.
Reuters also reported on Wednesday that AMP Capital Investors is trying to raise up to S$2.9
billion for direct property investments in Asia. The Australian fund manager hopes to purchase
Japanese shopping malls at a bargain as falling sales hit retailers and credit tightening squeezes
landlords. Industrial buildings and offices beyond the main financial district in Singapore are other potential targets.
Pension funds are also showing more interest in Asian real estate, said Mr Thompson. According to him, these investors are drawn to growing economies with a structural shortage of properties. The economies would also have to be politically stable, with transparent and sound regulatory systems. ‘(Singapore and Australia) are the easiest countries to invest in,’ he said. Across Asia, Mr Thompson believed that ‘the fundamentals for real estate are better than they are in Europe or America’. But because of the global economic slowdown and tighter credit, property values in Asia will continue to fall. Source : Business Times - 22 Nov 2008
Private home rents may fall 15%
Selling prices of top-end units could drop by up to 22% in months ahead
PRIVATE home rents in Singapore are set to drop by up to 15 per cent next year, as the reality of a slowing economy hits home. Property consultants say landlords are expected to become more flexible, given factors such as ongoing job cuts. ‘The quarters ahead should, however, see a more entrenched rental decline as demand weakens in the face of a global economic slowdown,’ said the report.
Given that the full force of the financial crisis erupted in mid-September, the rental property market has yet to feel the full impact, Savills Singapore said. In terms of top-of-the-market rents, known as prime rents, it expects a fall of 7 to 13 per cent next year. Another consultancy, Knight Frank, is projecting a bigger fall of 10 to 15 per cent in average islandwide rents next year. ‘Some landlords are already cutting rents to retain tenants. We may see more aggressive cuts by landlords if more multinational companies cut their headcounts,’ said Knight Frank’s director of research and consultancy, Mr Nicholas Mak. Next year, landlords in prime areas will have to contend with even more competition as more condos are completed. ‘Those who have advertised for a few months are willing to lower their asking rents but many others continue to hold on to the same asking levels.’
A renovated 1,650 sq ft unit at Pinewood Gardens at Balmoral Park is now available at $6,000 a
month or $3.64 per sq ft - already lower than most other done deals at the development - but a
potential tenant is willing to take it at only $5,000 a month or $3.03 psf, she said.
Source : Straits Times 21 Nov 2008
Savills sees over 20% drop in luxury home prices
Announced forecast for period ending 2009 grimmest yet by any consultancy
Savills Singapore is predicting price drops of more than 20 per cent in the next five quarters for
high-end and super-luxury private homes. This would follow declines of 14.3 per cent and 12 per
cent respectively for these two segments in the first nine months of 2008 from the peak in Q4 last year.
The forecast is probably the grimmest announced by a property consultancy here - although some rival firms BT spoke to yesterday said that privately, they have similar estimates. Research analysts at stockbroking houses/banks have already been making downbeat pronouncements, predicting declines of about 30 per cent or more for luxury home prices byl end-2009.
In its report yesterday, Savills said that the high-end and super luxury segments are more vulnerable to the deteriorating global investment climate. The average capital value for high-end (non-landed) residential homes fell to $2,065 per square foot in Q3 2008, 4.6 per cent lower than the preceding quarter and 14.3 per cent below the Q4 2007 peak of $2,410 psf.
In the super luxury league, the average capital value slipped to $3,240.40 psf in Q3, down 5.2 per cent from the preceding quarter and 12 per cent lower than the Q4 2007 figure.
The fundamentals of the mid-tier and mass-market segments are stronger today than during the Asian Crisis downturn, partly due to Singapore’s more open immigration policy, Savills said.
However, Savills expects rental demand drivers to weaken in coming quarters. Savills’ residential leasing head Patrick Lai says: ‘The inflow of expats is expected to slow down, although we’re still seeing an influx of foreign talent into Singapore, particularly in the healthcare, pharmaceutical, R&D and logistics industries.’
