23 Feb

More than half of released Bartley Residences units sold

With discounts of up to 20 per cent, its no wonder more than half the Bartley Residences units released yesterday were snapped up by eager home buyers. Prices range from $610,000 for a one-bedroom unit to slightly more than $2 million for  a dual-key unit.

Hong Leong Group yesterday sold 65 units at Bartley Residences at an average price of $1,240 per square foot after a discount of up to 20 per cent. During yesterday’s preview, it released 120 units in the 702-unit, 99-year leasehold private condo next to Bartley MRT Station. According to Hong Leong, 90 per cent of the buyers at yesterday’s preview were Singaporeans and permanent residents. The absolute price of a one-bedroom unit ranges from approximately $610,000 to $670,000; a two-bedroom unit ranges from $970,000 to $1.1 million; a three-bedroom unit is between $1.2 million and $1.4 million; a four-bedroom ranges from approximately $1.65 million to $1.9 million; and a dual-key unit ranges from around $1.8 million to $2.1 million. The average price psf of $1,240 is after absorption of 18 per cent (including the standard 3 per cent buyer’s stamp duty discount, and 3 per cent early bird discount), and an additional 2 per cent district discount.

Bartley Residences near Bartley MRT Station.

Said HSR Property Group’s special adviser, Donald Han: ‘The figures are encouraging because the launch is in the middle of the week. I sense this development will gather pace towards the end of the week, and that might give a truer reflection … The developers may have launched it (on Tuesday) more to get a sense of ground sentiment.’ Added Lee Sze Teck, senior manager at DWG Research and Consultancy: ‘At $1,240, the developer is aware of market conditions and is clearly pricing the project at the right level.’

The project – developed by Bartley Development, a joint venture between Hong Leong Holdings, City Developments, and TID Residential – is located next to Bartley MRT Station, and offers a range of unit types, from one-bedroom units (463 sq ft) to four-bedroom units (1,345-1,377 sq ft), and dual key units (1,603 sq ft). In January, the consortium won a 99-year leasehold private condominium housing plot at Mount Vernon Road. Their bid came in at $388.1 million, or $495 per square foot per plot ratio. ‘They’re certainly in a good position to (capitalise) that segment of the market … (There are) not many new residential projects being launched in the area, so I would expect pent-up demand coming in from potential upgraders from the vicinity,’ said HSR’s Mr Han.

How will sales at Bartley Residences compare to recent launches such as Parc Rosewood and Watertown.

Last month, the 992-unit, mixed-use development, Watertown, which is located in Punggol Central, saw more than 160 of the 250 units released during its preview snapped up. The 689-unit, 99-year condominium Parc Rosewood, in Woodlands sold 165 of the 236 units up for grabs during its preview launch.

The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
Properties near MRT stations are still calling the shots in Singapore’s property market. Private condominium, executive condominium or resale HDB flat, it’s no doubt transport concerns will be one of the top priorities for home buyers here.

22 Feb

Singapore’s Apartment rental prices third highest in Asia

Following hot on the heels of Hong Kong and Tokyo in terms of apartment rental prices, is Singapore. With these numbers in place,  its no wonder property investors are snapping up new properties, especially one and two-bedroom apartments, in large numbers.

Being labelled a ‘city of costs’ is no misnomer for Singapore, which ranks third in Asia’s most expensive locations to rent a three-bedroom apartment – with typical rents estimated to set one back by about US$5,570 per month, according to ECA International. However, Singapore’s rental growth in domestic dollar terms has remained conservative in the past year, with average rents for an unfurnished three-bedroom apartment rising 3 per cent, placing it among the lowest in the region and a stark contrast to the previous year when rents rallied by over 10 per cent.

Rooms available for rent at the prestigious Reflections at Keppel Bay.

Said Lee Quane, regional director of ECA International, Asia: ‘Singapore’s strong economic recovery following the downturn in 2008 has seen expatriate numbers increase significantly over the last two years. However, a number of new property developments in the market has led to pressure on rental property availability easing over the last year. This has resulted in only modest rent rises.’

