in Tiong Bahru and Jalan Membina have traditionally been popular because of their central location. Just a few months ago, a 1,593 sqft executive flat in Mei Ling Street was sold for $628,000.'But I'm surprised the prices there are so high now,' he said. 'I've not seen these prices in recent years. In today's market, paying $100,000 above valuation for an HDB flat is rare.'In most areas, home-buyers usually pay up to $30,000 above valuation for an HDB flat.'Click to see larger imageOne reason in this case could be the great view from the high floor.But Mr Lu attributed the interest in flats in these areas to home-owners who have profited from recent en-bloc sales. This explains why these buyers are able to pay above valuation prices and sometimes even pay up in full for the flats.He said: 'Some people affected by en-bloc sales in these areas, especially those from the River Valley area, are flush with cash.'They may decide to buy the bigger HDB flats now because of the size and location, and also because prices of private properties have climbed too high for them.'That may be the case with Mr Lee's buyer.The buyer, who is believed to have profited from an en-bloc sale recently, is expected to pay the entire sum in cash, said MrLee's agent, MsJaqueline Lee.The buyer declined to be interviewed for this report.Mr Lee did not expect his flat to be sold so fast.Ms Lee held an open house last month, for just two hours.It attracted more than 40groups of people, of which half had sold properties recently in collective sales, said MrLee.It took just a couple of hours before MrLee and a keen buyer agreed on a price, and the deal was clinched the same day.Said Mr Lee: 'I could have held out for more but I was comfortable with the buyer and I think she'll appreciate my place and the location.'He is now looking to rent a four- or five-room HDB flat as his house will be completed only in 2009.But Mr Lee said he would return to buy a flat in the area some time in the future because he loves the view and location.From his unit, he can see the CBD and all the way to Sentosa on a clear day.It takes him just five minutes to drive to the CBD.Said Mr Lee: 'I know the price I got was amazing but it'll go towards buying the other house. I'm not a property speculator, I'm just sacrificing location for a bigger place.'One reason that Mr Lee wants a bigger place is that he needs more room for his 3,000 movie posters, which he started collecting in secondary school.The flat he is selling is about 1,200sqft but his new terrace house will be about 2,700sqft, with five bedrooms.He said: 'One day, I'll move back here. I will definitely miss the view I have now.'When The New Paper visited some estates in the central area, we found the letterboxes littered with flyers from property agents offering to sell the units there.One flyer said: 'We have serious buyers looking to buy their home ONLY in this location.'Property agents have also been busy knocking on doors there, to find those ready to sell their flats.When The New Paper conducted a poll in the area, we were often mistaken for agents.Out of the 50 residents we spoke to, about half were not interested in selling, despite the record prices achieved.The ones who were open to offers wanted high prices, way above the valuation, simply because of the location (See chart on facing page.)But for one home-owner, even a price of $720,000 will not tempt her to leave the estate.Housewife Linda Wee, 48, who owns a five-room flat in that area, said in Mandarin: 'I can walk to Tiong Bahru Plaza and to the MRT station easily.'It's so near and convenient. And it's also easier for my children who work in the CBD area.'If I do sell, it would be hard for me to find a place at that price in this area.' - Additional reporting by YEH WEI XUAN and YVONNE POONSome Bishan sellers make lossesTHOSE who paid record prices for HDB flats earlier can still lose money.The New Paper spoke to one family who paid $770,000 for a Bishan five-room flat in 1997. They recently sold it for under $500,000 - a huge loss of about $270,000, not counting their interest payments.Their loss alone is enough to buy a five-room flat in Yishun.Property agent Daniel Chua said that unlike in Bishan, 'there are fewer executive and five-room flats in the central area which has seen plenty of en-bloc sales.'People who downgrade after enbloc sales want to live in the same area. This drives demand for the HDB flats there up.'Counsellor Jessica Seto, 32, said her family recently sold their 1,550 sqft place on Bishan Street 13. They are moving to a smaller rented flat in Ang Mo Kio.CAN'T PREDICTAsked how she felt about the loss, she said: 'We're just suay (unlucky). We can't predict how the market will move, so it's a matter of luck. We just have to move on.'Click to see larger imageMr Lim Chin Chai showing the roofttop balcony of his masionnette in Bishan, which affords him a clear view as far as the eye can