Oct 3, 2010
Little Thailand to be moved across road
New park, with sepak takraw courts and other facilities, for Thai workers to enjoy
By Rachel Chang
After years of complaints from residents, grassroots leaders in Kampong Glam have a plan to 'move' Little Thailand.
The popular haunt of hundreds of Thai workers is a Housing Board estate located across the road from the Golden Mile Complex.
The workers gather there on weekends, occupying void decks, playgrounds and common areas.
Residents allege the workers litter, play loud music late into the night, drink alcohol and relieve themselves in the drains.
These workers play an important role in Singapore, acknowledged the chairman of Kampong Glam's Citizens' Consultative Committee, Mr Woon Tai Hean.
'But while the whole of Singapore benefits from their work, we carry the national burden in Kampong Glam,' he added.
Now, after years of lobbying, the area's grassroots leaders are renting from the Singapore Land Authority (SLA) a small plot of land next to the Golden Mile Complex. The hope is that the Thai workers will migrate across the street to the grounds, named Harmony Park, and residents will finally be placated.
Grassroots leaders obtained a grant of about $400,000 from the National Development Ministry's Community Improvement Projects Committee, to pay for landscaping, fencing, and facilities such as sepak takraw courts, a miniature football field and pavilions for shelter.
By the end of the year, there will also be food stalls and Thai movie screenings at night.
The Sunday Times understands the use of the land was approved by the SLA a year ago, after endorsement by the ministries of manpower and trade and industry - two government bodies directly involved in regulating foreign labour.
The problem of 'Little Thailand' arose about 15 years ago.
Until then, Thai workers would gather on weekends at a sprawling grassy area next to Golden Mile Complex, known as Crawford Park.
They were, however, driven from it by the construction of a tunnel leading to Nicoll Highway.
They began congregating across the street at HDB blocks, where a cluster of shops selling Thai food and goods soon sprang up.
Mr Woon acknowledged they were not doing anything wrong in congregating in a common area.
'That is the behavioural norm in their country,' he said. However, he added that residents did not feel safe walking home through the mass of workers.
Many attempts have been made to address residents' concerns.
A year ago, Aetos security officers, paid for by the Ministry of Manpower, began to patrol the area to ensure orderly behaviour.
The town council also schedules cleaning on weekend afternoons, which leaves the floors wet and discourages the workers from sitting there. Residents said these measures had improved the situation, but not solved the problem.
With Harmony Park, grassroots leaders hope they have found the answer. In time, they hope the park can become self-funded, with the rental fees from vendors paying for its maintenance.
They also hope residents will use Harmony Park on weekdays, making it a 'win-win situation'.
An advocacy group, Transient Workers Count Too, welcomed the idea. Said its executive director, Vincent Wijeysingha: 'Given their extremely low wages, the workers are priced out of most social and sporting venues... this space will be close to them and accessible.'
rchang@sph.com.sg
Monday, October 4, 2010
ST : Leasing out a shoebox flat
Oct 3, 2010
property
Leasing out a shoebox flat
While Mickey Mouse flats may be relatively affordable, buyers should be aware that rents depend on location and proximity to amenities
By Joyce Teo
Buying a shoebox apartment for lease sounds like a very attractive proposition because such units are relatively more affordable. But investors should know what to expect because not everyone will want to rent such small units, experts said.
A record number of these small-format homes - also known as Mickey Mouse flats - have been sold in the first three quarters of the year, and at higher and higher prices.
The sale of 906 apartments of 500 sq ft and below in that period is 84 per cent higher than that in the same period last year, said CBRE Research, citing URA Realis. This has also exceeded the full-year sale of 722 units last year, it said.
Median prices of such homes have risen to $1,314 per sq ft (psf) so far this year, from $1,190 psf last year, and asking rents on a psf basis are comparable to those for prime developments in town.
'At first glance, investing in shoebox apartments might appear to be an attractive proposition due to the relative quantum affordability and rental yields,' said CBRE Research executive director Li Hiaw Ho.
However, the rents will depend on many factors, such as location, proximity to amenities, and demand and supply conditions, he said.
