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    Default Property measures cool sentiments

    http://www.straitstimes.com/PrimeNew...ry_624288.html

    Jan 15, 2011

    property measures

    Property measures cool sentiments

    Some buyers pull out, property shares hit, developers take stock

    By Jessica Cheam, Housing Correspondent


    SCORES of buyers have withdrawn offers or walked away from thousands of dollars of deposits as the shock of the tough cooling measures reverberated through the housing market yesterday.

    Agents have also reported that their phones have been running hot with worried people wanting advice.

    And property shares of companies like City Developments (CDL), Keppel Land and CapitaLand fell as well with investors bailing out of the sector.

    But one group was smiling yesterday: First-time buyers, who are optimistic that prices will now fall enough to allow them to get onto the private property ladder.

    The Government announced new rules on Thursday that raised the seller's stamp duty on new properties to as much as 16 per cent of the sale price if the home is offloaded within a year.

    The amount banks can lend on a second property has been lowered to 60 per cent of the home's value.

    The Government's move has stunned both sides of the market - developers and some buyers - with neither sure how to move forward.

    International Property Advisor chief executive Ku Swee Yong said many of the firm's clients had withdrawn their cheques or postponed decisions to buy.

    Others who had paid option fees - around $10,000 for a $1 million property - have walked away from the money rather than sign on the dotted line.

    But first time buyers such as credit analyst Mr Joshua Cheah, 29, were upbeat. Mr Cheah, who is renting a flat with his parents and plans to buy a private home, believes the moves will deter speculators and put a property within his reach.

    While some analysts say the measures will effectively wipe out all speculative activity and even end genuine investor demand, others in the industry are downplaying the impact.

    CapitaLand chief executive Liew Mun Leong says it is 'business as usual' for the firm, with no plans to delay launches or reduce prices in spite of the tough cooling measures.

    Law firm Rodyk & Davidson partner Lee Liat Yeang, who acts for many real estate developers, said that although developers are concerned, 'generally they are still optimistic'.

    One developer client of the firm said it may go ahead with launches as demand is still there. This is true for many mass market condos who target first-time buyers, which are largely unaffected by the new financing rules, added Mr Lee.

    But Mr Nicholas Mak, SLP International Property Consultants' research executive director, said: 'We are expecting developers to delay launches. Whether prices will fall is the big question,' he said.

    CDL spokesman Gerry De Silva told The Straits Times: 'The market will take time to absorb the news. We will assess the situation and meanwhile review our strategy.'

    Other developers have said they will also take the wait-and-see approach but The Straits Times understands some have already pulled back on marketing with at least three big-name firms yanking marketing campaigns for new launches.

    Still, SLP's Mr Mak said there could be a silver lining: Land prices for future tenders could decline in the light of weaker sentiment and in turn lead to cheaper apartments.

    Meanwhile, banks say the moves are unlikely to have a major impact on their business.

    Ms Vibha Coburn, business director of secured finance solutions at Citibank Singapore, said buyers are not always borrowing the maximum loan they can get due to the high liquidity in the market.

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    http://www.straitstimes.com/PrimeNew...ry_624298.html

    Jan 15, 2011

    property measures

    Impact on prices likely only after Q1

    By Esther Teo


    HOME prices are expected to take a tumble this year on the back of tough new cooling measures unveiled by the Government on Thursday, although top-end homes might be immune.

    Some analysts are predicting suburban home prices to fall by as much as 10 per cent after a significant run-up in the recent red-hot market.

    Any correction, however, is likely to emerge only after the first quarter of the year. Price falls often come only after a prolonged stand-off between buyers and sellers, they add.

    Most experts agree any further rise of prices will be halted at least temporarily as buyers adjust to the measures.

    But they added that continued low interest rates and strong confidence in the economy and property market might counter any prolonged dampening impact.

    The measures unveiled include a higher seller's stamp duty of up to 16 per cent applying to up to four years after date of purchase.

    Research firm Kim Eng said the mass market segment remains the most vulnerable, adding that prices could fall by up to 10 per cent over the next year.

    Buyers in the mid- to high-end segment tend to have deeper pockets. But even then, higher stamp duty may cap price appreciation now, it added.

    DMG & Partners property analyst Brandon Lee also expects a 10 per cent correction for mass market homes, where buyers usually take on larger loans and are more price-sensitive. He believes this will come in the second half of the year.

