www.shaproperty.com

But analysts warn that if the transaction price is too far below the market value, the home sellers may have to top up their CPF with cash.

More than 90 percent of home buyers use their CPF to purchase properties.

For those who made their purchases between 1994 and 1998 - when prices were at their peak - they would be seeing steep losses.

They could minimise the loss by trying to refinance their loans at a lower interest rate.

Donald Han, Managing Director, Cushman & Wakefield, said, "I think for owners like this, there is an option for them. That is to go and refinance their property with a bank and try to restructure their loan and in that sense, under the new refinancing structure, the bank would have a first lien onto the property itself, as opposed to the CPF having the first lien."

There are others who may choose to sell their properties instead.

If they let go at prices that are more than 20 percent below what they had paid, this would have eroded their initial cash top-up and eaten into the CPF amount used for the purchase.

And in this case, they might have to top up their CPF with cash.

If the property is sold way below the market value, the CPF Board has the right to insist for a cash top-up.

Property analysts estimate that about 20 percent below market value is still acceptable.

But beyond that, it will be prudent for owners to check with the CPF Board before they make the transactions.

Analysts do not expect home owners to suffer huge losses, as the property market is now picking up.

Home prices have been inching up over the last 12 months - with the URA price index up by about 2 percent.

Some market-watchers say it will be a good time to buy and sell properties within this year.

Mohamed Ismail, Chief Executive Officer, PropNex, said, "Things are moving a bit more stable and even in our own side, we have seen more interest and transaction for private property, those below S$1.5 million. Therefore, there's no reason to wait.

"As far as public housing is concerned, the new rule of the 6 percent will take place from 1 Jan next year and will go to 8 and 10 percent, so any serious consumer who intends to buy and sell, this will be a better year. There will be more challenges ahead."

Some owners may take the opportunity to buy a bigger property at current market value - even if it means booking a loss on the unit they had bought at high prices. - CNA/ms

81% of families 'staying put' in existing flats

Economic downturn and depressed property prices curb plans to upgrade
By
<http://straitstimes.asia1.com.sg/sub/sendmail/0,5576,EmailReporter-3238
92-20000,00.html?> Tan Hui Yee

THE economic slowdown and depressed home prices of recent years have
severely dampened aspirations to move to a bigger, better home, a
survey
of Housing Board <http://www.hdb.gov.sg/>  residents has found.

The 2003 study revealed that about 81 per cent of households saw
themselves staying on in their present home in the next five years. In
1998, the last time the survey was done, about 64 per cent said they
would be staying put.

Among those wanting to move, about half were hoping to upgrade. Most
also eyed four-room flats.

Significantly, a third wanted to move to a smaller home.

In 1998, three-quarters were planning on a bigger flat or going
private,
and five-room units were the top choice among those who wanted to move.
Just 13 per cent were looking to downgrade then.

Commenting on the more moderate expectations, the chairman of the
Government Parliamentary Committee for National Development and
Environment, Dr Amy Khor, said: 'Worries about job security still
persist. The home owners have also seen the value of their flats
fallen.

'Gone are the days when people expected flat prices to increase
indefinitely. Singaporeans are now more conservative about purchasing a
flat.'

Housewife Sally Chan, 35, who has been living in a four-room flat in
Choa Chu Kang with her husband since 1996, seems typical of this new
breed.

Asked why she chose a four-roomer, the mother of three sons replied: 'I
prefer it simple and small.'

It would be difficult for her family to move to a bigger place now.
Their monthly household income has been more than halved to $2,500
since
she quit her job in 2001 to look after her children.

The survey, which polled 7,300 households, also found that 55 per cent
were 'content' with the housing they had. In 1998, about 43 per cent
were.

Property agents are divided on the effect that the overall moderated
expectations would have on the market.

Some, like PropNex division director Eric Cheng, said it will mean the
demand for bigger flats will continue to lag behind that for smaller
flats, which it has in the last 18 months.

Others, like Mr Eugene Lim, assistant vice-president of ERA Singapore,
are hopeful that the demand for bigger flats will pick up once more
people become confident about job prospects.

While the survey found that most have put their housing dreams on hold,
at least one group of people are not scaling down their expectations.

Those who wed between 2000 and 2003 are opting for bigger flats for
their first homes.

The biggest proportion - about 37 per cent - went for five-room flats
over other sizes. In the 1990s, 22 per cent opted for one of these.

The managing director of property firm C&H Realty, Mr Albert Lu,
suggested that this could be due to couples marrying later and
therefore
having more savings to spend on their homes.

But lifestyle choices appear to count too. Administrator Kenny Tan, 31,
who moved into a five-room Sengkang flat with his wife in 2000,
explained: 'I like to have friends over at my home, so my living room
had to be big enough for a gathering.'

The couple's plan to have three to four children also made them go for
a bigger flat. They now have a three-year old daughter.

SINGAPORE : The number of people living in HDB flats has increased by
5.2 percent to 2.84 million in 2003.

The last survey was conducted in 1998.

The HDB Sample Household Survey, conducted once in five years, also
found that average household size has shrunk considerably from 6.2
persons in 1968 to 3.7 in 1998 and 3.5 in 2003.

Another key finding is the rise in average monthly household income -
from $3,719 in 1998 to $4,238 in 2003.

Also, in 2003, fewer households said they were inclined to move in the
next five years - only 18.6 percent compared to 35.7 percent in 1998.

And "buying" beat "renting" hands down - an overwhelming 95.6 percent
of
households interviewed prefer to own rather than rent a flat.

Eight such surveys have been completed since 1968.

The latest covered 7,300 households in all the HDB towns and estates. -
CNA/de