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Thread: New home sales, property stocks dip

  1. #1
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    Default New home sales, property stocks dip

    http://www.straitstimes.com/archive/...s-dip-20130115

    New home sales, property stocks dip

    Potential buyers, investors cautious as latest cooling measures kick in

    Published on Jan 15, 2013

    By Esther Teo Property Reporter


    THE latest round of property cooling measures has taken a fairly heavy toll on weekend new home sales and property stocks.

    Share prices of property developers were dragged down across the board yesterday as investors worried that the measures could hit the profits of these firms.

    Wing Tai Holdings fell 8.9 per cent to $1.84; City Developments shed 7.5 per cent to $11.65; Keppel Land, 7.2 per cent to $3.97, and CapitaLand, 4.1 per cent to $3.73.

    Some home buyers were willing to brave the weekend market.

    Still, numbers were well down as new home buyers digested this seventh round of measures - the most extensive so far - including tighter loan restrictions.

    At 810-unit La Fiesta next to Sengkang MRT station, fewer than 5 per cent of the 400 launched units were bought at the weekend, said EL Development's managing director Lim Yew Soon.

    It was a different story last Friday, as buyers scrambled to sign up before the new measures kicked in at midnight. Most of the "few hundred units" sold since its launch last Friday were sold then.

    "Buyers who bought over the weekend were mostly first-time buyers or second-time buyers who intend to dispose of their first property," Mr Lim added.

    The new measures allow the additional buyer's stamp duty (ABSD) of 7 per cent to be refunded to certain eligible married couples who buy a second home but plan to sell their existing one.

    A City Developments spokesman said weekend visitorship to its Echelon showflat next to Redhill MRT station was healthy.

    "We closed sales on several units during this time but understandably, there is concern from home buyers as they try to absorb the news of the latest government action on property," he added. Far East Organization sold a modest 22 units over the weekend despite offering a 5 per cent discount at all its projects in response to the measures. It had sold 38 units on Friday.

    The most popular were eCO in Bedok South, Hillsta in Choa Chu Kang and Watertown in Punggol. Most buyers were Singaporeans and permanent residents buying for the first time.

    Meanwhile, the Controller of Housing issued a circular to developers and solicitors yesterday warning them against backdating options to purchase for homes.

    "The Controller takes a serious view of this offence," it said.

    At showflats The Straits Times visited over the weekend, many potential buyers who were singles or cash-rich investors with a long-term view were sizing up possible purchases. But most were cautious, and delayed buying as they want to see if prices will fall after the latest measures.

    One La Fiesta buyer, who wanted to be known only as Mr Yeo, 53, said he was buying a three-bedroom unit that cost about $1 million either for his children or as retirement income.

    While Mr Yeo, who works in sales, bought his unit last Friday, he said he would have done so even if the measures were in place, as he planned to pay off an existing mortgage and take a loan of about 40 per cent for the new unit. "I'm more conservative and don't believe in large loans," he said.

    The Straits Times understands that the Real Estate Developers' Association of Singapore asked for an update of the review of the ABSD a week ago. It had been lobbying the Government for a review since the middle of last year as the ABSD had hurt certain sectors such as the luxury segment.

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  2. #2
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    Default Home sales 'may fall 30%'

    http://www.straitstimes.com/archive/...ll-30-20130115

    Home sales 'may fall 30%'

    Published on Jan 15, 2013

    By Esther Teo Property Reporter


    THE number of property sales could dive by up to 30 per cent on the back of the tough new cooling measures but prices might stay firm, some experts say.

    The estimate is based on a survey showing that 30 per cent of of sales are estimated to be for investment purposes, said a Credit Suisse report yesterday.

    The measures introduced last Friday, which include tighter loan limits and additional stamp duties, target investment demand.

    But near-term prices may still hold up due to developers' strong balance sheets although they could turn desperate if the number of unsold units builds up, added report authors Yvonne Voon and Chok Sing Ping.

    They expect prices to remain "relatively flattish" although they may fall a further 5 to 10 per cent in the prime segment due to vacancy risks.

    A UOB report by Mr Francis Tan and Mr Jimmy Koh said prices are unlikely to fall beyond 7 per cent as two factors - employment and interest rates - have remained stable.

    "(Therefore), even for those who are expecting a price correction, it would not go beyond 5 to 7 per cent," they added.

    "Indeed, if housing prices were to correct, first-time home owners may use the opportunity to purchase their home, thereby mitigating the price impact."

    Property consultancy CBRE expects volumes to dip below 20,000 units this year - about a 10 to 15 per cent decline from sales lodged last year.

    "It is still early days to make a call on price movements but what we do know is that developers will continue to show strong interest in Government Land Sale sites that have good location attributes," said Mr Joseph Tan, CBRE's executive director of residential services.

    "As with previous measures, developers will be creative in planning unit sizes, maximising unit efficiency, mindful of the overall lump sum payments that investors have to make for their second and subsequent properties."

    DBS Group Holdings chief executive Piyush Gupta also commented on the measures yesterday, noting that they are a lot more comprehensive than anything he has seen so far.

    "I think the measures are likely to have a lot more teeth than anything else we have had. Even first-time HDB home buyers are affected because of the debt service requirements," added Mr Gupta, who was speaking on the sidelines of a client event.

    He expects the number of mortgages issued to fall by about 10 to 20 per cent this year.

    "There will be a slowdown because of higher cost of properties, the lower loan-to-value ratios, and higher debt burden ratios. Against that, of course, is that rates are still at historic lows," said Mr Gupta.

    [email protected]

    Additional reporting by Magdalen Ng

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