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Panic selling may happen if current property downtrend persists: CDL

Posted by Singapore Property Launch on 17th August 2014 in Blog

Panic selling may happen if current property downtrend persists

SINGAPORE — City Developments Limited, the second-largest developer in the Republic, has flagged concerns about a downward spiral of property prices if the current declining trend continues, but it is confident that the government will take “timely action” if such a scenario arises.

“The general trend in a downturn cycle is that residential sales volume will start to fall and prices will dip slightly, leading to a more acute downward pressure, with spiralling effects, as panic selling or forced sales seep in. This applies across all segments of the residential property market,” said executive chairman Kwek Leng Beng.

“Various industry stakeholders have called for the Government to review and tweak some of its measures. The timing of when to review the cooling measures is a judgment call. (We are) hopeful that timely action will be taken by the Government if and when the situation warrants it.”

Despite the headwinds in the Singapore market, Mr Kwek said residential projects that tick the right boxes can still attract buyers, as evident by the company’s joint-venture developments Coco Palms and Commonwealth Towers, which have, respectively, sold 86 per cent and 78 per cent of the units released.

City Developments’ relatively resilient property development business helped increase its revenue by 5.9 per cent to S$861.1 million in the second quarter of this year. But net profit fell 32.8 per cent to S$137.9 million due to the absence of divestment gains that boosted earnings in the same period last year. On a like-for-like comparison, profits were 89.7 per cent higher in the three months to June.

City Developments said it intended to launch its District 9 freehold condominium, New Futura, subject to market conditions.

As the home market remains challenging, with cooling measures still working their way through the property sector, the developer is looking to accelerate its overseas expansion plans. It has made steady progress in markets such as the United Kingdom and China, and plans to make further inroads into Japan and Australia, said chief executive Grant Kelley.

“In the short term … whether it’s London residential, Japanese hospitality, Chinese residential or mixed-use developments, we’ve got a very clear direction and we will carry that forward with our other geographic expansion in the coming years,” he said.

credits: Today online

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RCR homes dominate deals as private home sales inch up in July

Posted by Singapore Property Launch on 17th August 2014 in Blog

RCR home dominate sales in July 2014

484 units were sold last month.

Private developer sales remained lacklustre in July. Sales inched up very slightly with 484 units sold last month compared to 482 units in June.

According to PropNex Realty, the Rest of Central Region (RCR) was the most active in July, accounting for 46.1 per cent of new private home sales, while Outside Core Region (OCR) and Core Central Region (CCR) accounted for 35.7 per cent and 18 per cent respectively.

“May’s exuberant private home market was largely due to two huge projects (Coco Palms and Commonwealth Towers) which accounted for over half of the month’s launches and sales respectively. For the months of June and July, however, we see more moderated sales but we could see healthy monthly sales in the future if more projects are priced realistically at levels that would draw in buyers,” commented Mr Mohamed Ismail, CEO of PropNex Realty

Here’s more from PropNex:

Private home sales remained moderated compared to June 2014 due to the market sentiments and the availability of new launches in July. As a result, developer sales remain subdued in July with a total of 434 units launched and 484 units sold (excluding ECs).

The various Government measures have effectively curtailed demand from all groups of homebuyers. Not only have selected groups of buyers been side-lined by financing rules under the TDSR, the home-buying budgets of eligible buyers have also been trimmed.

Additionally, demand from upgraders from the Housing and Development Board (HDB) market has also been affected by the softening resale prices of HDB flats which are expected to continue on a downtrend.

CEO of PropNex, Mr Mohd Ismail concluded, “Private New Home Sales volume for the whole of 2014 is likely to be in the range of be 9,000 to 10,000 units in all. This is about 35% shy of the 15,000 units sold in 2013 and about 55% lower than 22,688 units sold in 2012.”

 

credits: singapore business review

 

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Koh Brothers’ net profit soars 138% in Q2

Posted by Singapore Property Launch on 16th August 2014 in Blog
The Montana perspective 2
Image: Koh Brothers Development project The Montana.

Koh Brothers Group’s net profit jumped 138 percent from $4.8 million in Q2 2013 to $11.5 million in Q2 2014.

The record profit was on the back of higher group revenue mainly due to its real estate division which contributed higher sales in Q2 2014 and H1 2014, said Francis Koh, Managing Director and Group CEO of Koh Brothers.

Group revenue comprises sales of products, services rendered, property development and rental income, as well as construction contract revenue.

In Q2 2014, an increase in sales, mainly from its real estate division – Koh Brothers Development, lifted group revenue by seven percent to $109.5 million.

Whilst share of results from associated companies recorded a profit of $103,000 in Q2 2014, share of results from joint ventures had a loss of $1.6 million. The latter was mainly due to lower contribution from a property currently undertaking an asset enhancement exercise and initial setup cost for a residential project.

Looking ahead, Koh said, “The construction sector is experiencing a tight labour market and there are more stringent regulatory controls. However, the brighter side of it is that more construction demand is expected to be generated from the public sector. For the residential property market, with the various property cooling measures still in place, we expect prices to further moderate this year.”

The group’s various business lines include real estate development, construction, building materials, and environmental engineering.

credits: propertyguru

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92 households took up the Silver Housing Bonus scheme

Posted by Singapore Property Launch on 16th August 2014 in Blog

92 household silver scheme

HDB revealed 92 households have benefitted from its Silver Housing Bonus scheme since it was introduced in February 2013, reported the media.

