S Korea eases property controls for small cities

S Korea eases property controls for small cities


(SEOUL) South Korea said yesterday that it was easing measures aimed at curbing a sharp rise in domestic housing prices for small cities to support ailing property markets.


The Ministry of Land, Transport and Maritime Affairs said in a statement that the government had decided to lift the maximum loan-to-value ratio for unsold houses to 70 per cent from the current 60 per cent in areas where housing prices are unlikely to jump on speculation, if builders cut prices of unsold houses by 10 per cent.


The loan-to-value ratio expresses the maximum amount of a home loan as a percentage of the home’s market value, and South Korea has steadily reduced the limit over the past several years.


The government will also cut acquisition tax and registration tax for those homes by 50 per cent.


The concessions took effect from yesterday until the end of June next year, the ministry said.


The market cooling measures, along with higher property taxes, have dented demand for new homes in small cities, hitting the economy in those areas.


South Korea had some 132,000 unsold houses as of the end of March this year, almost double the average number over the last 10 years, ministry data showed.


Among those unsold houses, 109,000 units are in small cities. — Reuters


Source: Business Times

NZ home sales in May at 16-year low

NZ home sales in May at 16-year low


(WELLINGTON) New Zealand home sales slumped 53 per cent to a 16-year low last month, reinforcing speculation that the central bank will cut interest rates from a record high.


The number of houses sold dropped to 4,373 last month from 9,285 a year ago, the Real Estate Institute of New Zealand Inc said in a report to Bloomberg News yesterday. That’s the fewest since December 1991.


A cooling property market adds to signs that the economy is slowing as retail spending drops, employers cut workers and construction declines.


Reserve Bank governor Alan Bollard kept the official cash rate at 8.25 per cent last week, and said that he was likely to lower borrowing costs this year as moderating domestic demand helps ease inflation pressures.


‘The pace and depth of the current housing and economic correction suggest to us the central bank should have been easing already,’ said Shamubeel Eaqub, an economist at Goldman Sachs JBWere Ltd in Auckland.


‘The outlook for the residential property sector remains challenging.’


The Reserve Bank forecasts that the economy would grow 1.2 per cent this year, which would be the slowest pace in a decade.


Thirteen of 15 economists surveyed by Bloomberg News expect Mr Bollard to cut interest rates in the third quarter. Two forecast a reduction in the fourth quarter.


New Zealand‘s currency touched a 20-week low of 75.03 New Zealand cents yesterday. The five-year bond yield was unchanged at 6.52 per cent.


Demand for housing is slowing after immigration fell to a six-year low and investors reduce buying on expectations of falling prices and weaker rental returns, Goldman’s Mr Eaqub said.


The median house price slipped 1.4 per cent from a year ago to NZ$345,000 (S$357,700), the Real Estate Institute said yesterday.


Prices were unchanged from April. Mr Bollard said last week that house prices would fall over the next three years.


Adding to signs of a cooling economy, retail sales fell 1.2 per cent in the first quarter. Construction and the number of people employed also declined in the first three months of 2008.


The median time it took to sell a house increased to 49 days, the second longest on record, from 44 days in April, yesterday’s report showed. Days-to-sell reached 50 in February.


The growing amount of time needed for sales suggests that prices should fall further to clear a large stock of unsold residences, said Goldman’s Mr Eaqub. — Bloomberg


Source: Business Times

UK commercial property rents fall in May

UK commercial property rents fall in May


(LONDON) Commercial property rents in the UK fell for the first time since 2003 in May, confirming analysts’ fears and adding a fresh dimension to the country’s property slump, data from CB Richard Ellis Group Inc showed on Tuesday.


Worse still for investors banking on a quick end to the market’s slide, the data showed an acceleration for the first time this year in the monthly rate of decline in capital values.


Commercial property valuations, on average, have fallen by more than a sixth since the UK market peaked last August on the back of a sizzling multi-year bull run. Capital values fell by a further one per cent in May, after having slipped by 0.7 per cent in April, and are now 6.2 per cent lower than at the beginning of the year, CB Richard Ellis said.


Central London‘s crane-peppered office building market was under notable pressure – as financial sector job losses mounted at the same time as new buildings were completed – with rents sliding 1.3 per cent in the period, the property services firm said. — Reuters


Source: Business Times

UK banks, valuers tighten conveyancing

UK banks, valuers tighten conveyancing

Concern that current procedures do not capture discounts and other incentives


(LONDON) Britain’s mortgage banks and property valuers are to tighten up their conveyancing procedures in the wake of a housing downturn that has exposed some sharp practices on newly built homes.


‘Some lenders have been concerned that the valuation and conveyancing processes do not always capture discounts and other incentives that buyers may be able to negotiate with developers when purchasing newly built property,’ the Council of Mortgage Lenders (CML) said in a statement. ‘This may mean that, in some instances, lenders might unintentionally offer a mortgage based on a valuation of a property that is higher than the true price paid for it.’