see. -- Picture: Jonathan ChooThey are downgrading from their three-bedroom flat because her older brother has gone to work overseas and her sister is getting married soon.She said: 'There's no point us holding on to the flat till the price recovers because we never know how long we've to wait, or if that day will ever come.'The average valuation of a five-room flat in Bishan is about $378,000, according to HDB figures for the last quarter.But during the property peak of 1996-97, the Bishan flats, especially the big five-room and executive ones were hot.Owners of the high-floor maisonettes, each with a patch of roof garden, sold their flats for more than $800,000.Restaurant manager Lim Chin Chai paid $667,000 for a 1,850 sqft maisonette in Bishan in 2001, when the property market recovered briefly.Mr Lim, who paid $92,000 above valuation for the place, said he thought he had got a good deal, considering that the previous owner had paid more than $800,000 for the flat in 1997.Today, Mr Lim's four-bedroom flat is worth about $550,000.But he is not feeling sore about the paper loss of about $127,000.He said: 'It's about what you want in life. I could've bought a condo then but I just liked this unit with the roof-top balcony. How many such flats are there in Bishan and in Singapore?'His place is like a penthouse with a roof-top garden where Mr Lim spends most of his time.From his balcony, he has an expansive unblocked view of Ang Mo Kio and beyond.Mr Lim said the first owner probably paid about $300,000 when the flat was new some 15 years ago.He took a loan of over $300,000 then, and is paying a monthly instalment of just under $2,000.
AN ARDMORE Park condominium has just smashed the record for the most expensive collective sale in Singapore - less than a week since the last record was set.The Ardmore, a 24-unit freehold property off Orchard Road, was bought by high-end developer SC Global for $262 million, some $40 million above the initial asking price.This works out to an eyebrow-raising $2,338 per sq ft per plot ratio (psf ppr), including a $16.6 million development charge. It far surpasses the last record of $1,788 psf ppr set by Char Yong Gardens in Cairnhill last Tuesday.The Ardmore has also become the first condo here to cross the $2,000 psf ppr mark in a collective sale. Other nearby estates making similar attempts include Grangeford Apartments at Leonie Hill and Elizabeth Heights and Trendale Tower in the Cairnhill area.With this sale, each owner of The Ardmore - which has mainly three-bedroom units of 1,991 sq ft in size - stands to get about $11 million on average. No units have been transacted in the past two years, and the single unit that changed hands in 2005 went for $904 psf.The coveted condo was said to have attracted five other bids from big-name property developers in a public tender that closed last Tuesday. All the bids were close, a sign that developers remain bullish on the highest end of the property market despite the recent sharp run up in prices.Home prices rose 4.8 per cent in the first quarter, after rising 10.2 per cent last year. In the same periods, prices in prime districts shot up 7.3 per cent and 25.4 per cent, respectively.The Ardmore sits on the last site with redevelopment potential in Ardmore Park, one of Singapore's choicest residential districts. Most of the nearby condos are either fairly new or already sold for redevelopment.SC Global's winning offer for The Ardmore means it will have to sell units in the new project at more than $3,300 psf, and likely closer to $4,000 psf, said property experts.Mr Lui Seng Fatt, regional and head of investments at Jones Lang LaSalle, believes these prices are 'doable'.'Ardmore is among the best addresses in Singapore,' he said. 'The price that SC Global is paying for this site is certainly no surprise.'Mr Nicholas Mak, director of research and consultancy at Knight Frank, estimated that the breakeven price for the project could go up to $3,200 psf ppr. He said 45 to 50 new units of about 2,000 sq ft each could be built.The 42,565 sq ft plot can host a new 36-storey development with a total floor area of 119,181 sq ft, SC Global said yesterday. Chairman and chief executive officer Simon Cheong said the group intends to build a high-end luxury condo.'The Ardmore Park address is well-established in the international community as an upmarket residential enclave,' he said in a statement.This purchase brings SC Global's total bill for collective sales since last year to about $1 billion. Last year, it spent $648 million on Paterson Tower, Hilltops Apartments and some terrace houses in Cairnhill.The Ardmore sale is the latest in a string of record-breaking collective sales and comes a day after the Government said it is keeping an eye on fast-rising home prices.Although Minister of National Development Mah Bow Tan said buyers of 'multimillion-dollar' homes in the central regions 'can take care of themselves', he added that it was important to ensure that 'prices do not overshoot'.Last week, the Government released a slew of new residential sites, mainly in suburban areas, in what is being seen as a move to steady the market.fiochan@sph.com.sg
