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SINGAPORE : Property agents expect prices of private homes with less than 60 years' lease remaining to surge over the next few months.

They said prices of such landed properties would likely go up by 10 per cent, while apartments by about 5 per cent.

The government relaxed its rules on home financing for older leasehold properties last week, allowing home buyers to use their CPF to purchase them.

There has been renewed interest in older leasehold properties since the government relaxed its rules on home financing.

So now, owners of such properties are holding firm on their selling price.

Some are even planning to renovate their homes in order to attract a higher value.

Currently, such landed properties are priced at just a third of new landed homes, while private apartments fetch around half the price of new units.

Property agents said potential buyers would now find these properties attractive.

Mohamed Ismail, CEO of PropNex, said: "This is like a sudden new lease of life given to properties that are less than 60 years. In the past, most of them will never want to put their money there because from the investment angle, in the long term, such properties were depreciating in value."

He said there was more interests lately especially among older people because of the new policy and fewer restrictions in terms of the usage of CPF.

At the moment, prices of such properties have yet to rise sharply.

This is because many home buyers are still unclear about the new policy - and how it will affect them.

Banks have also not given clear guidelines as to how buyers can finance their loans for such properties.

Still property agents said they were confident the situation would improve - with prices rising by as much as 10 per cent over the next few months.

But with ample supply of brand new private residential developments and at competitive prices, some property agents said home buyers would still prefer to pick their choice property from the primary market.

Moreover, most home buyers would prefer to own a brand new property with better design and at good locations.

Still, market watchers expect the new policy will have a dampening effect on leasehold en-bloc sales - which have been generating much interest this year.

This is because as property prices surge, there will be less incentive for both the owners and developers to pursue collective sales. - CNA/de

SINGAPORE : Some developers are mulling at the possibility of raising their property prices.

This comes after a good turnout over the weekend by potential home-buyers - which translated into strong sales numbers.

Some developers are also starting to think about bringing forward their project launches.

Property sales over this past weekend have been better than what most developers had anticipated.

Many developers reported a sharp increase in the number of visitors to their show flats.

They said sales were boosted by the new 90 per cent financing limit and the 5 per cent cash outlay.

Chia Ngiang Hong, Group General Manager of City Developments, said: "These two are very helpful indeed for those who are first-time buyers and upgraders. Investors also find this very attractive as there are much more options in terms of investment for other kind of instrument which they are looking at."

Chia Boon Kuah, Deputy COO of Far East Organisation, said: "In the last eight years, it has been a doldrum. This 5 percent cash down, to us, is surely the turning point and what best way to describe or to underscore this then the numbers that were achieved over the weekend. I think that spoke volumes about buyers returning to private property."

Both developers and agents said those who made purchases had been house-hunting for sometime.

Joseph Tan, Director of Residential at CB Richard Ellis, said: "The people that we have seen coming in to buy over the weekend are basically prospects who have been looking at the various projects.

"They have visited us about two to three times before, and this announcement is a small catalyst to push them to making a faster decision."

And going by the positive response to last week's policy changes, developers are not ruling out the prospect of bringing forward some of their property launches.

Chia Ngiang Hong, Group General Manager of City Developments, said: "We have earlier mentioned that we are looking at releasing three projects. They are St Regis, King's Centre Plot 3 and possibly Tower 2 of the Sail at Marina Bay. Even though the dates are not fixed, we are now examining to see if we need to bring forward some of these launches."

Property developers are also not ruling out the possibility of raising the prices of their projects.

Chia Boon Kuah, Deputy COO of Far East Organisation, said: "We will certainly be looking at the demand, the transaction, and we will be making a small adjustment."

Analysts have revised their full-year forecasts for the total number of units sold to about 8,000 units - up from the earlier forecast of 6,500 units. - CNA/de

National Development Minister Mah Bow Tan said the government would step in if property prices rise excessively.

He was responding to concerns over developers wanting to raise property prices shortly after the government eased the financing limits on property purchases.

However property analysts say developers will more likely reduce the discounts on properties rather than raise the prices.

Just days after the government relaxed its rules on home ownership and financing, some developers have already hinted on raising their property prices.

And this is leading to concerns that property prices may again sky-rocket, like they did in the mid-90s.

Mr Mah said: "If the end result of this is that the market goes up and is supported by economic fundamentals, then that's it. If it becomes excessive like in 1996, then I think as we did in 1996, the government will step in. But that can only be on an exceptional basis."

But Mr Mah felt it was premature to speculate on how prices would move.

He said the situation back in 1996 was different from today.

Back then, interest rates were high and it was easy getting liquidity.

But now, with zero speculation and relatively low interest rates, home buyers are buying properties more for their own use.