Among those who benefitted is Choy Mui Leng. The 66-year old retired nurse tapped on the scheme by selling her four-room flat in Sengkang, and purchasing a three-room unit in Punggol.

“When you are getting old, it is very comfortable to stay in a small apartment, easy to manage,” she said.

Using $68,000 from the sale proceeds, she topped up the CPF Retirement Accounts for her husband and herself, while keeping the remaining $200,000.

Lower-income elderly can get up to $20,000 cash bonus per household if they use part of the proceeds to top up their CPF Retirement account in order to receive a monthly income for life.

However, Member of Parliament Lee Bee Wah, who is Chairman of the Government Parliamentary Committee for National Development and Environment, believes that the CPF component of the scheme makes it less attractive to some elderly since part of their earnings will be used to top up their CPF Retirement Accounts to meet the Minimum Sum.

“Most of the Singaporeans I still find that, they would rather change a bigger flat to a studio apartment and they want to take the one big lump sum, so that they can keep the money,” she noted.

“A lot of parents – they prefer to have cash for themselves so they don’t have to depend on their children or burden their children. So if we can build more studio apartments near MRT stations, near amenities, in the same housing estate. I would think that will be popular,” added Lee.

credits: propertyguru

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36% of young Singaporeans have no savings

Posted by Singapore Property Launch on 16th August 2014 in Blog

36percent singaporeans no savings

A number of Singaporeans within the age of 20 to 35 years old have zero savings, revealed a survey by EnjoyCompare.com as reported in the media.

According to the report, 36 percent of the respondents have no savings, while a quarter have put aside less than $6,000 for rainy days. In comparison, those in their parents’ age bracket have an average savings of $60,000.

“These are shocking figures,” said Mark Hall at the Singapore-based financial portal.

“There’s so little money going into investment or savings that some people are finding themselves rapidly up to their necks when they hit troubled times.” Without a contingency fund, some may even lose their homes if they become unemployed.

“The current generation are seemingly living for the day and spending their money rather than putting some aside for when it might be needed. This is endemic of what’s rapidly becoming known as the ‘renting generation’, who would rather not save money for a mortgage, pension or even for emergencies,” he explained.

In fact, 80 percent of the people surveyed had spent money they could have saved for a housing loan deposit, and about 33 percent are planning to purchase a residential property instead of renting.

In terms of expenses, the average Singaporean graduate spends 40 percent of their wage on rent, while another nine percent goes to student loan repayments.

credits:  propertyguru

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TDSR makes older property measures redundant: Experts

Posted by Singapore Property Launch on 14th August 2014 in Blog

TDSR makes older measures redundant

 

SINGAPORE — With the Total Debt Servicing Ratio (TDSR) framework proving effective in keeping housing prices in check, some of the property cooling measures introduced over the past five years may have become redundant, said real estate experts yesterday.

At a discussion at the annual National Real Estate Congress, panellists highlighted the Seller’s Stamp Duty (SSD) — imposed in February 2010 and subsequently expanded — and the Additional Buyer’s Stamp Duty (ABSD) — introduced in 2011 and raised in January last year — as measures the Government could review.

“I think nobody questions the reason behind the TDSR, but with it being in place for slightly more than a year now, I think it’s time for the Government to start looking at whether some of the earlier measures have become redundant because we have a pretty effective TDSR,” said Mr Dennis Yeo, managing director of property consultancy Colliers.

ERA key executive officer Eugene Lim shared this sentiment, saying the cooling measures may be an “overkill” now that speculative activity has been curbed.

Figures from the Urban Redevelopment Authority showed that sub-sales accounted for 3.4 per cent of all sale transactions in the second quarter of this year, lower than the 4.6 per cent recorded in the first quarter.

“The sub-sales number is actually very low across all types of properties, so there is very limited speculation. It could be an opportune time to review the measures aimed at tackling speculative buying and selling, which is essentially the SSD. Is it necessary anymore at this stage?” Mr Lim said.

However, Associate Professor Sing Tien Foo of the National University of Singapore’s Department of Real Estate said the cooling measures continued to act to prevent the formation of a property bubble, a view shared by fellow panellist Seah Seng Choon, executive director of the Consumers Association of Singapore.

“We don’t want to see a bubble forming. So, it’s good that the Government wants to slow things down to make sure it doesn’t go out of control and eventually burst, which would cause everyone to suffer, including the genuine buyers. So, it’s important that the measures are in place to ensure financial prudence is maintained,” said Mr Seah.

He said the cooling measures paled in comparison with some of those in the region.“The measures here are rather mild compared with, perhaps, Australia, where foreigners are not allowed to buy resale properties … So, I think genuine buyers should not be too affected by the measures. The measures are not to stop people from buying properties,” Mr Seah said.

Still, as more Singaporeans aspire to not only own a home to live in, but also have a second property for investment, it is perhaps timely to lower or remove the ABSD for local buyers, Mr Lim said. “The ABSD is needed to prevent foreigners from buying and driving up prices. But since the TDSR is already preventing locals from over-gearing, I don’t think tweaking the ABSD for local buyers will cause prices to shoot up again. Developers also have a lot of stock to clear,” he added.

credits: today online