Real News‎ > ‎2012‎ > ‎August 2012‎ > ‎

03 August 2012

3rd August, Friday




Busting the myth of a hot property market

Source: Business Times

When you read about units being snapped up at a record pace, you might think that the property market is sizzling.

But buried beneath the headline numbers, two distinct trends appear to puncture this myth.

Not only is the average unit size sold by developers much smaller now, compared to the pre-global crisis peak year of 2007, but islandwide the average price per sq ft is also much lower. That's because more units are being sold in the suburbs instead of the Core Central Region (CCR), where properties are costlier.

Although developers sold more non-landed private housing units last year and in 2012 (on an annualised basis) than in 2007, the total area of these units and their dollar value were lower than 2007's levels, according to a study.

That's because developers have taken to minting smaller units to keep lump sum unit prices affordable to buyers. Also, transactions in CCR, home to high-end properties, have shrunk.

Across Singapore, developers sold 13,910 units last year, up 19.4 per cent from 2007's figure of 11,647 units. The 2007 figure is also lower than the 2012 annualised figure of 15,824 units (based on caveats for 7,912 units lodged in the first half of this year).

However, the total area of 13.43 million sq ft in the non-landed units developers sold last year was about 19.2 per cent lower than the 16.62 million sq ft they sold in 2007.

The total islandwide dollar value of the units sold by developers in 2011 and 2012 (annualised), at $16.9 billion and $16.3 billion respectively, are shy of 2007's $22.7 billion.

This is because average home sizes have shrunk in all regions and volumes have dropped dramatically in CCR, where properties are pricier, while the action has swung to the suburbs.

Commenting on the shrinking average home size, Roxy-Pacific Holdings executive chairman Teo Hong Lim observes this is due not just to a proliferation of shoebox units but a general contraction of unit size across the board - two, three, four bedders - as developers try to keep lump sum investment sums affordable to buyers.

He also highlights that since the 2009 rule change to include bay windows and planter boxes as part of gross floor area, the saleable area of an apartment has shrunk by about 5-6 per cent even if it has a similar internal layout as before.


Link to the story:  



UOB launches instant home loan scheme

Source: Business Times

Home buyers can now enjoy immediate approval for their housing loans with United Overseas Bank's latest offering, the Split-Second Home Loan approval service.

Officially launched Thursday, the service (which is linked to the Credit Bureau of Singapore and UOB's credit evaluation system) provides a faster credit evaluation and approval process using the latest technologies, and enables almost instant loan approval for the purchase of new homes as well as the refinancing of private property home loans, HDB home loans and commercial property loans.

UOB gave its assurance that speed would not come at the expense of quality, as it will continue to use the same rigour to assess the suitability of the applicant before approving the loan.

Even after the loan is approved, buyers will have ample time to reconsider their impending purchase and prepare the necessary loan documents as the loan approval is valid for seven days.

For those who are interested to find out more, the new service is available at more than 70 showflats around Singapore (including the Archipelago, Bartley Residences, Bedok Residences, Parc Olympia, Palm Isles and Parc Rosewood) following its soft launch earlier this year.

UOB has also deployed more than 100 mortgage bankers to the showflats to promote the service. But home buyers would still need to go to a UOB branch to sign the letter of offer.


Links to the story:  



Investment Sales


Chateau Eliza offered for collective sale again

Source: Business Times

Chateau Eliza, a freehold residential re-development site along Mount Elizabeth, is back on the market after three failed collective sale attempts.

This time, the owners are looking to lower the current reserve price of $108 million further, said the marketing agent.

The property was first put up for collective sale in 2007 at an indicative price of about $115 million to $120 million.

Based on the current asking price of $108 million, this works out to about $2,042 psf per plot ratio (psf ppr) based on the proposed gross floor area (GFA) of 52,887 sq ft that a new development could build on the site. No development charge is payable.

With an additional 10 per cent balcony area, it translates to $1,925 psf ppr, based on the potential GFA of about 58,176 sq ft with a development charge of some $4 million payable.

Chateau Eliza comprises 37 apartments of 829 sq ft to 3,337 sq ft, on a land area of about 18,000 sq ft. Under the 2008 Master Plan, the land is zoned for residential use with a plot ratio of 2.8.

The tender will close on 14 August at 3pm.


Link to the story:  





Public grading for property firms next year

Source: The Straits Times

Property agencies will soon be publicly graded, just like hawker stalls and security guard firms.

The Council for Estate Agencies (CEA), which regulates them, told property agency bosses on Monday that it intends to start releasing grades next year, based on the quality of their agents.

The grades will primarily be decided by the number of complaints lodged with the CEA from the public against an agency, as well as instances of disciplinary action taken against its agents.

A working group is being formed to finalise the criteria.

The CEA also said at the briefing that it is unlikely to issue letter grades like "A" or "B", but rather bands such as "Excellent", "Fair", and "Poor".

In response to queries from The Straits Times, the CEA would only say that it encourages agencies to "constantly improve the services delivered by their salespersons and put in place effective processes to manage complaints when service lapses occur".

Details on new initiatives to raise professionalism will be shared when they are confirmed, it added.

But the proposal is already encountering some resistance from real estate agencies.

Property agency bosses are worried that frivolous complaints and a simplistic methodology will result in worse grades than they deserve, they said.

Chief among agencies' concerns is that the criteria disregard the number of transactions each agency chalks up.

The CEA currently provides each agency with its own quarterly number of complaints per 100 agents. Last year, the agency that topped the charts had 5.7 complaints per 100 agents.

There are also smaller agencies which do not have more than 100 agents.

The Straits Times understands that the CEA intends to use a different set of criteria to grade such smaller agencies.

Despite these concerns, property agencies are resigned to the public grading system, and expressed hope that the CEA will work with them to iron out the kinks.


Link to the story: