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Archive for May 17th, 2008

En bloc woes at Toh Tuck Road

Posted by luxuryasiahome on May 17, 2008

Residents complain of noise, dust, as developer builds showflat
 
‘It’s like living in a shipyard’
 
It’S not chirping birds that wake them now, but pounding hammers.

And it has been driving some Goodluck View residents up the wall.

The 20-year-old Toh Tuck Road estate has been sold en-bloc, but residents have been given a six-month grace period and need to move out only by August.

Long before that, in March, developer Hiap Hoe Limited started building the show flat.

Mr Paul Makselon, who rents an apartment there, said he has to endure the ‘noise outside his window’, every day from 8am.

Said the engineering consultant: ‘It’s like I’m living in a shipyard. It’s all right if they build the showflat in the middle of the road or somewhere further away, but it’s hard to live here when there’s all that noise so close to your home.’

The fence surrounding the showflat sits barely 2m from his window.

From his three-bedroom apartment, he can see and hear the workers.

Work on the showflat is expected to be completed by the end of July, according to a circular distributed by the estate’s management agent.

Yet, Mr Makselon’s patience is wearing thin.

Said the Singapore permanent resident: ‘My son has to prepare for an exam and he has complained that he is finding it hard to focus. He shuts his windows to block off the noise.

‘I find it difficult too because I work from home.’

His neighbour upstairs, Madam Tracy Dean, said that sometimes the noise can be a little too much for her.

At such times, she leaves the apartment.

Said the IT consultant: ‘I really look forward to rain because I know the workers will have to stop work. All that grinding and banging can drive you up the wall.

‘Even with the windows closed, the noise filters into my flat.’

Mr Makselon and his family plan to move out within three weeks.

Madam Dean will leave for Bangkok in August.

Said Mr Makselon: ‘We didn’t sign up to live like this. They work without considering that there are still people living here. I’ve had enough.’

And it’s not just the noise. MrMakselon claims dust and mosquitos have also been invading their homes.

He said he complained to the estate management when construction workers used the swimming pool toilet, leaving trails of mud.

He claimed that by starting work on the showflat, the developer was breaking the en-bloc agreement.

His landlord, Mr John Tilley, also said the developers should not be working there before August.

‘We (tenants and owners) are expected to leave by 21 Aug. But it’s extremely unreasonable for my tenant to live in such conditions,’ Mr Tilley said. ‘The six months grace period is meant for those still living here to find alternative accommodation.’

INCONVENIENCE EXPECTED

But a spokesman for Hiap Hoe said the company had not broken any rules.

There are no ‘hard and fast rules’ on building a showflat during the six-month free stay period, she said.

She added: ‘Some inconvenience is expected. But so long as we abide by the construction rules and try to minimise the inconveniences, the issue is unavoidable.

‘Building showflats during the free stay period is a very common practice in en-bloc developments. There is no clause that says we start work (on the showflat) only after all the occupants have left.’

The spokesman said they had received some feedback expressing unhappiness over the construction work.

She said no piling work was done, except for the erection of metal beams for the showflat.

The sale of the new development is scheduled for the third quarter of 2008.
 
Source : New Paper – 17 May 2008

Posted in Enbloc, General | Tagged: , , , , , , , | Leave a Comment »

En bloc woes at Toh Tuck Road

Posted by luxuryasiahome on May 17, 2008

Residents complain of noise, dust, as developer builds showflat
 
‘It’s like living in a shipyard’
 
It’S not chirping birds that wake them now, but pounding hammers.

And it has been driving some Goodluck View residents up the wall.

The 20-year-old Toh Tuck Road estate has been sold en-bloc, but residents have been given a six-month grace period and need to move out only by August.

Long before that, in March, developer Hiap Hoe Limited started building the show flat.

Mr Paul Makselon, who rents an apartment there, said he has to endure the ‘noise outside his window’, every day from 8am.