But when the effect of a stronger Singapore dollar is thrown into the picture, the whole ballgame changes. For instance, US companies that send their employees on international assignments to Singapore may face a greater cost impact if currency movements go against their favour. ‘In Singapore, rents have risen by just 3 per cent in local currency, but the strength of the Singapore dollar means that when we convert these prices into US dollars for comparison, the increase stands at 15 per cent,’ explained Mr Quane.

Further away from the Central Business District, TreVista condominium in Toa Payoh has a number of units for rent as well.

At a regional level, rents for three-bedroom apartments in Asia have risen by 5 per cent in local-currency terms over the last 12 months and 10 per cent in US-dollar terms. This translates to average rents of about US$3,680 a month in Asia, almost 20 per cent higher than the global average of US$3,080.

Hong Kong remains at the top of the list for Asia and the world with an average rent for an unfurnished three-bedder unit coming in at around US$11,813 per month. ‘This is a 15 per cent increase over the past year in local-currency terms and double the amount it costs to rent a similar property in Singapore,’ said ECA. Mainland China locations have seen the sharpest increases in Asia as the influx of international assignees continue to spur demand for rental properties there.

Just a little off the city centre is Jia@Wilkie. Jia is the mandarin character for "Home".

In addition, with home prices continuing to dig for a bottom in China, many locals have chosen to ride with the rental option for now. Tokyo has registered the greatest dip in rents on the back of lower international assignee numbers following the 2008 global financial crisis and more recently, the tsunami and nuclear disaster.  ‘This means there is less demand for rental property in expatriate areas, and rents in those areas have steadily fallen since then, dropping almost 5 per cent in yen terms,’ said Mr Quane.

The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
What does this all mean for the property market? Will property prices remain sky high as more are looking into buying for renting purposes? Will further property curbs be put in place within this year?

21 Feb

iProperty.com Asia Property Market Sentiment Report 2012

In December last year, many of you participated in iProperty.com Asia Property Market Sentiment Survey, which resulted in this Report. We thank you for making this Report so great, filled with insights that we’re sure will help you make better property decisions – here and overseas.

As the first regional online property survey of its kind, the iProperty.com Asia Property Market Report comprises of 7,720 responses from website visitors and subscribers of iProperty Group networks in Singapore, Malaysia, Indonesia and Hong Kong. The survey revealed a common thread amongst property buyers throughout the region, but also key country-specific findings.

Did you know?

“85.6% of respondents in Singapore deemed affordability and
rising housing prices as the top 2 issues in the property market.”

“42.2% of Singaporean users in the survey showed interest in overseas property,
citing Malaysia and Australia as their most preferred overseas locations.”

“Over half (51.7%) of Singapore buyers has a budget of
between SGD 500,000 to SGD 1 million.”

“ Two-thirds (66.4%) felts that the Singapore property market is holding
up well despite the threat of a global recession.”

“ 58.3% agreed that the government should
step in to control COV on HDB flats.”

 

Member of iProperty.com.sg? Login & download the full 65-page Report now.

Not a member yet? Register for free, login and start downloading this Report.

 

21 Feb

500 new homes sold last week

Within a quarter of the month, 500 new homes have been transacted. Last week alone, developers have been having a field day as buyers stepped up in response to their marketing efforts to push new properties. Property buying sentiments are still positive and there are no signs of that waning as yet.

Almost 500 new homes were sold over the past week as developers stepped up their marketing efforts to ride on last month’s stellar transaction figures. Last month, 1,872 new private homes were snapped up – the highest figure since November 2010 – and builders are clearly keen to keep the ball rolling.

Guillemard Edge condominium by the Macly Group.

Mr Colin Tan, research head at Chesterton Suntec International, said developers are rushing to launch more units to ride on the positive buying sentiment and to lock in sales in case new cooling measures are introduced. ‘The sales figures show you the number of investors that are in the market… Low borrowing costs have left them with few alternatives, liquidity doesn’t know where else to go,’ he added.

The leader for the week was Macly Group’s Guillemard Edge near Dakota MRT station, which recorded more than 230 sales. Units in the 275-unit project were priced between $1,150 per sq ft (psf) and $1,250 psf. More than half of the units were one-bedders of around 409 sq ft with a price tag of about $500,000.

Skyline @ Orchard Boulevard.