That has left some buyers of newly built properties more exposed to the risk of negative equity as house prices have tumbled and increased the potential for repossessions.


From Sept 1, lenders will require builders of any newly built, converted or renovated property to disclose any buyer incentives so that the decision to offer a mortgage is based on a reliable valuation of the property, the CML said.


CML members are responsible for 98 per cent of all residential mortgage lending in the UK.


According to Britain’s biggest lender HBOS, the average cost of a UK home has fallen by almost 8 per cent since prices peaked in August but anecdotal evidence and economist forecasts suggest the downturn is still in its early stages.


The CML has said that it expects gross mortgage lending to fall by a fifth in 2008 compared with 2007.


The Royal Institution of Chartered Surveyors, a key trade body that represents many of the conveyancers and valuers who act on behalf of banks in property transactions, said that it would help reinforce the changes by amending its rule book. — Reuters


Source: Business Times

Sino Construction falls 7.7% in S’pore debut

Sino Construction falls 7.7% in S’pore debut


SINGAPORE – Sino Construction, which has building and civil engineering projects in China’s Daqing City, opened 7.7 per cent below its initial public offering price of $0.39 (US$0.28) in its market debut on Thursday.


The stock was trading at $0.365 by 0103 GMT after opening at $0.36.


The company, which plans to use most of its $35.6 million in net proceeds to buy equipment, said its offering was approximately 1.03 times subscribed.


HL Bank is the underwriter, issue and placement manager of the public offering. — REUTERS


Source: Straits Times

US economy getting more sluggish: Fed

US economy getting more sluggish: Fed 

WASHINGTON – US economic conditions are getting more sluggish with consumers squeezed by high energy costs and bank lending tighter, the Federal Reserve said in its Beige Book report on Wednesday.

The Federal Reserve’s latest survey of the US economy, suggested price pressures are weighing on businesses amid surging food and energy costs.


In the Beige Book survey of the 12 Fed regions ‘economic activity remained generally weak’ from late April through early May.


The latest report, to be used by the central bank at its monetary policy meeting later this month, continued a trend starting last October of each successive Beige Book showing a weaker economy than the one before.


Three of the 12 Fed banks used words such as softer, weaker or lower. Five reported little change in conditions. Four said they saw sluggish growth.


‘Consumer spending slowed since the last report as incomes were pinched by rising energy and food prices,’ the report said.


Retailers were beginning to report some concern about rising inventories and a few were laying off workers.


Auto sales were weak, although hybrids and fuel-efficient cars were selling better.


Manufacturing was ‘generally soft’ except for export demand. Housing- and auto-related manufacturers had the worst situation.


Across businesses, ‘reports of higher input costs were widespread.’


Manufacturers ‘noted some ability to pass along higher costs to consumers.’ Wage pressures in most districts were ‘moderate or limited’ due to ‘some loosening of labor market conditions.’


The regional Fed banks said housing was ‘generally weak across the nation’ with flat or declining home sales and high or rising inventories.


For banks across the country, ‘reports of softening in the consumer segment persisted,’ and commercial and industrial lending was ‘mostly unchanged or declining,’ the report said.


‘All districts reporting on credit standards noted further tightening for consumer, residential and commercial loans,’ the Beige Book said. — AFP


Source: Straits Times

SMRT relents on demand to get condo to cut trees near tracks

SMRT relents on demand to get condo to cut trees near tracks


SMRT has backed down from its demand that a condominium trim its trees which the train operator says are too near to the overhead tracks.


The growth of the tree branches will now be monitored by the landscape contractor of Stratford Court condominium to ensure that they do not pose a safety hazard to train operations.


The matter will come up for review after six months. The decision was reached after a meeting attended by representatives from the Land Transport Authority (LTA), the National Parks Board (NParks), SMRT and Stratford Court’s management committee (MC) last week.


The issue of tree pruning arose in March when SMRT asked the condominium’s MC to prune the branches of 13 khaya trees near the MRT tracks between Simei and Tanah Merah MRT stations, saying that the overgrown branches posed a safety hazard to train operations.


But the MC refused to foot the bill of $2,145 to prune the trees. It pointed out that the trees pre-dated the Land Transport Authority (LTA) guide quoted by SMRT which went back to 2000.


Under the Act, the Commissioner of Parks and Recreation – the chief operating officer of the National Parks Board (NParks) – has the right to issue an order for the condominium to prune its trees if they are obstructing MRT trains.


In an attempt to resolve the matter, SMRT turned to LTA – which owns the train viaducts – and NParks for help. This led to an amicable settlement.


Source: Straits Times

Singapore private home sales down 40% in Q1

Singapore private home sales down 40% in Q1


SINGAPORE : Sentiments in the Singapore residential property market continued to weaken in the first quarter on the back of a possible recession in the United States.