Currently, some owners of one-bedroom and studio units in projects such as Kembangan Suites in Kembangan, Parc Imperial in Pasir Panjang and Soho 188 in Race Course Road are asking for rents of $2,000 to $3,600 a month.
In July, a 431 sq ft one-bedroom unit in Urban Lofts in Rangoon Road was leased out at $2,400 a month, while a similar-sized one-bedroom unit at Mountbatten Lodge in Mountbatten Road went for $2,300 a month.
Based on current valuations, indicative gross rental yields for shoebox units are estimated at 3 per cent to 5 per cent, said CBRE Research.
'These figures, however, do not take into account the utility and condo management fees, insurance, mortgage interest payments, property taxes and maintenance charges - all of which will make the net yield considerably lower,' said Mr Li.
ECG Property chief executive Eric Cheng said most people buy shoebox units to lease out but they should be aware that any rental projection given at the launch may not pan out.
For instance, when a project in the Thomson area was launched a few years ago, the rentals were projected at $3,500 to $4,500 a month, but the transacted rents now are more like $1,800 to $2,600 a month, he said.
Cushman & Wakefield's senior manager of Asia-Pac research, Mr Ong Kah Seng, said a large supply of shoebox apartments is scheduled for completion, and rents may come under pressure as leasing competition intensifies.
Also, while tiny apartments seem suitable for single expatriate tenants, not all will want to pay so much for a small unit unless it is in a prime area, or conveniently located near an MRT station, experts said.
Said Mr Ong: 'Owners of shoebox apartments... can at best rely on junior expatriates, besides local professionals.'
But since junior expatriates are cost-sensitive, they may be open to HDB flats which are conveniently located and offer a larger space for nearly the same rent as that for a shoebox apartment, he said.
Yet, CBRE Research found that more people are paying higher prices for a shoebox unit during new launches.
Buyers picked up 383 new shoebox units which cost $600,000 and above in the first nine months of this year, compared with 133 last year and 121 in 2008.
Experts said the question is whether these units can support even higher rentals when they are completed.
The introduction of cooling measures by the Government in late August has also affected the 'flippers'. Extending the imposition period of the sellers' stamp duty of about 3 per cent from one to three years makes it less lucrative for speculators to flip a unit, experts said.
Previously, investors could make significant capital gains from shoebox units with just a small investment sum and a short holding period.
Of the shoebox units launched last year, 66 units were sold in the first eight months of the year for capital gains of $6,400 to $232,000, said CBRE Research.
But for projects launched this year, only four units were sold and gains were in the $9,400 to $101,000 range, it said.
The 'already high buy-in prices' during a new launch might make it hard for an investor to sell it later at higher prices unless it is in a prime location, said Mr Li.
In the next few months, about 10 projects with mainly small-format units are expected to be launched. Apart from one in River Valley Road, the rest are in suburban areas such as Geylang and Eunos, said CBRE.
joyceteo@sph.com.sg
--------------------------------------------------------------------------------
Renting it out
'Owners of shoebox apartments...can at best rely on junior expatriates, besides local professionals.'
MR ONG KAH SENG, Cushman & Wakefield's senior manager of Asia-Pac research, who added that junior expatriates may also consider bigger HDB flats for the same rent
While buyers are paying more for shoebox apartments, rental projections at the launch may not always pan out. -- ST FILE PHOTO
property
Leasing out a shoebox flat
While Mickey Mouse flats may be relatively affordable, buyers should be aware that rents depend on location and proximity to amenities
By Joyce Teo
Buying a shoebox apartment for lease sounds like a very attractive proposition because such units are relatively more affordable. But investors should know what to expect because not everyone will want to rent such small units, experts said.
A record number of these small-format homes - also known as Mickey Mouse flats - have been sold in the first three quarters of the year, and at higher and higher prices.
The sale of 906 apartments of 500 sq ft and below in that period is 84 per cent higher than that in the same period last year, said CBRE Research, citing URA Realis. This has also exceeded the full-year sale of 722 units last year, it said.
Median prices of such homes have risen to $1,314 per sq ft (psf) so far this year, from $1,190 psf last year, and asking rents on a psf basis are comparable to those for prime developments in town.
