Resale flats Going Below Valuation

Source : The Sunday Times, Feb 1, 2009

Less cash needed now for bigger flats as market weakens amid financial crisis

A recent classified advertisement in The Straits Times offered a five-room flat near Ang Mo Kio Hub for a whopping $50,000 below its valuation of $640,000. Another one was offering five-room flats in Jurong for $10,000 to $15,000 below valuation.

These days, there are more and more advertisements for resale Housing Board flats going for zero cash or below valuation.

Indeed, the cash-over-valuation (COV) portion of an HDB resale flat deal - this is the amount over and above the flat's valuation that is payable only in cash - is falling faster than ever since it peaked a year ago.

Typically, the more desirable a resale flat is, the higher its COV.

In the fourth quarter of last year, the median COV for all HDB estates fell 21 per cent to $15,000, compared with a 4.5 per cent to 5 per cent decline in the previous three quarters, according to recently released HDB data.

Today, the COV has already moved lower, agents said. Not only is less upfront cash needed for resale deals, it is now also fairly easy to land a deal without forking out any COV or even find a flat that is priced below valuation.

Recent HDB data shows that about 85 per cent of all resale deals done in the fourth quarter last year required COV, which is 4 percentage points less than in the third quarter.

Some bigger flats selling at or below valuation

If you are aiming for a deal that falls within the remaining 15 per cent - deals done at valuation or below - you will have a high chance of success if you choose a five-room or an executive flat, property agency heads said.

Many of the bigger executive flats, in particular, are priced at or below valuation.

HSR Property Group's executive director, Mr Eric Cheng, said his agent sold an executive maisonette in Bukit Batok about three weeks ago for $55,000 below the valuation of $460,000.

'The seller's valuation report was going to expire. If he were to do a new one, the value would be lower,' he said.

There are more sellers than buyers for the bigger flats now, said Mr Steven Tan, executive director of OrangeTee's residential division.

'Affordability is an issue as the quantum is very high,' he said. Not many HDB buyers can easily afford a flat that costs $500,000 or more.

Ironically, flats in 'hot' areas such as Tiong Bahru and Queenstown are commanding less COV now because their values had appreciated a lot, he said.

For instance, the median COV for five-room flats in the once-hot town of Bukit Merah, which reached $61,000 in the third quarter of 2007, has since slipped to $10,000 in the fourth quarter of last year.

Overall, the COV for five-room flats registered a 35 per cent fall to $11,000 in the fourth quarter, from $17,000 in the third. This compares with a smaller 25 per cent fall in the COV of four-room flats.

Lower COV seen

As the market continues to weaken, buyers will want to pay less and less cash.

'What has happened lately is that people are resistant to paying high COV because valuation has gone up so much, easily by 20 per cent in the past year,' said PropNex chief executive Mohd Ismail.

'People are also a little hesitant to commit to a big monthly instalment because of such a gloomy economic outlook.'

Deals are now taking a little longer to close as buyers are negotiating harder, while sellers are taking longer to come to terms with falling COV, said ERA Asia-Pacific associate director Eugene Lim.

Given the weak economic outlook and the time lag between the private and HDB markets, there is no doubt that COV will continue to slide, with a bigger decline seen for bigger flats.

'Psychologically, people will avoid the bigger flats because the commitment is high,' said Mr Ismail.

In a downturn, demand for the smaller three- to four-room flats may also come from those downgrading from a private home, agency heads said.

Thus Mr Ismail is predicting that the overall median COV for bigger flats will easily drop to below $10,000 in the first half of the year, while the COV for the three- to four-room flats may drop only slightly.

Mr Lim said that as COV falls in general, HDB resale prices will also go down.