Said the engineering consultant: ‘It’s like I’m living in a shipyard. It’s all right if they build the showflat in the middle of the road or somewhere further away, but it’s hard to live here when there’s all that noise so close to your home.’

The fence surrounding the showflat sits barely 2m from his window.

From his three-bedroom apartment, he can see and hear the workers.

Work on the showflat is expected to be completed by the end of July, according to a circular distributed by the estate’s management agent.

Yet, Mr Makselon’s patience is wearing thin.

Said the Singapore permanent resident: ‘My son has to prepare for an exam and he has complained that he is finding it hard to focus. He shuts his windows to block off the noise.

‘I find it difficult too because I work from home.’

His neighbour upstairs, Madam Tracy Dean, said that sometimes the noise can be a little too much for her.

At such times, she leaves the apartment.

Said the IT consultant: ‘I really look forward to rain because I know the workers will have to stop work. All that grinding and banging can drive you up the wall.

‘Even with the windows closed, the noise filters into my flat.’

Mr Makselon and his family plan to move out within three weeks.

Madam Dean will leave for Bangkok in August.

Said Mr Makselon: ‘We didn’t sign up to live like this. They work without considering that there are still people living here. I’ve had enough.’

And it’s not just the noise. MrMakselon claims dust and mosquitos have also been invading their homes.

He said he complained to the estate management when construction workers used the swimming pool toilet, leaving trails of mud.

He claimed that by starting work on the showflat, the developer was breaking the en-bloc agreement.

His landlord, Mr John Tilley, also said the developers should not be working there before August.

‘We (tenants and owners) are expected to leave by 21 Aug. But it’s extremely unreasonable for my tenant to live in such conditions,’ Mr Tilley said. ‘The six months grace period is meant for those still living here to find alternative accommodation.’

INCONVENIENCE EXPECTED

But a spokesman for Hiap Hoe said the company had not broken any rules.

There are no ‘hard and fast rules’ on building a showflat during the six-month free stay period, she said.

She added: ‘Some inconvenience is expected. But so long as we abide by the construction rules and try to minimise the inconveniences, the issue is unavoidable.

‘Building showflats during the free stay period is a very common practice in en-bloc developments. There is no clause that says we start work (on the showflat) only after all the occupants have left.’

The spokesman said they had received some feedback expressing unhappiness over the construction work.

She said no piling work was done, except for the erection of metal beams for the showflat.

The sale of the new development is scheduled for the third quarter of 2008.
 
Source : New Paper – 17 May 2008

Posted in Enbloc, General | Tagged: , , , , , , , | Leave a Comment »

En bloc woes at Toh Tuck Road

Posted by luxuryasiahome on May 17, 2008

Residents complain of noise, dust, as developer builds showflat

‘It’s like living in a shipyard’

It’S not chirping birds that wake them now, but pounding hammers.

And it has been driving some Goodluck View residents up the wall.

The 20-year-old Toh Tuck Road estate has been sold en-bloc, but residents have been given a six-month grace period and need to move out only by August.

Long before that, in March, developer Hiap Hoe Limited started building the show flat.

A resident, said he has to endure the ‘noise outside his window’, every day from 8am.

The engineering consultant said: ‘It’s like I’m living in a shipyard. It’s all right if they build the showflat in the middle of the road or somewhere further away, but it’s hard to live here when there’s all that noise so close to your home.’

The fence surrounding the showflat sits barely 2m from his window.

From his three-bedroom apartment, he can see and hear the workers.

Work on the showflat is expected to be completed by the end of July, according to a circular distributed by the estate’s management agent.

Yet, patience is wearing thin, said the Singapore permanent resident: ‘My son has to prepare for an exam and he has complained that he is finding it hard to focus. He shuts his windows to block off the noise.

‘I find it difficult too because I work from home.’

His neighbour upstairs, Madam Tracy Dean, said that sometimes the noise can be a little too much for her.

At such times, she leaves the apartment.

Said the IT consultant: ‘I really look forward to rain because I know the workers will have to stop work. All that grinding and banging can drive you up the wall.