'At first glance, investing in shoebox apartments might appear to be an attractive proposition due to the relative quantum affordability and rental yields,' said CBRE Research executive director Li Hiaw Ho.
However, the rents will depend on many factors, such as location, proximity to amenities, and demand and supply conditions, he said.
Currently, some owners of one-bedroom and studio units in projects such as Kembangan Suites in Kembangan, Parc Imperial in Pasir Panjang and Soho 188 in Race Course Road are asking for rents of $2,000 to $3,600 a month.
In July, a 431 sq ft one-bedroom unit in Urban Lofts in Rangoon Road was leased out at $2,400 a month, while a similar-sized one-bedroom unit at Mountbatten Lodge in Mountbatten Road went for $2,300 a month.
Based on current valuations, indicative gross rental yields for shoebox units are estimated at 3 per cent to 5 per cent, said CBRE Research.
'These figures, however, do not take into account the utility and condo management fees, insurance, mortgage interest payments, property taxes and maintenance charges - all of which will make the net yield considerably lower,' said Mr Li.
ECG Property chief executive Eric Cheng said most people buy shoebox units to lease out but they should be aware that any rental projection given at the launch may not pan out.
For instance, when a project in the Thomson area was launched a few years ago, the rentals were projected at $3,500 to $4,500 a month, but the transacted rents now are more like $1,800 to $2,600 a month, he said.
Cushman & Wakefield's senior manager of Asia-Pac research, Mr Ong Kah Seng, said a large supply of shoebox apartments is scheduled for completion, and rents may come under pressure as leasing competition intensifies.
Also, while tiny apartments seem suitable for single expatriate tenants, not all will want to pay so much for a small unit unless it is in a prime area, or conveniently located near an MRT station, experts said.
Said Mr Ong: 'Owners of shoebox apartments... can at best rely on junior expatriates, besides local professionals.'
But since junior expatriates are cost-sensitive, they may be open to HDB flats which are conveniently located and offer a larger space for nearly the same rent as that for a shoebox apartment, he said.
Yet, CBRE Research found that more people are paying higher prices for a shoebox unit during new launches.
Buyers picked up 383 new shoebox units which cost $600,000 and above in the first nine months of this year, compared with 133 last year and 121 in 2008.
Experts said the question is whether these units can support even higher rentals when they are completed.
The introduction of cooling measures by the Government in late August has also affected the 'flippers'. Extending the imposition period of the sellers' stamp duty of about 3 per cent from one to three years makes it less lucrative for speculators to flip a unit, experts said.
Previously, investors could make significant capital gains from shoebox units with just a small investment sum and a short holding period.
Of the shoebox units launched last year, 66 units were sold in the first eight months of the year for capital gains of $6,400 to $232,000, said CBRE Research.
But for projects launched this year, only four units were sold and gains were in the $9,400 to $101,000 range, it said.
The 'already high buy-in prices' during a new launch might make it hard for an investor to sell it later at higher prices unless it is in a prime location, said Mr Li.
In the next few months, about 10 projects with mainly small-format units are expected to be launched. Apart from one in River Valley Road, the rest are in suburban areas such as Geylang and Eunos, said CBRE.
joyceteo@sph.com.sg
--------------------------------------------------------------------------------
Renting it out
'Owners of shoebox apartments...can at best rely on junior expatriates, besides local professionals.'
MR ONG KAH SENG, Cushman & Wakefield's senior manager of Asia-Pac research, who added that junior expatriates may also consider bigger HDB flats for the same rent
While buyers are paying more for shoebox apartments, rental projections at the launch may not always pan out. -- ST FILE PHOTO
ST Forum : Hard to spot home loan changes
Oct 2, 2010
Hard to spot home loan changes
IN MARCH 2004, I refinanced my HDB home loan with HSBC's Smartmortage package, which offered an interest offset feature with a linked current account.
I meticulously checked the loan terms with the bank officer and asked her why the agreement gave the bank a unilateral right to vary any condition, thereby defeating the purpose of signing a contract. Her reply was that it was industry practice.
Early last month, I wrote in to redeem the loan as I had sold my house. Later, I was puzzled to see interest debit costs charged to my account in my latest statement.