Parc Rosewood in Woodlands found buyers for 120 units at an average price of $1,000 psf. This was up from the $925 psf to $998 psf price range when it was first previewed late last month. Last week’s transactions brought total sales to more than 510 at the 689-unit project. It is jointly developed by Fragrance Group and World Class Land. A City Developments spokesman said its show suites attracted a steady crowd over the weekend. The firm sold more than 40 units in total at The Palette, NV Residences, H2O Residences and Hedges Park, as well as The Rainforest and Blossom Residences executive condominiums.

Similarly, Far East Organization sold 77 units across all its projects over the weekend, including at The Greenwich, Skyline@Orchard Boulevard and The Scotts Tower. About 10 sales over the weekend at 435-unit The Nautical in Sembawang Road brought total sales to more than 200 units. Average prices were between $850 psf and $860 psf. Experts noted that many of the projects that sold well consisted of small one- and two-bedroom units with affordable quantums. These are typically popular with investors.

The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
Smaller private apartments in the one to two-bedroom configurations are selling like hotcakes. Popular with both investors and young singles, they are also good properties to rent. How much do they rent for and is the rental market revving up as most options become available?

21 Feb

Hot property – Resale HDB flats in older estates

New private properties are popping up all over town. Have resale HDB flats been relegated to the backseat? Apparently not as resale flats in older HDB estates are still considered ‘hot property’.  With COV prices dropping, and the Government introducing a scheme which pays older Singaporeans a $20,000 bonus when they sell their flats and downgrade, will more people be looking for flats in mature estates?

Resale activity in public housing estates with many elderly homeowners is set to increase after the Government introduced a $20,000 bonus for older Singaporeans who sell their flats and buy three-room or smaller flats.

HDB flats in mature estates such as Bukit Merah may be the next big thing in the property market.

The measure to help older Singaporeans unlock the value of their Housing and Development Board flats ‘is likely to impact the resale activity in the public housing market favouring the older central districts such as Bukit Merah and Queenstown, given the higher proportion of senior households and recent property price trends’, said Chua Yang Liang, head of research for South-east Asia at property consultant Jones Lang LaSalle (JLL). He estimates that up to 5 per cent of existing HDB households may take advantage of the new scheme, potentially giving a small boost to the resale prices of three-room or smaller HDB flats.

Bukit Merah, Toa Payoh and Queenstown could see more resale activity as a result of the new scheme, based on an analysis of the premium gap between five-room and three-room flats, and four-room and three-room flats, respectively, in each HDB town, as well as the number of senior households in the towns, JLL said.

Toa Payoh, one of the older HDB estates, are a hive of activity and have lots of amenities and facilities available.

Overall, however, ‘the Budget is likely to have a limited impact on the property market, given recent market trends and the existing government policies in place’, it added. The Government’s aim to double the number of housing units within 400 metres of MRT stations to 400,000 in a decade would require an increase in government land sales close to MRT stations over the next 10 years, JLL said. Those are likely to be weighted more towards public housing developments rather than private property, given the Government’s emphasis on building an inclusive society, it added.  ‘On the development front, we should see a shift in developers’ strategy as there could be more public housing sites being released nearer train stations over the course of the next decade.’ Dr Chua said.

The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
How do older estates such as Bukit Merah or Toa Payoh compare to newer ones such as Punggol or Sengkang? Which areas do HDB flat buyers prefer and why?

17 Feb

30% drop in HDB flats COV prices

Is this an indication that HDB flats are no longer in as big a demand as before, especially with new private properties flooding the property market recently? What is an acceptable price for a resale HDB flat? 

Cash premiums demanded by those selling their Housing Board flats are falling across the island, and by some 20 to 30 per cent in most flat types. Property agencies told The Straits Times that this is the result of the record number of new flats released by the HDB, as well as upcoming policy changes, which are putting the brakes on both supply and demand in the resale market. According to fresh figures compiled by The Straits Times, the overall median cash-over-valuation (COV) amount for all flat types based on last month’s deals has dropped in the range of $4,700 to $8,000. It has fallen more sharply for bigger flat types – as much as $10,000 for five-room flats and $17,000 for executive units.

With the sizes of private properties shrinking, is it more worthwhile to buy a HDB flat instead?