Private home sales dropped by 40 percent in the first quarter of this year compared with the last quarter of 2007, according to a report by DTZ Research.


Transactions of private condominium units, based on caveats lodged, fell 41 percent to 2,500, while sales of landed homes declined 38 percent to 566.


Analysts said the poor sales were due to a stand-off between buyers and sellers’ price expectations.


“A lot of these sellers are still looking for prices at the peak of the market, which is probably in the middle of last year. They are still confident that the market would trend up in the mid term, and that the current slowdown is likely to be temporary,” said Tay Huey Ying, Director of Research & Advisory at Colliers International.


But the slowdown looks set to stay for a while. Developers are launching fewer units. Only 487 private condominium units were released for sale in the first quarter of this year, down 49 percent compared with the previous quarter. This is the lowest since the SARS period in the first three months of 2003.


The number of new properties resold before completion continued to decline, by 40 percent in the first quarter, the lowest in one and a half years.


“I think sub-sales will continue to remain at a very low volume in the coming quarters…..Speculators are likely to continue to stay away from the market at this point because the road ahead is still very uncertain – the uncertainty in the US economy, as well as the global financial market turmoil,” said Tan.


Going forward, analysts expect overall prices in the private residential property market to increase by between 0.5 and 1.5 percent in the second quarter of this year. – CNA /ls


Source: Channel NewsAsia

Private property market sentiment still weak: DTZ

Private property market sentiment still weak: DTZ

Property consultant DTZ Debenham Tie Leung says sentiments in the private market are expected to continue to be weak.


It added that sales activity may be improved by smaller developers who are more willing to lower price to move sales.


In a research note released today, DTZ predicts that though speculative activity has cooled, the sub-sale market is likely to see continued activity.


This as speculators dispose of their units as they reach T-O-P, especially for those who had purchased multiple units on Deferred Payment Schemes.


DTZ’s analysis of transactions of private residential properties in the first quarter noted that slight over 3,000 units were sold.


This was a significant 40 percent drop compared to the previous quarter on concerns of the U.S. sub-prime crisis as developers held back sales.


There were only 2,500 transactions for non-landed private properties, the lowest number since the first quarter of 2005.


The fall in non-landed private property sale was attributed to less developer sales, which numbered 487, the lowest since the SARS-stricken first quarter in 2003.


Those upgrading from HDB to private units numbered at 850, a decline of 26 percent over the previous quarter.


Median sub-sale prices also decreased 8 percent quarter-on-quarter, at just over 1,100 dollars per square foot.


With collective sale purchases dying down, the share of total transactions by companies went down to 4 percent.


Source: 938Live

Chinatown Complex: Make it accessible to all

Chinatown Complex: Make it accessible to all


I REFER to the reply, ‘NEA working to improve ventilation in hawker centre’ (June 2). I am heartened to learn that the National Environment Agency (NEA) is taking steps to improve the poor air quality in that section of the upgraded wet market in Chinatown Complex.


I understand the NEA, the manager of this project, can begin construction work only when the proposed building plans have been approved by the authorities, especially the Singapore Civil Defence Force fire-safety department.


After incorporating any requirements into the plans and once they are finally cleared, NEA starts construction. I understand the constraints NEA faces, for example, working within the budget and meeting the completion deadline.


May I offer my humble suggestions to avoid problems like those in the wet market? It costs much more to retrofit a completed job than do it from scratch. It is a waste of taxpayers’ money and resources, and causes inconvenience to occupants.


After the building plans are cleared, the project team should do a final evaluation of whether requirements imposed by other authorities will affect the environment (especially air quality), accessibility and so on. If the answer is yes, take pre-emptive measures at the planning stage to solve the problem.


I live in Chinatown Complex and my mother is wheelchair-bound. There are many elderly and infirm folk in my block. Some are also wheelchair-bound.


I urge the planning committee and our MPs to take a personal interest in this upgrading so that accessibility for the physically challenged is not compromised.


I salute NEA for an excellent job incorporating numerous accessibility features in the upgraded Chinatown Complex. Going around in a wheelchair is now a breeze.


However, the old folk in my block await with trepidation the completion of the enclosed lift lobby on the ground floor. For more than 20 years, we have enjoyed an open-concept lift lobby. Old folk, some with weak limbs or in wheelchairs, can reach the lifts effortlessly.


To follow fire-safety rules, walls have been built around the lift lobby on the ground floor of the two apartment blocks and heavy doors are fixed at all staircases. Access to the lifts is now via two heavy fire doors – supposedly to be kept closed at all times.


Many old folk fear such imposing features will curtail their independence. Not to mention the wheelchair-bound who need someone to wheel them. If there is no one to hold the door open, they will be stranded.


Julie Chia (Ms)



Source: Straits Times