The bank replied that there was a standard term that allowed interest to be levied during the three-month redemption notice. I could not find such a condition in my loan agreement. On Wednesday, HSBC indicated where it was: in a few sentences included in several monthly statements in 2008, stating an amendment.
When a customer receives a monthly statement, his focus will be on checking the accuracy of the figures. Now he must check for amendments to the loan agreement as well.
Signing a long-term loan, such as a home loan, with a bank seems like signing a blank sheet of paper where the bank can change the conditions unilaterally at any time.
Mohamed Rafiq Hamjah
Hard to spot home loan changes
IN MARCH 2004, I refinanced my HDB home loan with HSBC's Smartmortage package, which offered an interest offset feature with a linked current account.
I meticulously checked the loan terms with the bank officer and asked her why the agreement gave the bank a unilateral right to vary any condition, thereby defeating the purpose of signing a contract. Her reply was that it was industry practice.
Early last month, I wrote in to redeem the loan as I had sold my house. Later, I was puzzled to see interest debit costs charged to my account in my latest statement.
The bank replied that there was a standard term that allowed interest to be levied during the three-month redemption notice. I could not find such a condition in my loan agreement. On Wednesday, HSBC indicated where it was: in a few sentences included in several monthly statements in 2008, stating an amendment.
When a customer receives a monthly statement, his focus will be on checking the accuracy of the figures. Now he must check for amendments to the loan agreement as well.
Signing a long-term loan, such as a home loan, with a bank seems like signing a blank sheet of paper where the bank can change the conditions unilaterally at any time.
Mohamed Rafiq Hamjah
ST Forum : Market will fix commission rates
Oct 2, 2010
Market will fix commission rates
WE THANK Miss Koh Wee Leng for her feedback ('Confused over stand on fixed commission rates'; Sept 18). The Council for Estate Agencies, when it is set up, will not prescribe commission rates, but will instead allow them to be determined by market forces. Estate agents will then have the right incentive to price their services competitively, and consumers can negotiate the best rates.
In general, the Competition Act prohibits market players from fixing prices. The Competition Commission of Singapore ruled earlier that the Institute of Estate Agents' guidelines for professional fees, commission for estate agents and salespersons would likely infringe the Act, and advised that estate agents and salespersons set their fees and fee structures independently.
Although the guidelines are non-binding, they may still discourage price competition below the recommended rate and facilitate price coordination. More efficient estate agents, who can charge lower rates, would then have little incentive to do so. The institute voluntarily withdrew the guidelines shortly after the ruling.
Consumers should compare fees and services before deciding on their choice of agent and negotiate fees and terms to facilitate and encourage competition. To let consumers make informed choices, agents can provide a breakdown of their fees vis-a-vis the level of services and options they provide.
Cheryl Lim (Ms)
Deputy Director
(Regulatory Control)
Ministry of National Development
Market will fix commission rates
WE THANK Miss Koh Wee Leng for her feedback ('Confused over stand on fixed commission rates'; Sept 18). The Council for Estate Agencies, when it is set up, will not prescribe commission rates, but will instead allow them to be determined by market forces. Estate agents will then have the right incentive to price their services competitively, and consumers can negotiate the best rates.
In general, the Competition Act prohibits market players from fixing prices. The Competition Commission of Singapore ruled earlier that the Institute of Estate Agents' guidelines for professional fees, commission for estate agents and salespersons would likely infringe the Act, and advised that estate agents and salespersons set their fees and fee structures independently.
Although the guidelines are non-binding, they may still discourage price competition below the recommended rate and facilitate price coordination. More efficient estate agents, who can charge lower rates, would then have little incentive to do so. The institute voluntarily withdrew the guidelines shortly after the ruling.
Consumers should compare fees and services before deciding on their choice of agent and negotiate fees and terms to facilitate and encourage competition. To let consumers make informed choices, agents can provide a breakdown of their fees vis-a-vis the level of services and options they provide.
Cheryl Lim (Ms)
Deputy Director
(Regulatory Control)
Ministry of National Development
ST : Private home prices rise at slower rate
Oct 2, 2010
Private home prices rise at slower rate
High asking prices put off buyers even before govt measures kicked in
By Joyce Teo
THE heat started coming out of the private homes market even before the Government imposed cooling measures on Aug 30.