    However, Mr Lee expects high-end property prices to hold steady owing to their limited supply and the strong holding power of such developers.

    But not all experts agree that mass market homes will be the worst hit. Cushman & Wakefield's senior manager for Asia-Pacific research Ong Kah Seng says prices in this segment are unlikely to fall immediately, as they are underpinned by genuine demand and the economy's strength.

    However, this could change if there is prolonged resistance to home buying, he added.

    UOB Kay Hian property analyst Vikrant Pandey has drastically cut his price forecast for this year from up to 3 per cent growth to a 5 to 15 per cent correction. He also expects sales volumes to fall by up to 35 per cent.

    'The seller's stamp duty hike is the most severe unanticipated measure and would instantly dry up speculative transactions that make up around 8 per cent of total housing transactions and will cause a major slowdown in the secondary market,' he said.

    A day after the market was stunned by the tougher-than-expected measures, analysts say only first-time homebuyers and those without outstanding home loans have emerged unscathed. They can look forward to property prices taking a dip from their record highs.

    Property developers and disgruntled owners looking to sell their homes, however, will have to adjust to a shrinking buyer pool as many take a wait-and-see approach on their purchases.

    Mr Chia Boon Kuah, chief operating officer of property sales at Far East Organization, said that the firm is presently reviewing some of its business programmes to build a stronger base of long-term buyers. 'We will roll out our launches as and when ready,' he added.

    CapitaLand chief executive Liew Mun Leong said at a public lecture at National University of Singapore yesterday he expects sales volume and home prices in all segments, except at the top-end, to fall.

    Boutique developer EL Development managing director Lim Yew Soon, who is planning to launch SkySuites 17 at Balestier in March, said he will watch market reaction closely in the next two months.

    'If the reaction is not so strong then we may proceed as planned but if the market quietens down then we may postpone it to a later date,' he added.

    Even if the firm was willing to drop the launch prices, they cannot fall much lower since there were already many other costs to consider, Mr Lim said.

    Additional reporting by Cheryl Lim

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    http://www.straitstimes.com/PrimeNew...ry_624299.html

    Jan 15, 2011

    property measures

    Upgraders get warm feeling from cooling measures


    Mr Kee believes the government measures improve his chances of moving into a dream home with his wife Avia Chiong and their sons (from left) Caleb, Rayner and Jairus. --ST PHOTO: CAROLINE CHIA

    UPGRADERS like Mr Ken Kee, 33, are feeling optimistic in the wake of the property market cooling measures announced on Thursday.

    The manager, who rents a four-room flat in Sembawang, believes the latest government rulings will dampen speculation and improve their chances of landing their dream homes.

    Mr Kee, whose joint income with his wife is less than $7,000, has three sons, aged eight, six and one.

    He previously owned a four-room flat in Sembawang, which was bought for $212,000 in 2003 and sold for $380,000 in December.

    His dream was to own either an Executive Condominium (EC) or a private property.

    Now with the latest measures in place, he is hopeful that prices will head downwards.

    As his mortgage has been fully paid up, he is not affected by the new rules which stipulate that buyers with outstanding mortgages must pay at least 40 per cent of the property price up front and in cash.

    Instead, he needs to pay only 20 per cent up front and can borrow up to 80 per cent.

    While he is glad that the new measures could mean less competition from speculators, he also knows that he cannot own private property and also invest in a resale HDB flat.

    The measures introduced on Aug 30 last year stipulate that owners must sell their private properties after buying resale flats.

    That said, however, he remains upbeat: 'Since there is a lot of uncertainty in the market now, I think this is the best time to go in, before prices inch upwards again.'

    DARYL CHIN

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    http://www.straitstimes.com/PrimeNew...ry_624295.html

    Jan 15, 2011

    property measures

    Closer to dream of owning his own home


    Mr Cheah believes the new rules imposed for the seller's stamp duty will lead to more affordable prices. -- ST PHOTO: LIM SIN THAI

    AS A potential first-time home buyer, Mr Joshua Cheah, 29, was all smiles after he heard about the latest Government measures to curb property speculation.

    The credit risk analyst, who previously lived with his parents in a five-room flat at Farrer Court, has been on the lookout for his own pad since the HUDC estate went en bloc in 2007.

    The family is currently renting a four-room Housing Board flat at Marine Parade.

    Mr Cheah has yet to decide if he will buy his first home by himself or together with his parents.

