Analysis of Q3 caveats by DTZ points to new trends relating to subsales, foreign buying, HDB upgraders

By KALPANA RASHIWALA

[SINGAPORE] 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. Subsales also accounted for a smaller 13 per cent share of purchases of non-landed private homes in Q3, compared with 16 per cent in Q2.

Subsales of high-end condos/apartments slowed down even more in Q3 2008. 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.”

DTZ executive director Ong Choon Fah also points out that attractive property values are emerging in other cities which Singapore will be competing with. “Foreign investors have lots more opportunities to consider where to invest,” she added.

The dip in subsales may be due to the fact that it has become more difficult for ‘specuvestors’ and speculators to offload their properties in the current quiet market. “For investors who take a long-term view, especially for better assets, the tendency would be to ride out the market,” says Mrs Ong. 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. Together with CPF savings, it may be easier for them to cross over to private homes,” notes Mrs Ong.

Buyers with HDB addresses picked up 1,718 private homes in Q3, up 34 per cent from the previous quarter. Their share of caveats lodged for private home purchases rose to 41 percent in Q3, from shares of 34 per cent in Q2 and 28 per cent in Q1 this year.

HDB upgraders’ 41 percent share of private home purchases in the July-Sept quarter was the highest quarterly share in four years.

“The trend was supported by the narrowing gap between HDB resale flat prices and private home prices in Q3, as HDB resale prices continued to increase while private home prices fell,” Ms Chua said the latest Q3 jump in private homes bought by HDB dwellers was mainly in the primary market. The number of units these HDB dwellers picked up from developers leapt 89 per cent from Q2.

Livia in Pasir Ris and Clover by the Park in Bishan were the two most popular projects among HDB buyers in Q3, with 192 units and 142 units respectively sold to HDB upgraders. Analysts say HDB upgraders’ share of total private home purchases may rise further. In Q2 2002, their share surged to 81 per cent and at the trough of the Asian Financial Crisis property slump in Q4 1998, the figure was 68 per cent.

Subsales refer to secondary market deals in projects that have yet to receive their Certificates of Statutory Completion. This may be anywhere from three to 12 months after the project gets its Temporary Occupation Permit (TOP).

DTZ said that for total subsale deals of non-landed private homes, the median price continued to fall in Q3, easing 11 per cent quarter-on-quarter to $941 psf –the lowest since Q3 2006, according to DTZ. “In view of softening market demand, owners are more realistic in asking prices,” it said.

The Sail @ Marina Bay got the strongest subsale interest in Q3, with 30 deals (compared with 34 in Q2). The median subsale price for the project slid 6 per cent quarter-on-quarter to $1,719 psf, following a 14 per cent slide in Q2. Median subsale prices also fell 3 per cent for Park Infinia at Wee Nam to $1,380 psf, The Esta (slipping 5 per cent to $910 psf) and City Square Residences (down 6 per cent to $960 psf).

Mrs Ong expects subsales to continue trending downwards although there will be spikes as major projects get their TOP. That’s when there’s usually more sales activity as the finished product can be viewed by potential buyers and the prospects of renting the units would increase the appeal of such homes to potential investors.

Days of sky-high HDB rents numbered: Analysts

Published On : 03/11/2008

Falling private home rents seen as a major cause

By Joyce Teo

PROPERTY CORRESPONDENT

THEY are the next segment of the local property market to be hit by the global financial crisis.

Rents of Housing Board flats, which have been climbing steadily, largely on demand from foreigners squeezed out of the private homes market, are up only slightly in the third quarter even as rents of private homes fell.

But property experts say HDB rents have likely peaked. They will hold steady for the next several months before they begin to crack from the pressure of falling rents in the private homes market.

“Any decline in private rents is going to contribute to the downward slide in HDB rents, but it may take a few months for the impact to filter down,” said Knight Frank’s director of research and consultancy Nicholas Mak.

The pressure is already starting to show: Rents for HDB flats have shown smaller increases in the third quarter. Median rents for five-room flats have risen by $100 every quarter this year to $2,000 in the third. But median rents for three-room flats remained unchanged at $1,500 in the three-month period to Sept 30 while median rents for four-room flats showed a smaller $50 rise to $1,800, from $1,750 in the second quarter and $1,600 in the first.

