Signs of speculation in private property market
http://www.channelnewsasia.com/stori...445345/1/.html
Signs of speculation in private property market
By Mok Fei Fei, 938LIVE | Posted: 29 July 2009 1157 hrs
SINGAPORE: The government is seeing some signs of speculation in the Singapore property market, according to National Development Minister Mah Bow Tan.
Speaking on the sidelines of the topping out ceremony of the Marina Bay Financial Centre on Wednesday morning, Mr Mah said the government is monitoring the situation.
He added that it is uncertain if the buying momentum seen in recent months can be sustained.
"The forecast is still for negative growth this year. Although it's not as negative as it was in the beginning of the year. I think there is still uncertainty... But what is important really is for all of us, all the players in the market, to make sure that the market remains healthy," said Mr Mah.
According to latest data from the Urban Redevelopment Authority (URA), sales of uncompleted private homes reached a record high of 1,825 units in June as improving sentiment in the market spurred homebuyers to snap up more units.
Mr Mah assured that there is adequate supply of units in the market for now and the government is prepared to release more land for sale if necessary.
On the Marina Bay Financial Centre, Mr Mah noted that it has already attracted over S$20 billion of private real estate investments from both local and international investors. About 61 per cent of space in the centre has been pre-leased.
Mr Mah also reiterated the government's commitment to the project, saying another S$1 billion in infrastructure works will be invested over the next 10 to 15 years. The figure is on top of the S$7.5 billion already invested in Marina Bay.
- 938LIVE/so
Speculation creeping back into market: Mah
http://www.businesstimes.com.sg/sub/...43872,00.html?
Published July 30, 2009
Speculation creeping back into market: Mah
Govt will act if housing market overheats; supply pipeline is strong
By EMILYN YAP
(SINGAPORE) Speculation is trickling back into the property market and the government is watching the situation closely, National Development Minister Mah Bow Tan said yesterday.
The authorities will take action should the market overheat but home seekers should also be careful about making purchases, he underlined.
'I wouldn't say that there is excessive speculation at the moment but there is some element of speculation involved,' Mr Mah told the press after the topping-out ceremony for Tower One at Marina Bay Financial Centre (MBFC).
'Some of the practices and habits that you saw in the last property boom are beginning to come back.'
Queues have started forming outside some showflats and property agents are reportedly armed with blank cheques from clients.
Median prices have also gone up at some launches - by up to 7 per cent a month in a handful of cases. This has stemmed the fall in private home prices, with the Urban Redevelopment Authority's (URA) price index sliding 4.7 per cent in Q2 from a quarter ago - much less than the 14.1 per cent tumble it took in Q1.
The question, though, is why a buying wave is forming when economic waters remain tepid. The slowdown has moderated but a contraction is still on Singapore's books, Mr Mah said.
The official forecast now points to the economy shrinking 4-6 per cent this year.
It is therefore unclear if the buying momentum is sustainable, he said. 'I'm not so sure whether the demand is due to pent-up demand, or whether it is due to buyers responding to lower prices by developers or even to the current low interest rates.'
While it is premature to call it the start of a property bubble, the government is monitoring the market closely and will take 'whatever action is necessary', Mr Mah said.
He also urged home seekers to research the property market thoroughly and seek affordable units.
'Don't panic - because there is a lot of supply in the market.'
According to URA, there were 62,350 uncompleted private homes from projects in the pipeline at the end of Q2. Of these, 38,482 units were still unsold.
The government can also inject supply through the Government Land Sales (GLS) programme, Mr Mah said. It is considering whether it should reintroduce the confirmed list (suspended last October) for the first half of 2010.
Responding to Mr Mah's comments, the Real Estate Developers Association of Singapore (Redas) said that developers share a 'common desire to see a steady growth, for greater stability and sustainability in the property market'.
It also highlighted that not all property launches have been snapped up.
'Only a selected few launches have been highly successful for various reasons. This could also be a result of pent-up demand.'
Industry watchers saw Mr Mah's message as a signal against excess exuberance in the market. The move could have contributed to a fall among major property counters yesterday: City Developments lost 10 cents to close at $9.94, while CapitaLand shed six cents to $4.00.
Colliers International's research and advisory director Tay Huey Ying felt that there is 'genuine concern' about the sustainability of current demand. Some buying has been driven by accumulated wealth from the boom years and when the funds dry up, it will take strong economic fundamentals to generate new demand, she said.
But she also believes that the government will 'tread cautiously' when it comes to tempering market sentiment, because the pick-up has only begun and is fragile.
Developer sales of private homes started to recover in February - interest first poured into mass-market projects and gradually filtered into mid- and high-end ones.
Over the last month, for example, KOP Group sold 11 units at its luxury site The Hamilton Scotts, at prices ranging from $2,500 to $3,000 psf.
Across liquidity-flush Asia, several economists have flagged the risk of property bubbles forming. However, many do not believe that policymakers will aggressively tighten measures when economic recovery remains nascent.
Mah sounds warning on property buzz
http://www.straitstimes.com/Prime%2B...ry_409847.html
July 30, 2009 Thursday
Mah sounds warning on property buzz
Government will take action if excessive speculation develops
By Jessica Cheam
THE Government will take 'whatever action necessary' to prevent excessive speculation in the property market, said National Development Minister Mah Bow Tan yesterday.
Mr Mah's note of caution comes amid a buying frenzy that has gripped the real estate sector in recent months.
He told the media on the sidelines of an industry event: 'I wouldn't say there is excessive speculation at the moment, but there is some element of speculation involved.
'Some of the practices and habits that you saw in the last property boom are beginning to come back, so I think we'll have to be careful.'
He also warned about a property bubble forming. 'Obviously it is not in our interest for such a bubble to form, because when it does, and bursts, which it inevitably must, then I think a lot of people will get hurt,' said the minister, adding that all parties concerned must ensure that such a bubble does not materialise.
'A little bit of speculation is inevitable in every market, but when it becomes excessive, then it is something that we should try to avoid.'
There are certainly signs of a red-hot market, including queues forming days before the launch of a new project.
Suburban condo Optima, next to the Tanah Merah MRT, drew lines snaking outside the showflat on Monday, though the unit does not open until tomorrow.
Real estate agents were also in the queues with blank cheques from clients.
Buyers at Ang Mo Kio were equally keen to put their money down at the 329-unit Centro Residences, reportedly paying $1,150 per sq ft, a price level typically seen in central districts.
Mr Mah said the Government was monitoring the market but added that it was uncertain if the activity is due to pent-up demand or generated by buyers responding to lower prices or low interest rates.
'It is in all our interest that the market is a healthy, sustainable one,' he said.
Property veteran Nicholas Mak, former head of research at Knight Frank, agreed that the key is sustainability of demand: 'Although now it seems it's a bit too much and too fast, with buying volume growing at an unsustainable rate.'
Speculation is on the rise, with the number of subsales in the second quarter at 940 compared with 412 in the first quarter of this year, he noted.
Mr Mah yesterday called on buyers to do their homework: Research prices, study information on upcoming supply and check data from the Urban Redevelopment Authority's website. 'Don't commit right up to the hilt...think about what if interest rates rise in the future, would you still be able to afford it?' he said.
He emphasised that there was plenty of supply in the pipeline: Of 62,350 uncompleted units of private homes, about 38,482 units remain.
The minister also announced that the confirmed list of sites in the Government's land sales programme could be reinstated if supply is needed.
The Real Estate Developers Association of Singapore backed up Mr Mah's comments that a bubble should not form.
It pointed out last night that not all the property launches have been snapped up. Only a select few have been highly successful for various reasons. This could also be a result of pent-up demand.
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