Author Archives: Gabriel

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Gabriel Tan Hp: (65) 9747 8988 CEA Reg No: R011521I Associate Marketing Director Propnex Realty Pte Ltd CEA Reg No: L3008022J

IRAS threatens foreclosure on pre-war house if owners don’t pay S$7,000

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Sep 9, 2011 – PropertyGuru.com.sg

A pre-war terrace house on Devonshire Road in Somerset faces foreclosure after the home owners failed to pay property tax for two years, amounting to around S$7,000.

The Inland Revenue Authority of Singapore (IRAS) served the owners with a notice of sale in August 2011.

If the home owners fail to pay the amount within three months from the publication of the government gazette, the 1,717 sq ft property will be sold at a public auction in November.

According to Nicholas Mak, Head of Research at SLP International, the freehold property is valued between S$2.2 million and S$2.3 million, based on comparable properties within the vicinity.

Part-time chef Chen Zhen Nan, 53, one of the owners of the freehold property, said that he cannot pay the property tax due to financial problems.

Chen said he had wanted to sell the property earlier to solve his financial problems, but he couldn’t reach an agreement with his siblings.

“We need help to pay our debts,” he said.

IRAS wanted to foreclose on the property but Chen’s eldest brother helped to pay the tax then, preventing it from being sold.

His brother, however, passed away this year.

A property auction was the last option, after all attempts to recover outstanding property taxes failed.

A spokesperson from IRAS said, “Before we auction a property, we would have issued reminders, notices to pay, made phone calls and appointed banks as agents to try to recover the taxes due.”

“We have also communicated with the occupant of the property, one of the children of the deceased owner, about the outstanding property tax.”

“No one has come forward to pay the outstanding property tax.”

Thus, the property will be sold by IRAS (subjected to a reserve price), taking the outstanding amount, less the expenses incurred in selling the property, such as the commission of the property agent.

The remaining amount will be returned to the owners of the property.

To contact the journalist, you may send your message to editor@propertyguru.com.sg

US mortgage demand falls for third straight week

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Sep 8, 2011 – PropertyGuru.com.sg

Despite mortgage rates falling to record lows, the demand for home loans in the US continued to fall for the third consecutive week, according to the latest data from the Mortgage Bankers Association (MBA).

The MBA’s seasonally adjusted mortgage applications index, comprising both home purchase and refinancing demand, fell 4.9 percent in the week ending 2 September 2011.

In addition, MBA’s seasonally adjusted refinancing application index also dropped 6.3 percent, while its estimate of loan requests for home acquisitions surged 0.2 percent.

The rates for a 30-year fixed mortgage averaged 4.23 percent, a decrease from 4.32 percent a week ago. It was also the second lowest rate since MBA started its survey almost 22 years ago.

The group also noted that 15-year loan rates averaged 3.41 percent, a decrease from 3.49 percent in the prior week.

“Despite these rates, refinance application volume fell for the third straight week and is more than 35 percent below levels at this time last year,” said Mike Fratantoni, Vice President of Research and Economics at MBA.

“Purchase application volume remains relatively flat at extremely low levels, close to lows last seen in 1996,” he added.

To contact the journalist, you may send your message to editor@propertyguru.com.sg

Housing in high demand, prices stable

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Sep 5, 2011 – PropertyGuru.com.sg

Singapore property prices will remain stable in the medium term, with key home-buying factors like upgrading and investment still expected to drive up demand, said a My Paper report.

This comes amid the expected slowdown in Singapore’s economic growth, led by the debt crisis in western countries.

As home buyers are likely to be more cautious, prices will not increase or decline by over five percent by end-2012, said property experts. They added that rental yields are also expected to rise by between two and three percent in 2012, in line with historical averages.

“The Asia-Pacific region, including Singapore, remains on track for continued growth and can weather a global slowdown,” said Ong Kah Seng, Senior Manager at Cushman & Wakefield for Asia-Pacific.

He noted that Singapore, like Hong Kong, is in the “high-risk range” when it comes to its vulnerability to the economic crisis in the West.

Ong pointed out that home buyers will likely see a 10 to 15 percent capital appreciation on their properties over the next five years.