Private home rents are expected to continue dropping given the weaker economic outlook, particularly as supply is expected to rise next year when more developments are completed, experts say. HSR Property Group executive director Eric Cheng says HDB rents are likely to stay stable for the next few months until the gap between private home rents and HDB rents starts to narrow.

There are now 21,400 HDB flats approved for subletting, up from 20,200 in the second quarter. But HDB subletting deals fell 4 per cent to 3,960 cases in the third quarter.

ERA Asia-Pacific’s assistant vice-president Eugene Lim said: “Next year, when tenancies are up for renewal, you will see rentals coming down.” If landlords do not lower rents, their tenants may switch over to private apartments as the price differential between the two types of property narrows. “It’s the push-down effect as those pushed out of the private market go to the HDB market,” said ERA’s Mr Lim.

Government data shows private home rents surged dramatically by 41.2 per cent last year, with rents for non-landed homes in suburban areas up 41.9 percent.

An HDB property agent, who wanted to be known only as Chui, said sentimentin the HDB market has been slightly hit by the gloomy economic outlook and there is more “tenant resistance”. “HDB rents have come down a bit. For three-room flats, it is still not a problem getting tenants to pay $1,400 to $1,600 a month, but maybe not above that.”

Unit size and location play a big part in determining HDB rents, given that there is a renters’ threshold, said PropNex chief executive Mohamed Ismail. “A small three-room flat in a good location can get more than $2,000 but an executive flat in the same location may not command even $3,000,” he said. “The threshold for HDB flats is around $2,500. Beyond that, people will go for condos with facilities.”

HDB flat owners can rent out their entire unit after occupying it for three years. This minimum occupation period rises to five years if they have a subsidy or housing grant. Mr Alan Wong rented out his 67 sq-m three-room HDB flat in Kallang last month for a whopping $2,100 a month. “It’s a family from China. They are permanent residents, professionals, and have a daughter studying in a school nearby,” he said.

But he is one of the lucky few. HDB data shows median rents for three-room flats in the Kallang/Whampoa area at $1,500. Currently, three-room flats in the central area, Bukit Merah and Marine Parade command the highest rents among HDB towns.

Still, rents of Marine Parade three-roomers have fallen from $1,750 in the second quarter to $1,700 in the third.

joyceteo@sph.com.sg

Remark: With the falling hdb rents rates, is your rental yield giving you as much as before? Past year owners have already secured the rental lease and getting as much as $2,000 from an 5-room apartment in Pasir Ris area. So it is a matter of time before the rental market in Pasir Ris starts to fall. If you have any enquires, please feel free to give me a call. We can discuss your property investment and I will be able to give you advices. Thanks

PropNex covers clients with free Home Insurance

31 Oct 2008

With the onset of the global financial crisis, now, more than ever, is the time when we must all be proactive in protecting our assets. And our biggest material asset is, for most of us, our property.

That is why PropNex, in its continuous efforts to add value to its clients, is proud to introduce its free Home Insurance coverage, available to all PropNex buyers and sellers from 1 November 2008 onwards.

This latest initiative from the leading real estate company aims to protect home assets from unforeseen circumstances and is an industry-first in that it provides free coverage for both renovations and home contents. The total coverage of up to $65,000 comprises $50,000 for renovations, fixtures and fittings and $15,000 for home contents.

The coverage is for a three-month period upon activation after consultation with a representative from SingCapital. The insured customer can choose to cover his/her existing or tnew property after the sale has been completed. They will then receive a Certificate of Insurance from Tenet Insurance Company Ltd detailing the details of coverage.

PropNex clients covered by this Home Insurance plan may claim for loss or damage arising from fire, lightning and other insured perils such as:

• Aircraft damage
• Bursting or overflowing of water tanks, apparatus or pipes
• Earthquake, volcanic eruption, hurricane, cyclone, typhoon and windstorm and floods
• Explosion
• Impact by road vehicles
• Riot and strike
• Malicious damage

While many of us may think that these disasters are highly unlikely to strike us, statistics show that for the first quarter of 2008 alone, over 1,000 cases of rubbish chute fires and more than 200 fires caused by unattended cooking have been reported. And these are just some of the more common reasons behind household fires.

