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Archive for January 24th, 2009

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Developers grateful for small mercies

Posted by luxuryasiahome on January 24, 2009

NOT all their wishes for the Budget were met, but real estate developers were still glad to receive property tax rebates and other measures that would help them with project deferments in these tough times.

But even before the government stepped in, the slow property market had already forced several developers to hold back their projects. What the Budget does is to reduce the pain of doing so.

Among other measures announced on Thursday, the government gave a one-year extension of the completion period for private residential projects. It also extended from two to four years the period for developers with Qualifying Certificates to dispose of all residential units in their projects, and developers can rent out unsold units during this period.

The extended timeline creates ‘more flexibility in the way we market the property and also provides an alternative source of revenue in the interim, through rental’, said a City Developments (CDL) spokesperson. As a UBS Investment Research report also pointed out, the help ‘relieves pressure on developers who bought en bloc projects in 2006-2008 to rush to complete projects and avoid exacerbation of residential price declines’.

But even before the Budget, some property developers were already delaying their projects in the face of slumping demand and prices. According to the Urban Redevelopment Authority yesterday, private residential prices fell 6.1 per cent in Q4 2008.

For projects which have not been built, developers have another incentive to postpone them as construction costs are expected to fall further.

‘Developers have to defer (projects) whether they like it or not,’ said Thio Gim Hock, CEO and group managing director of OUE. The developer, which bought The Grangeford at Leonie Hill en bloc in 2007, has put the property back on the rental market. It is also deferring another project, the Parisian.

Large property developers have made similar plans. Keppel Land said on Wednesday that it will consider delaying the construction of some projects to save costs. CDL also said late last year that it will hold back the launch of new residential projects such as The Arte at Thomson and The Quayside Collection.

‘We will continue to monitor the market conditions closely, reassess and decide (launches) accordingly at the appropriate time,’ the CDL spokesperson told BT.

Source : Business Times – 24 Jan 2009

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Private housing supply shrinking as prices fall

Posted by luxuryasiahome on January 24, 2009

Developers delay projects’ expected completion dates to beyond 2011

DEVELOPERS appear to be turning their backs on the property market, deferring more projects as property prices keep falling.

Private residential property prices fell 4.7 per cent last year. This, after rising over 30 per cent in 2007. On a quarterly basis, prices fell 6.1 per cent.

And according to statistics from the Urban Redevelopment Authority (URA), the number of private residential homes expected to be completed between 2009 and 2011 is now also expected to be lower.

URA said that as at Q4 2008, there were 64,982 private residential units in the pipeline. Of these, about 31,000 units were expected to be completed between 2009 and 2011, lower than the pipeline supply of about 34,600 private residential units as at Q3 2008.

URA said that the decline in the pipeline supply was mainly because a number of developers had in Q4 2008, made adjustments to the expected year of completion of their private housing projects to beyond 2011.

DTZ senior director for research Chua Chor Hoon said that while developers have already been delaying completions over the last few quarters, the momentum increased in Q4 2008. She also believes that with the recent Budget announcements giving developers more leeway to delay completion of their projects, ‘there would be further adjustments to improve the supply-demand balance’.

Still, she notes that 10,448 private housing units are expected to be completed this year, which is higher than the past 10-year average of 8,700 units. ‘These projects are at the advanced stage of construction and cannot be delayed. These would add pressure on prices and rentals.’

While the property tax deferment on approved development sites is expected to cost the government $290 million over the next two years, Knight Frank director of research and development Nicholas Mak said that this will not have much impact on the supply pipeline – but only because many developers have already decided to do this. He does, however, believe that it will help developers bear the holding costs.

Barclays economist Leong Wai Ho added: ‘I don’t think these (Budget) measures per se will reverse the slide in the property market. The dominant factors in the near term are the increase in white-collar unemployment and falling household income.’

Poorer economic prospects are more likely to persuade developers to defer projects.

Already, of the 64,982 uncompleted units in the pipeline, 43,414 units were still unsold. These comprised 3,880 units that had been launched for sale by developers and 14,386 units which had the pre-requisite conditions for sale and could be launched for sale immediately. The remaining 25,148 units with planning approvals did not have the pre-requisite conditions for sale.

Prices of non-landed properties fell by 6.3 per cent in Q4 2008 compared with the decline of 2.5 per cent in the previous quarter. For the full year, prices of non-landed properties fell by 5.3 per cent.

Prices of non-landed properties in Core Central Region1 (CCR) fell by 6.5 per cent in the quarter while prices of non-landed properties in Rest of Central Region (RCR) and Outside Central Region (OCR) fell by 6.2 per cent and 5.9 per cent respectively. For the whole 2008, prices of non-landed properties in CCR, RCR and OCR fell by 5.6, 4.7 and 2.9 per cent respectively.