Donald Han, Managing Director, Cushman & Wakefield, said: "Developers may be tempted to raise prices...for projects that have been selling very well, the take up rate has been extremely good. And even then, I think it's selected to just a few projects. And even if they were to increase price, I think it will not take place in that manner, but probably to reduce the amount of discount that's given to a particular property."

Analysts say most developers will probably try to re-market their properties over the next few weeks.

But for them to justify a price hike, there has to be increased activity in terms of transactions.

They say the market should ultimately dictate the prices, not the government.

Property analysts say the less interference the better, now that new measures are already in place.

It is better to see how well the market performs and let the market sets its own pace in terms of adjusting the property prices.

Market watchers say the current system of the reserve list should also limit an excessive surge in property prices as it releases land parcels according to market demand. - CNA /ch

SINGAPORE : National Development Minister Mah Bow Tan has announced changes to policies concerning Singapore's property market in three major areas.

These are: easing the cap on bank financing for residential properties, limits on the use of the CPF for property purchases, and restrictions on foreign ownership of land and properties.

On mortgage and financing policies, the financing limit for housing loans will be raised from 80 percent to 90 percent of the property value.

Mr Mah said the remaining 10 percent, which the buyer has to pay, would deter over-borrowing and minimise potential losses by banks as a result of borrower default.

HDB will also raise the loan limit for its flat buyers from 80 to 90 percent.

This takes immediate effect and will apply to all properties bought from Tuesday.

Also with immediate effect, the cash payment for private residential properties will be lowered from 10 percent to five percent.

From January next year, the cash requirement for HDB flats financed with bank loans will also be adjusted to five percent, down from ten percent.

Mr Mah said these changes would give consumers a wider choice of financing options when buying a property.

In a ministerial statement in Parliament on Tuesday, he stressed that the purpose of the measures was neither to boost nor depress the property market.

Rather, the review was aimed at improving structural rules to improve the functioning of the market and to better achieve broader economic and social objectives.

Mr Mah, however, cautioned that some of the measures introduced would have a positive effect on the market, while others might have a dampening effect.

And the net effect would depend on many factors beyond the measures announced.

On the use of money from the Central Provident Fund, Mr Mah said buyers could use their CPF to buy residential properties with shorter leases of between 30 and 60 years.

Restrictions on foreigners buying property are also being eased.

Mr Mah said the government would remove the restriction on foreigners owning property in apartment blocks of six floors and below, but will still require foreigners to seek approval for purchases of landed properties. - CNA/de/al

To hasten the lift upgrading process in Housing Development Board (HDB) estates, Town Councils will soon have the power to seize and sell homeowners' moveable property or flats to recover such improvement costs from recalcitrant residents who refuse to pay up.

Sound drastic? Town Council chairmen and members of Parliament don't think so.

The amendment to the Town Council Act, which may be passed in the parliamentary session which begins today, will also allow Town Councils to use their sinking funds for lift upgrading work.

It effectively extends the Town Council's duty to include lift-upgrading work - similar to what the HDB does in its Lift Upgrading Programme (LUP), which the Government launched in 2001 and aims to complete within the next 10 years, instead of the projected 10 to 15 years. However, it does not increase the Town Council's powers to any degree, say Town Council chairmen and MPs.

Dr Amy Khor, Southwest CDC mayor and Government Parliamentary Committee chairman for National Development, said: "The existing provisions in the Act already allow Town Councils, with the prior approval of the HDB, to sell the resident's flat if he is not able to pay his service and conservancy (S&C) charges."

Hence, the amendment grants Town Councils the same powers that the HDB has in the recovery of such arrears - defined as contributions left unpaid after three months. As of last January, town councils were owed a total of $24.7 million in S&C arrears.

So, just how much more in terms of LUP arrears can Town Councils expect to chalk up and chase residents for?

The HDB told Today that it had billed three LUP precincts at the end of June after the upgrading work was completed, hence it has no outstanding LUP arrears.

But there is another issue. Unlike monthly S&C charges - which range from $18 to $80 per household for maintenance services such as grass cutting, cleaning and lift-maintenance - not everyone may be in favour of the LUP, or benefit from it. The maximum co-payment cost for the Town Council LUP will range from $263 to $714 for residents, depending on the type of unit.

At least 75 per cent of residents must vote in favour of lift upgrading work before it can proceed. So what if the remaining 25 per cent don't want to pay up or can't afford to?

Dr Teo Ho Pin, Holland-Bukit Panjang Town Council chairman, said: "All PAP Town Councils have an arrears recovery system where we work closely with our community partners such as grassroots organisations or voluntary welfare organisations to assist needy residents who face difficulty in paying their fees or charges."

The procedure, he said, starts with a notice of reminder to house visits. Then a claim is lodged with the small claims tribunal. A writ of seizure and sale of moveable property - such as television or hi-fi sets is issued. The sale of the flat is a final step, to be taken only if all efforts at recovering the arrears fail.