Basic coverage schemes for both HDB flats and private properties, under the HDB Fire Insurance and MCST Insurance respectively, only cover the original improvements and fixtures forming part of the unit; they do not cover the cost of additional renovations done and the owners’ contents. PropNex believes that it is necessary for homeowners to be adequately covered, so that we can ensure security for ourselves and our loved ones. With PropNex, valued clients can always trust on reliable service and innovation.

Taken from www.propnex.com.sg

Pasir Ris EA unit for sale!

Pasir Ris Drive 1 Block 537 :

• High Floor for sale!
• 5 minutes walk to MRT.
• Very near to whitesand shopping and fish pond.
  
• Good view plus designer deco and renovations.
  

Interested buyers please call Feng at 8333 7566 for viewing. Thanks!

Economy may slow for ‘several quarters’

Published On : 06/10/2008

But strong fundamentals will see Singapore past global crisis: Tharman

BY LI XUEYING

POLITICAL CORRESPONDENT



HEAVILY exposed to the global economy, Singapore will see an economic slowdown that could last “several quarters”, not just one or two quarters, said Finance Minister Tharman Shanmugaratnam yesterday.

In tandem, unemployment is expected to increase. But he also sounded a note of optimism, saying with its strong fundamentals, Singapore will ride out the crisis – and emerge better than most countries. Mr Tharman was addressing some 300 grassroots leaders and residents of Toa Payoh East, after a three-hour walkabout which saw him, among other things, opening an exercise corner for the elderly.

Accompanied by MPs from the Bishan-Toa Payoh GRC, including Mrs Josephine Teo, it was his first ministerial walkabout since taking charge of the finance portfolio this year. During the 80-minute dialogue that followed, residents asked 13 questions covering topics from foreign talent to greater rewards for grandparent caregivers.

But the focus was on the darkening economic outlook amid increasingly gloomy news from the United States – and the world – on what some have termed “the worst financial crisis since the 1930s”. So grassroots leader Raymond Teo, 39, wanted Mr Tharman’s opinion of the US$700 billion (S$1 trillion) package to bail out troubled financial institutions in the US, and how it impacts Singapore.

The minister expressed relief that the US Congress had supported the package, as it is a step forward. But it is “not a full solution” in addressing the real malaise: shortage of capital in the banks, he noted. This, the new US President would have to work out whenhe takes over in January.

And because the problems are “deep and extensive”, it will take “a year or two” before the world emerges from the crisis, he later told reporters. Meanwhile, the crisis has moved into what he calls “its second phase”. “It’s no longer just a financial crisis,” he said. “It is now an economic crisis.” Growth is slowing in the US, Europe, Japan, and even China and India, he noted. “So globally the economy is slowing down. This is a fact we cannot escape.” Thus, Singapore “will see an economic slowdown which, from all indications, will last not just one or two quarters, but may last several quarters, because we’re heavily exposed to the global economy”.

But he stressed that Singapore is armed with strengths that will see it safely through the crisis. First, the unemployment rate is low. So while fewer jobs will be created in the next few quarters, the starting level is “much lower” than most countries.

Second, Singapore has a diversified economy. “Some sectors are still doing well,” he said, citing marine engineering, construction and manufacturers of high-value products. Even in the embattled financial services industry, wealth management and private banking are doing well.

Third, the Government is in a strong fiscal position, “and we’ll be able to take the necessary actions if the situation turns much worse”. He said: “Frankly, it was just as well we decided not to spend all the surplus that we earned last year.” Part of it was given to Singaporeans as Growth Dividends. “This crisis shows the merits of thinking not just short-term but medium- to long-term,” the minister added.

Exuding confidence about the country’s strong fundamentals, he told Singaporeans to keep their eye on the medium to long-term future, as the short-term problems can be dealt with. “If we keep our focus on education, continuous training, and attracting new investments and new industries here – which is what we’re doing – Singapore will continue to do well. “So we’ll ride through the down cycle ...I feel we’re going to come through it better than most countries – not just in the region but even most developed countries.”

