HDB imposes checklists on resale flats

Business Times – 25 Mar 2008

THE Housing and Development Board will introduce mandatory checklists for housing agents handling resale flat transactions from May 1 – a move welcomed by industry players.

The checklists cover key policies and procedures that housing agents will need to advise resale flat buyers and sellers on before they commit to a transaction, HDB said yesterday.

‘This is part of HDB’s ongoing efforts to ensure that buyers and sellers are aware of the relevant HDB purchase and financing policies when buying/selling an HDB flat,’ it said.

The move comes after a new scam involving HDB flats surfaced recently. Under the scam, a seller and buyer together report a falsely low sale price to HDB.

The buyer then pays the difference between the actual and declared price to the seller in cash, which means the seller has more cash in hand – rather than having any leftover money go back into his CPF account. To sweeten the deal, the seller usually gives the buyer a discount on the market value of the flat.

Under HDB’s new initiative, housing agents will have to submit a completed resale checklist to HDB with a resale application. Resale applications that do not comply with this requirement will be rejected and there will be ’serious penalties’ for false declarations.

Housing agents engaged by both sellers and buyers will have to go through a resale checklist with clients before an option to purchase (OTP) is granted or exercised.

Buyers and sellers who do not engage the services of housing agents need not submit a checklist. PropNex, which says it has more than 40 per cent of the public housing resale market, welcomed HDB’s move.

Public housing has many policies and financing requirements that many may not be familiar with, said PropNex chief executive Mohamed Ismail.

Most buyers tend not to read the important notes attached to OTP, he said.

The new resale checklist for housing agents engaged by buyers, for example, will ensure that buyers are aware of their rights as well as of financing matters. It will also highlight to them the fact that any form of cashback arrangement, such as over or under declaration, is punishable by law.

Similarly, the checklist for sellers’ housing agents will ensure prospective sellers understand the various eligibility rules.

Mr Ismail said that while many agents already educate potential buyers and sellers, some may not, leaving them in the dark.

‘This initiative should lead to greater transparency for buyers and sellers, and ensure a consistently high level of professionalism amongst the agents,’ he said.

Home, retail, office rental growth to ease

Business Times – 25 Mar 2008

Housing rentals to rise 5-15% year-on-year in 2008: Knight Frank

PRIVATE housing rents are expected to grow at a slower pace this year than last year, Knight Frank said in a report yesterday.

The property consultancy firm expects a year-on-year rise of 5-15 per cent in 2008 – after a massive 40 per cent year-on-year increase in 2007.

Knight Frank’s estimates are based on the resistance of tenants and companies to even higher rents, and the limited availability of places at foreign schools for children of expatriates.

‘Due to the fact that foreign schools are full and there are long waiting lists faced by children of foreign families who relocated here, housing demand from new foreign family tenants is projected to decrease,’ Knight Frank said.

‘On top of this, foreign tenants as well as corporate HR (departments) have readjusted housing allowances this year, which constricts rental demand according to their budgets.’

Despite this, a demand-supply imbalance could still result in rental rises until a supply of new units is felt significantly from 2009.

About 8,400 new private homes will be completed this year. But the number will expand dramatically in the three years from 2009 to 2011, with an estimated 16,000 to 17,000 units completed each year.

This could put downward pressure on rents, Knight Frank said.

The same holds true for the retail sector. Knight Frank predicts that landlords could face stronger resistance from retailers to rising rents in the later part of 2008 as more space comes on stream.

‘Rents are forecast to maintain at their current level only until early 2008,’ it said. ‘Faced with a larger supply in the pipeline in the second half of 2008, island-wide prime retail rents are projected to appreciate by a relatively modest 5-10 per cent for entire 2008, compared to 22.1 per cent growth in 2007.’

Knight Frank also said growth in office rents and capital values in 2008 and 2009 will likely to be more moderate than in 2007. Office rents are forecast to rise 10-20 per cent year on year, while capital values are expected to increase 10-15 per cent year on year.

Don’t know what to do during the current property lull?

Business Times – 25 Mar 2008

PROPERTY EXPERTS GIVE SOME TIPS

Seven tips for buying a second home

Did you know, for example, that an HDB flat near an MRT station will give you a higher rental yield than most private properties?

The importance of being earnest when going en bloc

A major en bloc sales agent discusses the impact of the new legislation on collective sales introduced last year on warring owners.

