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The Government has taken the unusual step of reassuring private home buyers that there are plenty of brand-new unsold units in the pipeline - about 22,700 of them.

It offered this new figure in what is being seen as a move to calm the booming property market, even as the latest estimates show that private home prices shot up 7.9 per cent over the last three months.

In an unusual addendum to the price estimates released yesterday, the Urban Redevelopment Authority (URA) reassured home buyers that the supply of homes over the next few years will be plentiful.

It reiterated that around 42,200 new homes will be completed between now and 2010. Of these, slightly more than half have yet to be sold, it said.

These include units that have already been launched but not yet taken up, as well as those that have not yet been launched for sale.

While the URA did not provide details of where these homes will be located, property consultants estimated that most of them will be in the central areas.

For the rest of the island, the Government has already taken steps to alleviate the situation. Last month, it announced it will release a slew of land plots in the second half of this year, enough for developers to build about 8,000 homes.

This comes as some property watchers issue alerts of a potential supply crunch of homes in the market, following an unprecedented wave of collective sales that will lead to thousands of homes being torn down.

But the Government was quick to assure buyers that ‘it will continue to monitor the market very closely’.

‘The Government will ensure that there will be sufficient supply of residential space to meet demand,’ the URA said. ‘If necessary, the Government will make available even more sites for private residential development… next year.’

It added that ‘prospective home buyers should take into consideration the sufficient pipeline supply of private housing, as well as the potential supply… when deciding to make a property purchase’.

Dr Chua Yang Liang, head of Singapore research at Jones Lang LaSalle, saw the Government’s statement as ‘quite a strong indication to tell the market there is adequate supply, and not to go on a panicked buying spree’.

The URA also appeared to be addressing fears of a property bubble in its statement. It was quick to say that the jump in home prices was due to strong fundamentals. ‘The increase in private housing prices in recent quarters is in line with greater economic growth and rising confidence,’ it said.

‘Private housing prices are now increasing at a faster pace because of good economic prospects going forward and the increasing attractiveness of Singapore as a global city.’

Source : Straits Times - 3 Jul 2007

Demand is picking up due largely to better economy and upbeat sentiment: Analysts

There has barely been a pulse in the public housing scene for the past couple of years but the beast is stirring and showing distinct signs of life.

It is certainly attracting more attention, thanks to some cashed-up collective-sale sellers picking up Housing Board (HDB) flats at mind-boggling prices.

Fortunately, the action is not just limited to those infrequent deals. Demand has largely picked up with a better economy and greater market confidence, said property experts.

It is all a far cry from the grim days of about three years ago when HDB prices were artificially inflated by rampant cash-back arrangements.

These illegal deals involved the seller declaring a higher price in order to secure a bigger loan for the buyer and so facilitating the sale. Rules were introduced in April 2005 to curb these deals.

Preliminary government estimates yesterday showed a 2.85 per cent rise in HDB resale flat prices in the second quarter, up from 1.25 per cent in the first.

Experts are forecasting continued price growth in line with Singapore’s positive economic outlook.

The HDB resale market is experiencing a ‘filter-down effect’ from the strong private property market, said ERA Singapore’s assistant vice-president, Mr Eugene Lim. ‘Homebuyers who are priced out of the private property market will be looking at the larger flat types such as the five-room and executive flats.’

The asking prices of these larger flats have already risen to as much as $50,000 to $150,000 above valuation, he said.

In the past, weak demand meant that many flats, particularly the larger ones, were selling at levels below valuation.

Things have perked up since with units now largely selling above valuation, and some flats in the outlying areas going for about $10,000 to $30,000 above valuation, consultants said.

Some sellers are asking for very high prices, hoping to land a windfall similar to those two owners who hit the headlines last month after reaping prices of $675,000 and $720,000 for their conveniently-located flats.

But these deals are not everyday occurrences, said Mr Lim, and sellers must be realistic as the typical flat buyer depends a lot on bank financing.

If the resale flat is not a standout - that includes having unblocked panoramic views and a snazzy decor - rational buyers would not pay a high premium for a 99-year property, he said.

And only flats in certain areas such as Tiong Bahru and Redhill, which are near collective-sale sites, appear to be attracting higher prices, said PropNex chief executive Mohamed Ismail.

He noted that not all sellers in collective sales are taking the HDB route; some are buying into ageing suburban condominiums which offer facilities like a pool.

He described the price rise in the HDB resale market as ‘fair’ as prices had been lagging behind those of private properties.

For the full year, HDB resale prices may rise by about 10 per cent, said property experts.

A HDB market with steady growth would help support the private property market, added Savills Singapore’s director of marketing and business development, Mr Ku Swee Yong.

The official figures for the second quarter will be released at the end of the month.

Source : Straits Times - 3 Jul 2007

When my son’s estate was ready for en bloc sale, the appointed sales committee engaged a property agent to market the property and a lawyer to represent the owners in the documentation. However, this lawyer adopted a ‘didn’t ask, don’t mention’ attitude while vetting the contract that the owners had to sign with the property agent.

