PRICES of Housing Board flats have reached a historical record, rising 1.4 per cent in the second quarter this year, reversing a first-quarter dip of 0.8 per cent.

Fresh data released from the HDB on Friday shows the resale price index rising to 140.2 – beating the previous record set in the fourth quarter of last year when it hit just over 139.

The figures have come in slightly higher than flash estimates released earlier this month which showed that prices rose 1.2 per cent.

Sales of HDB resale flats also surged 58 per cent, reflecting improved market sentiment, to reach 10,184 transactions in the second quarter, compared to 6,446 in the first quarter.

Year on year, second quarter sales rose 31 per cent compared to the 7,763 units sold in the same period last year. Analysts attribute the healthy sales volume to the economic outlook which has grown more optimistic in the second quarter.

Industry observers also noted that resale flats were popular as the cash needed upfront, or cash-over-valuation (COV), to buy a resale flat was low or approached zero.

Friday’s HDB data showed that the median COV continued to decline, falling to $3,000 in the second quarter, compared to $4,000 in the first quarter.

The number of flats which sold above valuation also declined from 62 per cent of all transactions in the first quarter, to 57 per cent in the second quarter.

The remaining 43 per cent was sold at or below valuation, said HDB.

Meanwhile, rental rates for HDB flats did not register drastic movements. Median sublet rents for two-room and five-roomer flats for the second quarter stayed the same, but fell by $100 for three room, four room and executive flats.

Rental transactions increased by 9.6 per cent to 3,862 cases in second quarter compared to the first quarter. But compared to the same period last year, it fell by 6.3 per cent.

The total number of HDB flats approved for subletting rose to about 23,200 units as at second quarter, compared to 22,800 units in the first quarter.

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6,000 BTO flats
The board said it plans to launch another 6,000 units under its build-to-order scheme in the next six months, of which some 2,400 units would be three-room and smaller flats.
The bulk of new flat supply would be in Punggol.

To date, the HDB has launched about 2,000 new flats in Punggol, Sengkang and Woodlands in 2009 to ramp up supply.

Some 1,500 condo-style HDB flats were also on offer by private developers under HDB’s Design, Build and Sell (DBSS) scheme.

Source: Straits Times Breaking News, 24 July 2009

(NEW YORK) Home resales in the US rose in June for a third consecutive month, spurred by tax incentives, lower borrowing costs and foreclosure-driven declines in prices.

Purchases climbed 3.6 per cent to an annual rate of 4.89 million, stronger than forecast and the highest level since October, the National Association of Realtors (NAR) said yesterday in Washington. Median prices fell 15 per cent.

The gain in sales confirms Federal Reserve chairman Ben Bernanke’s remarks this week that the worst housing slump in eight decades appears to be moderating. A record drop in household wealth, due in part to the plunge in property values, and mounting unemployment are among the reasons that rebounds in housing and the economy are likely to be drawn out.

‘We have finally bottomed out,’ said Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh. Improved affordability ‘is stalemating the drag from higher unemployment’. Mr Hoffman forecast sales would rise to a 4.9 million pace.

Economists forecast existing sales would rise to a 4.84 million rate from a previously reported 4.77 million for May, according to the median of 68 projections in a Bloomberg News survey. Estimates ranged from 4.7 million to 5 million.

The Labor Department earlier reported that first-time applications for jobless benefits climbed by 30,000 to 554,000 in the week ended July 18. The number of workers filing claims had dropped by 93,000 over the previous two weeks, reflecting changes in the timing of mid-year auto shutdowns to retool for the new-model year.

Stocks gained and Treasury securities fell after the report. The Standard & Poor’s 500 index rose 1.4 per cent to 967.67 at 10.21am in New York.

June traditionally is one of the top sales months of the year as families prepare to move before the start of the next school term, according to the NAR. The group adjusts the figures for these seasonal variations in order to facilitate month-to-month comparisons. — Bloomberg

Source: Business Times, 24 July 2009

(SINGAPORE) Hersing Corporation’s Harry Chua does not want to sell you just a house – he wants to sell you a mattress along with it, as well.

Two months after Hersing’s quiet opening of the Dozz Mattress showroom at its headquarters in Toa Payoh, the holding company of real estate agency ERA is going for gold.

At a private launch today with guests from the Ferrari and Lamborghini jet-set, it will be launching a mattress with a 22-carat gold cover from Italian brand Magniflex that will cost as much as $50,000.

This new venture will sit alongside Hersing’s eclectic assortment of dealings in the real estate, storage and money transfer industries.

In 2003, Hersing – which holds the local franchises for property broker ERA and remittance agency Western Union – set up a wholly-owned self storage firm, Storhub, which has since grown to five locations in Singapore.

To Jack Chua, Hersing’s president, the group’s move into mattresses makes perfect sense. ‘After buying a house, the customer needs a mattress. We’re just providing them with a customer service,’ he said.

With 18 mattress brands, the showroom has seen a 30 per cent increase in monthly revenue since its soft launch in May.

