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11 October 2012

11th October, Thursday




'Industry much improved, but expect changes’

Source: Today

Visible changes have been made over the last two years to improve the standard of real estate agencies, but more changes might be on the way, experts at a National Real Estate Congress said Wednesday.

The Council for Estate Agencies (CEA) was set up in October 2010 to enhance regulations for the industry, which has about 1,500 agencies and 32,000 licensed agents.

The statutory board provides regulatory requirements on enhanced licensing and registration of agents, code of practice and ethics, as well as better public education, among others.

Since it was set up, overall standards have improved, with visible changes including "consolidation in the market place, more thorough background checks and fixed qualification requirements at agent recruitments," said Mr Seah Seng Choon, Executive Director of the Consumers Association of Singapore and a CEA council member.

However, the industry should expect more changes over the next six to 12 months as the CEA evaluates existing issues in the industry, which for the longest time resembled a "cowboy town where anything goes", Mr Seah added.

He declined to elaborate on the possible changes, but said that efforts have to be made to enhance education for agents to go beyond meeting the minimum requirements on professionalism.


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Home prices unlikely to fall in next 12 months

Source: Business Times

While residential prices can be expected to moderate in the fourth quarter, they are unlikely to dip in the next 12 months.

According to an analyst, prices of resale housing board (HDB) flats could inch up by 0.5 per cent in 4Q and private non-landed home prices are likely to see a marginal 0-0.5 per cent increase.

This is in comparison with the expectation that HDB resale prices would increase by 2-2.5 per cent and private non-landed homes would increase 0.8 per cent quarter-on-quarter, before the latest cooling measures were announced.

That being said, prices are unlikely to fall, given the low interest rate environment and the fact that the market is flush with liquidity.

Despite this, the latest set of measures, which include a 35-year cap implemented on loan tenures alongside tighter loan-to-value (LTV) ratios, may result in moderated sales takeup.

Another potential impact of the measures is that HDB upgraders who previously may have held on to their flats for investment purposes would now have to let go of their HDB flats, he said.


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Refinancing home loans no longer attractive after 35-year cap: analysts

Source: Channelnewsasia

The current low interest rate environment has led to a trend of home buyers refinancing their loans to take advantage of promotional rates. Most analysts agree that it may no longer be attractive for investors with longer loan terms to do so, given the 35-year cap on new home loans.

Most home buyers refinance their mortgages in the third or fourth year of their loan repayment period. This as interest rates step up gradually over time, and as the usual 'lock-in period' for a loan package expires.

But now that tenures for new loans are capped at 35 years, mortgage advisors said some home buyers looking at refinancing may be caught in a snag.

Under the new rules, those who want to refinance existing home loans will have to make sure that the tenure of the refinancing facility and the number of years that have elapsed since the first loan was disbursed, cannot add up to more than 35 years.

When asked about the proportion of such long tenure loans that will be eligible for refinancing, the three local banks and most foreign banks here declined to comment.


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Business park property holding well: analysts

Source: Business Times

The business park sector continued to hold steady in the third quarter of the year, and should remain resilient in the next three to six months, analysts have said.

In a report, average rents for business and science parks worked out to S$3.70 per sq ft (psf) per month in 3Q, the same rate as in the previous quarter.

Vacancy rates meanwhile fell to 6.9 per cent from 7.5 per cent from 2Q.

The report said rents held firm for a couple of reasons: one was a strong pre-commitment by companies to upcoming land supplies; the other was multi-national companies (MNCs) based in the Central Business District relocating amid a gloomy economic outlook.

Leasing activity completed in 3Q 2012 included British Telecom and International SOS taking up around 65,000 sq ft of space in UE Bizhub East.

Three new sites with 1.04 million sq ft in net lettable area (NLA) will be completed in the fourth quarter. But companies have already committed to about 71 per cent of the upcoming space.

The biggest risk to the current assessment remains the uncertain economic outlook, the analysts believe.


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Dim property outlook for office and retail sectors

Source: The Straits Times

The property market might be displaying resilience amid a global economic slowdown, but experts say both the office and retail segments face weakness ahead.

Office space did better than expected in the three months to September. Vacancy rates fell and more space was leased than was vacated for a fourth straight quarter.

However, office rents are still falling and are set to come under further pressure, a report said. This is particularly so for older office buildings - such as One George Street, PWC Building and DBS Tower One - as space becomes available when existing tenants move to newer buildings, it added.

On the retail front, rents held firm in the third quarter. Retail demand was mixed, with the withdrawal of Carrefour from Singapore juxtaposed against more new brand entrants and food and beverage outlets entering the market.

However, landlords were still able to hold up their asking rents this quarter, with flexibility extended to new market entrants and desired tenants. The landlords will monitor and review tenants' gross sales performance before making any rental revisions.

Average rents tracked across all sub-markets were stable for the fourth straight quarter.

Prime Orchard Road rents held steady at $31.60 psf a month, while prime suburban rents were $29.75 psf a month.

But the outlook for the retail market is expected to weaken in the light of poor business sentiment, with market resilience expected to wane in the next six to 12 months.


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