Mr Mak said that despite the mass market sector experiencing the slightest decline in home prices, a drop in prices in OCR reflected that buying interest for mass-market private homes has waned. ‘Prices of mass-market homes were initially thought to be able to hold better than high-end private residential properties in 2008, as some buyers settle for mass-market private homes for lower-cost alternatives. However, the cautious homebuying sentiments have become so significant that some homeseekers chose to purchase HDB resale flats,’ he added.

Rental decline accelerated, easing by 5.3 per cent in Q4 2008 quarter-on-quarter. Mr Mak noted: ‘On a yearly basis, the 2 per cent growth rate in 2008, though still positive, is a far cry from the double-digit expansion observed in the last two years.’

Last year saw the total number of homes sold fall to 13,593 units, down from a record high of 40,654 units in 2007.

CBRE Research executive director Li Hiaw Ho notes that the fall in sales volume was seen in both the primary and secondary markets, with only 419 new homes, 965 resale homes and 203 sub-sales registered in the fourth quarter. ‘The decline in sales momentum was indeed significant as both home-buyers and developers retreated from the market,’ noted Mr Li.

For the whole year, the 4,264 new private homes sold was a record low, and made up only 29 per cent of the 14,811 new homes sold in 2007. Similarly, a total of 7,701 resale homes were transacted last year, compared with 20,980 sold in 2007. Sub-sales fell to 1,628 in 2008 from 4,097 in 2007.

Source : Business Times – 24 Jan 2009

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Steep fall in transactions surprises many

Posted by luxuryasiahome on January 24, 2009

THE public housing market – the only property segment still growing – suffered a sharp fall in transaction volume in the fourth quarter of 2008. HDB’s Resale Price Index rose just 1.4 per cent – a marked slowdown from 4.2 per cent in Q3 and 4.5 per cent in Q2.

Analysts had expected price increases to moderate because the economy was losing steam.

But what has taken some by surprise was the steep drop in transactions.

The number of resale homes sold fell 24 per cent, from 8,110 in Q3 to 6,190 in Q4 – the lowest Q4 volume ever, according to one analyst.

The poor showing meant total transaction volume for 2008 was 28,419 units – 1,926 fewer than 2007’s 29,436.

The median cash-over-valuation (COV) amount in Q4 also fell, by $4,000 to $15,000. Sales involving COV constituted 85 per cent of all resale transactions, 4 per cent fewer than in Q3.

‘ERA’s resale transaction volume for Q4 was quite stable and that led us to predict resale volume of about 30,000 units for the whole of 2008. So the overall dip certainly caught us by surprise,’ said Eugene Lim, associate director for ERA Asia Pacific. ERA says it has a 45 per cent share of the HDB resale market.

One of the main reasons for the dip could be that COV amounts have been falling. ‘The days of transactions involving more than $50,000 COV are over,’ said Mr Lim. Unusual exceptions are well-renovated flats with unobstructed, panoramic views.

With the economy likely to shrink further and more lay-offs on the way, home buyers have become sharper, analysts say.

They start by making offers below valuation, and many deals now are closed at valuation, or at most a COV of $5,000-$30,000.

Propnex chief executive Mohamed Ismail said that this is ‘indeed a buyer’s market’. The dip in 2008 transaction volume can be explained partly by the financial crash in October and partly by fewer launches, which led to fewer upgrading transactions.

Another reason for the dip could be that HDB plans to increase the supply of new flats in 2009. With this, buyers have more choice, so demand is taken away from the resale market.

Demand for public housing is still expected to grow this year, but probably not at the double-digit pace of 2007 and 2008. Mr Ismail expects the resale price index to grow 3-7 per cent in 2009, with smaller (three and four-room) flats accounting for 5-8 per cent growth and larger flats seeing slower one to 3 per cent growth.

‘If the economy doesn’t improve there will be more downgraders and increasingly cautious buyers in the wake of retrenchments and tighter budgets,’ he said. ‘But we should still see growth because demand exceeds supply.’

The public housing sector is also expected to get a boost from the Government’s Budget announcement on Thursday that it will widen the Additional CPF Housing Grant (AHG) for first-time home-buyers.

To ensure that public housing remains affordable for first-timers, the Government has decided to increase the maximum grant to $40,000, from $30,000. At the same time, the household income ceiling will be raised from $4,000 to $5,000.

An extra 2,700 first-time buyers will benefit from the enhanced AHG every year, taking the number of beneficiaries of the scheme to 8,000 a year.

Analysts reckon that this will boost demand from first-timers who look to the resale market rather than waiting for new homes to be completed by HDB.

Source : Business Times – 24 Jan 2009

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KepLand’s bleak results may set tone for industry

Posted by luxuryasiahome on January 24, 2009

KEPPEL Land, Singapore’s third-largest property group by market capitalisation, on Wednesday reported an 88 per cent fall in fourth-quarter earnings, which led to a 70.8 per cent drop in 2008 net profit. The developer is seen as the harbinger of bad news as other property companies, set to announce their financial results in the coming weeks, are also expected to report lower year-on-year earnings on weaker sales in Singapore and abroad.