‘Even with the windows closed, the noise filters into my flat.’

The Resident and his family plan to move out within three weeks.

Madam Dean will leave for Bangkok in August.

‘We didn’t sign up to live like this. They work without considering that there are still people living here. I’ve had enough.’

And it’s not just the noise. Residents claim dust and mosquitos have also been invading their homes.

The resident said he complained to the estate management when construction workers used the swimming pool toilet, leaving trails of mud.

He claimed that by starting work on the showflat, the developer was breaking the en-bloc agreement.

His landlord, Mr John Tilley, also said the developers should not be working there before August.

‘We (tenants and owners) are expected to leave by 21 Aug. But it’s extremely unreasonable for my tenant to live in such conditions,’ Mr Tilley said. ‘The six months grace period is meant for those still living here to find alternative accommodation.’

INCONVENIENCE EXPECTED

But a spokesman for Hiap Hoe said the company had not broken any rules.

There are no ‘hard and fast rules’ on building a showflat during the six-month free stay period, she said.

She added: ‘Some inconvenience is expected. But so long as we abide by the construction rules and try to minimise the inconveniences, the issue is unavoidable.

‘Building showflats during the free stay period is a very common practice in en-bloc developments. There is no clause that says we start work (on the showflat) only after all the occupants have left.’

The spokesman said they had received some feedback expressing unhappiness over the construction work.

She said no piling work was done, except for the erection of metal beams for the showflat.

The sale of the new development is scheduled for the third quarter of 2008.

Source : New Paper – 17 May 2008

Posted in Enbloc, General | Tagged: , , , , , , , | Leave a Comment »

Dakota Residences

Posted by luxuryasiahome on May 17, 2008

Dakota ResidencesIn a pristine corner of the eastern quarters in Singapore lies an address you will be proud to call home. An outstanding location that places all you need and want in life at your fingertips, Dakota Residences is perfect for your exemplary lifestyle. Impressive views and superb connections frame this undisturbed oasis presenting you with the best of all worlds.

Dakota Residences comprises 348 units ranging from two-, three-, four- bedrooms and penthouse apartments. It is located adjacent to a river with a view overlooking the landed houses of Mountbatten Road.

Location: Dakota Crescent
Tenure: 99 year leasehold
Expected Completion: 31 August 2010
Development: Five Blocks of 19 storey residential building
Total Units: 348

Unit Types:
2 bedroom ~ 1023-1119sqft
3 bedroom ~ 1292-1744sqft
4 bedroom ~ 1830-1970sqft
Penthouse ~ 2605-3714sqft

Facilities: Swimming Pool, Wading Pool, Waterfall Pool, Playground, Gymnasium, Jogging Track, BBQ, Meeting Rooms, Basement Parking, Security 24hr, Amphitheatre

Residents and visitors are welcomed into the development with a grand drop-off amidst a lavish cascading waterscape. The architectural design of the residential towers is a composition of planes and lines, lending itself to a striking fa?ade of linear striations. The full height glazing at the living areas expands the space visually to the extent of the balconies, integrating the external with the internal seamlessly whilst offering uninterrupted views to the cityscape beyond.

The development is centrally located and it is 5 minutes walk away from the future Dakota MRT Station. The World-Class Sports Hub and East Coast Park are only a few minutes’ drive away, while the Central Business District is less than 10 minutes away.

Dakota Residences promises a lifestyle of leisure and convenience offering serene respite from the busy city while maintaining ease of accessibility. With Dakota and Mountbatten being an up and coming residential estate, purchasers would definitely be looking out for this river-edge condominium.

Contact us at info@lushhomemedia.com or +65 9631 8037 with the following for more information:

Dakota Res / Name / Contact # / Unit Type Interested

Posted in For Sale, General, New Launches | Tagged: , , , , , , , , , , | 1 Comment »

Developers face higher funding costs

Posted by luxuryasiahome on May 17, 2008

PROPERTY developers in Asia face a ‘double whammy’ of rising credit spreads on loans and banks lending less against the value of new projects, a senior Asian property fund manager said yesterday.

