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Thread: Respite for home buyers as HDB discloses figures of resale prices

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    Default Respite for home buyers as HDB discloses figures of resale prices

    July 16, 2007

    Respite for home buyers as HDB discloses figures of resale prices


    HOME buyers feeling the heat from fast-rising resale prices for Housing Board (HDB) flats may be about to get some respite.

    The HDB has taken the unprecedented step of disclosing figures designed to give an overview of resale prices region by region - along with the average sum paid above valuation.

    Property agents expect the HDB's move to throw a bucket of cold water over some of the more absurd asking prices of late - some more than $100,000 above valuation.

    These overly-optimistic asking prices have resulted from one-off record high prices in the central area that have captured wide attention in recent weeks.

    The new HDB figures put those figures in perspective by showing that average resale deals islandwide are not nearly as high as the eye-catching sales.

    Although the HDB has long issued quarterly figures on HDB resales, these new figures give more detail such as how much buyers pay above valuation.

    Still, some market players have misgivings about the figures. Their gripe - they are grouped according to five clusters of towns, such as 'West' for Bukit Batok, Bukit Panjang, Clementi, Choa Chu Kang, Jurong East and Jurong West.

    They say this makes it difficult for buyers or sellers to get a clear picture of how flats similar to theirs are faring.

    Preliminary figures show resale prices of HDB flats overall grew by 2.85 per cent in April to June this year, up from 1.25 per cent in the first quarter of this year.

    Read the full report in Tuesday's edition of The Straits Times.

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    Default Re: Respite for home buyers as HDB discloses figures of resale prices

    Published July 17, 2007

    70% of HDB resale deals in Q2 go above valuation

    Central region takes top spot with average cash over valuation of $20,900

    By KALPANA RASHIWALA


    (SINGAPORE) The Housing & Development Board (HDB) yesterday released data showing that 70 per cent of resale deals in Q2 were above valuation with the average cash-over-valuation (COV) amount being about $10,100.

    The biggest COV premium was recorded in the central region, with an average figure of $20,900. Within this region - which includes the hot Bukit Merah and Marine Parade areas which recently saw record prices being achieved - five-room flats posted the biggest premium - an average of $33,600.

    Executive flats in the central region on average posted a premium of $28,900, followed by four-room flats ($24,200) and three-room flats ($13,900) in the same region.

    Islandwide, the east region (including Bedok, Pasir Ris and Tampines) posted the second-highest average premium of $10,900, followed by the north-east region, which includes Ang Mo Kio, Hougang and Serangoon ($9,100).

    The HDB said yesterday's market data were released to 'assist both flat buyers and sellers in making informed decisions, taking into account the prevailing trends in the HDB resale market'.

    The board said: 'Potential buyers are advised to take into account the overall market trends, instead of relying on reports of high selling prices for isolated resale transactions, when considering flat purchases. Given the long-term financial commitment of buying a property, buyers are urged to exercise prudence in making their housing purchase decision.'

    Estate agents generally welcomed the release of COV premiums recorded for resale flats but suggested that providing a breakdown of average COV premiums by individual estate would be even better than figures for five regions.

    PropNex CEO Mohamed Ismail said: 'Providing data at the regional level does not help consumers much. HDB should list the data by all 27 HDB estates.'

    ERA assistant vice-president Eugene Lim welcomed yesterday's release 'as HDB resale market has gone berserk recently'.

    He suggested that the board could provide a split of COV premiums each quarter by individual estates. 'On top of that, it should also include the median COV premium instead of just the average (mean), as that will be a more accurate picture of what most buyers are willing to pay for each location,' he said.

    'Right now, serious buyers are being priced out of the market or pushed beyond their limit because of a few publicised benchmark transactions which have led other owners asking for fantastic premiums above valuation - sometimes as high as $200,000 or 40 per cent above current valuation.

    'The typical HDB buyer depends on financing, as he does not have much cash. So the current trend of owners asking prices way above valuation pushes the serious buyers out of the market. Those in urgent need of housing will think of ways and means to come up with the cash. Such a climate could lead to 'creative' forms of financing and illegal practices, which can't be healthy for the market.'

    News of record prices like the $720,000 achieved last month for a five-room resale flat at Kim Tian Place in the Tiong Bahru area - similar units in the area were earlier selling for around $550,000 - have led to HDB flat owners across the island seeking substantial premiums above valuations.

    The benchmark prices have so far been set by those who have sold their homes in private estates and urgently looking for replacement homes, agents say.

    Mr Lim said he had heard of a 20-year-old five-room flat in the Bukit Batok area being sold for around $600,000, significantly higher than the $300,000 or so it could have fetched earlier this year.

    Mr Ismail reckons that about a year ago, less than 40 per cent of resale flat deals were at prices above valuation.

    The HDB figures for Q2 show that about 70 per cent of sales were above valuation. Mr Ismail reckons the average islandwide COV premium a year ago might have been below $2,000 at best, with some homes even selling for below the official valuation.

    In its release yesterday, HDB also sought to assure the market that there is sufficient supply of flats. In the resale market, there are some 760,000 flats eligible for transaction, providing 'a wide variety of housing options across location and flat type for flat buyers to choose from, taking into account their budgets and housing aspirations', the HDB said.

