Category Archives: Market News

S’poreans should save for rainy days: Khaw

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Aug 8, 2011 – PropertyGuru.com.sg

Global economic uncertainties have affected Singapore and Singaporeans need to “save for a rainy day”, said National Development Minister Khaw Boon Wan.

Delivering his message yesterday on the sidelines of a national day observance ceremony in Sembawang, the minister called on Singaporeans to be more prudent and reminded them that spending more than one earns is unwise.

He noted that the US and Europe are in debt because they did not save and worse, have overspent.

“You earn S$1,000 but you spend S$1,200, where does the S$200 come from? These are common-sense values but sometimes, people forget,” he said.

In comparison, he said the Japanese are much better in managing debt but their lack of political leadership is their greatest problem.

“For 20 years, no (Japanese) political leader came forward to say the right thing. Everyone tried to be popular, be populist, and say what people like to hear. But what people like to hear, sometimes, may not be the right thing,” he said.

He stressed that political leaders have the responsibility to lead a country but sometimes “get punished by voters for saying the right thing.”

“So, Singaporeans have to decide — do you always want to hear pleasant things even though they are dishonest?”
“Sometimes you get fine weather, sometimes rainy. But if you have always saved for the rainy day, you’ll be pretty steady and safe,” he noted.

His comments followed Deputy Prime Minister Tharman Shanmugaratnam’s warning that it will be tough for the country in the next three to four years, as advanced economies experience slow growth and possible bouts of recession.

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

US credit downgrade could adversely affect mortgage market

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Aug 8, 2011 – PropertyGuru.com.sg

The US mortgage market, which has been supported by the government, could be affected by the country’s recent credit downgrade, with the possibility of a hike in borrowing costs for consumers.

Karen Shaw Petrou, Managing Partner of Federal Financial Analytics, said that the “sufficiently perilous” status of the US mortgage market and the downgrade “can do nothing but harm the market”.

Standard & Poor’s cautioned in July that a downgrade of the credit rating will trigger a downgrade of major mortgage-finance players Fannie Mae and Freddie Mac — the firms that were nationalised three years ago and have maintained their triple-A rating since the government guaranteed their debt.

Currently, no one knows the extent of the impact of the downgrade on the mortgage market, even if the market is primarily intertwined with the federal government.

As a direct result of the government’s rating, the securities issued by the government-owned corporation Government National Mortgage Association, or Ginnie Mae, have been given a triple-A rating.

Approximately 90 percent of new mortgages are backed by Freddie, Fannie or Ginnie.

If the company’s ratings are to be downgraded, borrowing costs will increase, which will translate to an increase in mortgage rates or losses to the firms.

The US$4 trillion in mortgage-back securities guaranteed by Fannie and Freddie and held by investors are not rated and traded as safe investments, as they are government assured.

The combination of the downgrade, Euro-zone debt crisis and roller-coaster nature of the US economy could lead to greater volatility in the mortgage market.

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

URA gets strong support for changes to Housing Developers Act

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Aug 5, 2011 – PropertyGuru.com.sg

The Urban Redevelopment Authority (URA) announced that it has strong support for the proposed amendments to the Housing Developers (Control & Licensing) Act (HDCLA) and Housing Developers Rules (HDR).

In a statement published yesterday, the URA said it received feedback from more than 100 respondents, including property developers, agents, solicitors, property consultants and other members of the public.

The URA noted that most of the respondents are “generally in favour of URA’s proposed requirements on developers to provide accurate information in the showflats and to provide more information on the housing units to prospective home-buyers to help them make better informed decisions.”

One of the key proposals that received overwhelming support is the release of “more mandatory information on housing projects” to homebuyers prior to the issue of the Option-to-Purchase, to enable them to make informed decisions.

Additionally, some of the respondents provided suggestions on how to further enhance the URA’s market transparency and better protect home buyers’ interests.

These included mandating developers to give a further breakdown of the strata floor area by room, as well as providing a list of developers with suspended sales licences on URA’s website.

The URA said that it has carefully considered the suggestions and will finalise the proposed amendments to the HDR and the HDCLA, with the new rules and regulations to be implemented in due course.

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

Private home sales drop sharply in June

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Jul 18, 2011 – PropertyGuru.com.sg
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Sales of private homes in June dropped 25 percent month-on-month to 1,182 units, excluding Executive Condominiums (EC).

This means a total of 4,562 units were transacted in Q2 2011, about 27 percent more than the 3,595 new homes sold in the previous quarter.

“It is not surprising to see the decline in private housing transactions in June, due to the June school holidays, when many families may be abroad for holidays,” said Adam Tan, Communications Manager of PropNex Corporate.

“In addition, the decline in private housing transactions can also be attributed to the HDB announcing that they will be building 25,000 new flats in 2011, so some potential first-time buyers in the middle income bracket may switch to the public housing market instead.”

“Furthermore, with more than 10,000 new private homes expected to enter the market in the second half of 2011, consumers may be waiting for more choices in other locations across the island,” he added.

Meanwhile, the robust transactions in the April-June period were primarily achieved by suburban leasehold projects. Among the major projects that sold well during the second quarter are Eight Courtyards (488 units sold), Hedges Park (309 units sold) and Terrasse (229 units sold).

“High-end projects located in the Core Central Region (CCR) maintained a steady level of interest throughout the quarter, averaging at around 30 units per month and sold at median prices of S$2,500 psf and above. Nevertheless, buying is still very selective among both local and foreign HNWIs,” noted Joseph Tan, Executive Director for Residential at CB Richard Ellis (CBRE).

“In June, the highest floor rate of S$4,362 psf was achieved for a unit in Le Nouvel Ardmore. In May, a unit in The Marq On Paterson Hill was sold at a record price of S$5,842 psf and in April, a unit in The Orchard Residences was sold at S$4,799 psf.”

He added that residential prices in Q2 increased 1.9 percent quarter-on-quarter, according to the URA’s preliminary forecasts.

Moving forward, Joseph Tan believes “developers will continue to launch new suburban leasehold projects. However, we expect the take-up in Q3 2011 to be lower than Q2 2011’s volume.”

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

HDB ramps up BTO launches to reduce disappointment

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Jul 18, 2011 – PropertyGuru.com.sg
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Minister for National Development Khaw Boon Wan revealed in his latest blog entry that ramping up the launches of build-to-order (BTO) flats will increase applicants’ chances of getting a unit, as it reduces the application rate.

Data gathered by the Housing and Development Board (HDB) on winning applicants during BTO exercises held from January to March 2011 revealed that the probability of being able to select a BTO flat was higher when there were lesser applicants for them.

The minister wrote, “For January BTO, practically all first-timers got to select a flat.  Even second-timers got an 84 percent chance to select. However, as application rate increased to five or eight, the chances fell significantly, especially for second-timers. That is why we are ramping up BTO launches to reduce application rate, and hence raise the chances for our applicants.”

He also stressed in his blog that the HDB “’loads’ the ballot in favour of first-timers”.

He stated that for the February BTO exercise, first-timers were “three to five times more likely to be selected than second-timers” in choosing their flats.

He added that more loads have been given to first-timers who had not been successful in previous BTO launches.

Mr. Khaw noted that his ministry is dealing with the issue by offering applicants more choices.

“We are trying to offer larger BTO launches. This way, we hope to provide more choices and reduce the odds of repeated disappointment.”

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