As a result, the contract was worded in favour of the agent, e.g., the agency fee was pegged at 5 per cent of the reserve price and any price above the reserve price would incur a fee of 6 per cent. Laymen would assume that the commission would be calculated at 5 per cent up to the reserve price and the balance thereafter at 6 per cent.

As the sale was concluded above the reserve price, the agent charged the owners

6 per cent of the total sale proceeds. When they approached the lawyer for advice, he confirmed that it was correct. Why didn’t the lawyer explain it clearly in the first place?

Then the lawyer quoted a fee of 2 per cent on the sale proceeds and an additional charge for bank redemption. The quotation for the additional charge was not included in the documentation and subsequently the bill consisted of a charge for handling the bank redemption, $X, and a charge to the lending bank for handling the case, $Y (which the bank claimed back from my son.)

When he queried the lawyer about the four separate charges (including the CPF Board’s lawyer’s fee), he claimed that they were standard charges and the fees were based on a scale.

Why do we have to engage a lawyer to redeem a mortgage loan? Would not the CPF lawyer be sufficient? Why was there a double charge - imposed on the borrower as well as the lending bank - when the lawyer handled the same document?

Source : Straits Times - 3 Jul 2007

Home seekers need not despair at the rapid rise in home prices shown by the latest estimates released yesterday.

They can turn to a number of residential areas and developments that are still lagging behind the market, with one area even falling in price, according to a study by Savills Singapore.

The property firm noted that in areas such as Bedok and the West Coast, average home prices have risen by less than 5 per cent over the last 12 months.

In contrast, home prices across Singapore have surged by about 20.6 per cent in the same period, boosted by a 7.9 per cent jump in the last three months alone.

For suburban areas as a whole, home prices have gone up by slightly more than 11 per cent over the last year, according to figures released by the Urban Redevelopment Authority yesterday.

But Savills data shows that in Bedok, home prices inched up only 4.9 per cent in the period. In the West Coast, the increase was about 4.8 per cent.

And in Upper Thomson, prices in the general area actually fell by 4.1 per cent, said Savills.

‘There hasn’t been much attention paid to these areas because there haven’t been many new launches there,’ said Mr Ku Swee Yong, director of marketing and business development at Savills Singapore.

Also, in areas such as Paya Lebar, home sales and prices have been affected because of the Circle Line MRT construction that has been going on for a few years, he pointed out.

According to Savills, home prices in Paya Lebar have gone up by only about 7.5 per cent in the last year.

‘If HDB flats can go to the $700,000 type levels, units in these areas are also good buys,’ said Mr Ku.

In a market where values of popular condominiums rise by the week, the slow price climb of developments in these areas serves as a reminder that there is no need to panic, he added.

‘Many homebuyers don’t bother to do their homework,’ he said. ‘If they haven’t heard of a development, they just write it off even though it might be of good value.’

Many of these more affordable projects are fairly new. Some are even freehold but have suffered from a lack of publicity.

There are even developments in these and other areas that have fallen in price over the last 12 months. In the Upper Thomson area, Savills singled out Bullion Park in Lentor Loop, where average prices have slipped by 1 per cent from $520 per sq ft a year ago to $515 psf now.

The Linear in Upper Bukit Timah has also seen average prices dip by 0.7 per cent in the same period, said Savills. Prices were about $564 psf a year ago but are $560 psf now.

Source : Straits Times - 3 Jul 2007

The roaring market shows no signs of easing, going by recent project launches.

New developments around the country have started to reach prices not seen since the property peak of 1996.

Units in Duchess Residences in Bukit Timah, for instance, have crossed the $2,000 per sq ft (psf) mark - the first time homes in the area have done so in almost a decade.

More than 80 per cent of the project’s 120 units have been sold since they were put up for sale last week, with all the smaller three- and four-bedroom units sold, said developer UOL Group.

Singaporeans were the main buyers but 20 per cent of the homes were sold to buyers from Hong Kong, Malaysia and Indonesia, said UOL, adding that many of them were from the finance industry.

Developer Wing Tai, meanwhile, has quietly sold all 50 units it has released in Helios Residences in Cairnhill.

The Straits Times understands that the units were priced at around $3,000 psf - also a benchmark for the area.

Prices for two-bedroom apartments are believed to start from $3.51 million.

Wing Tai said it would release the rest of the project’s 140 units soon, although it did not specify a date.

But the central areas are not the only ones doing well.

In the relatively quieter Kembangan, a 32-unit boutique project called D’Oasia had half its units sold for as much as $1,003 psf, said Savills Singapore, which is marketing the project at Lorong Melayu.

Despite prices in the area hovering around $700 psf or lower for several years, D’Oasia developer Monfort Land has managed to sell 15 units of the freehold project at an average of $950 psf.

And strata-bungalow development Dunsfold 18 has enjoyed a good take-up in Lorong Chuan.

Since mid-May, 10 of its 18 bungalows have been sold at prices ranging from $3.08 million to $3.56 million each, or an average price of $770 psf.

Source : Straits Times - 3 Jul 2007