Are you overpaying for your home loan?

Is the deferred payment period on the condo unit you bought a little while ago expiring soon? Read an independent mortgage broker’s advice before you go shopping for that home loan.

Aim for a landed home

So you’ve missed out buying a condo last year? Not to worry. Landed homes may become more appealing this year as they have yet to see the sharp price appreciation experienced by their non-landed counterparts.

3,500 vied for 714 condo-like flats in Boon Keng, but only 460 sold

The Straits Times March 25, 2008

THOUSANDS of applications poured in for a condo-like Housing Board project in January – but as of last week, less than two-thirds of the flats had been taken up.

About a third of the 714 units – or about 250 units – in City View @ Boon Keng remained unsold, said HSR Property Group, which is marketing the project.

These flats will be offered to the public, probably via walk-in selection.

The number of leftover units came as a surprise to market watchers, given that 3,500 applicants had vied for them.

This works out to five would-be buyers for each flat at City View, the second public housing project to be built by a private developer.

It boasts condo-like features such as timber floors, built-in wardrobes and air-conditioning.

All the applicants were given a chance to book the flats they wanted, said HSR project director Kellie Liew.

The selection process stretched over 20 days and ended last Thursday, with more than 3,000 potential deals falling through.

Developer Hoi Hup Sunway sold about 460 units, including six of the top-priced five-room units at $727,000 each, said Ms Liew.

But she added that some buyers backed out of their purchases due to the weakening property market, while others did not meet the required criteria to buy the flats.

‘We’ve been having a series of not-too-positive news about the market, so that could have affected the sentiment of the buyers,’ she said.

‘Also, some applicants were over-qualified, with combined monthly incomes of more than $8,000, so they were not eligible for the flats.’

Hoi Hup declined to comment.

Market watchers suggested that the relatively high prices for the City View units could also have proved a deterrent at crunch time.

The three-room flats were priced between $349,000 and $394,000, double the price tag of similar flats in the vicinity.

Five-room flats went for up to $727,000, which experts said was close to condominium prices.

‘Some people may have jumped on the bandwagon because of the hype, but when it was time to pick up a unit, they felt it was actually too expensive,’ said Mr Mohamed Ismail, chief executive of property agency PropNex.

‘In today’s market, there are many 99-year leasehold properties with full condo facilities that are going for less than $600 per sq ft, so some buyers may have thought twice.’

But Mr Chris Koh, director of Dennis Wee Properties, believes the remaining units could be snapped up quickly.

‘Fundamentals are still strong,’ he said. ‘We don’t see property prices sliding at all.’

He added that the situation could mirror that of The Premiere @ Tampines, the first developer-built public housing project.

The Premiere drew almost 6,000 applications for its 616 units when it was launched in 2006, but fewer than 500 units were sold when the booking process was over.

When the remaining flats were released to the public, long queues formed and would not disperse despite a downpour.

US crisis deepens as home owners turn to short-term loans

The Straits Times March 25, 2008

Such ‘payday loans’ come with high interest rates, piling on the debts

CLEVELAND (OHIO) – AS HUNDREDS of thousands of American home owners fall behind on their mortgage payments, more are turning to short-term loans with sky- high interest rates to get by.

While hard figures are hard to come by, evidence from non-profit credit and mortgage counsellors suggests that the number of people using these so-called ‘payday loans’ is growing. This is a negative sign for economic recovery as the United States housing crisis deepens.

‘We’re hearing from around the country that many folks are buried deep in payday loan debts as well as struggling with their mortgage payments,’ said Mr Uriah King, a policy associate at the Centre for Responsible Lending.

A payday loan is typically for a few hundred dollars, with a term of two weeks, and an interest rate as high as 800 per cent. The average borrower ends up paying back US$793 for a US$325 loan, according to the centre.

The centre also estimates that these lenders issued more than US$28 billion (S$38.9 billion) in loans in 2005. This was the latest available figure.

In the Union Miles district of Cleveland, which has been hit hard by the crisis, all the regular banks have been replaced by payday lenders.

‘When distressed home owners come to us, it usually takes a while before we find out if they have payday loans because they don’t mention it at first,’ said Ms Lindsey Sacher, the community relations coordinator at non-profit East Side Organising Project, which works to refinance US sub-prime mortgage borrowers on the verge of default or foreclosure. ‘But by the time they come to us for help, they have nothing left.’