The group expects the showroom to break even this month, according to Hersing’s founder and chairman Harry Chua.

The latest feather in its cap where the mattress business is concerned is Hersing’s clinching of the exclusive distributor rights for the Magniflex brand for South-east Asia.

The group is currently looking into the mega-retail mattress store concept for its foray into the rest of Asia.

While $50,000 will get buyers a super king-sized Magniflex Gold – a personalised mattress with gold thread in its cover – normal Magniflex mattresses also retail at the showroom from a less eye-widening $1,298.

To date, more than 100 units of the Magniflex Gold have been moved globally, with the gold thread being touted for its anti-bacterial and anti-static qualities.

Despite the current downturn, Mr Harry Chua is unperturbed by the prospect of offering the Rolls Royce of mattresses to the Ferrari-owning crowd.

‘If you can pay a million dollars for a car, what is $50,000 for a mattress in which you spend eight hours a day? I think we will do very well. As well as Storhub,’ he said.

With the financial market currently displaying volatility, perhaps the monied classes can be persuaded to put their money in mattresses instead of under them.

Source: Business Times, 24 July 2009

S’pore growth for 2010 forecast at 3.5%, and the rest of Asean 4.2%

ASIAN economies appear to have turned the corner from the global recession and should be able to double next year the anaemic growth rates they are expected to post in 2009, the Asian Development Bank (ADB) said yesterday. But it warns in its latest Asia Economic Monitor that the road to full recovery is strewn with hazards.

Growth centre: China’s growth is expected to rise to 8 per cent in 2010 from 7 per cent this year
The biggest single threat to continuing recovery identified by ADB report is the danger that recession in the US and Europe, on which Asia relies heavily for export markets, will last longer then generally expected.

Singapore’s GDP growth rate is forecast by the report to reach 3.5 per cent in 2010, after an expected overall contraction of 5 per cent this year. The rest of Asean should recover from marginal growth of 0.7 per cent this year to 4.2 per cent expansion in 2010, ADB says.

China remains the region’s star performer, with growth expected to be maintained at a relatively high 7 per cent this year, rising to 8 per cent in 2010. Japan, on the other hand, is forecast to suffer a 5.8 per cent GDP contraction this year and recover to just 1.1 per cent growth in 2010.

South Korea and Hong Kong are forecast to recover to respective growth rates of 4 and 3 per cent in 2010 after sharp contractions this year, but Taiwan will remain one of the laggards of the region with growth recovering only to 2.4 per cent next year.

Recovery got under way in Asia during the second quarter of this year, the ADB report notes, fed largely by fiscal and monetary stimulus programmes. But while exports are showing some recovery as a result of inventory adjustment, underlying external demand remains weak.

Among the positive signs for Asia are ‘early indicators that the pace (of economic contraction) slowed in the second quarter of 2009′, while balance of payments positions have ‘turned positive’ again, stock markets have rebounded, several currencies have begun appreciating and inflation has eased.

Meanwhile, the region’s banking systems ‘appear capable of weathering the economic storm’, ADB says, ‘with prudential indicators strong and lending continuing to grow’ across much of the region.

Despite these positive indications, the report says: ‘The overall external environment for emerging East Asia remains difficult and uncertain, with the recession in advanced economies continuing and global financial conditions improving (but) still tight.’

Emerging East Asia – which excludes Japan and the newly-industrialised economies (NIEs) of South Korea, Taiwan, Hong Kong and Singapore – ‘could see a V-shaped recovery’, with growth dipping sharply in 2009 before recovering next year to its pace in 2008.

But this scenario could change for the worse if there is a more prolonged recession than forecast in advanced economies, with export demand remaining depressed longer than expected. Premature fiscal or monetary tightening could also damage the prospects for a V-shaped economic recovery in Asia.

And falling inflation could turn into deflation in some economies of the region, says ADB, noting that Singapore and Taiwan, whose economies have contracted most sharply among the NIEs in the current recession, have been ‘experiencing deflation over the past few months’.

Given the tentative nature of the expected recovery, ‘it is critical that authorities stay the course in supporting domestic demand and growth’ through fiscal and monetary stimuli, the ADB report adds.

Source: Business Times, 24 July 2009

SINGAPORE: Mainboard-listed Fragrance Group said one of its units has bought a property at Telok Kurau for S$36.5 million.

The freehold land parcel has a total site area of nearly 48,000 square feet. It can yield a maximum permissible gross floor area of some 93,000 square feet.

Fragrance said it plans to turn the site into a five-storey mixed development, comprising commercial shops and residential apartments.

It will fund the purchase and development through internal funds and bank borrowings.

The firm said it plans to start the construction and sale of the project in the second half of the financial year.

Depending on the number of units sold and the progress of construction, Fragrance said the development would contribute to the firm’s earnings in the current financial year and beyond.

Source: Channel News Asia, 24 July 2009

SINGAPORE: The resale prices of HDB flats rose by 1.4 per cent in the second quarter of 2009, higher than an initial estimate of a 1.2 per cent increase made earlier this month.