700 units in HDB's second private-developer project will cost about 57% more than those in the first onePUBLIC housing is set to go upmarket by another notch when three 40-storey blocks built by a private developer - the second batch under a hybrid scheme - are completed by 2010.The 700-unit project at the junction of Boon Keng and Bendemeer roads will give residents a clear view of the Kallang Basin and beyond. When ready, the three blocks will join a select number of 40-storey HDB blocks islandwide - 22 - that have already been completed, or would have been around that time.The Boon Keng project - like the first, The Premiere@Tampines - will stand out from other HDB flats with its condo-like finishings like kitchen cabinets, bedroom wardrobes and bay windows. Under this programme, developers have a free hand to design, build, price and sell these flats, which will be available only to those who qualify for public housing.This means that buyers' household incomes cannot exceed $8,000 a month; there is also an ethnic quota. But a buyer can use a government grant of up to $40,000 to offset the price of the flat.The Boon Keng project, developed by a consortium comprising Hoi Hup Realty, Oriental Worldwide Investments and Sunway Concrete Products, will be launched later this year.It will come at a time when, thanks to collective sales of private estates, some cash-rich buyers are chasing up prices of relatively new resale units in mature estates like Tiong Bahru and Queenstown. Last week, a 29th-storey five-room flat in Kim Tian Place was sold for a record $720,000.Mr Wong Chee Herng, director of Straits Construction which owns Hoi Hup Realty, said the Boon Keng units will be priced at an average of almost $500 psf, which would work out to about $645,000 for a 1,290 sq ft five-room flat. This is slightly lower than prices at nearby private condominium Kerrisdale, where new units are selling for about $550 psf, according to estimates by Knight Frank.It is, however, 57 per cent higher than the average price of $318 psf fetched by The Premiere's units.But Mr Wong is confident that the Boon Keng project will sell, and is unfazed about possible competition from executive condominiums - after the Government last week made available a site for such homes for the first time since the last such plot was sold in 2004.He said: 'We don't see a similar project that can compete on pricing and location.' The project is sited in the central area, next to Boon Keng MRT station.Even without these attributes, The Premiere drew close to 6,000 applications for 616 units.Most units in the Boon Keng project will be five-room flats, with up to 35 per cent - or 245 units - comprising three- and four-room flats.Property agents and analysts contacted were divided about the project.While chief executive Mohamed Ismail of property agency PropNex felt the flats were good value for their location, Knight Frank's head of consultancy and research Nicholas Mak felt their relatively higher prices may cause the queue to move slower than the one for The Premiere@Tampines.
(SINGAPORE) Goldman Sachs (Singapore) has argued a case for lifting restrictions on foreigners buying landed homes in Singapore, saying this would serve as a catalyst for further foreign buying of private homes and boost the current residential property upcycle.Its analysis shows that the average price of a top-end bungalow (with a 15,000 sq ft land area) is about $17 million - or 35 per cent below that of a comparable condominium (a 7,500 sq ft unit priced at $3,500 psf), which goes for about $26.3 million.'We think this price gap can narrow to parity or very close to it, should the restrictions on foreign ownership of landed properties be relaxed,' the bank said in a research note dated June 24.'In the event of an across-the-board relaxation of restrictions for landed property, we believe the positive effects would be two-fold: (1) developers with landbank for landed developments would benefit; and (2) all residential developers could gain from even greater foreign buying interest given the positive message such a move would send,' it said.Although the government has made no announcements on the subject, 'we see the possibility of the government relaxing restrictions on foreigners buying landed property as higher than previously, because: (1) discussions with developers have affirmed our view of foreign interest in landed property, and (2) the tone of government policy changes has been firmly pro-immigration ... We think relaxing restrictions on foreigners buying landed property would accelerate Singapore's efforts to attract foreign talent,' Goldman Sachs said in the research note.'In our view, foreigners would