On top of the steep cost, payday loans have an even darker side, Ms Sacher noted. ‘We also have to contend with the fact that payday lenders are very aggressive when it comes to getting paid.’

Mr Bill Faith, executive director of the Coalition on Homelessness and Housing in Ohio, an umbrella group representing some 600 nonprofit agencies in Ohio, said the state is home to some 1,650 payday loan lenders. This is more than all of Ohio’s fast food franchises put together.

‘That’s saying something, as the people of Ohio really like their fast food,’ Mr Faith said. ‘But payday loans are insidious because people get trapped in a cycle of debt.’

Mr Robert Frank, an economics professor at Cornell University, equates payday loans with ‘handing a suicidal person a noose’.

‘These loans lead to more bankruptcies and wipe out people’s savings, which is bad for the economy,’ he said.

‘This is a problem that has been caused by deregulation’ of the US financial sector in the 1990s.

REUTERS

Singapore inflation stays at 26-year high

The Straits Times March 25, 2008

Prices jump 6.5%, driven by higher food, transport and housing costs

CONSUMER prices surged 6.5 per cent last month from a year ago, continuing a rate of increase not seen in 26 years.

Food, transport and housing costs were again the main drivers as a confluence of external and internal factors kept last month’s inflation at just a shade off January’s 6.6 per cent.

The figure – released by the Department of Statistics yesterday – was broadly within market expectations. A Bloomberg News poll of 17 economists tipped a rate of 6.8 per cent.

Experts said rising prices will persuade the Monetary Authority of Singapore (MAS) to keep its policy of allowing the local currency to strengthen, to help fight off higher prices of imported goods.

But there is less consensus as to whether the central bank will get more aggressive when it holds its scheduled review next month.

Any tightening of monetary policy will hurt an already slowing economy.

‘February’s consumer price index moderated a touch but still stayed elevated,’ said Goldman Sachs economists Mark Tan and Michael Buchanan, who expect inflation to peak at around 7 per cent in the first half of the year.

Prices of meat and poultry, cooking oils and dairy products clocked double-digit gains, while rice, cereal and fruit cost almost 10 per cent more than they did last year.

High oil prices also made themselves felt in electricity bills and at petrol pumps.

Indeed, transport costs jumped 9.6 per cent, boosted also by higher taxi fares and car prices.

Housing costs surged the most at 8.8 per cent. But this was mostly a pass-on effect from January’s one-off revision in annual home values.

Health-care costs rose 7.4 per cent from higher hospitalisation fees and medical consultation charges – and also as Chinese herbs became costlier.

Standard Chartered Bank economist Alvin Liew said sustained increases in this area are of concern, especially as the population gets older.

He noted that the sector is especially dependent on foreign nurses. Competition for these workers and the rising currencies of their home countries may be driving up wage costs in Singapore.

The statistics department also highlighted foreign maid salaries, holidays, cable subscriptions and cigarettes as other significant sources of inflation.

The Trade and Industry Ministry issued an accompanying statement yesterday, saying the ‘underlying momentum in inflation remained stable’. It expects this to decline ‘during the year’ and is retaining its forecast of 4.5 to 5.5 per cent for annual inflation.

Still, Mr Tan and Mr Buchanan believe the MAS will move next month to allow for a faster appreciation of the Singapore dollar.

‘Slowing growth is an obstacle…but in our view, the easing in fiscal settings revealed in the 2008 Budget and low interest rates will provide a buffer to growth,’ they said.

But Citigroup economist Kit Wei Zheng reckons the MAS will stay put as growth concerns take precedence.

He raised his full-year inflation forecast to 5.4 per cent, ahead of the latest data. But he also slashed his economic growth estimate to 4.7 per cent, from 5.2 per cent, citing worsening United States conditions.

Realising the Marina Bay vision

Business Times – 22 Mar 2008

CHING TUAN YEE and BENJAMIN NG reflect on the planning of Singapore’s most ambitious urban project and highlight the exciting developments in store for Singaporeans and visitors alike

THE vision for Marina Bay is that of a high-quality, 24/7 live-work-play environment, one that encapsulates the essence of the global city Singapore is envisaged to be.

Waterfront business districts such as Canary Wharf in London and Pudong in Shanghai have come, in recent years, to signify urban progress and prosperity. They have raised the international profile of their respective cities while spurring growth and investment.