This comes after a slight drop of 0.8 per cent in the three months ending March.

Resale transactions also increased, jumping from 6,400 cases in the first quarter to 10,000 cases in the second quarter.

The median cash-over-valuation (COV) amount among all resale transactions continued its declining trend.

COV fell to S$3,000 in the second quarter, down S$1,000 from the first quarter.

HDB flats which sold above valuation accounted for 57 per cent of all resale transactions in the second quarter, down from 62 per cent in the previous quarter.

HDB also announced plans to launch 6,000 new Build-to-Order flats over the next six months, of which some 2,400 units will be 3-room or smaller apartments.

The bulk of the new flats will be in Punggol.

In the HDB rental market, rents for 3-room, 4-room and executive flats fell by S$100, but remained the same for 2-room and 5-room units.

Source: Channel News Asia, 24 July 2009

SINGAPORE: Private home prices in Singapore fell 4.7 per cent in the second quarter of this year, compared with the previous three months.

Although that marked the fourth straight quarter of falls, the pace of the decline appeared to be moderating.

Prices fell a record 14.1 per cent on quarter in the January to March period.

The second quarter decline was also better than 5.9 per cent fall predicted in the advance estimate released earlier this month.

Meanwhile, private residential rents fell 5.2 per cent in the second quarter, compared with an 8.5 per cent drop in the first quarter.

Source: Channel News Asia, 24 July 2009

‘Fee for secure booking’ practice reportedly rampant at Meadows@Peirce

THE sizzling-hot property market and the rush by buyers to secure choice units have led some property agents to turn greedy.

Some agents are offering potential buyers their services to secure a booking for their choice units if they pay them a commission. This has prompted at least two marketing agencies to warn their agents against this practice.

This scheme is reportedly rampant at the freehold Meadows@Peirce development near Teachers’ Estate, which is supposed to be open for preview only from today.

Some marketing agents, however, told Today that it is the potential buyers that are offering commissions to agents to secure for them their choice units.

The fee earned by these agents is said to be about 1 per cent of the property value. With unit prices at Meadows@Peirce ranging from $900,000 to more than $1 million, these agents could potentially earn between $9,000 and more than $10,000 for each unit that they can secure for an eager buyer.

In an email to its 3,000 associates on Wednesday, ERA Realty Network, one of the marketing agents for the project, warned: “Please do NOT collect commission from buyers for Meadows@Peirce or any other projects. Anyone caught doing so will be terminated from ERA and no commission will be paid to the associates.”

ERA’s associate director Eugene Lim said the email was a “preventive measure”.

“We want to stop it before anyone receives a commission. It is not right,” he added.

Of late, ERA has been cracking the whip on its agents in an industry where complaints of rogue or ignorant agents are rife. Last week, ERA warned its agents against submitting transactions under the names of senior colleagues to garner a higher share of the commissions.

And in February, a couple successfully sued ERA after its agents profited from “flipping” an apartment they were engaged to sell. The couple had sold their apartment through ERA agent Jeremy Ang, but it turned out that the buyer, Ms Natassha Sadiq, was the wife of his boss Mike Parikh, a senior director at ERA. She immediately resold the unit for a $257,000 gain.

Another marketing agent for Meadows@Peirce also issued an email warning a few days ago. Knight Frank reminded its 700 agents that they cannot receive or ask for commission from buyers, cannot collect an entrance fee into the showflat and cannot ask for blank cheques, which can subsequently cause the buyer to feel pressured to make a purchase.

The company’s executive director Foo Suan Peng said: “This is something we don’t condone because it will give rise to conflict of interest.”

Agents Today spoke to said the “fee for secured booking” practice happens with other projects, too. One said there was “nothing wrong” for buyers to pay agents, as both are willing parties.

Singapore Accredited Estate Agencies chief executive Tan Tee Khoon disagrees. He told Today: “The agent receives a commission from buyers when they are already hired by the developer to provide the services. That is unethical.”

Source: Today, 24 July 2009

NEW YORK – A stronger-than-expected report on United States home sales helped re-energise bulls on Wall Street yesterday, boosting hopes for a recovery of the ailing housing sector and the overall economy.

Just before noon in New York, the Dow Jones Industrial Average was up 164.75 points, or 1.9 per cent, at 9,046.01, as the blue-chip index topped the 9,000 mark for the first time since January.

The technology-rich Nasdaq composite jumped 38.51 points, or 2 per cent, to 1,964.89 and the broad Standard & Poor’s 500 index advanced 19.34 points, also 2 per cent, to 973.41.

The market, which has been riding a wave of better-than-expected corporate earnings reports, found a new catalyst when the National Association of Realtors said sales of existing US homes rose 3.6 per cent to an annualised rate of 4.89 million units in June, better than the consensus analyst forecast of 4.83 million.

Mr Joel Naroff at Naroff Economic Advisors said: “Investors are looking for reasons to believe earnings will rise going forward and a turn in the housing market can only improve expectations.” AFP

Source: Today, 24 July 2009