Monday, August 6, 2012

Singapore property update August 2012

* The overall Singapore Residential Price Index (SRPI) flash figures showed that the prices of private, completed non-landed projects fell sharply, 1.1 per cent, in July 2012 after recording a 0.1% gain in June 2012. The non-central private residential units recorded the sharpest decline by 1.3% while central homes recorded a 1.1% decline.
Source: Prices for resale homes fall in July, shoebox segment up

* "I would still maintained that the correction will be coming and the way I look at it, if there is a cycle, if you take away the 2008 temporary drop, you smooth out the curve, it is actually the eight or ninth year of the rise in this cycle". These are the Chairman of Wing Tai who warns for a possible correction in Singapore's property market. The warninf came after the property developer's forth quarter net profit fell 16 per cent to $140.5 million.
Source :Wing Tai warns of property market correction as profit slips

* Singapore Government warned that fresh measures might be introduced if commercial property prices do not moderate. Prices of factory and warehouse space have increased 16 percent in the first half of 2012 due to the investors diverted into the industrial property segment from residential property segment by cooling measures. Ministry Of Trade and Industry has noted that owners flipping their industrial units for a profit are on the rise and are currently 15 percent of all industrial property transactions.
Source : Government keeping close eye on industrial property

* After recording a sharp decline (In June 2012, new private residential property sales excluding Executive Condominiums fell 19.5 per cent to their lowest in 2012 after falling 32 per cent in May), private residential property sales in Singapore are up 41.7% from June 2012 to 1,943 units. Despite government
measures to cool the property market, property sales numbers and prices are still highly inflated due to ultra low interest rates.
Source :  Private home sales rebounded in July

* Housing Development Board (HDB) will offer at least 20,000 new flats in 2013 announced Minister for National Development Khaw Boon Wan in his blog entry. This is on the top of 50,000 new flats promised for 2011 and 2012:
"Next year, we will keep up this momentum to help more Singaporeans own their flats.  While the plan is still being finalised, I have told HDB to build at least 20,000 new flats next year." 
I expect this sustained supply to firmly stabilise the housing market. This will give Singaporeans many options as they make their flat purchases prudently and wisely."
Source : Making Steady Progress 
* National Development Minister Khaw Boon Wan criticized the 50-year housing loan as a “gimmick”, and urged prospective home buyers not to fall for it. 50-year housing loan are reportedly offered by United Overseas Bank.

* United Overseas Bank (UOB) has announced the launch of instant home loan scheme, the Split-Second Home Loan approval service which would enable home buyers to get immediate approval at the show flat. This will allow mortgage brokers with iPads which are connected to its credit evaluation system and linked to the Credit Bureau (Singapore) would be ready to abuse your compulsive buying instincts in the showflats. But MAS, Singapore's Central Bank, has quickly stepped in said that they do not permit loan applications for residential property to be approved at such temporary locations, whether in-principle or otherwise, verbal or in writing:

“MAS rules allow banks to set up a temporary location at a property launch site to receive applications for residential property loans. We do not permit loan applications for residential property to be approved at such temporary locations, whether in-principle or otherwise, verbal or in writing. MAS has instructed banks that this is not allowed under our rules.” 
The authority also highlighted that a residential property loan is a long-term financial commitment, and by allowing banks to approve applications at temporary locations, imprudent lending by banks might occur. 
Said an MAS spokesman: “In granting residential property loans, MAS expects banks to conduct credit assessment of borrowers in a thorough and prudent manner. When banks entice consumers with loan approvals at temporary locations, consumers may be rushed into accepting a long-term financial commitment, even if a cooling off period is incorporated within the approval.”

Source : Instant home loan decision at showflats
Source : Split-second home loans? Hold it . . .

* There are 2 trends in Singapore property market which is hidden beneath ever increasing numbers of private property units sold in Singapore: Average unit size sold by developers are getting smaller, average price per square foot is also much lower compared to the pre-global crisis peak year of 2007. If you look at property market from total square footage and total dollars paid for apartments/condos perspective, the property market looks very different. These two trends are result of more units are being sold in the suburbs instead of the Core Central Region (CCR), where properties are costlier." says Business Times.
Source : Busting the myth of a hot property market

* Low income families in Singapore can now go for bigger HDB flats with the announced Enhancement to Special CPF Housing Grant (SHG) by HDB. With the changes families earning less than 1500 Singapore Dollars per month can use SHG to buy 3 room flats.
Source : HDB Launches 7 BTO Projects Offering 4,191 New Flats and Enhances Special CPF Housing Grant

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