The Singapore example is in Marina Bay. A seamless extension of Singapore’s flourishing central business district spanning 360 hectares of prime land for development, Marina Bay is our city’s most exciting and ambitious urban project that will support our continuing growth as a major business  and financial hub in Asia.

Set by the water’s edge and with our signature city skyline as a backdrop, Marina Bay is envisioned to be a Garden City by the Bay, a 24/7 destination presenting an exciting array of opportunities for people to explore new living and lifestyle options, exchange new ideas and information for business, and be entertained by rich leisure and cultural experiences in a distinctive environment.

The groundwork for the expansion of the existing CBD (Central Business District) and its transformation into a waterfront business district focused around Marina Bay had been laid as early as the late 1960s. Land adjacent to the CBD was reclaimed in phases between 1969 and 1992.

The Master Plan for Marina Bay focuses on encouraging a mix of uses (commercial, residential, hotel and entertainment) to ensure that the area remains vibrant around the clock.

The concept of ‘white’ site zoning also gives developers more flexibility to decide on the mix of uses for each site, including housing, offices, shops, hotels, recreational facilities and public spaces.

To cater for good connectivity and seamless extension, the development parcels at Marina Bay were planned based on a grid urban pattern which extends from the existing road network within the  CBD.

This grid creates a flexible framework with a series of land parcels that can be amalgamated or subdivided to meet different requirements as well as changing demands and allow the phasing of developments.

Creating signature districts

In the planning of Marina Bay, specific attention was paid to creating value. The land parcels are located within a series of distinctive districts, each focusing around attractive public open spaces and tree-lined boulevards which will provide signature address locations for developments.

Along the waterfront and fronting key open spaces, building heights are kept low. This maximises views to and from individual developments further away from the waterfront, enhancing their attractiveness and creating a dynamic ’stepped-up’ skyline profile as well as more pedestrian scaled areas.

The successful development of Marina Bay is supported by state-of-the-art infrastructure. To date, the government has pumped in more than $4.5 billion to facilitate development of the area.

A Common Services Tunnel housing electrical and telecommunication cables and other utility services underground is being built, making repeated road diggings a thing of the past. An extensive road and rail network has also been planned, with three MRT stations to be built in the area as part  of the new Downtown rail line.

A new vehicular and pedestrian bridge will link Bayfront to Marina Centre. The 280m pedestrian linkway – the longest in Singapore – will sport a dynamic double helix structure. Together with a new waterfront promenade, this will create a continuous walking loop connecting up the necklace of attractions and open spaces around the Bay.

Another key infrastructural project is the Marina Barrage. When officially opened in 2009, it will turn the existing water body into Singapore’s first reservoir in the city. This will serve as a new source of fresh water for Singapore and a new lifestyle attraction allowing for a variety of water-based  activities and events to take place. It will also house Singapore’s tallest fountain project.

The softer touch

Having provided for much of the ‘hardware’ for the new business district, it became clear that URA had to go beyond its traditional roles of urban planning and land sales management. To this end, the Marina Bay Development Agency was set up within URA to focus on the ’software’ for developing  the area. Since then, URA has embarked on a full spectrum of marketing, promotion and place management activities to showcase the uniqueness of this new destination.

To generate more buzz, a calendar of events and activities for public spaces and water bodies has been put in place in partnership with various agencies and the private sector. Signature events, like the Marina Bay Singapore New Year’s Eve Countdown, have become a new urban tradition. Marina Bay has also become the definitive venue for a host of sporting events like the F1 Powerboat Race, the Oakley City Duathlon and the Great Eastern Women’s 10km run.

The shape of things to come

While it will take more than a decade for the entire area at Marina Bay to be fully developed, a host of projects that will offer people from all walks of life exciting and attractive options to live, work and play are already taking shape. These upcoming developments have contributed significantly towards enhancing the area’s reputation as a location that offers something for everyone: a tropical living environment among lush greenery; a bustling global business hub and a lifestyle locale presenting a kaleidoscope of entertainment and leisure choices.

LIVE – by the Bay. Marina Bay has fast become one of the city’s most popular and prestigious residential addresses, with a number of outstanding projects already under construction.

