mr funny
02-07-07, 14:55
July 2, 2007
UPFRONT
Bishan no longer property hotspot
By Lin Xinyi
http://www.straitstimes.com/STI/STIMEDIA/image/20070701/ST_IMAGES_XINHDB.jpg
AT A LOSS: The $730,000 pumped into their Bishan executive maisonette has resulted in a huge paper loss now for Felix and Margaret Chua. Given a chance, they would like to downgrade to a four-room flat. -- ST PHOTO: ALPHONSUS CHERN
BACK in 1997, Mr Felix Chua and his wife Margaret paid $730,000 for a 14th floor, 146 sq m executive maisonette in Bishan.
Both property agents, they believed they had struck a good deal.
They had earlier missed out on two flats in the same block - an 18th floor unit which sold for $750,000, and another on the eighth floor that went for $720,000.
Today, their flat is not worth anything close.
Property analysts put the current value of executive maisonettes at Bishan Street 23 at about $480,000 - already 10 per cent more than at the start of this year, when prices were closer to $440,000.
So buyers - especially those now flush with cash from the collective sale of their old homes - thinking of paying top dollar for resale flats might well take this as a cautionary tale.
Last month, a six-year-old 115 sq m Housing Board flat at Kim Tian Place went for $720,000 - setting a record for five-room flats.
The buyer had cash from a collective sale to blow; the seller pocketed a tidy profit of $350,000.
Residents in this Tiong Bahru neighbourhood are not short of interested buyers, some of whom are willing to pay $60,000 to $70,000 above the valuation of about $530,000 - all in cash.
Almost every day, residents receive fliers from various real-estate companies in their mailboxes. Property agents have also shown up in person at their doors.
Occasionally, these residents get handwritten notes slipped in under their doors from buyers looking for a quick purchase without going through a property agent.
Just down the road from Kim Tian, at the Jalan Membina HDB estate, a buyer paid $675,000 for a 16th floor unit last month.
Property analysts are surprised by these purchases.
Chesterton International research director Colin Tan said such prices are not justified by the expected rentals.
He said: 'Sometimes, people do pay 10 per cent more for benefits such as staying near their parents or being near a school.
'But if they are thinking of paying 50 per cent more, there are alternatives in the resale market.'
Analysts say the recent rash of collective sales is fuelling this buying frenzy.
PropNex chief executive Mohamad Ismail said: 'If not for that, I do not think anyone will pay $700,000 for a five-room flat.'
He said that while those who have windfalls from properties sold en bloc will not feel the pinch because they are paying just a fraction of what they have made, HDB upgraders in the market for resale flats do need to worry about paying such high prices, he said.
Even though he expects HDB prices to go up over the next two to three years, he reckons that buyers who paid more than $100,000 above valuation previously will not be able to sell at today's prices.
Retiree Alan Pwee, 63, has been down that very road.
In 1997, he upgraded from a five-room flat in Bishan Street 23 to a $760,000 top-floor maisonette a few blocks away.
The maisonette is now worth only $480,000.
'Of course, I regret buying at that price. It was partly an investment. Now, I have no choice but to take it as a paper loss,' he said resignedly.
Mr Pwee and the Chuas are among those who bought homes during the last property boom a decade ago.
Mr Ismail said: 'Anyone who bought in 1996 will not make a dollar's profit today.'
However, those in Bishan are counting bigger paper losses. The inflated prices back then came from the demand for five-room and executive flats in the estate.
A decade ago, Bishan was a new satellite town.
Demand for homes there was jacked up because of its good location: It is served by expressways and the MRT, and amenities and premier schools - such as Raffles Institution and Catholic High School - are in the neighbourhood.
The only comfort from the paper loss for Mr Chua, now 50, is that he and his wife feel they 'got what they wanted'.
But given a chance, they would like to downgrade to a four-room flat.
Those hoping to 'let go' properties they paid a high price for are saying they will wait out the current market.
Mr John Ching moved into Bishan about 10 years ago when he bought a maisonette at $620,000.
'I won't sell unless the price is about $600,000,' said the 59-year-old retiree.
But property analysts say Bishan residents would have to wait for the economy to improve further to stand a chance of breaking even.
Mr Ismail noted that the price index is 20 per cent lower than in 1996.
And Bishan is no longer the estate buyers are eyeing.
The choice locations now are Telok Blangah, Redhill and Tiong Bahru because they are near the city and the upcoming integrated resorts, said Mr Ismail.
Mr Nicholas Mak, director of research and consultancy at Knight Frank, said: 'Flats are not an ageless commodity like gold.
'Bishan is no longer the hot area as flats there are much older now.'
[email protected]
RESIGNED TO A PAPER LOSS
'Of course, I regret buying at that price. It was partly an investment. Now, I have no choice but to take it as a paper loss.'
RETIREE ALAN PWEE, 63, who paid $760,000 for a top-floor maisonette in 1997. The maisonette is now worth only $480,000
NO PROFITS TO REAP
'Anyone who bought in 1996 will not make a dollar's profit today.'