like the flexibility of greater choice of housing and the positive signal of Singapore's open door policy emanating from such a move,' Goldman Sachs argued. It added that a relaxation on foreign buying of landed homes would not hurt the national objective of giving Singaporeans a stake in the country by being able to buy and own residential properties at affordable prices as the public housing market addresses this objective.In the first quarter of this year, foreigners accounted for 26 per cent of buyers of private homes, up from 23 per cent in 2006 and 21 per cent in 2005.Under the Residential Property Act, foreigners (including permanent residents) are prohibited from buying landed property without prior approval from the government.Foreigners have to be PRs before they can receive permission to buy landed homes on mainland Singapore; Sentosa Cove is the only location where foreigners who are not PRs are allowed to purchase landed property.Foreigners, including PRs, can at any one time own only one landed home in Singapore and must occupy it themselves rather than rent it out.Among the criteria that the Minister for Law will consider when asked to approve foreigners buying a landed home are the applicant's qualifications and whether the applicant has made, or will be able to make, adequate economic contribution to Singapore.However, foreign buyers may acquire an unlimited number of non-landed private homes - condominiums and apartments.Goldman Sachs acknowledged that 'for now, we note there is still no certainty of any policy change and the nature of change could be restricted to select types of landed property like Good Class Bungalows or cluster housing'.The bank's analysis of 36 landed property transactions at Sentosa Cove between January 2005 and May 2007 showed that Singaporean and foreign buyers each accounted for 44 per cent of purchases, with the balance accounted for by companies.In contrast, Goldman Sachs' study of islandwide private home transactions between January and May this year showed that foreign buyers accounted for just 8 per cent of total landed property deals, lower than their 29 per cent share of non-landed home purchases over the same period. This suggests the scope for a higher share of foreign buying if the landed private housing sector is also opened to foreigners.'We think relaxing restrictions on foreigners buying landed property would not adversely impact demand for condominiums and apartments, given the positive signal such a move would send to foreigners,' the bank said. 'Moreover, we look for a positive spill-over from rising landed property prices to condominiums and apartments.'Goldman Sachs estimates about 2,800 landed homes with written permission for development, the bulk (2,565 units) of which have yet to be sold, will come on stream over the next few years.This supply is almost 4 per cent of the current stock of landed homes in Singapore.Among the developers with exposure to landbank slated for residential housing are Bukit Sembawang, Allgreen Properties, MCL Land, Fragrance Group, and Sing Holdings.
Private-home prices in Singapore rose to the highest in almost 10 years in the second quarter, climbing 7.9 per cent in the second quarter of this year, says the Urban Redevelopment Authority today.The price index of private residential property rose 7.9 per cent to 147.3 points in the three months to June 30 from the previous quarter, which went up by 4.8 per cent, according to the flash estimate released by URA. This the fastest pace in almost eight years and the highest level since the fourth quarter of 1997.The index rose 9.8 per cent across Singapore for the whole of last year.The advance estimates are compiled from transaction prices lodged during the first 10 weeks of the quarter, as well as data from new apartments that have been booked.Singapore's economy is enjoying its longest expansion since 1994, allowing developers to sell apartments at record prices. SC Global Development Ltd. sold its "The Marq" apartments for as much as $5,100 a square foot at the end of June. Home prices in the city could rise as much as 25 percent this year, Citigroup Global Markets said last month.
Teban Gardens sites picked for en bloc redevelopmentTen blocks of HDB flats in Teban Gardens Road will soon make way for en bloc redevelopment.Affected will be 917 sold flats in Blocks 2 to 11, which are between 30 and 31 years. These comprise 672 three-room units, 120 4-room and 125 5-room flats.This will bring the total number of sites identified for the Selective En bloc Redeveloment Scheme (SERS) since its implementation in Aug 1995 to 71.HDB will build some 1,100 units of new 2,3,4 and 5-room replacement flats at Teban Gardens Road to rehouse the flat owners. The replacement flats are located at a convenient location, near the HDB commercial facilities at Block 61 Teban Place and the neighbourhood centre with a market/food centre at Block 37A.This will ensure that the residents will continue to enjoy the current wide range of shopping, eating and market facilities available in the estate.Eligible SERS flat owners will be invited to register for their replacement flats in mid-2008. HDB will also inform all SERS flat owners individually. For further information, they can call the SERS enquiry line at 1800-866 3070.Source: http://www.asiaone.com/A1Home/A1Home.html