The Sail @ Marina Bay will be the tallest residential development in Singapore at 245 metres when it is completed in 2009. It boasts two towers – one at 70 storeys and the other at 63 storeys.  Meanwhile, the Marina Bay Financial Centre incorporates the 55-storey Marina Bay Residences, comprising 428 luxury apartments, and the Marina Bay Suites, a 66-storey development offering 221 exclusive bayside units.

WORK – by the Bay. With its prime location in the heart of Singapore’s future downtown, Marina Bay continues to be a magnet to global investors and tenants seeking premium office space in a prime location.

The development of Marina Bay will help to further position Singapore as one of Asia’s leading financial centres, doubling the size of the existing financial district. The new growth area set aside for the seamless extension of the existing financial district is more than twice the size of London’s Canary Wharf and will provide some 2.82 million square metres of office space, equivalent to the office space within Hong Kong’s main business district, Central.

Already, a nucleus of office developments is forming with the development of One Raffles Quay, the soon-to-be-completed Marina Bay Financial Centre, and the two recently sold sites at Marina View.

Several global banks and multinational corporations, including UBS, Deutsche Bank, DBS and Standard Chartered, are already located or will be locating in these developments.

PLAY – by the Bay. The ‘fun’ factor at Marina Bay is expected to be raised to a new high when the Marina Bay Sands Integrated Resort opens its doors in 2009. With its impressive design featuring a sky park and three soaring 50-storey hotel blocks with landscaped balconies, the area’s most anticipated project will add a new dimension to our city skyline.

The integrated resort is poised to be a world-class development that will house a casino, two theatres, 110,000 sq metres of meeting and convention facilities, as well as about 2,500 hotel rooms. Other attractions at the integrated resort include restaurants in the form of two floating crystal pavilions and an ArtScience Museum, the rooftop of which becomes an amphitheatre with tiered seating.

Building on Singapore’s green legacy, three world-class waterfront gardens of about 100 hectares have been planned for the area. With the first phase of the project slated for completion in 2010, the Gardens at Marina Bay will be another unique destination attraction for those visiting Singapore and a green sanctuary for people living and working in the city.

Each garden will feature a distinctive design and character. All three gardens will also be interconnected via a series of pedestrian bridges to form a larger loop along the whole waterfront and linked to surrounding developments, open public spaces, transport nodes and attractions.

Focal point for the community

Marina Bay is a prime example of a visionary masterplan that is not only well on its way to becoming a new focal point for the local community, but it has also drawn worldwide attention and interest.

Testament to this is its achievement in attracting close to $16.5 billion worth of private investments to date from international investors and developers from the US, Hong Kong, Australia, Europe as well as the Middle East.

Moving forward, Marina Bay will continue to be the centrepiece of Singapore’s urban transformation, providing the city with the opportunity to attract new investments, visitors and talents.

The URA, as the Development Agency for Marina Bay, is committed to our long-term and strategic plans to meet the area’s future development needs. We will continue to adopt a holistic and integrated approach in designing the area with people in mind, work with partners and communities to implement key infrastructure, and carry out active promotion and place management activities. We will also engage investors to garner more interesting business concepts and ideas. This will take us closer to our vision of making Marina Bay a choice destination for all, one that promises

Singaporeans and visitors alike a brand-new, live-work-play experience.

Ching Tuan Yee is Executive Architect, Urban Planning Section, Urban Redevelopment Authority, while Benjamin Ng is Place Manager, Marina Bay Development Agency, Urban Redevelopment Authority

Business confidence takes a dive

Business Times – 24 Mar 2008

BT-UniSIM survey shows companies gloomy about next six months, despite strong orders

 (SINGAPORE) Business confidence in Singapore has slumped to its lowest level since end-2004, according to the latest business climate survey by The Business Times (BT) and SIM University (UniSIM).

While sales and profit figures were largely unchanged in the three months to Dec 31, 2007, prospects have fallen dramatically for the next six months, the poll of 128 companies revealed.

This was despite companies reporting a strong pipeline of orders and new business. Some 71 per cent of the firms polled have overseas businesses.

Chow Kit Boey, director of the quarterly BT-UniSIM survey, said: ‘I think the firms may be overly pessimistic because of the grim prospects in the US economy, accompanying volatile and weak stock markets and rising oil prices.’

She said that improved orders and new business numbers suggest that the Singapore economy would not suffer too badly in the first quarter of 2008, given the low growth rate a year ago and the largely successful air show in February.