Some buyers have been holding fire for a couple of months at least, deterred by sky-high asking prices, especially in the mass market.
Private home prices rose 3.1 per cent in the three months to Sept 30, according to flash estimates from the Urban Redevelopment Authority (URA) yesterday, down on the 5.3 per cent increase in the previous quarter.
The estimates capture mainly transactions in July and August before the measures took effect. The data will be updated four weeks later.
Price rises have moderated over the past four quarters, but private home prices are still up 14.7 per cent in the first nine months of the year.
This puts the URA residential price index at 4.7 per cent above its all-time peak in the second quarter of 1996.
CBRE Research said the continuing upward trend in prices was 'probably due to the strong sales momentum in July and August, as the market slowed down from September after the government introduced the property measures'.
Yesterday's flash estimates showed that prices of non-landed private homes rose by 1.6 per cent in the city centre and 2.4 per cent in the city fringes and suburban areas.
City fringe prices have shot up 15.6 per cent this year while they are up 12.9 per cent in suburban spots and 11.7 per cent in the city centre.
CBRE Research said the stronger price growth in the city fringes and suburban areas could be due to the higher price benchmarks set by successful new launches such as The Scala, The Greenwich, Viva Vista and NV Residences.
But overall, buyers have become more price-resistant in the mass market segment, say experts.
Colliers International's director for research and advisory, Ms Tay Huey Ying, said the Aug 30 measures were more pre-emptive in nature and would hit sales numbers first.
Indeed, Jones Lang LaSalle (JLL) said that sales volume seems to be consolidating, with private home transactions in the third quarter possibly dropping by about 30 per cent from the second quarter.
The latest cooling measures will be more effective in shrinking demand and so are expected to curb overall price growth, said JLL's head of research for South-east Asia, Dr Chua Yang Liang.
The number of home sales in the fourth quarter will be far lower than in the first three quarters of the year, said CBRE Research.
But new projects near MRT stations are still expected to do well and prices overall will still be up about 15 per cent for the year, it added.
Ms Tay reckons that prices may stay flat or rise by just 2 per cent in the fourth quarter and be stable in the first quarter of next year.
'Price resistance is still there and there's the traditional slowdown during the year-end period, compounded by the cooling measures,' she said.
joyceteo@sph.com.sg
--------------------------------------------------------------------------------
Prices may stay flat or rise by just 2 per cent in the fourth quarter and be stable in the first quarter of next year, said Colliers International's director for research and advisory, Ms Tay Huey Ying.
Private home prices rise at slower rate
High asking prices put off buyers even before govt measures kicked in
By Joyce Teo
THE heat started coming out of the private homes market even before the Government imposed cooling measures on Aug 30.
Some buyers have been holding fire for a couple of months at least, deterred by sky-high asking prices, especially in the mass market.
Private home prices rose 3.1 per cent in the three months to Sept 30, according to flash estimates from the Urban Redevelopment Authority (URA) yesterday, down on the 5.3 per cent increase in the previous quarter.
The estimates capture mainly transactions in July and August before the measures took effect. The data will be updated four weeks later.
Price rises have moderated over the past four quarters, but private home prices are still up 14.7 per cent in the first nine months of the year.
This puts the URA residential price index at 4.7 per cent above its all-time peak in the second quarter of 1996.
CBRE Research said the continuing upward trend in prices was 'probably due to the strong sales momentum in July and August, as the market slowed down from September after the government introduced the property measures'.
Yesterday's flash estimates showed that prices of non-landed private homes rose by 1.6 per cent in the city centre and 2.4 per cent in the city fringes and suburban areas.
City fringe prices have shot up 15.6 per cent this year while they are up 12.9 per cent in suburban spots and 11.7 per cent in the city centre.
CBRE Research said the stronger price growth in the city fringes and suburban areas could be due to the higher price benchmarks set by successful new launches such as The Scala, The Greenwich, Viva Vista and NV Residences.
But overall, buyers have become more price-resistant in the mass market segment, say experts.
Colliers International's director for research and advisory, Ms Tay Huey Ying, said the Aug 30 measures were more pre-emptive in nature and would hit sales numbers first.