PROPNEX CHIEF EXECUTIVE MOHAMAD ISMAIL
UPFRONT
Bishan no longer property hotspot
By Lin Xinyi
http://www.straitstimes.com/STI/STIMEDIA/image/20070701/ST_IMAGES_XINHDB.jpg
AT A LOSS: The $730,000 pumped into their Bishan executive maisonette has resulted in a huge paper loss now for Felix and Margaret Chua. Given a chance, they would like to downgrade to a four-room flat. -- ST PHOTO: ALPHONSUS CHERN
BACK in 1997, Mr Felix Chua and his wife Margaret paid $730,000 for a 14th floor, 146 sq m executive maisonette in Bishan.
Both property agents, they believed they had struck a good deal.
They had earlier missed out on two flats in the same block - an 18th floor unit which sold for $750,000, and another on the eighth floor that went for $720,000.
Today, their flat is not worth anything close.
Property analysts put the current value of executive maisonettes at Bishan Street 23 at about $480,000 - already 10 per cent more than at the start of this year, when prices were closer to $440,000.
So buyers - especially those now flush with cash from the collective sale of their old homes - thinking of paying top dollar for resale flats might well take this as a cautionary tale.
Last month, a six-year-old 115 sq m Housing Board flat at Kim Tian Place went for $720,000 - setting a record for five-room flats.
The buyer had cash from a collective sale to blow; the seller pocketed a tidy profit of $350,000.
Residents in this Tiong Bahru neighbourhood are not short of interested buyers, some of whom are willing to pay $60,000 to $70,000 above the valuation of about $530,000 - all in cash.
Almost every day, residents receive fliers from various real-estate companies in their mailboxes. Property agents have also shown up in person at their doors.
Occasionally, these residents get handwritten notes slipped in under their doors from buyers looking for a quick purchase without going through a property agent.
Just down the road from Kim Tian, at the Jalan Membina HDB estate, a buyer paid $675,000 for a 16th floor unit last month.
Property analysts are surprised by these purchases.
Chesterton International research director Colin Tan said such prices are not justified by the expected rentals.
He said: 'Sometimes, people do pay 10 per cent more for benefits such as staying near their parents or being near a school.
'But if they are thinking of paying 50 per cent more, there are alternatives in the resale market.'
Analysts say the recent rash of collective sales is fuelling this buying frenzy.
PropNex chief executive Mohamad Ismail said: 'If not for that, I do not think anyone will pay $700,000 for a five-room flat.'
He said that while those who have windfalls from properties sold en bloc will not feel the pinch because they are paying just a fraction of what they have made, HDB upgraders in the market for resale flats do need to worry about paying such high prices, he said.
Even though he expects HDB prices to go up over the next two to three years, he reckons that buyers who paid more than $100,000 above valuation previously will not be able to sell at today's prices.
Retiree Alan Pwee, 63, has been down that very road.
In 1997, he upgraded from a five-room flat in Bishan Street 23 to a $760,000 top-floor maisonette a few blocks away.
The maisonette is now worth only $480,000.
'Of course, I regret buying at that price. It was partly an investment. Now, I have no choice but to take it as a paper loss,' he said resignedly.
Mr Pwee and the Chuas are among those who bought homes during the last property boom a decade ago.
Mr Ismail said: 'Anyone who bought in 1996 will not make a dollar's profit today.'
However, those in Bishan are counting bigger paper losses. The inflated prices back then came from the demand for five-room and executive flats in the estate.
A decade ago, Bishan was a new satellite town.
Demand for homes there was jacked up because of its good location: It is served by expressways and the MRT, and amenities and premier schools - such as Raffles Institution and Catholic High School - are in the neighbourhood.
The only comfort from the paper loss for Mr Chua, now 50, is that he and his wife feel they 'got what they wanted'.
But given a chance, they would like to downgrade to a four-room flat.
Those hoping to 'let go' properties they paid a high price for are saying they will wait out the current market.
Mr John Ching moved into Bishan about 10 years ago when he bought a maisonette at $620,000.
'I won't sell unless the price is about $600,000,' said the 59-year-old retiree.
But property analysts say Bishan residents would have to wait for the economy to improve further to stand a chance of breaking even.
Mr Ismail noted that the price index is 20 per cent lower than in 1996.
And Bishan is no longer the estate buyers are eyeing.
The choice locations now are Telok Blangah, Redhill and Tiong Bahru because they are near the city and the upcoming integrated resorts, said Mr Ismail.
Mr Nicholas Mak, director of research and consultancy at Knight Frank, said: 'Flats are not an ageless commodity like gold.
'Bishan is no longer the hot area as flats there are much older now.'
[email protected]
RESIGNED TO A PAPER LOSS
'Of course, I regret buying at that price. It was partly an investment. Now, I have no choice but to take it as a paper loss.'
RETIREE ALAN PWEE, 63, who paid $760,000 for a top-floor maisonette in 1997. The maisonette is now worth only $480,000
NO PROFITS TO REAP
'Anyone who bought in 1996 will not make a dollar's profit today.'
PROPNEX CHIEF EXECUTIVE MOHAMAD ISMAIL