直落古楼公寓 牛年抢先登场

Source : 《联合早报》January 31, 2009

位于东部直落古楼的Palmera Residence公寓抢先成为牛年第一个正式登场的新项目，在大年初三就正式展开销售活动。

另外，至少有四个新的房地产项目相信会在近日正式推出，它们分别是位于湖畔地铁站附近的Caspian、女皇镇地铁站旁的Alexis、马里士他路的Nova 48， 以及惠德里一带的Montclair @ Whitley。

据了解，星狮地产（Frasers Centrepoint）旗下的Caspian共管公寓，推出计划已经差不多准备就绪。只要市场条件许可，这个拥有712个单位的项目很可能会在2月份正式推出。

大年初三就开卖的Palmera Residence靠近道南学校，是牛年第一个登场的新房地产项目

目前，Caspian附近的共管公寓售价分歧相当大。一年多前完工的湖畔园(The Lakeshore)，转售价格大约是每平方英尺730元，但是屋龄较大的共管公寓，例如2000年完工的玫芳园(The Mayfair)转售价格只有每平方英尺560元。

一名市场人士说：“市场已很久没有价格大众化的99年地契郊外共管公寓推出，Caspian肯定是今年最重要的房地产推出活动之一。”

由于这个项目的单位相当多，再加上市场信心脆弱，市场人士认为，发展商必须拟定一个较为吸引人的价位，才能推动一定的销售量，为市场注入一点信心。

“这幅地段是星狮地产在2008年初买下的，成本估计只有每平方英尺560元左右，星狮地产有相当大的价格空间可以作调整。”

另外一个备受瞩目的新项目是位于女皇镇地铁站旁的Alexis共管公寓，这个地段是永泰控股和Greatearth在去年初联手买下的，地价为每平方英尺639元。这意味，整个项目的成本在每平方英尺1000元左右。

提高小型单位比率

据了解，发展商为了迎合市场情况的改变，已经改变了整个项目的设计。这个拥有293个单位的99年地契共管公寓，一口气将小型单位（一两房式）的比率由原本的六成提高至八成。

去年，本地楼市陷入寒冬，不但楼价下跌了4.8％，一整年卖出的私宅单位也跌剩4264个，创下历来最低水平。过去几个月来，只有一些价格大众化的郊外共管公寓项目，又或者是售价在100万元以下的小型市区边缘公寓，仍有相对不错的销售成绩。

由于国际间的坏消息仍陆续出炉，市场人士相信，发展商会在农历新年过后才推出新房地产项目，一方面是希望预算案有一些刺激作用，一方面是因为拜年和新春庆祝活动可能会影响人们的购屋兴趣。

不过，也有发展商在大年初三就推出新项目，期望沾染农历新年的喜气。World Class置地在星期三（28日）正式推出位于直落古楼罗弄N的Palmera Residence，该公司负责人黄诚忠透露，至今公司已卖出五六个单位。

“反应还算不错，尽管是过年期间，我们还是达到了预期的反应。前来参观的购屋者包括新加坡人和外国人。”

这个永久地契项目共有38个单位，每平方英尺售价介于650元至900元。最便宜的单位价格从50万元起跳，最昂贵的单位价格为129万元。

据了解，大多数发展商都在农历新年期间将示范单位关闭，例如乐斯太平洋（Roxy Pacific）旗下的所有示范单位（位于直落古楼的Lucent公寓除外）自1月18日就关闭两个星期，要到下个周末才会重新开放让买家参观。

该集团执行主席张丰霖透露，他可能会在过了农历新年后，将位于马里士他路（Balestier Rd）的另外一个项目——Nova 48正式推出市场销售。

这是因为本月初推出的Nova 88已卖出了30％的单位，由于一些买家在参观Nova 88示范单位时，也对隔邻的Nova 48表示兴趣，所以他打算在近一个月内正式将后者推出。

Nova 88共有88个单位，每平方英尺平均价格约950元。Nova 48则有48个单位，同样属于永久地契，但推出价格未定。

至于Alsovec的Montclair @ Whitley也计划在下个周末推出，该公司发言人透露，这个共有10个单位的聚落式有地洋房的售价预计在300万元以上。“我们还没有订立价格，它们包括八间半独立、两间独立式洋房，建筑面积大约是3800平方英尺。”

据了解，另一共管公寓，即星狮地产旗下的Caspian已经差不多准备就绪，只要市场条件许可，这个拥有712个单位的项目很可能会在2月份正式推出。