Indeed, Jones Lang LaSalle (JLL) said that sales volume seems to be consolidating, with private home transactions in the third quarter possibly dropping by about 30 per cent from the second quarter.
The latest cooling measures will be more effective in shrinking demand and so are expected to curb overall price growth, said JLL's head of research for South-east Asia, Dr Chua Yang Liang.
The number of home sales in the fourth quarter will be far lower than in the first three quarters of the year, said CBRE Research.
But new projects near MRT stations are still expected to do well and prices overall will still be up about 15 per cent for the year, it added.
Ms Tay reckons that prices may stay flat or rise by just 2 per cent in the fourth quarter and be stable in the first quarter of next year.
'Price resistance is still there and there's the traditional slowdown during the year-end period, compounded by the cooling measures,' she said.
joyceteo@sph.com.sg
--------------------------------------------------------------------------------
Prices may stay flat or rise by just 2 per cent in the fourth quarter and be stable in the first quarter of next year, said Colliers International's director for research and advisory, Ms Tay Huey Ying.
ST : HDB resale deals fall 25% after new rules
Oct 2, 2010
HDB resale deals fall 25% after new rules
Fewer homes changed hands last month compared to August
By Jessica Cheam
NEW measures to cool the sizzling property market have already made an impact with sales down, prices and cash-over-valuations (COVs) moderating and buyers taking a breather.
Official estimates released yesterday point to a slowing market in both the private and Housing Board (HDB) segments with experts tipping that the pace will slow further as the year draws to a close.
HDB said yesterday that 'the impact of the measures is not fully reflected in the data yet' as most of its third-quarter transactions were submitted before the new rules were announced.
Nonetheless, it estimated that transactions of HDB resale flats fell an estimated 25 per cent last month compared with August. As a result, an estimated 8,200 homes changed hands in the three months to Sept 30, or 10 per cent fewer than the previous quarter.
The measures cooled a market that rose 4 per cent to another new record in the two months before the latest measures were announced.
The market has now seen nine straight quarters of record prices. Prices had risen 4.1 per cent in the second quarter compared to the first.
There was no official indication yesterday as to what happened to prices last month. But one agency boss reckoned they had softened about 5 per cent.
The story is more sombre in the private property market, with price rises moderating even before the measures were implemented.
Urban Redevelopment Authority (URA) estimates showed prices rose 3.1 per cent in the third quarter, down from a 5.3 per cent rise in the previous quarter.
Property agencies said their own data confirmed last month's slowdown in the HDB resale market.
ERA Asia Pacific's sales volume last month fell by almost 30 per cent over August while at PropNex, third-quarter volumes fell 35 per cent compared with the second.
Agency bosses say the new rules have hit demand in the resale market as permanent residents and private property owners have been effectively shut out of the sector by tough ownership restrictions.
HSR Property Group chief executive Patrick Liew said sales at his agency dipped 10 per cent in the past month while cash upfront asked by sellers, or COVs, have dropped 15 per cent.
'Sales have slowed because while people are waiting on the sidelines for prices to become clearer, sellers are also not desperate to sell,' he said.
ERA Asia Pacific associate director Eugene Lim said its data showed median COV for resale flats hit a high of $35,000 in August before dropping to $28,000 last month.
The median COV for the second quarter was $30,000, according to the HDB.
Mr Lim added the falling COVs implied they had softened about 5 per cent.
The new rules, which are aimed at halting a property bubble, tighten financing and restrict ownership of HDB flats.
PropNex chief executive Mohamed Ismail added: 'Many upgraders have been stumped by the higher downpayment needed for a second home now.'
Mr Lim estimates that COV could go as low as $10,000 by the end of the year while PropNex's Mr Ismail tips $22,000.
He feels that when the median COV dips below $20,000, buyers will be tempted to return to the resale market.
COV was a major factor for engineer Hildya Yong, 26, and her fiance. They bought a new five-room flat in Sengkang directly from the HDB last week.
'Even though COV is coming down, we still cannot afford it. So we decided to go with a new flat instead,' she told The Straits Times.