And the wider interest margins that banks have been demanding on loans since the start of the financial market turmoil are likely to be sustained, said Olivier Lim, chief financial officer of CapitaLand, South-east Asia’s largest developer.

Mr Lim and Ng Beng Tiong, the Singapore-based director of operations at ARA Asia Dragon Fund, were speaking at a panel discussion on the last day of a conference organised by Merrill Lynch that started on Tuesday.

Mr Ng said that although benchmark interest rates in Singapore and Hong Kong have fallen, ‘what we’ve seen is that the margins have shot up tremendously – more than double in many cases’.

Before the US sub-prime mortgage crisis broke, property companies in Asia could borrow at spreads of less than 100 basis points or one percentage point above interbank lending rates, Mr Ng said.

‘Now banks are quoting 200, 300 and for some smaller developers we understand that they’re being quoted 400′ basis-point spreads.

Besides paying higher interest rate spreads on loans, developers are also finding that the proportion of a project’s value that banks are willing to fund – the loan-to-value (LTV) ratio – has shrunk, he said.

‘In the bullish days, we were seeing 70-80 per cent LTV. Now banks are quoting 50-60 per cent, so it’s a double whammy for project financing.’

ARA Asia Dragon Fund is the flagship private real estate fund of ARA Asset Management, an affiliate of Hong Kong’s Cheung Kong Group. At the end of last year, the fund, which invests in major cities throughout Asia, had more than US$1.5 billion of capital from institutional investors worldwide, including Calpers, the largest US public pension fund.

CapitaLand’s Mr Lim said the first quarter saw ‘the worst credit market situation I’ve seen in my 19-year career’.

Although spreads have since narrowed slightly, ‘I think the blow-out in the credit margins will be sustained’, he added. ‘I don’t see it compressing to where it was last year.’

At CapitaLand, ‘we’re seeing, on average, rates go up by between 60 to 100 basis points, depending on whether it’s corporate risk or project risk’.

‘But we are sensing a flight to quality, so for us we’ve been able to raise about S$4 billion overall of credit debt from multiple sources in the first quarter alone. We still have access, but we do have to adjust to a higher margin. Thankfully, the cost of money is much lower, so the overall cost is about the same as it was last year.’

Last month, the firm raised another S$2 billion of bank funding for its new condominium development at Farrer Court. ‘Banks are still lending,’ he said.

In Asia, outside its main markets of Singapore, China and Australia, CapitaLand has been ‘probing many other markets’ including Thailand, Malaysia and the Middle East, ‘but it’s becoming much clearer to us that two countries are at the top of the list – Vietnam and India’, he said. ‘We’re starting to accelerate our investments in both of those countries.’

Meanwhile, despite suggestions that property prices in Singapore have risen too far too fast, ‘I think the market is a lot healthier than people indicate’, Mr Lim said.

Source : Business Times – 17 May 2008

Posted in Developer News, Finance, General | Tagged: , , , | Leave a Comment »

Developers face higher funding costs

Posted by luxuryasiahome on May 17, 2008

PROPERTY developers in Asia face a ‘double whammy’ of rising credit spreads on loans and banks lending less against the value of new projects, a senior Asian property fund manager said yesterday.

And the wider interest margins that banks have been demanding on loans since the start of the financial market turmoil are likely to be sustained, said Olivier Lim, chief financial officer of CapitaLand, South-east Asia’s largest developer.

Mr Lim and Ng Beng Tiong, the Singapore-based director of operations at ARA Asia Dragon Fund, were speaking at a panel discussion on the last day of a conference organised by Merrill Lynch that started on Tuesday.

Mr Ng said that although benchmark interest rates in Singapore and Hong Kong have fallen, ‘what we’ve seen is that the margins have shot up tremendously – more than double in many cases’.

Before the US sub-prime mortgage crisis broke, property companies in Asia could borrow at spreads of less than 100 basis points or one percentage point above interbank lending rates, Mr Ng said.

