New Sentosa Tunnel To Be Built By 2015

Source : The Business Times, July 26, 2008

THE Land Transport Authority (LTA) will be adding to and expanding the current road infrastructure around the Sentosa gateway. This is to ensure that extra capacity will be available to meet projected use in 2015.

These improvement and construction plans will include a two-lane tunnel that connects outbound traffic from Sentosa directly to Kampong Bahru Rd and Keppel Rd, bypassing the Telok Blangah and Sentosa Gateway junction entirely.

According to LTA chief executive, Yam Ah Mee, the tunnel will cut motorists' travel time in 2015 by half, around 10 minutes' worth of savings, and ensure smoother traffic flow.

Motorists who are travelling on surface roads will also experience a reduction in travel time due to less pressure being placed on the above ground roadway infrastructure.

'These road improvement plans complement the package of road improvements we announced earlier in February this year, and will ensure that both visitors and residents who are heading out of the Sentosa area will have a pleasant traffic experience,' said Mr Yam.

The actual construction of the tunnel will only start after the opening of Resorts World, and is slated to begin in 2011, and to be completed in 2015.

US House Prices Overvalued By Up To 20%: IMF Paper

Source : The Business Times, July 26, 2008

WASHINGTON - The downward spiral of US housing prices still has a way to go and homes were overvalued by between 8 per cent to 20 per cent in the first quarter of this year, according to research by an International Monetary Fund economist published on Friday.

In his report 'What goes up must come down? House price dynamics in the United States,' IMF economist Vladimir Klyuev used several economic techniques to determine by how much US home prices are overvalued.

Mr Klyuev drew from a government study of single-family home prices to conclude that values were 'around 14 per cent above equilibrium in the first quarter of 2008, with a plausible range of 8 to 20 per cent.'

His research showed that home prices became considerably overvalued from 2001 and while the housing market has started to correct itself, there is still a long way to go.

US policy-makers are now trying to guide the housing market into a soft-landing after a five-year run-up in home values that ended in 2006.

The report also said that it is likely home prices will swing well below their equilibrium level before they start to recover.

Mr Klyuev's research included data gathered by the US Office of Federal Housing Enterprise Oversight which regulates mortgage-finance companies Fannie Mae and Freddie Mac and collects purchase price data.

He analysed the dynamics of home prices and found the inventory-to-sales ratio the most important driver of changes in property values in the short run.

'Starts in foreclosures, which obviously add to inventory, seem to also exert additional downward pressure on prices,' he added.

According to the research the bloated inventory-to-sales ratio, high foreclosure rates, and inertia in housing markets imply that recent price declines are likely to continue.

The research also considered whether the current fall in US housing prices represented a nationwide bust.

'While the national price level is falling on every measure, there is an opinion that this decline might reflect oversized drops in a few isolated markets rather than a countrywide phenomenon,' it said. -- REUTERS