The full impact of the measures will be seen only in the fourth quarter, say industry analysts. HSR's Mr Liew predicts that sales and prices will stay flat before picking up next year.
But Mr Nicholas Mak, the executive director of SLP International Property Consultants, said the drop in resale flat sales will hit prices in coming months.
'The impact of the property measures will continue to be felt next year,' he said. 'They are not expected to directly cause prices to fall. However, they could be the catalyst of a decline in prices if there was any weakness in the Singapore economy in the coming year.'
Meanwhile, the HDB will launch 3,400 new flats before the year end and 5,000 in the first quarter of next year.
jcheam@sph.com.sg
HDB resale deals fall 25% after new rules
Fewer homes changed hands last month compared to August
By Jessica Cheam
NEW measures to cool the sizzling property market have already made an impact with sales down, prices and cash-over-valuations (COVs) moderating and buyers taking a breather.
Official estimates released yesterday point to a slowing market in both the private and Housing Board (HDB) segments with experts tipping that the pace will slow further as the year draws to a close.
HDB said yesterday that 'the impact of the measures is not fully reflected in the data yet' as most of its third-quarter transactions were submitted before the new rules were announced.
Nonetheless, it estimated that transactions of HDB resale flats fell an estimated 25 per cent last month compared with August. As a result, an estimated 8,200 homes changed hands in the three months to Sept 30, or 10 per cent fewer than the previous quarter.
The measures cooled a market that rose 4 per cent to another new record in the two months before the latest measures were announced.
The market has now seen nine straight quarters of record prices. Prices had risen 4.1 per cent in the second quarter compared to the first.
There was no official indication yesterday as to what happened to prices last month. But one agency boss reckoned they had softened about 5 per cent.
The story is more sombre in the private property market, with price rises moderating even before the measures were implemented.
Urban Redevelopment Authority (URA) estimates showed prices rose 3.1 per cent in the third quarter, down from a 5.3 per cent rise in the previous quarter.
Property agencies said their own data confirmed last month's slowdown in the HDB resale market.
ERA Asia Pacific's sales volume last month fell by almost 30 per cent over August while at PropNex, third-quarter volumes fell 35 per cent compared with the second.
Agency bosses say the new rules have hit demand in the resale market as permanent residents and private property owners have been effectively shut out of the sector by tough ownership restrictions.
HSR Property Group chief executive Patrick Liew said sales at his agency dipped 10 per cent in the past month while cash upfront asked by sellers, or COVs, have dropped 15 per cent.
'Sales have slowed because while people are waiting on the sidelines for prices to become clearer, sellers are also not desperate to sell,' he said.
ERA Asia Pacific associate director Eugene Lim said its data showed median COV for resale flats hit a high of $35,000 in August before dropping to $28,000 last month.
The median COV for the second quarter was $30,000, according to the HDB.
Mr Lim added the falling COVs implied they had softened about 5 per cent.
The new rules, which are aimed at halting a property bubble, tighten financing and restrict ownership of HDB flats.
PropNex chief executive Mohamed Ismail added: 'Many upgraders have been stumped by the higher downpayment needed for a second home now.'
Mr Lim estimates that COV could go as low as $10,000 by the end of the year while PropNex's Mr Ismail tips $22,000.
He feels that when the median COV dips below $20,000, buyers will be tempted to return to the resale market.
COV was a major factor for engineer Hildya Yong, 26, and her fiance. They bought a new five-room flat in Sengkang directly from the HDB last week.
'Even though COV is coming down, we still cannot afford it. So we decided to go with a new flat instead,' she told The Straits Times.
The full impact of the measures will be seen only in the fourth quarter, say industry analysts. HSR's Mr Liew predicts that sales and prices will stay flat before picking up next year.
But Mr Nicholas Mak, the executive director of SLP International Property Consultants, said the drop in resale flat sales will hit prices in coming months.
'The impact of the property measures will continue to be felt next year,' he said. 'They are not expected to directly cause prices to fall. However, they could be the catalyst of a decline in prices if there was any weakness in the Singapore economy in the coming year.'
Meanwhile, the HDB will launch 3,400 new flats before the year end and 5,000 in the first quarter of next year.
jcheam@sph.com.sg
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