Source : Business Times - 21 Nov 2008
REAL ESTATE AGENTS: Downgraders, bargain hunters are
main clients
THE real estate industry is keeping its head above water as a result of bargain hunters attracted to the falling prices and home owners downgrading to smaller, cheaper properties.
The higher number of sales transactions has translated to better pickings for property agents. Major agencies contacted say they have had better sales for lower-end housing in the last three months.
PropNex’s stable of 5,000 agents sold more than 400 condominium units in the price range of
$1,000 per sq ft or less in that period, up a quarter from the preceding three months.
Sales of HDB flats and low-end landed houses have also jumped 10 per cent.
HSR Property Group, the largest agency here with 8,500 agents, is selling about 2,500 flats and
low-end condo units a month - 5 per cent more than three months ago.
At Dennis Wee Properties, sales - particularly of three and four-room flats - are ‘going strong’.
Two recent launches from the housing board also saw brisk activity, with applicants outnumbering the number of available flats by more than 10 times.
The rise in number of transactions for lower-end units more than makes up for the fall in that for high-end properties, said industry experts, who cite an average 7 per cent drop for that sector.
The downturn has made for good times for agents.
The executive director of HSR Property Group Eric Cheng said in good times, new agents join the industry because they think it is easy to make a quick buck. The pie is split among more people. ‘But in a downturn, the number of agents falls and each tends to earn more,’ he added.
Mr Ryan Tan, 40, for example, has sold 12 properties this month, up from five last month. His
clients are moving from prime areas to the suburbs, with many saying they need the extra cash.
His clients would know what it is like to be in the shoes of teacher C.Y. Leow, 51, who sold her
five-room private apartment in Somerset two months ago after losing $150,000 in Minibond
investments - money that was to be her retirement nest egg. She and her family will move into a
five-room Bishan flat next month- a move that nets her about $750,000.
PropNex chief executive Mohamed Ismail said the business seems recession proof. ‘At the end of
the day, everyone needs a roof over their heads. An agent will always have a job in any market.’
Source : Straits Times - 24 Nov 2008
S’pore govt will not implement measures to stimulate property
sector
The Singapore government will not introduce measures to stimulate demand or prop up prices
artificially in the property sector.Speaking at an industry event on Wednesday, National
Development Minister Mah Bow Tan said such efforts are not sustainable.
Developers are feeling the heat from the economic downturn, credit crunch and poor consumer
confidence, and many new project launches have been shelved. To boost property demand, some
developers hope the government could relax some of its policies, such as reviving the Deferred
Payment Scheme, reducing the development charge rate and introducing property tax exemptions. Source : Channel NewsAsia - 26 Nov 2008
Buyers paying less cash for HDB resale flats
Some deals may be done at valuation but no drop in prices; big flats moving slowly
THE private home market is at a standstill and prices have fallen as the global financial crisis scares buyers away. Yet, the HDB resale flat market remains active and prices are still fairly strong. However, there are increasing signs that this segment of the market is no longer immune to the economic slowdown. ‘In view of the current sentiment, HDB resale flat valuations should stay flat going forward,’ said Mr Lim. ‘So if COV is coming down, prices will eventually come down.’
Prices, however, will not plunge as there is a large base of potential buyers, he said.
Within the HDB market, the segment for small flats will likely be busier than the one for bigger
flats. Already, property experts say the market for bigger flats - five-room flats and executive flats - have started to slow down. ‘In challenging times, homebuyers tend to spend less by falling back on what is deemed a safer and more affordable housing option’ than private homes, according to a recent ERA study.
It also noted that HDB resale flat sales volume was steady in 1997 when the Asian financial crisis
began. The following year, when retrenchments rose, sales volume actually shot up by 57 per cent to 49,618 units. ‘Many people were downgrading from private properties to HDB flats,’ explained Mr Lim. - MR EUGENE LIM, associate director of ERA Asia Pacific
Source : Sunday Times - 30 Nov 2008
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