COV is the sum that the buyer of a HDB resale flat pays above the flat’s valuation. Under HDB rules, this has to be paid in cash, making COV a key factor in the affordability of HDB resale flats. The latest COV data was provided to The Straits Times by three agencies – PropNex, ERA Realty and Dennis Wee Group (DWG) – which together account for the majority share of the HDB resale market. The HDB stopped providing nationwide median COV figures in July last year as it said the figures could be misleading. But it still reveals median COV data by towns and flat types that have more than 20 deals in any quarter.

Mr Lee Sze Teck, senior manager of research and consultancy at DWG, said the lower COV figures are due to sellers and buyers ‘sitting on the sidelines’ to see what the changes are in the HDB market. For example, HDB has hinted it may change rules to its build-to-order (BTO) scheme to allow more flats to be sold to second-time home buyers. ERA Realty key executive officer Eugene Lim noted that this is significant because second-timers make up about 45 per cent of resale flat buyers – the largest buyer segment. Many are putting off either buying or selling homes until the policy becomes clearer. HDB also rolled out a record 28,000 BTO flats last year, and will be offering another 25,000 this year. These new flats are cheaper and have lured many buyers away from their resale counterparts, said Mr Lim. The falling COV premiums indicate that the HDB resale market could finally be taking a breather after a spectacular bull run in the past five years which has seen prices rise 84 per cent. Some agency bosses are already predicting that HDB resale flat prices could dip 3 to 5 per cent this year, or up to 10 per cent if the global economic situation worsens.

New HDB flats, Tampines Alcoves, launched in January this year. Next HDB BTO flat sales launch will be in March 2012.

Mr Lee Han Sing, vice-president at C&H Properties, who specialises in HDB sales, said flats in good locations used to sell at a COV of $50,000 over the flat’s valuation price. ‘Now, that’s more in the region of $35,000, as sellers are more open to negotiation,’ he said. But sellers themselves are also more reluctant now to sell their flats, he added. One such home owner, Ms Rebecca Foo, 32, said she is putting off selling her executive apartment in Hougang. ‘The lower COVs transacted means there is less reason to sell now,’ she said. Also, HDB upgraders who decide to buy new BTO flats only need to sell their existing flats in two or three years’ time, when their new homes are ready. As a result, the HDB resale market is the quietest it has been for a while.

Advertisements for the flats Mr Lee is marketing used to attract 10 to 15 calls a day in last year’s busy months, but this has fallen to half that number in January, he said. But for some home buyers, such as writer Yu-Mei Balasingamchow, 37, COVs have not fallen enough. ‘What matters is still the total price of the flat and the bank loan you need to get. Prices of HDB flats are still high, whichever way you look at it,’ she said.

The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
COV has been hotly debated since its inception. But could it also have turned attention away from the real issue of the actual selling prices of HDB flats? Recent surveys conducted by iProperty have showed the prices of HDB flats in various estates. Have they risen to unseemly heights?

16 Feb

New private homes sales back on track

After a lull in sales of private properties in December last year, following news of the new stamp duty, home buyers are once again out in full force. New properties such as Bartley Residences, Seletar Park Residence, Casa Cambio and Sky Habitat will soon be launched. What will the figures then show?

New private home sales here rebounded strongly last month thanks to some major launches after sinking to a two-year low in December when tough new property cooling measures set in. But there are also signs that foreigners are shying away from buying homes after a hefty 10 per cent additional buyer’s stamp duty was imposed on them as part of the Dec 8 measures. A total of 1,872 units were sold last month – the highest number since November 2010 – in sharp contrast to the two-year low of 632 units in December. When sales of executive condominiums (ECs) such as The Rainforest in Choa Chu Kang are included, home sales rose further to 2,077 units. ECs are a hybrid of public and private housing.

The Rainforest Executive Condominium.

Experts say Singaporean first-time buyers and investors, little affected by the new additional buyer’s stamp duty, are keeping the market buoyant. But foreign demand seems to be drying up. Only 7.5 per cent of the 889 homes sold at Far East Organization’s 992-unit Watertown were bought by non-permanent resident (PR) foreigners. They made up 10 per cent of the 420 units sold at 528-unit The Hillier. In comparison, non-PR foreigners made up about 20 per cent of buyers at the 338-unit The Tennery in Bukit Panjang launched last year. This apparent trend away from foreign purchases is further supported by a preliminary analysis of the 172 new sale caveats lodged last month with the Urban Redevelopment Authority.