‘Now banks are quoting 200, 300 and for some smaller developers we understand that they’re being quoted 400′ basis-point spreads.

Besides paying higher interest rate spreads on loans, developers are also finding that the proportion of a project’s value that banks are willing to fund – the loan-to-value (LTV) ratio – has shrunk, he said.

‘In the bullish days, we were seeing 70-80 per cent LTV. Now banks are quoting 50-60 per cent, so it’s a double whammy for project financing.’

ARA Asia Dragon Fund is the flagship private real estate fund of ARA Asset Management, an affiliate of Hong Kong’s Cheung Kong Group. At the end of last year, the fund, which invests in major cities throughout Asia, had more than US$1.5 billion of capital from institutional investors worldwide, including Calpers, the largest US public pension fund.

CapitaLand’s Mr Lim said the first quarter saw ‘the worst credit market situation I’ve seen in my 19-year career’.

Although spreads have since narrowed slightly, ‘I think the blow-out in the credit margins will be sustained’, he added. ‘I don’t see it compressing to where it was last year.’

At CapitaLand, ‘we’re seeing, on average, rates go up by between 60 to 100 basis points, depending on whether it’s corporate risk or project risk’.

‘But we are sensing a flight to quality, so for us we’ve been able to raise about S$4 billion overall of credit debt from multiple sources in the first quarter alone. We still have access, but we do have to adjust to a higher margin. Thankfully, the cost of money is much lower, so the overall cost is about the same as it was last year.’

Last month, the firm raised another S$2 billion of bank funding for its new condominium development at Farrer Court. ‘Banks are still lending,’ he said.

In Asia, outside its main markets of Singapore, China and Australia, CapitaLand has been ‘probing many other markets’ including Thailand, Malaysia and the Middle East, ‘but it’s becoming much clearer to us that two countries are at the top of the list – Vietnam and India’, he said. ‘We’re starting to accelerate our investments in both of those countries.’

Meanwhile, despite suggestions that property prices in Singapore have risen too far too fast, ‘I think the market is a lot healthier than people indicate’, Mr Lim said.

Source : Business Times – 17 May 2008

Posted in Developer News, Finance, General | Tagged: , , , | Leave a Comment »

Developers face higher funding costs

Posted by luxuryasiahome on May 17, 2008

PROPERTY developers in Asia face a ‘double whammy’ of rising credit spreads on loans and banks lending less against the value of new projects, a senior Asian property fund manager said yesterday.

And the wider interest margins that banks have been demanding on loans since the start of the financial market turmoil are likely to be sustained, said Olivier Lim, chief financial officer of CapitaLand, South-east Asia’s largest developer.

Mr Lim and Ng Beng Tiong, the Singapore-based director of operations at ARA Asia Dragon Fund, were speaking at a panel discussion on the last day of a conference organised by Merrill Lynch that started on Tuesday.

Mr Ng said that although benchmark interest rates in Singapore and Hong Kong have fallen, ‘what we’ve seen is that the margins have shot up tremendously – more than double in many cases’.

Before the US sub-prime mortgage crisis broke, property companies in Asia could borrow at spreads of less than 100 basis points or one percentage point above interbank lending rates, Mr Ng said.

‘Now banks are quoting 200, 300 and for some smaller developers we understand that they’re being quoted 400′ basis-point spreads.

Besides paying higher interest rate spreads on loans, developers are also finding that the proportion of a project’s value that banks are willing to fund – the loan-to-value (LTV) ratio – has shrunk, he said.

‘In the bullish days, we were seeing 70-80 per cent LTV. Now banks are quoting 50-60 per cent, so it’s a double whammy for project financing.’

ARA Asia Dragon Fund is the flagship private real estate fund of ARA Asset Management, an affiliate of Hong Kong’s Cheung Kong Group. At the end of last year, the fund, which invests in major cities throughout Asia, had more than US$1.5 billion of capital from institutional investors worldwide, including Calpers, the largest US public pension fund.