The quarter marked the 17th successive one with positive net balances in sales and orders as well as new business, she added. ‘This implies that the slowdown could be mild. It appears that the economy could grow at a faster rate in Q1 2008 than in Q4 of 2007.’

Economists polled recently by the Monetary Authority of Singapore (MAS) pared their first-quarter growth forecast to a median 5.7 per cent from 7 per cent previously, slightly higher than the 5.4 per cent recorded in Q4 2007.

The BT-UniSIM survey showed that the business prospects net balance – the difference between the percentage of optimistic and pessimistic companies – fell to 20 per cent, from 39 per cent in the third quarter of the year. This was itself a sharp drop from an average of 57 per cent for the first half of 2007, showing how confidence has crashed in recent months.

The drop was particularly severe among large and local firms, whose net balances dropped by more than half from the previous quarter. But foreign firms were about as confident as they were in the preceding three months and, intriguingly, small firms were much more upbeat – net balance for the segment tripled to 26 per cent from 8 per cent.

The overall poor sentiment was partly balanced by healthy orders and new business numbers. The overall net balance – the difference between those reporting more orders or new business and those reporting fewer – rose slightly to 39 per cent, from 32 per cent in the third quarter.

But conditions varied widely across firms. Small companies reported a net balance of minus-one per cent, though still an improvement on the previous quarter (-12 per cent). Foreign companies  recorded a net balance of 51 per cent, up from 26 per cent previously.

Among sectors, financial and business services was the star performer for the quarter. It had the highest net balances in sales, profits and orders, and new business.

Firms in the construction sector were the most confident of business prospects for the next six months for the eighth quarter running.

Foreign firms recorded the best performances for Q4, with the largest increases in net balances for sales, profits and orders, and new business. Local firms saw the biggest decline, owing partly to weaker profits, said Ms Chow.

And comparing overall and overseas sales, orders and prospects showed that domestic business activities were stronger in the fourth quarter. In the previous three months, businesses found better sales and orders overseas. But small and local firms still saw better prospects from their foreign operations, while foreign and large firms were more optimistic on the local market.

Vietnam is also fast climbing the charts as a favoured investment destination. China and India were the other frontrunners but ‘Vietnam has gained much popularity as an investment destination by almost all types of firms’, said Ms Chow.

The BT-UniSIM survey was launched in 1996 and is now in its 13th year.

Singapore interest rates likely to fall further

The Straits Times March 24, 2008

Fed cut and robust Sing$ could push interbank lending rate below 1%

SINGAPOREANS can expect cheaper mortgages but lower savings and fixed deposit rates in the months to come.

This is after a move by the United States Federal Reserve to slash a key US interest rate last week.

The Fed had cut three-quarters of a point off its federal funds rate, bringing it to 2.25 per cent, to fight a mushrooming credit crisis and a slowing US economy.

Economists in Singapore said the lowering of the Fed funds rate will have a knock- on effect in the Republic.

The Singapore Interbank Offered Rate (Sibor), or the rate at which banks lend to one another, tends to track the Fed rate.

Citigroup economist Kit Wei Zheng said: ‘For Singapore rates, the trend is downwards. We expect the Fed to cut its rate to 1 per cent and Singapore should follow with a lag.’

He lowered his forecast for the Sibor, estimating it would fall to as low as 0.75 per cent by the end of the third quarter, down from an earlier estimate of 1 per cent.

A recent report by DBS Group Research also forecast the Sibor would fall, to 0.83 per cent in the second quarter, and remain at that rate through the second half before rising next year.

The three-month Sibor fell to a 12-month low of 1.25 per cent last Monday, before recovering to 1.425 per cent on Thursday, ahead of the Good Friday public holiday.

Mr Kit said Singapore rates were also affected by the Singapore dollar’s appreciation against the US currency. He said the Singdollar is most probably at the top end of the secret trade-weighted band within which the Monetary Authority of Singapore (MAS) guides the currency.

‘With the Singdollar expected to continue appreciating, MAS will aim to moderate it by flooding the market with liquidity, which will in turn pressure interest rates downwards,’ he said.

OCBC economist Selena Ling said another consequence of the strong Singdollar would be a high inflow of foreign capital into the Republic. ‘This can also contribute to lower interest rates.’

For consumers, the net result is both good and bad.