Home > Press Releases > Public Housing Resale Prices Public Housing Resale Prices HDB has released data on the transacted prices of resale HDB flats and the Cash-Over-Valuation (COV) amounts in the resale prices. The release of such market data is to assist both flat buyers and sellers in making informed decisions, taking into account the prevailing trends in the HDB resale market.HDB Resale Market2 With robust economic growth and improved sentiments in the property market, the demand for HDB flats has picked up, and this has resulted in a rise of HDB resale flat prices by about 4.2% in the first half of 2007, as reported in the flash estimates of the HDB Composite Resale Price Index. Please see Annex A for the average prices of resale flats by region and flat type in 2Q 2007.3 As for COV, HDB’s records show that not all the resale flats are transacted above valuation or command a high COV premium. Of the resale flats transacted in 2Q 2007, about 70% were transacted above valuation, with the remaining 30% transacted at or below valuation. The average COV amount was about $10,000 overall. Please see Annex B details.4 There are currently about 760,000 flats eligible for transactions in the resale market. Hence there is a wide variety of housing options across location and flat type for flat buyers to choose from, taking into account their budgets and housing aspirations.Upcoming Supply of New Flats for Sale5 HDB monitors the public housing market closely and will adjust its building plans in line with market demand. In response to the rising housing demand, HDB offered about 1,400 new flats under Build-to-Order (BTO) exercises in 1st Half 2007, and is planning to offer about 3,000 new flats under BTO exercises in various towns in 2nd Half 2007. The new BTO supply will complement HDB’s sales programme for completed units, with at least one sales exercise launched per month this year. HDB will provide the details of the flat supply when the sales exercises are launched.Conclusion6 HDB will continue to offer an adequate supply of new flats for sale to flat buyers. There is also a large pool of resale flats in the open market. Potential buyers are advised to take into account the overall market trends, instead of relying on reports of high selling prices for isolated resale transactions, when considering flat purchases. Given the long-term financial commitment of buying a property, buyers are urged to exercise prudence in making their housing purchase decision.
gd move by HDB..hope all those home sellers dun tink dat they are sittin on gold mine & trying 2 sell their houses at high cash..i've seen houses..on 2nd floor..facing or below dustbins,minor renovations..askin 40k cash.. Huroso agents stop smoking & pressurising buyers 2 buy b4 price gets higher..
To calm the public. Another stunt by the mighty gahment.Yalor yalor.....the idiot whom wrote this article should follow me to view a 3-room flat on offer recently.House is a total mess and needs 99% renovation...only 67m2 and the owner got the cheek to ask for 200k + 20k cash!!!!! And its a 36 year old flat!!!!! Hur Hur Hurand u know what.....the unit was sold within a week!!!!! duno which suxer took the bait. Unimpressed Unimpressed Unimpressed
The figures released can be very misleading.It encompasses hdb flats in all areas including less popular estates such as Jurong West, Sembawang, Woodlands, Sengkang/Punggol, Yishun and Pasir Ris. The report says only 7 out of 10 units are abv valuation which makes it look like prices are not escalating out of control, but the truth is, quite a big proportion of pple lives in the above estate which I mention, hence, bringing down the overall avg COV to 10K and making the resale cases of selling abv valuation to only 7 out of 10. However, outside of these areas, the truth is, HDB flats are going at crazy prices. If you want to buy a resale flat and live in any areas such as Toa Payoh, Clementi/Dover, AMK, Bishan, Marine Parade (let's not even talk abt the more centralised locations such as Redhill,Tiong Bahru and Queenstown), it is not likely you can get anything lower than 40K abv valuation these days.HDB will then ask you to lower your expectations by considering to move to less convenient areas like Jurong West, Woodlands, SK/Punggol and etc instead if you cannot afford so much cash abv valuation. Problem is, how many willing to do so? If you have stayed in Toa Payoh all your life, maybe you would not mind relocating to AMK, but would you be prepared to move to Woodlands or Yishun?
