Muted market gives buyers more bargaining power

Muted market gives buyers more bargaining power


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


By Joyce Teo


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.


Source: Straits Times

Will I be forced to sell home upon divorce?

Will I be forced to sell home upon divorce?


Q MY husband and I have been separated for nine months. He has moved out of our home, but my children and I are still living in the condominium, which is under both his name and mine.


When we divorce, what will happen to the condo? Will I be forced to sell it and split the money 50:50? What are our options if my children and I want to continue living in the condo? My husband is currently paying half of the mortgage loan.


A THE fate of your matrimonial home can be affected in two scenarios – if there is a default in the mortgage repayments and upon divorce.


If there is a default in the mortgage payments, the mortgagee bank would be entitled to recover possession of the property and sell it off.


In the event of a divorce, the division of the matrimonial home will be adjudged by the court if the parties are unable to reach an amicable settlement. When it falls to the court to decide, there are various factors that it takes into account.


The starting point is the parties’ respective direct financial contributions to the initial payments and the monthly mortgage. Payments for these through Central Provident Fund (CPF) monies are also taken into account. The court then takes into account indirect financial contributions such as renovations, payment for furniture, fittings and furnishings, monthly maintenance charges, utilities bills and other outgoings on the home.


Finally, the court takes into account indirect non-financial contributions such as looking after the children and the welfare of the family, cooking, housekeeping, looking after an aged or disabled member of the family.


In raising your children and looking after them, you would have earned an additional equity or share in the matrimonial home that would be added to your share due to your financial contributions.


The court also takes into account that if you have the care and control of your children, you would continue contributing towards their upbringing and welfare. If there was an agreement, its terms (for instance in a separation deed) would also be a factor to be considered.


However, the court does not embark on a detailed calculation of mathematical precision. Instead, it adopts a ‘broad brush’ approach and understandably so, as no one keeps such neat and precise accounts as in a business.


The court is also not compelled to order an equal division as the law requires the division to be just and equitable, although in some cases, an equal division may be the most just and equitable one.


In short, the court will be fair to both parties. Having arrived at your share or equity in the home, the next issue is to decide how to satisfy that equity, for instance whether you have the financial means and capability to buy out your husband’s share.


Depending on your age and the amount of funds available in your CPF account, you may be able to use some of those funds to buy out your husband’s share. You may also be able to find a bank willing to enter into a fresh loan agreement with you for the apartment.


If your husband is agreeable, you may also be able to postpone the sale until, say, when the youngest child reaches 21 years of age or completes his or her education, whichever occurs later.


The apartment may have to be sold as a last resort, and after deducting the outstanding loan, the refund to your respective CPF accounts and expenses of the sale, the rest of the money will then be distributed according to you and your husband’s shares as determined by the court.


While it is true that it is possible to maintain the standard of living that both parties have been used to during marriage, it is also true that upon a divorce, there will almost always be a lowering of the standard. You may have to find alternative affordable accommodation for yourself and your children and look to your husband to contribute towards the expenses as part of his monthly maintenance obligations.


With the recent amendments to the CPF Act, you may be able to persuade the courts to transfer the apartment to you without having to refund your husband’s CPF account first, but it may not be reasonable for you to insist on living in a private condo when there is ample affordable public housing available.


Amolat Singh


Amolat & Partners


Advice provided in this column is not meant as a substitute for comprehensive professional advice. E-mail questions to lorna@…


Source: Straits Times