ST Fourm : Where's the planning?

Sep 6, 2010


Where's the planning?

'The measures to curb property price escalation, transport congestion and the influx of foreigners appear to be knee-jerk reactions.'

DR GOH PHUAY YEE: 'The measures to curb property price escalation, transport congestion and the influx of foreigners appear to be knee-jerk reactions rather than well-planned measures. The Government is in the best position to plan ahead with information from statistics on population numbers, availability of accommodation, number of commuters the system can take, number of vacancies in schools, and such. It should be able to regulate the inflow of foreigners without causing a sudden crunch on our infrastructure, jobs and social stability. All these problems arose over the years because of a lack of foresight and swift response.'

ST Forum : Why it isn't fair

Sep 6, 2010

PROPERTY AS INVESTMENT

Why it isn't fair

IN SATURDAY'S letter ('Property: Nothing wrong in having it both ways'), the writer asks: 'Why shouldn't Singaporeans be allowed to use property investment as a vehicle for growing wealth for future needs while living a modest life as an HDB dweller?'

While it is wise to invest for our future needs, the use of property as a vehicle for investment is not fair in land-scarce Singapore.

Humans have three basic needs: food, water and shelter. If many Singaporeans bought a second property here as investment, it would drive up the property prices, making it more expensive for those who don't own property to meet their minimum needs for shelter.

If many Singaporeans bought extra property to fund their 'future' needs, it would put the less well-to-do at risk of being unable to meet their 'current' needs. The Government is doing the right thing by taking measures to cool the red-hot property market and curb speculation.

It is a little self-centred on the part of some to insist on giving them free rein to speculate in properties. They should invest their money elsewhere, in instruments where others' basic needs are not compromised - like stocks and bonds.

Chan Yeow Chuan

ST Forum : Get this

Sep 6, 2010

Get this

'Many Singaporeans are yet to have their first HDB flats, let alone dream of having a second property as investment.' /p>

MR PHILIP SOH: 'I refer to Saturday's letter ('Property: Nothing wrong in having it both ways'). Many Singaporeans are yet to have their first HDB flats, let alone dream of owning a second property as investment. It cannot be our nation's priority to help some achieve future economic gains at the expense of young couples who are waiting for a flat of their own to grow a family.'



Right step

'If the measures work, property prices would come down, making those 'dream homes' more within our reach.'

MR STEFFEN TOH: 'The 30 per cent down payment rule for the purchase of a second property effectively ensures that buyers have sounder fundamentals before they make that commitment. With interest rates currently very low, the danger of Singaporeans over-stretching themselves is very real. If the measures work as they are intended to, property prices would stabilise and possibly even come down, making those 'dream homes' more within our reach.'

ST : Low-cost housing still out of reach

Sep 6, 2010

Low-cost housing still out of reach

Few financing options available for Shanghai's low-income buyers

SHANGHAI: After months of anxious waiting, Ms Wang Jinxia finally obtained a coveted spot in Shanghai's trial afford-able-housing programme, but now the former factory worker is scrambling to pay for it.

The 53-year-old divorcee, who took early retirement years ago, is desperate to move after living for eight years in a 60 sq m Shanghai apartment with her octo-genarian parents and two other relatives.

'I've been stressed out recently. I have many new grey hairs. I will have to pour all of my 70,000 yuan (S$14,000) savings into this,' Ms Wang said outside a makeshift centre for mortgage applications at a local school.

She is among the first batch of about 1,940 families selected to buy low-cost housing selling for about one-third of market prices, as part of a new affordable housing campaign in the city of more than 20 million.

But Ms Wang and others find even 'affordable' housing out of reach, due to limited financing options for low-income buyers - a hurdle for government efforts to quell public concern over skyrocketing prices.

China's public housing programmes have been neglected for years, as local governments sought to cash in on spiralling property prices with more upmarket developments. But a growing outcry over the past year has put affordable housing back on Beijing's agenda.

The stakes in the housing programme are also high for the economy. It grew 10.3 per cent in the second quarter of this year - slowing from a blistering 11.9 per cent in the first quarter - as Beijing took steps to cool soaring property prices.

'The social housing programme is on track and will constitute an important cushion for any potential slowdown in private, market-based residential property construction,' Morgan Stanley economist Qing Wang wrote in a note.

Beijing's ambitious target to build 5.8 million affordable housing units this year is aimed at preventing a hard landing for property investment growth, and propping up demand for basic materials such as cement and steel, said the economist.

If it succeeds, the programme could boost China's economic growth by up to one percentage point or more, said property analyst Bai Hongwei of China International Capital.

However, only limited and fuzzy official data is available, and the push has been blemished by reports of insufficient land and high-income earners exploiting loopholes to take social housing spots.

Analysts estimate that only 40 per cent of the housing local governments pledged to build last year materialised, as they continued selling land to developers at market rates, and it may rise to 50 per cent this year, at best.

In May, Beijing told local officials that affordable housing would be part of their performance appraisals.

To qualify for the trial, a family's average annual income per capita must be less than 27,600 yuan, while each member's current share of floor space must be under 15 sq m. Yet once chosen, participants must still find a way to pay for the home.

