princess_morbucks
08-01-14, 10:54
Building castles in the air?
http://business.asiaone.com/property/news/building-castles-the-air
SINGAPORE- The seven blocks of the Pinnacle@Duxton on the edge of Chinatown rise an imposing 50 storeys towards the sky, giving their owners not just a great view of downtown Singapore but also the comfort that they are sitting on a potential gold mine.
Simply wait out the five-year minimum occupation period, which ends at the end of this year, after which those who want to cash in could easily demand more than $1 million for their units in the resale market.
At least, that was the conventional wisdom until recent months, when resale flat prices kept dropping in a soft property market.
Now, some residents in the Housing Board's (HDB) iconic blocks of flats, which are linked by skybridges, are tempering their expectations on how much profit they could make.
That seven-figure resale price could now be a skybridge too far.
A resident, who wanted to be known only as Mr Tan, said he was not hopeful of making a killing if he decides to sell his flat.
Mr Tan, who is in his late 40s, bought his 1,130 sq ft five-room unit in 2005 for around $400,000.
He said: "I may need to upgrade to a bigger flat as my two children get older. But the resale value might not be as good as previously estimated, so it may not be advisable to upgrade."
Last Thursday, estimates released by HDB indicated the resale price index continued to fall in the fourth quarter of last year, recording the sharpest drop in 8½ years.
The resale price index declined 1.3 per cent as prices slipped for the second quarter in a row, reported The Straits Times.
The fall was also the sharpest quarterly drop since 2005, when resale prices plunged 4.8 per cent in the second quarter.
Mr Tan said he had been optimistic the resale value would "be good, especially after I heard that a resident here had bought one of the balance five-room flats for $600,000 in 2008".
Furthermore, five-room flats in Bukit Merah had been sold at around $785,000, he added.
"But with the new (cooling) measures, it's not uncommon for sellers to reduce their asking cash over valuation (COV)," said Mr Tan, referring to the cash premium that buyers pay for resale flats.
STRICTER CONTROLS
The price decline in public housing is a result of stricter controls on home loans as well as the attractiveness and volume of new Build-To-Order offerings.
New permanent residents also have to wait three years before they can buy a resale flat.
The New Paper spoke to 10 residents of the Pinnacle@Duxton, the first 50-storey project in Singapore.
Comprising 1,848 units over seven blocks, it was launched in 2004 in a lacklustre property market.
Prices of four-room flats started at $289,200 and five-room flats were offered at up to $439,400.
Like Mr Tan, five residents said they were thinking of selling after they fulfil the minimum occupation period in December this year.
While they can only wait and see now, property agents told TNP that the purchase restrictions have reduced the demand for resale flats and they expect prices to drop further.
In Punggol, for instance, the median resale price and COV of a five-room flat - at $560,000 and $30,000 respectively in the second quarter - fell in the third quarter to $542,000 and $8,000, reported The Straits Times in October last year.
A property agent, who declined to be named, said: "In the past, people were asking for $100,000 as COV if their flat was in a good location, but buyers now are even looking for zero COV flats - something that was unheard of years ago."
But PropNex Realty chief executive Mohamed Ismail said it was "still possible" for selected units at the Pinnacle@Duxton to fetch high prices in the resale market.
"People might still pay high COVs if the unit has unblocked views, for instance," he said.
While he doubts that any unit will hit the magic million-dollar mark, he said owners still stand to make "a huge profit, especially since many bought their units for below $500,000."
Agreeing, Mr Donald Han, managing director at Chesterton Singapore, said resale prices for the Pinnacle@Duxton "will hold" because it is a "hotly sought-after location and is unlike any other HDB estate".
But such forecasts are moot points for Pinnacle@Duxton resident Foo Soo Lim, 58, who bought his five-room unit on the 49th storey for $450,000 in 2004.