    He believes the revision in the seller's stamp duty - which will now range from 4 per cent to 16 per cent, depending on when the sale is done during the four years following the property's purchase - will put off speculators and lead to more affordable prices.

    He is keeping his options open and is prepared to wait up to two years 'because these price adjustments take time'.

    Before, he was considering only public housing, either new or resale.

    'With these new rules, I will wait and see how much private property prices slide before I take the plunge,' he said.

    'Just as in Hong Kong, land is scarce in Singapore, so property is a good investment,' he added.

    Regarding the new measures, he said: 'It's a good move that will allow more Singaporeans to pursue their dream of owning a home of their own, even with foreign buyers coming in.'

    DARYL CHIN

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    http://www.straitstimes.com/PrimeNew...ry_624297.html

    Jan 15, 2011

    property measures

    Investor forfeits $10,000 fee


    Ms Angela Hou, 28, was about to buy two condo units but decided to forfeit her booking fee for one of them after she heard the news on Thursday. -- ST PHOTO: DESMOND WEE

    PROPERTY investor Angela Hou knows what the new cooling measures have cost her - around $10,000.

    That is the princely amount she walked away from yesterday after deciding to forfeit her booking fee for a condominium unit she had set her heart on. Ms Hou, 28, was about to buy two condo flats when she heard the news on Thursday night.

    'On the spot, I decided to let go of the 1 per cent booking fee for one of the properties, which was about $10,000.'

    'Because at least I would have lost that amount, rather than if property prices slide more than 1 per cent then I'll lose out more.'

    Ms Hou, who became a property investor, and subsequently an agent after getting the real estate bug a year or so ago, said many others like her have decided to let go of their booking fees and have adopted a wait and see attitude.

    'Another reason why I decided to let go was the fear that I might not be able to find a tenant to cover my mortgage,' she added. 'With fewer people selling because of the changes to seller's stamp duty, this means more buyers will be renting out, to cover cost - resulting in oversupply.'

    The new measures soured Ms Hou on the property scene after what had been a couple of good years for her. She ventured into real estate and bought a studio unit in District Nine when the property market was down two years ago.

    'That was the time during the Lehman Brothers debacle, and the small profit I turned from selling it gave me the confidence to continue,' she said yesterday.

    It also gave her a taste of real estate and she became a property agent.

    It was all going swimmingly as well thanks to the booming market, and Ms Hou snapped up several properties.

    But then Thursday's housing measures landed, leaving her frustrated and out of a substantial sum.

    Ms Hou said she will be more careful in future purchases because there is less room for error.

    'Who knows, I might look around again in about five months or so, but I'll really have to be sure.'

    DARYL CHIN

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    http://www.straitstimes.com/PrimeNew...ry_624293.html

    Jan 15, 2011

    property measures

    Investment condo now out of reach


    Mrs Dinesen's plans to buy another condo have been stymied. --ST PHOTO: AZIZ HUSSIN

    THE investment condo Mrs Rhoda Dinesen was all set to buy after years of saving has got that much more out of reach.

    The new rules mean Mrs Dinesen, 42, has to stump up a much bigger upfront payment - 40 per cent instead of 30 per cent - as she still has an outstanding loan on her first home.

    'Where in the world does anybody have 40 per cent waiting in the bank that is not used somewhere else? This rules out the middle class completely,' she said yesterday.

    It has all come as a bitter blow for the director of a public relations agency.

    In 2002 she took out a 25-year bank loan for a three-room condominium unit in Geylang.

    Nearly 10 years on she felt it was the time to buy another property.

    'I, like many others, want to get a bigger place as I'm trying to bring in my mother to live with us. I also want to leave this area and move to somewhere quieter like Kembangan.'

    But now she fears she may have missed the boat.

    'A few years ago, I could purchase only something up to $800,000, but my dream home was valued at $1.2 million. So I waited. Then the measures kicked in last year, and I waited again. (Thursday) was a shocker.'

    If Mrs Dinesen, who still has an outstanding home loan, bought a house before yesterday, she would have needed to pay only 30 per cent of the price upfront and borrow the rest.

    But now she would have to fork out 40 per cent - cash she just does not have.

    Her focus now is to keep a lookout for properties overseas. 'For many of us, it's not about speculation, it's about retirement. If I can't buy in Singapore, I'll just buy overseas, because I have to think long term about what I will have when I retire.'

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