'No bank wants to do this. It's not a profitable business,' said a mortgage officer at the makeshift centre. 'We are here because the government instructed us.'

For Ms Wang, a mortgage for the newly built 70 sq m home on the city outskirts would cost 2,200 yuan a month.

That is 43 per cent of her and her parents' combined pension, payable over 16 years, the longest period the bank offers.

She has persuaded the developer to give her three months to come up with cash to buy the apartment as she asks friends to lend her money. But success is still far from certain, she said.

AGENCE FRANCE-PRESSE

ST : Lacklustre property sales as cautious mood prevails

Sep 6, 2010

Lacklustre property sales as cautious mood prevails

Homes in mass-market segment appear to be most affected

By Jessica Cheam

WAIT-AND-SEE was the order of the day at showflats over the weekend - the first since measures aimed to cool property speculation were introduced by the Government last Monday.

The mass-market segment appeared to be the most affected, with thinner crowds and noticeably fewer sales. At more upmarket properties, there was still some interest among genuine buyers.

There were no new launches over the weekend, but at projects that The Straits Times visited, sales were poor.

At The Minton, a 1,145-unit condominium in Lorong Ah Soo, a healthy crowd was seen but actual sales were lacklustre, said Mr Peter Ow, managing director of residential services at Knight Frank, the agency selling the condo.

'The crowd levels were the same as the previous weekend, but take-up was poor. The sentiment on the ground now is buyers want to wait and see what happens in the property market.'

The condo has sold 437 units at an average price of $860 per sq ft (psf) to date.

Property agents interviewed said overall, the mood seems to be cautious, with most buyers now keeping that home purchase on hold.

HSR agent John Chan, 26, who took his clients to the Waterfront Gold showflat in the Bedok Reservoir area said the recent measures have 'tipped many borderline buyers into the wait-and-see group'.

'People want more indication of whether prices will hold or fall before making decisions,' he said.

Developers appear to have maintained their selling prices for now, a move which probably gave buyers another reason to hold back.

A Frasers Centrepoint spokesperson said there were no sales done over the weekend for Waterfront Gold. To date, 200 out of 272 units have been sold at an average price of $980 psf.

The showflat was relatively quiet, with more agents milling around than there were buyers drifting in.

Over at Seletar Hills, Far East Organization sold eight homes at an average price of $1,065 psf over the weekend at Phase 2 of The Greenwich, a 319-unit leasehold project.

In contrast, 34 units were snapped up in the week from its Phase 2 launch on Aug 23 to Aug 29. It had sold out 174 units in its Phase 1 launch previously.

This hit on the mass-market segment, typically made up of upgraders, had been expected by property analysts.

'This segment was the star performer this year, so naturally it will take a hit as buying sentiment has cooled as everyone is waiting to see if prices will come down,' said Chesterton Suntec International research and consultancy director Colin Tan.

The new measures included tighter lending rules for home owners with existing mortgages looking to buy another property. They can borrow up to only 70 per cent of the value, down from 80 per cent. Assuming a price tag of $1 million, buyers will have to fork out an extra $100,000 for the down payment, a hefty sum for an upgrader.

Those who buy an HDB resale flat on or after Aug 30 must also dispose of their private property - including any held overseas - within six months of the HDB purchase.

One buyer, Mr Terence Tan, a 37-year-old flight attendant, said that the higher down payment has made it more difficult for buyers such as himself to upgrade.

'But if I really like the home and the price is right, I will fork out the higher down payment to secure it,' he said.

Agents agree that there will still be buyers who will sign on the dotted line if they feel the development is unique enough and will thus keep its value.

Retiree Ng Eng Koon, 65, who was at The Greenwich showflat looking to buy his retirement home, said the new rules will not deter him from buying if he likes a home.

'No one can predict what will happen now, even the Government. I don't think the rules will have great impact on genuine buyers, only the investors,' he said.

Agents added that there will also be some genuine buyers who need homes and cannot wait.

The mid- to high-end market still seemed to attract buyer interest. BS Capital's The Lumiere at Shenton Way saw a muted crowd, but people were buying.

A property agent who declined to be named said that the project - which has been completed - has not been drastically affected as the buyers 'can afford to invest'. He had personally sold two units a few days ago, after the new measures were introduced.

Homes at the 168-unit leasehold project are priced at about $2,500 psf.

Another reason for the lacklustre sales activity could be the Hungry Ghost Festival, which ends tomorrow, said market observers.

With a few of the recent projects having sold out, buyers may also be hoping for new launches to offer more choice.

The best time to gauge the impact of the curbs will be when there are new launches, noted Chesterton's Mr Tan, although this may not be for some time yet as developers are widely expected to put these on the backburner.

'We have received feedback that buyers are waiting to see if developers will lower their prices, and they might return to the market when this happens,' said Mr Tan.

jcheam@sph.com.sg


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'The crowd levels were the same as the previous weekend, but take-up was poor. The sentiment on the ground now is buyers want to wait and see what happens.'

Mr Peter Ow, managing director of residential services at Knight Frank on sales at The Minton in Lorong Ah Soo