    The board also gave an update on the supply of new HDB flats for sale, saying it will 'adjust its building plans in line with market demand'.

    The HDB is planning to offer about 3,000 new flats under Build-to-Order (BTO) exercises in the second half of this year, double the 1,400 units in H1. The new BTO supply will complement HDB's sales programme for completed units, the board said.


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    Default Re: Respite for home buyers as HDB discloses figures of resale prices

    July 17, 2007

    HDB data shows resale prices not that high

    Figures may help cool market but industry players want details

    By Tan Hui Yee, Housing Correspondent


    HOME buyers feeling the heat from fast-rising resale prices for Housing Board (HDB) flats may be about to get some respite.

    The HDB taken the unprecedented step of disclosing figures designed to give an overview of resale prices region by region - along with the average sum paid above valuation.

    Property agents expect the HDB's move to throw a bucket of cold water over some of the more absurd asking prices of late - some more than $100,000 above valuation.

    These overly optimistic asking prices have resulted from one-off record high prices in the central area that have captured wide attention in recent weeks.

    The new HDB figures put those numbers in perspective by showing that average resale deals islandwide are not nearly as high as the eye-catching sales.

    Although the HDB has long issued quarterly figures on resale flats, these new figures give more detail such as how much buyers pay above valuation.

    Still, some market players have misgivings about the figures. Their gripe: They are grouped according to five clusters of towns, such as 'West' for Bukit Batok, Bukit Panjang, Clementi, Choa Chu Kang, Jurong East and Jurong West.

    They say this makes it difficult for buyers or sellers to get a clear picture of how flats similar to theirs are faring.

    For example, five-room flats in Clementi, with an average value of $377,200 from January to March, are lumped together with those in Jurong West, which had an average value of $268,800 in the same period. The average second-quarter resale price for the 'West' cluster was $295,000.

    This grouping system has also raised eyebrows as the HDB's regular quarterly resale statistics give average valuation of flats according to each of the 26 HDB towns.

    The chief executive of property agency Propnex, Mr Mohamed Ismail, said: 'The true picture of the market is being muffled.'

    Sellers with flats in more popular towns in a cluster may find it harder to sell now, if their unit is worth more than the cluster average, he added.

    The assistant vice-president of ERA Singapore, Mr Eugene Lim, said: 'We hope more figures will come out. The average figures are not reflective of the whole market.'

    The executive director of Roof Real Estate Group, Mr Dave Lau, predicts the move will slow resale transactions for the next two to three weeks as buyers lower their offers but sellers hold out for more.

    Still, the agents concede the new figures will help ease worries among buyers.

    Having more detailed figures released on a regular basis would help make the market more transparent, they said. However, it is not clear if these figures will become a regular feature.

    Preliminary figures show resale prices of HDB flats overall grew by 2.85 per cent in April to June, up from 1.25 per cent in the first quarter of this year.

    The HDB said yesterday that it will adjust building plans in line with market demand. It will offer about 3,000 new flats under its build-to-order scheme from this month till December, up from the 1,400 new flats it put up for sale in the first half of this year.

    The Board also urged homebuyers to watch their wallets.

    'There is also a large pool of resale flats in the open market,' it said. 'Potential buyers are advised to take into account the overall market trends, instead of relying on reports of high selling prices for isolated resale transactions, when considering flat purchases.'

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    Default HDB data should be fine-tuned to give clearer picture: analysts

    HDB data should be fine-tuned to give clearer picture: analysts

    By Daryl Loo, Channel NewsAsia | Posted: 17 July 2007 2315 hrs


    SINGAPORE : One day after the government released more comprehensive data for the private and housing market, analysts are already calling for the figures to be fine-tuned.

    The aim, they say, is to give buyers an even clearer picture of the red-hot property market.

    The Housing and Development Board and the Urban Redevelopment Authority both released additional housing data on Monday to calm fears of escalating property prices.

    URA has said its table of property prices will be updated monthly.

    The additional data on HDB resale transactions released on Monday has been welcomed by most market-watchers.

    They say the data provides more transparency, helping home buyers to make better-informed choices.

    But they also say the figures - which include the amount of cash buyers pay above valuation - should be fine-tuned.

    Mohamed Ismail, CEO, PropNex, says: "It will be of much greater help to the consumer in making some sense out of these figures that HDB provide by estates...Because even when we talk about a particular estate, those flats that are closer to amenities and MRT always command a higher cash price."

    Property consultants are also asking for HDB to release the data on a regular basis to provide a better indication of market trends.

    As for private residential property, market watchers say the URA's table lacks details of sub-sales - or the secondary market - which represented over 6 percent of all private home sales in the first quarter of this year.

    But they suggest that buyers should consider developers' sale prices, so they do not get overcharged on the secondary market.

    Eugene Lim, Assistant Vice President, ERA Realty, says: "By looking at the table I would know what has been achieved by the developer. So when I'm looking at the prices in the sub-sale market, this would basically tell me what premium I'm paying above what was done previously at the original launch. So this would help check the amount of premiums that people are willing to pay."

    A highly-popular project can usually be resold quickly by a buyer for a tidy profit in an industry practice known as flipping. - CNA/ch

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