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13 July 2012

13th July, Friday




Mixed views on direction of home prices

Source: Business Times

Property prices will continue their upward climb, and the government will roll out more cooling measures - these are the views of many of the 300 respondents to a Credit Suisse survey.

Some 47 per cent of those surveyed in the bank's inaugural proprietary housing survey believe that homes here will cost more within the next year, with almost three in 10 predicting price increases of up to 10 per cent.

Yet many also believe that the opposite is true: 35 per cent of respondents expect prices to fall within the next 12 months.

What is much clearer in the minds of the public is the likelihood of government intervention, with 6 in 10 predicting that another round of cooling measures will hit the property market. This could happen within a year, say 40 per cent of respondents.

Those who expect property prices to keep rising cite "genuine demand" from buyers, and the ability to afford a home.

Six in 10 respondents say they will consider buying a residential property within three years, with just 31 per cent of these potential buyers saying that their purchases are for investment purposes. The bulk of those looking to buy residential property say they want a new home to live in, while a number want to upgrade from their current home. Some also say that they are planning to buy a house for their children or parents.

And at least 76 per cent of those surveyed reported a monthly household income of above $5,000, allowing them to afford a property "fairly easily".

At the same time, 47 per cent of respondents do not have an existing mortgage, while 30 per cent of the average survey population has over $100,000 in liquid assets (cash-in-hand).

However, the reporto noted that the caution is beginning to set in within the property market, with only 21 per cent of respondents saying they will consider buying a home within the year. Many also say they prefer to hold cash than park their money elsewhere.

The survey also touched on shoebox apartments, with 6 in 10 saying that they would not buy an apartment that is less than 500 square feet in size.

Credit Suisse said that the respondents to its survey had a profile that matches the Singapore population "quite accurately", with 80 per cent living in public housing. Close to 9 in 10 own a home.


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Developers' body wants extension of sales period

Source: The Straits Times

The Government is studying a proposal from the Real Estate Developers' Association of Singapore (Redas) to extend the two-year period in which developers must sell units in new projects after they have been completed.

The Straits Times understands that developers of about half a dozen projects have sought extensions to the two-year window. Of the six, extension charges have been paid by three.

Developers pay 8 per cent, 16 per cent and 24 per cent of the property purchase price for the first, second and third extra years, respectively. The amount is pro-rated based on the proportion of unsold units.

Experts said the projects needing extensions are likely to be high-end ones in prime areas rather than mass-market homes, which have been selling well due to cheaper absolute prices.

Under the Residential Property Act, housing developers whose shareholders and directors are not all Singaporeans have to get a Qualifying Certificate (QC) to buy residential property.


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Parc Centros condominium gets July 21 launch date

Source: Today

Singapore-listed Wee Hur Holdings is set to launch the Parc Centros condominium, its largest residential development to date, in Punggol Central on 21 July.

In a filing on the Singapore Exchange Thursday, the property development and construction firm said Parc Centros will be the first condominium to offer five-bedroom apartments in the surrounding area of Punggol.

The project comprises 618 units and is located near the Punggol MRT station.

Wee Hur said Parc Centros offers one to five-bedroom apartments as well as penthouse units, with an average price of S$950 per sq ft.

The 99-year leasehold property consists of eight blocks of 16-storey buildings.

Parc Centros is expected to be ready in December 2016.


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Developers take innovative approach to office supply

Source: Business Times

Developers are thinking of more "innovative" ways to deal with the growing supply of prime office space by redeveloping existing office buildings for other uses, said a consultant at the Redas (Real Estate Developers' Association of Singapore) Property Prospects Update Seminar 2012 Thursday.

Notably, office space in Singapore's central business district (CBD) with a net lettable area (NLA) of around 1.4 million sq ft is set to be removed for redevelopment into residential and commercial type projects over the next year or so, according to data compiled.

All that said, the quantum of existing office space that will be removed for redevelopment still remains somewhat negligible from a bigger picture perspective.

New supply and increasing secondary stock in the CBD Grade A space are still a concern going forward, particularly beyond a two-year horizon as sizeable tranches that are substantially yet to be pre-leased are set to hit the market sometime in 2015 to 2016.

Not surprisingly, vacancy rates have also crept up over the past year or so, with 1Q 2012 numbers coming in at 6.5 per cent, almost twice that of the same period a year back (3.6 per cent), though the consultant was quick to assure that the numbers are not all that worrying yet.

"Vacancy rates around 2002 to 2005 were somewhere around 20 per cent . . . So we've got a long way to go before we have any real concerns on vacancy levels," he said.


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