Banks recently embarked on a mortgage loan war, with Maybank firing the first salvo last month with an aggressive three-year, fixedrate package offered at 1.68 per cent for the first year.

DBS Bank and United Overseas Bank (UOB) have also unveiled attractive packages. UOB has one that offers a zero rate in the first year.

And with Sibor-linked home loan package rates likely to head south too, it could be a good time to refinance mortgage loans, experts said.

A DBS spokesman said: ‘DBS offers transparent mortgage rates pegged to the Sibor and the CPF Ordinary Account rate, so our rates will move in tandem with market forces.’

But there is also the possibility that savings and fixed deposit rates could slump as interest rates go down.

OCBC’s vice-president for group wealth management, Mr Fabian Lum, said the bank would review its deposit rates to keep them in line with prevailing market conditions.

And while the bank has not changed its savings rate recently, it lowered its 12-month fixed deposit rate for amounts between $50,000 and $1 million to 1.2 per cent a year from 1.4 per cent earlier this month.

DBS said that its savings deposit rates had not been adjusted since 2005, but added that its fixed deposit rates are always pegged to the interbank rate and would thus be adjusted accordingly.

CIMB-GK economist Song Seng Wun said that the low interest rates did not reflect a lack of liquidity on the part of banks. ‘The loansdeposit ratio is still very strong, so banks definitely have the money to lend,’ he said.

‘But I think there is greater caution now, after what has happened in the US with the sub-prime crisis, and people are much more cautious nowadays when it comes to borrowing and lending money.’

PROPERTY: Muted market gives buyers more bargaining power

The Straits Times March 23, 2008

Prices aren’t tumbling but it’s a good time to get a unit at a reasonable price, say experts

IT IS no secret that the residential property market is in a lacklustre mood.

With many buyers and sellers having scurried to the sidelines as the United States sub-prime woes brought about an uncertain stock market, new home sales slipped to a nine-month low last month.

For those looking to buy a home, the question is whether to buy now or later.

As fire sales have yet to hit the market and prices largely appear to be holding steady, it may not yet be a time when bargains abound everywhere.

But property experts say this may be the best time to bargain for a reasonable deal if you have something in mind.

It is a time when sellers – be it developers selling their new developments or individuals selling their properties in the resale market – are more flexible and buyers have more bargaining power, they say.

Generally, developers are still loath to lower their prices. So a good bet now is likely to be the resale market, where sellers can be more flexible, depending on their reasons for wishing to sell their property.

Completed properties also have the advantage of generating an immediate rental yield, or allowing buyers to move in any time they like, consultants say.

‘Right now, bargain-hunting may take place in the secondary market,’ says Mr Donald Han, Cushman & Wakefield’s managing director.

Some sellers may be looking to get out of the property market because they either cannot or do not wish to hold on to the asset on hand, he adds.

There are certainly desperate sellers out there, but it is not as though they are all ready to sell at a major discount or take a significant loss, says a property investor who declined to be named.

Last month, only 185 new homes were sold, down from 328 in January.

If the current standstill in the market continues, some small developers may start to lower their prices, say property consultants.

And if this happens, it will affect the entire market.

Home prices could fall, but by then, other buyers may beat potential buyers to the properties that they like.

This is why some property consultants say it is really an individual’s reading of the market on when to buy.

This is particularly so for those with a specific unit or a small project in mind, or those seeking unusual products such as suburban condominium units with pools.

The freehold 39-unit Ambrosia in Telok Kurau, for example, offers units with swimming pools, which is not common in small projects.

Its nine penthouses and two ground-floor units come with private pools and these have attracted fairly strong interest.

About 30 per cent of the five-storey development has been sold at an average price of $950 per sq ft (psf), says property consultancy Knight Frank, which is marketing the project.

‘Last year, valuation was trying to keep up with transacted prices,’ says Mr Han. ‘Now, transacted prices are keeping up with valuations.’ Mr Eric Cheng, executive director of HSR property group, says: ‘In today’s market, you can find cheap buys.’

But not all units are cheap, even if the sellers are willing to offload their homes without any profit, he adds.

For instance, some sellers at the 99-year leasehold The Rochester in Buona Vista may be keen to sell at around $1,200 psf, which could be the price they bought at last year.

But the project was launched at 2007 prices, at a time when the market was booming, he said, so they are not a real bargain.