Mr Chew Heng Ching, East Coast Town Council chairman and coordinating chairman for PAP Town Councils, said: "This provision is basically the last resort by the Town Council for those who have defaulted on their payments for improvement contributions. The Act serves to empower the Town Council to take action against residents who can afford to pay but are not doing so."

Or, as some Town Councillors call them, chau kuan homeowners - a Hokkien phrase referring to someone with a bad attitude.

Dr Khor agreed: "As Town Councils are familiar with the profile of the flat dwellers, such a sale would only be resorted to after all other avenues have been explored and exhausted."

Some observers note that the Town Council's function, role and relationship with residents will change.

Said one: "With HDB as the landlord, Town Councils have hitherto just managed and maintain common property in HDB estates. It remains to be seen how this enlarged function will change its relationship with the residents it serves." - TODAY/jt

SINGAPORE : Private residential property prices are expected to go up by between 5 and 8 percent next year.

That is according to property consultants at a seminar organised by the Real Estate Developers' Association of Singapore.

And they expect residential rental rates to rise by about 10%.

Property consultants are optimistic that the current pick-up in private residential property sector will continue into next year.

They are forecasting prices to climb higher in 2006, compared to this year's expected climb of between 3% and 5%.

Said Wallace Chu, Senior Manager of Research & Consultancy at Savills: "I think we will see a strong pickup in both internal demand and external foreign investments. The price will be in the range of 5% and 8% for the low to middle class. It will be higher for the luxury class, probably hitting the double digits."

Peter Ow, Executive Director (Residential) at Knight Frank shares the same views.

He said: "For next year, growth will be anywhere in the region of between 5% to 8%. The reason is the rental market has been firming up quite strongly. This will translate into better returns for property."

Market watchers say they expect to see growing demand from foreign investors.

Last year foreign investors from China and India account for some 10% of all sales.

Ow said: "It's in the region of 10% for both China and India. With the growth that we see happening in 2006, this should increase to between 12 to 13%."

Analysts say rental prices will go up by up to 10% especially in the prime residential districts.

As for the commercial sector, property consultants are expecting rental rates to rise for the rest of this year, especially for Grade A office buildings.

Said Agnes Tay, Director of Business Space with Knight Frank: "We are very positive about it and right now we are on the recovery. Looking at prime A office buildings, we see an increase of 5% over the next 6 months bringing the full year to about 10%."

Meantime, rental for retail outlets are seen rising moderately between 3% and 6%.

The biggest hike could be in the prime shopping belt of Orchard Road and the Marina-Raffles area.

SINGAPORE: Singapore's private home prices rose 0.4% on quarter in the April-June period for the fifth straight quarter.

This is according to a flash estimate by the Urban Redevelopment Authority.

The URA's private residential property index stood at 115.1 points in the second quarter, up from 114.6 in the January-March quarter.

Prices rose 0.7% in January-March from October-December.

The URA's advance estimate is based on caveats lodged during the first 10 weeks of the quarter supplemented by information on the number of new units booked.

The URA will release a detailed report on Singapore's property market later in the month.

Meanwhile HDB resale prices fell in the second quarter.

The HDB resale price index came in at 101.6 points, down 4.8 percent from the first quarter.

It was the first quarter on quarter decline in more than 3 years and the biggest drop since early 1998.

The board says this could be due to new measures introduced in April when HDB said only its assigned licensed valuers could value its flats.

This effectively put a stop to a practice where the price of a property would be inflated to allow buyers to gain access to bigger loans.

Marcus Chu, Senior Vice-President, Real Estate Division, Hersing Corp, said: "That actually helps to curb the cash back problems in the industry and therefore there is a very clear sign that volumes have declined. The properties have been over valued in the past months. And when measure kicked in it actually reflects the true property values of the flats."

Over in the private residential space, advanced figures from the Urban Redevelopment Authority showed that prices rose 0.4 percent in the April to June period from the previous quarter.

This is despite a host of property launches in the second quarter.

Analysts say that is due to demand for high-end and niche market projects.

Mr Chu said: "Buyers are more location driven. Which means they buy according to the locations that is their preferred choice, that is near to the central locations and prices that is very affordable."

Feng Zhi Wei, Associate Director, Real Estate Intelligence Service (Asia), Jones Lang LaSalle, said: "In fact the sales are also quite good. So we see these well located projects with a kind of attractive team or competitive pricing there is still a ready pool of buyers."

Analysts say buyers are now more discerning when it comes to buying a home due to economic uncertainty and the concern over possible rising interest rates.

For this year, analysts still expect private home prices to rise by between 3 percent and 5 percent, while HDB flats may stabilise. - CNA /ch