Asked for the full-year economic growth forecast, he said the Trade and Industry Ministry will reveal the numbers on Friday. Trade and Industry Minister Lim Hng Kiang had warned growth might dip “a bit below” 4 per cent this year. One resident, technician Ali Khan, 43, said he was assured by Mr Tharman’s replies, as he and his friends had been worried about their job security.

“It gives me some confidence that despite the downturn, we’ll be all right in the long run.”

xueying@sph.com.sg

Recent transacted price in Pasir Ris

Hi Ladies and Gentlemen. Today I will be showing you the recent transacted price of HDB flats in Pasir Ris for the month of August. This information are all taken from HDB's website and are very accurate. For those who are interested to purchase a home in Pasir Ris, can use this as a quick guide to know the price. However, do remember that the property price market is very unpredictable just like stock market.

Click on image to enlarge.

For 4rm flats in Pasir Ris, the highest transacted price is $415,000. As for the average price, it ranges from $320,000 to $340,000.

Click on image to enlarge.

For 5rm in Pasir Ris, the highest transacted price is $465,000 for blk 517. The reason for the high price is because blk 517 is just beside a Primary school and only a few minutes walk to the MRT. As for the average price, from my experience it is between $380,000 to $420,000.

Click on image to enlarge.

This above data includes both EA and EM. Highest transacted price is $565,000. As for average price of EA, its is between $500,000 to $530,000. For EM the average price is $500,000 to $540,000 depending on location.


Last but not least, anyone whom is interested can give me a call. We can arrange for an appointment and I can explain everything that you need to know to help you find the right home or help you sell your property. No obligation! Thanks and have a nice day!

Tip of the day : Knowledge is power. Knowing more helps you decide better.

With the recent drop of prices in the private home sector, it is rather surprising that the prices of HDB is still going strong and looking to continue to increase. With higher valuation and a stronger demand, home owners now enjoy a higher rate when selling their homes. But, the important thing is, home owners should start to sell their home early if they plan on taking advantage of the rising market. This is because HDB had said in a statement that they plan to offer about 3,900 new flats under the Bulit-To-Order(BTO) system over the next 6 months. This in turn, will create a competition between the resale market and new flat market. For example, would you want to buy a resale flat 4room for $400,000 when HDB's BTO system provides you a NEW 4room which also cost $400,000?

Therefore, with the price increase, HDB home owners who are looking to sell their property or their investment should start to consider selling early. With the tighter demand of upgraders, downgraders and permanent residents, the chances of getting your property sold is rather high because there is still a strong demand for resales flats. For example, permanent residents are not allowed to purchase new flats, so the only way is to purchase a resales flat.

Another issue that I would like to bring up is the falling private sector market. In my opinion, I believe condo owners should sell their property early to prevent the prices from dropping any further.

The above article is about the recent launches of BTO projects in Sengkang and Punggol area. The poor response was due to the changes in the application process and the location of the project.

After so many years of studying and a long time serving the NS (national service), I have finally step out into the society as an working adult. Weeks and weeks of looking through the classified section. Looking for a suitable job for me proved to be rather, challenging. Have you ever gotten the feeling that you are more suited to work elsewhere? Well, every time I have decided on a job, I can't help but keep asking myself, 'Am I really suited for this job?'.

In the end, after weeks of searching for a job, my lovely girlfriend asked me, 'why not try to be a property agent?'. This was the golden sentence that made me join the training, thus becoming a Propnex property agent. The training was tough, lots of theory and policies to remember. Secondly, there's lots of prospecting to do, looking for a good location to start and a lot of hard work have to be put in. But it was the sense of satisfaction after serving the customer and the idea of helping my family out with home allowance that really drives me.

Not only does my manager guide and teach me along the way, the company have helped me greatly as well. With almost 6000 other agents island-wide, I can assure you once my customer's property listings is posted, 6000 other agents from PropNex alone, will be notified about the listings. This helps greatly because if other agents have buyers looking for a unit at your area, they can give me a call to view the property.

So do visit my blog as and when you would like to have a view of the current property market. I will be posting some of the details about the recent transactions going around my work area, which is Pasir Ris. If you have any queries, do feel free to drop me an email at limshengfeng@yahoo.com.sg . I thank everyone who have visited this website and hope to see you soon! Cheers!