CapitaLand’s Mr Lim said the first quarter saw ‘the worst credit market situation I’ve seen in my 19-year career’.

Although spreads have since narrowed slightly, ‘I think the blow-out in the credit margins will be sustained’, he added. ‘I don’t see it compressing to where it was last year.’

At CapitaLand, ‘we’re seeing, on average, rates go up by between 60 to 100 basis points, depending on whether it’s corporate risk or project risk’.

‘But we are sensing a flight to quality, so for us we’ve been able to raise about S$4 billion overall of credit debt from multiple sources in the first quarter alone. We still have access, but we do have to adjust to a higher margin. Thankfully, the cost of money is much lower, so the overall cost is about the same as it was last year.’

Last month, the firm raised another S$2 billion of bank funding for its new condominium development at Farrer Court. ‘Banks are still lending,’ he said.

In Asia, outside its main markets of Singapore, China and Australia, CapitaLand has been ‘probing many other markets’ including Thailand, Malaysia and the Middle East, ‘but it’s becoming much clearer to us that two countries are at the top of the list – Vietnam and India’, he said. ‘We’re starting to accelerate our investments in both of those countries.’

Meanwhile, despite suggestions that property prices in Singapore have risen too far too fast, ‘I think the market is a lot healthier than people indicate’, Mr Lim said.

Source : Business Times – 17 May 2008

Posted in Developer News, Finance, General | Tagged: , , , | Leave a Comment »

Regent Garden owners file appeal despite sale completion

Posted by luxuryasiahome on May 17, 2008

ONE of Singapore’s most unusual collective sale disputes, over Regent Garden, is now headed for the Court of Appeal even though the sale was completed yesterday.

Last month, the High Court ruled that the $34 million sale of the West Coast Road condo to Allgreen Properties must go ahead.

But now, the owners of 23 out of the 31 Regent Garden apartments have filed papers to take the case to Singapore’s highest court – the Court of Appeal.

They cannot overturn the sale now that it has been completed, but they want the court to rule on certain ‘burning’ questions, and they might seek remedies if they succeed.

They say other people involved in collective sales might be interested in getting answers to these questions.

These majority owners, including owners of two units who did not join the appeal, had earlier sought to overturn the $34 million deal, claiming among other things that their condo had been undervalued.

In a statement, the sale committee said: ‘These questions include whether, in a situation where a minority of owners object to a proposed collective sale, an intending buyer is permitted to go behind the backs of the majority owners and reach a side deal with the minority owners.’

A spokesman for the majority owners said the ’side deal’ referred to the fact that six of the owners who had opposed the sale had received an extra $2 million, divided between them, in return for withdrawing their objections.

Those appealing also want to know whether these minority owners are entitled to retain the extra payments without sharing the sum with the majority owners in accordance with the distribution arrangements in the sale agreement.

Yesterday, all the owners at Regent Garden completed their sale, which means they would each have pocketed a large part of their proceeds, which range from slightly over $700,000 to $1.4 million.

The remaining 5 per cent of their proceeds is due to be released to them when they vacate their homes.

In a statement released yesterday evening, Allgreen described the appeal as ‘curious’, given that the sale and purchase of Regent Garden had been completed earlier yesterday.

‘Allgreen intends to vigorously contest the appeal, and all claims and allegations made by the appellants,’ it said.

Source : Straits Times – 17 May 2008

Posted in Enbloc, General | Tagged: , , , | Leave a Comment »

Regent Garden owners file appeal despite sale completion

Posted by luxuryasiahome on May 17, 2008

ONE of Singapore’s most unusual collective sale disputes, over Regent Garden, is now headed for the Court of Appeal even though the sale was completed yesterday.

Last month, the High Court ruled that the $34 million sale of the West Coast Road condo to Allgreen Properties must go ahead.

But now, the owners of 23 out of the 31 Regent Garden apartments have filed papers to take the case to Singapore’s highest court – the Court of Appeal.