Although this pool of caveats is very small, and might not be representative of the entire month, only 5 per cent were lodged by non-permanent resident foreigners. More caveats are expected to stream in over the coming weeks. By comparison, from September to November last year – three months before the measures – foreigners made up 18 per cent of all new sale caveats. Robust mass market sales led the charge again last month, powered by a few large mass market projects – Watertown in Punggol, The Hillier in Upper Bukit Timah and Parc Rosewood in Woodlands – which made up 72 per cent of total sales. Still, some experts say sales might be more subdued in the next few months given a lack of large-scale mixed-use developments such as Watertown and The Hillier – typically popular among investors hoping to rent the finished units out. SLP International research head Nicholas Mak said units in the three top-selling projects consist of primarily small one- or two-bedder units that are likely to be bought by local investors. He expects monthly sales to fall to between 900 and 1,400 units in the next few months.

Bartley Residences.

However, Jones Lang LaSalle’s head of research Chua Yang Liang said that with some developers absorbing part of the additional stamp duty, the impact of the recent measures has been mitigated. Underlying demand from Singaporean buyers is likely to keep sustaining the mass market, he said, adding that up to 12,000 homes could be sold this year if the market remains stable. Mr Ong Teck Hui, head of research and consultancy at Credo Real Estate, said last month’s encouraging showing will lead to more new launches as developers capitalise on positive sentiment.

Casa Cambio in Serangoon.

Upcoming new launches include Bartley Residences, Seletar Park Residence, Palm Isles, Casa Cambio and Sky Habitat. However, it is a vastly different story in the high-end segment which is at a ‘standstill’ with only 17 homes in the city centre sold last month. Homes on the city fringe performed only slightly better with 94 units sold. Experts say that demand in the city centre is expected to remain subdued as it has a higher proportion of foreign buyers compared with suburban areas.

The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
Majority of the buyers are now locals, with foreigners making up less than 20 per cent. How accurate are the numbers and what do they really say?

15 Feb

Smaller spaces for bigger prices

At first glance, home prices may not seem to be going any higher, but what you are getting for your price is getting lesser – in terms of floor space, that is. What are the possible causes of this trend?

The prices keep going up but the median size of private homes has been rapidly shrinking as home buyers try to stretch their dollar further. Developers are driving the trend as they downsize homes to keep them affordable even though the prices per sq ft (psf) have been increasing. The shrinkage has been marked with the median size of all new homes sold last year falling to 904 sq ft – 26 per cent less than the median 1,216 sq ft just two years ago, according to an analysis by consultancy CBRE of caveats lodged. Experts add that a typical three-bedroom unit has been whittled down from about 1,100 sq ft to 1,300 sq ft five years ago to about 1,000 sq ft. Shoebox apartments of 500 sq ft and less are also likely to have brought the median home size down as they have been gaining in popularity in recent years. They usually go for under $1 million and attract mostly investors. Sales of such units have shot up from 300 in 2008 to 1,900 in 2010, or from 6 per cent to 12 per cent of developers’ sales over the same period.

Auralis low-rise apartment in East Coast has smaller units with one-bedroom under 500sq ft.

Mr Colin Tan, research head at Chesterton Suntec International, said it is ‘alarming’ to note that half of all new homes sold last year were 904 sq ft or smaller. ‘Unless all of these units are popular due to lifestyle changes…the data reflects how much damage has been inflicted on our physical real estate by high property prices,’ he added. ‘I expect average sizes of sold units to continue getting progressively smaller as long as market price levels remain high.’ Big units are also likely to command a premium in the longer term as there will be fewer of them, Mr Tan noted. Mr Ong Teck Hui, head of research and consultancy at Credo Real Estate, said there has been a definite trend towards smaller units, especially in recent years. In 2005, units up to 1,076 sq ft comprised 35 per cent of new private home sales, but last year that figure jumped to 65 per cent.