The businessman, who lives there with his wife, 53, their daughter, 12, and his mother-in-law, 88, said: "No matter what price is offered, I'll never sell my flat because I love the location. It's convenient because my place is right next to the Central Business District."
http://business.asiaone.com/property/news/building-castles-the-air
SINGAPORE- The seven blocks of the Pinnacle@Duxton on the edge of Chinatown rise an imposing 50 storeys towards the sky, giving their owners not just a great view of downtown Singapore but also the comfort that they are sitting on a potential gold mine.
Simply wait out the five-year minimum occupation period, which ends at the end of this year, after which those who want to cash in could easily demand more than $1 million for their units in the resale market.
At least, that was the conventional wisdom until recent months, when resale flat prices kept dropping in a soft property market.
Now, some residents in the Housing Board's (HDB) iconic blocks of flats, which are linked by skybridges, are tempering their expectations on how much profit they could make.
That seven-figure resale price could now be a skybridge too far.
A resident, who wanted to be known only as Mr Tan, said he was not hopeful of making a killing if he decides to sell his flat.
Mr Tan, who is in his late 40s, bought his 1,130 sq ft five-room unit in 2005 for around $400,000.
He said: "I may need to upgrade to a bigger flat as my two children get older. But the resale value might not be as good as previously estimated, so it may not be advisable to upgrade."
Last Thursday, estimates released by HDB indicated the resale price index continued to fall in the fourth quarter of last year, recording the sharpest drop in 8½ years.
The resale price index declined 1.3 per cent as prices slipped for the second quarter in a row, reported The Straits Times.
The fall was also the sharpest quarterly drop since 2005, when resale prices plunged 4.8 per cent in the second quarter.
Mr Tan said he had been optimistic the resale value would "be good, especially after I heard that a resident here had bought one of the balance five-room flats for $600,000 in 2008".
Furthermore, five-room flats in Bukit Merah had been sold at around $785,000, he added.
"But with the new (cooling) measures, it's not uncommon for sellers to reduce their asking cash over valuation (COV)," said Mr Tan, referring to the cash premium that buyers pay for resale flats.
STRICTER CONTROLS
The price decline in public housing is a result of stricter controls on home loans as well as the attractiveness and volume of new Build-To-Order offerings.
New permanent residents also have to wait three years before they can buy a resale flat.
The New Paper spoke to 10 residents of the Pinnacle@Duxton, the first 50-storey project in Singapore.
Comprising 1,848 units over seven blocks, it was launched in 2004 in a lacklustre property market.
Prices of four-room flats started at $289,200 and five-room flats were offered at up to $439,400.
Like Mr Tan, five residents said they were thinking of selling after they fulfil the minimum occupation period in December this year.
While they can only wait and see now, property agents told TNP that the purchase restrictions have reduced the demand for resale flats and they expect prices to drop further.
In Punggol, for instance, the median resale price and COV of a five-room flat - at $560,000 and $30,000 respectively in the second quarter - fell in the third quarter to $542,000 and $8,000, reported The Straits Times in October last year.
A property agent, who declined to be named, said: "In the past, people were asking for $100,000 as COV if their flat was in a good location, but buyers now are even looking for zero COV flats - something that was unheard of years ago."
But PropNex Realty chief executive Mohamed Ismail said it was "still possible" for selected units at the Pinnacle@Duxton to fetch high prices in the resale market.
"People might still pay high COVs if the unit has unblocked views, for instance," he said.
While he doubts that any unit will hit the magic million-dollar mark, he said owners still stand to make "a huge profit, especially since many bought their units for below $500,000."
Agreeing, Mr Donald Han, managing director at Chesterton Singapore, said resale prices for the Pinnacle@Duxton "will hold" because it is a "hotly sought-after location and is unlike any other HDB estate".
But such forecasts are moot points for Pinnacle@Duxton resident Foo Soo Lim, 58, who bought his five-room unit on the 49th storey for $450,000 in 2004.
The businessman, who lives there with his wife, 53, their daughter, 12, and his mother-in-law, 88, said: "No matter what price is offered, I'll never sell my flat because I love the location. It's convenient because my place is right next to the Central Business District."