They cannot overturn the sale now that it has been completed, but they want the court to rule on certain ‘burning’ questions, and they might seek remedies if they succeed.

They say other people involved in collective sales might be interested in getting answers to these questions.

These majority owners, including owners of two units who did not join the appeal, had earlier sought to overturn the $34 million deal, claiming among other things that their condo had been undervalued.

In a statement, the sale committee said: ‘These questions include whether, in a situation where a minority of owners object to a proposed collective sale, an intending buyer is permitted to go behind the backs of the majority owners and reach a side deal with the minority owners.’

A spokesman for the majority owners said the ’side deal’ referred to the fact that six of the owners who had opposed the sale had received an extra $2 million, divided between them, in return for withdrawing their objections.

Those appealing also want to know whether these minority owners are entitled to retain the extra payments without sharing the sum with the majority owners in accordance with the distribution arrangements in the sale agreement.

Yesterday, all the owners at Regent Garden completed their sale, which means they would each have pocketed a large part of their proceeds, which range from slightly over $700,000 to $1.4 million.

The remaining 5 per cent of their proceeds is due to be released to them when they vacate their homes.

In a statement released yesterday evening, Allgreen described the appeal as ‘curious’, given that the sale and purchase of Regent Garden had been completed earlier yesterday.

‘Allgreen intends to vigorously contest the appeal, and all claims and allegations made by the appellants,’ it said.

Source : Straits Times – 17 May 2008

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Construction starts on US homes rise by 8.2%

Posted by luxuryasiahome on May 17, 2008

Growth comes from a big jump in apartment building construction

Construction starts on new US homes posted the biggest increase in more than two years in April, rising by a surprisingly strong 8.2 per cent and applications for new building permits turned up for the first time in five months, the Commerce Department reported in a rare spot of good news amid the worst downturn in housing in more than two decades.

The report signalled a glimmer of hope that the hard-hit housing sector still had some spring vigour.

However, confidence among US consumers fell in May to the lowest level in almost 28 years as record-high fuel prices, lower home values and fewer jobs rattled Americans.

The Reuters/University of Michigan preliminary index of consumer sentiment decreased to 59.5, the weakest level since June 1980, from 62.6 in April. The measure averaged 85.6 in 2007. Consumer spending, the biggest part of the economy, is cooling as surging food and fuel costs erode Americans’ buying power and job losses mount.

Housing starts in April, meanwhile, ran at a 1.032-million-unit annual rate, up from a revised 954,000-unit rate in March, while permits gained 4.9 per cent to 978,000 a year from a revised 932,000 in March.

Building of single-family homes, a better and more stable indicator of new home trends, continued to weaken, however. The growth came from a big jump in apartment construction.

Still, the overall gain represented recovery after a steep slump in March building pushed activity to the slowest pace in 17 years.

The surprising rebound was expected to be temporary given the headwinds builders are confronting, from slumping sales to soaring home foreclosures.

The strength in April came entirely from a huge increase in apartment construction, which can be extremely volatile from month to month. Apartment building, defined as two or more units, jumped by 36 per cent to a seasonally adjusted annual rate of 340,000 units. The larger single-family sector dropped by 1.7 per cent to an annual rate of 692,000 units.

Applications for building permits, considered a good sign of future activity, also recorded an increase in April, rising by 4.9 per cent to 978,000 units. It was the first gain in permits in five months.

But economists believe that housing construction will remain under pressure until builders have more success in reducing a huge backlog of unsold homes.

That effort is being made more difficult by a record wave of foreclosures as millions of borrowers lose their homes because they cannot keep up with escalating payments, particularly on sub-prime mortgages and loans extended to people with weak credit histories. Even with the improvement, housing construction nationwide was 30.6 per cent below the level of activity a year ago.

The National Association of Home Builders reported on Thursday that its monthly survey of builder sentiment edged down in May to a reading of 19, just above the all-time low of 18 set in December. – AP, Reuters, AFP, Bloomberg

Source : Business Times – 17 May 2008

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