Affordability is a major factor in the shrinking of floor areas, he said, with home prices surging 74 per cent from 2005 to last year. ‘Back in 2005, one could buy a new 1,100 sq ft to 1,200 sq ft three-bedroom suburban condo for $500 psf to $600 psf. Today’s rate for a comparable unit would generally be upwards of $900 psf, making bigger floor areas less affordable than before,’ Mr Ong noted. Mr Tan Kok Keong, OrangeTee’s head of research and consultancy, said lifestyle changes, like more singles choosing to live on their own, could have led to smaller homes. ‘But the trend of shrinking homes might be reversed if property prices fall, allowing developers to build larger homes instead while keeping overall prices steady,’ he added. He noted that the median of 904 sq ft is just slightly smaller than a four-bedroom Housing Board (HDB) flat, which is usually 90 sq m to 95 sq m – or between 969 sq ft and 1,023 sq ft.

Seletar Park Residence with one to four bedroom units configurations.

Private home sizes cannot keep getting smaller as there is a limit to how much home buyers, such as HDB upgraders, might be willing to trade size for private condo amenities, he said. Home values have been generally rising on the back of the property market’s recovery from the global financial crisis in 2009. Median prices reached $1,194 psf in 2010 before dipping slightly to $1,125 psf last year, possibly due to an increased number of suburban homes sold compared with those sold in 2010. But while the number of new homes sales in 2010 and last year exceeded the number in the previous record year of 2007, they were well below the total transaction value of $24.5 billion in 2007. Experts say this is because 2007 was a year when the high-end and luxury market peaked and thousands of expensive homes in districts 9, 10 and 11 were snapped up. On the other hand, it was the mass-market segment, with typically lower quantums, that powered the property market in the past two years.

The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
Change in lifestyle, population size and societal demographics aside, as long as demand for these small apartments remain, prices will continue to stay high. But is this matter more social than economic? 

15 Feb

1 in 10 HDB Flat owners sealing their own deals

If you fancy being your own property agent in the buying and selling of your own HDB flat, it is not entirely impossible. It may be a little more tedious but with guidelines from the Council for Estate Agencies (CEA), you may be able to save the 1 -2 per cent agent commission.

One in 10 Housing Board (HDB) resale transactions last year was done without the involvement of property agents, National Development Minister Khaw Boon Wan revealed in his blog yesterday. He added that the Council for Estate Agencies (CEA), as part of its ongoing consumer education efforts, would help home owners better understand their rights if they opted to act without agents. He noted that while there had been suggestions to prohibit real estate agents from handling HDB resale transactions as well as ban do-it-yourself (DIY) resale deals, he did not think it was appropriate to do either. The HDB already provides DIY resale checklists of requirements such as eligibility to buy or sell and financing. Industry experts said that while they had not observed a discernible DIY trend, it was not uncommon for a buyer or seller to want to complete at least part of the transaction without an agent.

More HDB flat owners are making the effort to save the 1 to 2 per cent agent commission by being their own proeprty agent.

Buyers and sellers said they chose to go agent-free to avoid paying the agent’s commission – usually about 1 per cent of the transaction price for buyers and 2 per cent for sellers. Mr Nicholas Mak, head of research at SLP International, said going DIY was not as easy as it seemed because there is a lot of unfamiliar paperwork. For example, sellers have to submit a financial plan for the purchase of their next flat. He said it was more common for people to find a buyer or seller and then ask an agent to do the paperwork.

An example is Mr Kumar Suresh, 39, who is helping his sister to sell her Jurong West three-room flat. Though he plans to seal the deal by himself, he intends to get his agent to go through the paperwork as the agent would be more familiar with it. ‘Even with him doing the paperwork, I can save up to $5,000. By dealing with the buyer myself, I can also decide what is a reasonable price rather than having an agent who might coax me into accepting a figure,’ said the youth worker. Ms Vera Chua, a business owner in her 30s, is selling her four-room flat in Tiong Bahru without an agent. ‘I’m doing it to save on the agent’s commission and learn how the process works so I can use the skills in future. And because I conceptualised the flat’s decor myself, I think I’m the best person to present it and match it to the new owner,’ she said. She would get a lawyer’s help with the paperwork.