Singapore (dpa) - The property market in Singapore is the "world's hottest" for major real estate investments, Jones Lang LaSalle (JLL) said Thursday in a new study.The firm cited astounding rental growth and rising values for the strong showing in the first half of this year.Capital values of prime property in the city-state have soared 50 per cent in the past six months alone, said JLL's report in The Straits Times.The study tracked properties that sell for more than 5 million US dollars around the world, which are mostly commercial buildings.Property investments worldwide rose for the sixteenth quarter in a row, reaching a record 382 billion US dollars in the first half of this year, up 17 per cent from a year ago.The bulk of these deals were made in the United States, where investments jumped 32 per cent to 171 billion US dollars. They rose 4 per cent to 157 billion US dollars in Europe, the study said.Asia-Pacific property investments climbed 12 per cent to 55 billion US dollars,
From: Dchin 14-Sep 23:46 To: university of ang mo kio (Phd candidate) (whitehorse88) 61 of 88 152526.61 in reply to 152526.58 For those harping on price fall. Take note of the followings:1) Worldwide inflation2) China higher wages and property prices, PRC no longer export deflation, they are exporting inflation soon3) Worldwide price appreciation of primary products as well as commodities such as oil4) India is now outsourcing its IT needs due to high wages when it was once a destination for outsourcingAnd from Singapore perspective.1) Starting wages of new graduates in 2007 is $2800 as compared to in 1993 at $17002) Property price appreciation in Singapore started in end 2006 while HK and Taiwan property moved up in 2004 till now.3) Strong economic growth in South East Asia overall.You can wish for prices to fall, and if it does fall, it is a good buying opportunity as the world wide trend of inflation is here to stay. The good news is that current inflation is accompanied with strong economic growth worldwide, very similar with the 70s inflation but unlike the early 90s inflation which lack economic growth. If your parents had not missed the property appreciation in the 70s, you will probably be owning at least a piece of landed property by now. Chances are that a lot of people had missed out on the price appreciation of the 70s due to high interest rate and low income. Would you prefer to hold cash during high inflation period? or would you rather hold on to hard asset that would appreciate in value in tandem with inflation.All these talk abt price falling in time of inflation is totally rubbish!! And let me allow you to think further. Who are the buyers of enbloc sales, issit any TOM, your neighbour DICK or the big developers with economic advisors and bankers backing them? Would they buy now if they think price will fall 2 years down the road?
From: ChinChaiOne 15-Sep 10:51 To: Dchin 66 of 88 152526.66 in reply to 152526.61 Although you made good points, I am of the opinion that you are optimistic.1. Inflation - Although inflation will affect the cost of building, the margins of gains for developers is high enough to make a profit by lowering prices to buyers.Developers don't become billionaires for no reason.You are also generalising by saying India is outsourcing. It is NOT a true concept. They are actually outsourcing to THEMSELVES. Becos in most cases they have already bought over the "high value added" companies that were above the chain.Singapore's perspectiveThe wage numbers are not to be believed as it is just a sample, and those are based on small numbers working for MNCs, Investment banks..etc.Just as is happening in the sub-prime mess in the US, jobs will be lost when the sudden surge of foreign money slowly stops. Altho' new money will still come in, the rate will not be that quick.As we have seen in the 70s and 80s, alot of foreigners were working for the banks. It will happen again when more foreigners (FT policy) will be engaged by foreign banks/investment banks. The locals who took the positions now will be due for retrenchments when they hit 35-40.What's happened in the past two years is NOT true. The spike in housing prices only occurred late last year.Where is the "strong" economic growth? Strong economic growth will be indicated by:1. Strong retail numbers (which we don't have)2. Strong property prices (which in the heartlands and HDBs are NOT moving by much)3. Strong stock market (altho we are in a bull market, it has been fluctuating like crazy and many analyst has already said our stocks are OVER priced)I really hate it when people compare property prices in the 60s when you can get a nice terrace for only $10-20k.You have to look at money in real terms.My father who was a police officer then, salaries was less than $200 per month or something.Put it this way, our property prices, excluding of landed, freehold and prime districts are still way off the 1997 prices.The enbloc sales value does not equal the potential. A simple way to think of it, is that whatever they demolished, they can build twice or more the current no. of apartments.Higher stories, smaller apartments, more blocks...leads to MORE money, BUT NOT necessarily HIGHER prices.Just an example.A client of mine bought a landed property about $1.5M some years back. He has now broken up his land and built three semi-Ds. He stand to make some $1M cool profits. If he were to sell this very landed property, he won't be able to get it.