“If you are looking at the nearer term, property prices here will generally remain fairly flat in the next year, with the potential for some downward adjustment,” he said.

“But there is always underlying demand stemming from individuals looking at upgrading or for investment, and opportunistic buyers may be quick to react to the lower housing prices, thereby pushing the market up again.”

Meanwhile, Mark Teo, Senior Group-Division Director at ERA Realty Network, said that while external factors affecting Singapore’s economy are important, what affects the property market most are the government’s policies and measures.

He cited how government investment in the development of the Marina South area has led to prices of several properties in the area skyrocketing.

“The development became a global product that commands international pricing,” he said. “Government policy in Singapore is very, very powerful, so make sure to track this especially if you are looking at properties for investment purposes.”

For young couples seeking to acquire properties for the first time, Teo recommended Build-To-Order (BTO) flats, as they are usually cheaper and have “higher capital appreciation value”.

Catherine Tan, Senior Executive Estates Officer with the HDB, also said that buyers need to “refer to transacted resale prices of comparable flats and not on cash-over- valuation in your negotiation so that they will not overpay.”

“The transacted flat prices can be found on the HDB info-web,” she added.

To contact the journalist, you may send your message to editor@propertyguru.com.sg

COV is here to stay, says Khaw

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Aug 11, 2011 – PropertyGuru.com.sg

National Development Minister Khaw Boon Wan has clearly stated that he cannot abolish the cash premiums that HDB resale flat buyers must pay to sellers.

His announcement came as a reply to comments posted on his Facebook page on National Day. He explained that the Cash-Over-Valuation (COV) premiums are set by buyers and sellers themselves and thus, cannot be removed.

He added that removing the COV and having a professional valuer determine the price of resale flats was tried “years ago”. As a result, the “COV then went underground as ‘under counter cash payment’,” he wrote.

The debate over this policy started when Mr. Khaw posted his National Day message, after which comments trickled in, suggesting that the COV be removed as it is an “inflationary” factor.

He explained that the COV is the difference between the valuation of the flat provided by a professional valuer and the price agreed on between the seller and the buyer.

In July, the HDB announced that the nationwide overall median COV figure will no longer be included in its quarterly releases. Furthermore, it has also ceased publication of the overall median COV numbers for various flat types and housing estates. He noted that the data could be misinterpreted as there are other variables involved.

With regards to rising resale flat prices, he said the government has taken notice but the problem will be resolved in three to five years time, when Build-to-Order (BTO) flats are ready.

To contact the journalist, you may send your message to editor@propertyguru.com.sg

GCB market to remain tight

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Aug 11, 2011 – PropertyGuru.com.sg

Median rents for Good Class Bungalows (GCBs), an exclusive category of bungalows with stringent planning guidelines, have been stable over the past few decades, according to The Business Times.

Based on built-up area, the average rents for GCBs reached S$3.41 psf per month as of the second quarter of 2011. However, the average annual compounded rate of increase hit six percent between 2005 and Q2 2011, when the number of permanent residents (PRs) and foreigners increased significantly.

There are 2,300 completed GCBs across the country, located in 39 GCB areas in Districts 10, 11, 21 and 23. This represents slightly more than three percent of landed properties and 22 percent of all detached houses across the country. A bungalow that falls within a GCB area is subject to a minimum land area of 15,070 sq ft (1,400 sq m) and a building height of two storeys.

According to the report, the provision of greater built-up space is a recent trend in the GCB market. This could moderate median rents on a psf basis for a few quarters, as more bungalow-type properties are completed and leased out.

Since 2002, prices of GCBs have not declined, even at the peak of the 2008 global financial crisis. The annual compounded rate of capital values was 8.8 percent since 2000 but reached a whopping 20.6 percent, if one measures capital growth rates from 2005.

“GCBs should expect to see strong leasing demand and rentals are expected to increase due to limited supply. The GCB leasing market should remain tight because demand from top executives with the budget for these properties will meet limited supply. Vacancy levels are therefore likely to stay low,” said the report.

To contact the journalist, you may send your message to editor@propertyguru.com.sg