Minister Khaw Boon Wan has mentioned in his blog post on the purposes and effects of the Council of Estate Agencies (CEA). Photo by the Ministry of National Development.

In his blog post, Mr Khaw also thanked members of the public for their feedback on what they wanted the CEA to do and revealed suggestions such as improving the quality of training and raising the minimum education qualification of agents. Since January last year, all property agents must register with the CEA, which can investigate complaints and impose penalties. The council said areas for development in its training courses included professional ethics as well as business leadership and management. Mr Khaw said the council is looking into shortening the time for resolving disputes between buyers/sellers and agents.

Currently, parties with disputes over the Estate Agency Agreement, which puts on record the commission amount agreed on by both parties, can make use of the council’s resolution scheme, which involves mediation and arbitration.

The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
This move by the CEA to reach out to the public and help them with various property-related issues is helpful for those willing to do the legwork and handle their own affairs. This does not eliminate the need to find a good property agent should you require assistance and if all goes well, you may save yourself a good deal of unwanted trouble.

13 Feb

Prices of Resale flats to fall 3 – 5%

With the largest number of new HDB flats built in 15 years, the impact may be felt in the resale HDB flat market. Property experts are expecting prices to fall by as much as 5% within this year. 

Property agency bosses are predicting a 3 to 5 per cent fall in the prices of resale Housing Board flats. This correction could even hit 10 per cent if the euro zone crisis worsens and Singapore’s economy is affected, said the head honchos of major local agencies at a conference yesterday.

Are resale HDB flat prices going to drop as more new HDB flats are made available to the buying public?

HDB resale unit prices have enjoyed a largely uninterrupted bull run in the past five years, rising a stunning 84 per cent. The only blip was in the first quarter of 2009, in the aftermath of the 2008 financial crisis, when prices dipped a marginal 0.8 per cent before climbing again. Bosses of firms such as PropNex, Dennis Wee Group, ERA Realty, HSR Property Group, C&H Properties and DTZ – which together account for almost all HDB resale transactions – point to a combination of dampened demand in the resale market and a record supply of new HDB flats as key factors.

PropNex chief executive Mohamed Ismail said: ‘The HDB resale market has been due for a correction for some time now and we are likely to see it happening this year.’ But the analysts were quick to add that there would not be a price crash, citing strong fundamentals in the market. In the short term, however, there are a few reasons why prices would come under pressure. Foreigner numbers entering Singapore, for example, are falling. This group typically contributes to strong demand for HDB rental and resale flats. C&H Properties key executive officer Albert Lu noted that the number of new permanent residents and citizens in 2010 had dropped significantly compared with previous years, even as the HDB had ramped up the supply of new build-to-order (BTO) flats which had been priced ‘very attractively’.

HDB is building more flats and at a qiucker pace. Seen here is the Fernvale Lea new BTO flats in Sengkang, part of HDB's January 2012 sales launch.

HDB offered 28,000 flats last year, and is set to offer 25,000 new BTO units this year. The launch of 50,000 flats in just two years is something HDB has not done in the past 15 years, said Mr Ismail. And with the recent move to raise the household monthly income ceiling for new flats from $8,000 to $10,000, more buyers are flocking to the new flat market from the resale one, he said. ERA Realty key executive officer Eugene Lim said that if HDB sets aside more new flats for second-time home buyers, as it recently hinted it might do, then even more demand would migrate from the resale to the new flat market. Both ERA and PropNex told The Straits Times on the sidelines that based on last month’s transactions, the average cash premium paid to sellers above a flat’s valuation – known as cash-over- valuation (COV) – has been declining. ‘In the past, the median COV was above $30,000 across the island; now it’s more at the $20,000 to $25,000 level,’ said Mr Ismail.

As for how much the market would eventually correct, HSR Property Group CEO Patrick Liew said the extent would depend on macroeconomic conditions – whether Singapore slips into a recession, and if the Government introduces further measures to cool the property market. Yesterday’s conference was attended by about 500 people from the industry.

The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
Will prices of resale HDB flats correct themselves this year? How much will the price correction be? There does not seem to be a guaranteed answer anytime soon. Looks like the only way to go is to keep one eye on the macroeconomic situation and the other on the local real estate ups and downs.

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