From: makapa 15-Sep 04:58 To: ALL 152613.1 S'pore housing market heads for correctionPrivate home prices, which have surged to decade highs in the past 40 months, are holding for now, but analysts say the market is increasingly vulnerable to a sudden downturn in sentiment. -- PHOTO: BTSINGAPORE'S housing market - which has seen prices skyrocket amid frenzied buying - is heading for a correction, as analysts predict a building boom could flood the city-state with new homes by 2009.Private home prices, which have surged to decade highs in the past 40 months, are holding for now, but analysts say the market is increasingly vulnerable to a sudden downturn in sentiment.Global property investor LaSalle Investment Management, which has US$6 billion (S$9 billion) of real estate assets in Asia, says Singapore residential property is 'fully priced' and will consolidate before appreciating any further.'By global standards, Singapore luxury apartments are very expensive. At some point, affordability and common sense have to come in,' said Jack Chandler, LaSalle Investment Asia-Pacific Chief Executive Officer.Property developers and agents say fewer deals were struck last month, slowing a buying frenzy that saw people queue overnight for some projects and that pushed Singapore real estate price gains past those of regional rivals such as Hong Kong.'A correction is going to take place. The question is: how severe?' said Winston Liew, analyst at OCBC Investment Research.Singapore luxury homes fetched an average $16,743 per square metre (psm) in June, up 52 per cent from a year ago, against Hong Kong's 13 per cent rise in capital values to $18,286 psm.Those who bought property as a sure-fire investment are fretting.'I'm nervous because I don't expect prices to rise anytime soon. The signals aren't good,' said Charles Wong, who paid S$1.1 million (US$728,000) for a one-bedroom downtown apartment in April.Excess supplyHousing supply has been tight as developers tore down old developments to replace them with newer properties, pushing thousands of displaced homeowners back to the market.According to Jones Lang LaSalle, some 3,876 private apartments will be demolished this year - more than the 3,295 new homes expected to come on to the market.These 'en bloc' deals - where entire housing estates are knocked down - have slowed since the government tightened rules on them. Collective home sales totalled S$11 billion in the first seven months this year but dropped to S$783 million in August.Property market sentiment has been supported by Singapore's long-term goal to boost the island's population to 6.5 million from 4.5 million, but analysts forecast a glut of new homes from end-2008.'In terms of actual occupants, there will be excess supply by 2009,' said Jones Lang LaSalle Head of Research Chua Yang Liang.He estimates there will be 11,975 new private apartments available in 2009 - nearly four times the number expected this year and double the anticipated amount in 2008.Car garages in the skyAt least four out of five Singaporeans live in state-subsidised high-rise flats, leaving the private home market dependent on upper-income residents and foreigners.Investment firm Emirates Tarian Capital is betting these foreign investors, who comprise nearly half the buyers in most projects, will focus increasingly on high-end homes.'Demand is going to be selective and for branded, quality projects where the quantity is limited,' said Kunalan Sivapuniam, managing partner of the firm, which is investing in two high-rises including one 30-storey block equipped with individual lifts to bring owners' cars up to each apartment.Developers, who usually sell their projects in stages, have held off launching their units for sale in recent weeks.'If we feel the market is slowing, we're not going to push the project only to have buyers back out later,' Cheng Wai Keung, chairman of luxury home builder Wing Tai Holdings said.Crunch timeAnalysts say a global credit crunch could constrain Singapore property firms' ability to offer liberal repayment schemes that allow buyers to make a 10 to 20 per cent deposit and delay the bulk of payment until the property nears completion.These 'deferred payment' plans, introduced after a property slump in 2001, have been key to driving market growth, with up to 90 per cent of buyers in some projects opting for them.In July, the central bank warned that delayed payments plans posed 'additional risks' to developers and their banks because of the possibility of default. Those risks have only grown with the US mortgage crisis.'If the cost of capital rises, smaller developers will find it harder to offer deferred payment schemes,' said an analyst.Singapore's biggest developer CapitaLand said it would continue to offer such schemes 'where appropriate'.CapitaLand, City Developments and Keppel Land have posted strong second-quarter profits, driven by strong contributions from their Singapore businesses.They should, however, be largely protected against a fall in housing prices as most have diversified into office property and housing developments outside Singapore. CapitaLand, for example, earns up to 80 per cent of its profit overseas.'Major developers have lower gearing, sufficient cash or unutilised credit lines to prevent a squeeze,' wrote Deutsche Bank strategist Gregory Lui in a recent report. -- REUTERSLatest commentsThe markets had been going up too fast and its not a surprise tht it is consolidating now. This is healthy for the mkts. Over all i do not think the mkts will hav a correction. One will hav to be patient and investments will make money.Posted by: nealsahni at Sat Sep 15 02:54:54 SGT 2007
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Topic: [Focus] Singapore housing market (Read 37113 times)