Analysts issued ‘hold’ and ‘underperform’ calls on KepLand following its Q4 results announcement. ‘The outlook remains challenging, with little visibility over the timing of launches both in Singapore and abroad,’ said Deutsche Bank analysts Gregory Lui and Elaine Khoo. They scaled back their assumptions of average selling price, launch schedules and take-up rates and reduced their revalued net asset value (RNAV) and earnings per share (EPS) forecasts by 8 per cent, and issued a ‘hold’ call on the stock. DBS Vickers analyst Lock Mun Yee also issued a ‘hold’ call and said that KepLand’s outlook remains challenging.

Other developers are likely to see the same fate as they announce their 2008 results. On Jan 13, Goldman Sachs warned that the 2009 and 2010 earnings of property companies could disappoint. Analysts Paul Lian and Natasha Parchani reduced their 2009/2010 earnings estimates on the back of deferred launches and expected continued slow sales throughout the two years.

But they also said that the deferment of stamp duty and property tax rebates from the Budget would be positive for the industry. Developers told BT that they were hoping for the same thing.

When the government unveiled its 2009 Budget on Thursday, developers were granted some of their wishes. A property tax rebate of 40 per cent for industrial and commercial properties for 2009 was announced – a move which is expected to reduce developers’ operating cost and cash burden.

And to make it easier for developers to hold back some developments in these weak market conditions, the government is also deferring property tax for land approved for development for two years or till the project attains its temporary occupation permit (TOP), whichever is earlier. The time developers are given to complete private residential projects will also be extended by one year. These measures are expected to help prop up home prices by reducing supply.

‘Property market measures announced during Singapore’s 2009 Budget will come as a timely relief for property developers which had been experiencing declining sales in light of the weak economy and property market,’ said OCBC Investment Research in a note yesterday.

Said Kim Eng’s research team: ‘This initiative will make it easier for developers to phase out their projects, at a time when demand is weak and more challenging for developers to pre-sell units to fund their construction. This could reduce the supply of completed units coming into the market in the near-term, alleviating some fears of an impending supply overhang.’

In its report, OCBC Investment Research identified CapitaLand, UOL Group, City Developments and Singapore Land as the key beneficiaries of the government measures announced on Thursday. ‘Developers with significant exposure in industrial and commercial properties will be the primary beneficiaries of the budget measures as their bottom-lines will directly benefit from the 40 per cent property tax rebate and the early property tax assessments, which should see the assessed annual value of properties coming down with the softening in rental rates,’ the report said.

Property stocks with hotels in their portfolios will also enjoy one more year of a 20 per cent assessment rate on hotel rooms, instead of the 25 per cent assessment originally intended for 2009. This will help through a difficult 2009 as tourist arrivals fall.

However, demand-side initiatives that developers were hoping for – the deferment of stamp duty and even re-instatement of the deferred payment scheme (DPS) – did not materialise. Home sales are therefore expected to continue to be weak this year.

This means that one cause for concern highlighted by analysts – unsold inventory that is building up – will remain in 2009.

‘With competition coming from the cheaper secondary market, unsold uncompleted inventory in the system has been creeping up since end-2007. This is starting to become a worrying trend,’ said CIMB analyst Donald Chua in a report earlier this month.

On Wednesday, KepLand had one reason to rejoice – the developer made no provisions or writedowns in its Q4 financials. Analysts said that most developers are unlikely to make provisions or write-downs when they report their Q4 earnings.

Source : Business Times – 24 Jan 2009

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CapitaLand yet to make decision on fund-raising

Posted by luxuryasiahome on January 24, 2009

CAPITALAND has been receiving various proposals for fund raising – including through rights issues – but it has yet to make a decision.

The property titan said this yesterday in response to media reports that it was considering a rights issue.

Dow Jones reported yesterday that South-east Asia’s largest property developer was mulling a rights issue to raise about $1.5 billion.

Citing people familiar with the situation, the report said yesterday morning that CapitaLand was looking at offering one new rights share for every four existing shares at $2.20 each. This represents a 12 per cent discount to CapitaLand’s opening price of $2.50 yesterday.

The stock was the most actively traded yesterday, with 59.1 million shares changing hands. It dived 14 cents, or 5.6 per cent, to end at $2.36.

The report added that the possible capital increase could occur around mid-February, though no firm decision had been made.

In a regulatory filing yesterday, CapitaLand said that ‘it has received and is continuing to receive various proposals for fund raising’.

‘These proposals include rights issues,’ CapitaLand said. ‘CapitaLand has not made any decisions.’

Talk of a rights issue had surfaced two weeks back after a similar report by Dow Jones, causing the stock to shed 8.2 per cent.

The company then said that it would not comment on market speculation.

CIMB-GK analyst Donald Chua told BT that should CapitaLand look to raise funds through a rights issue, the monies could be channelled later to buying assets on the cheap in markets such as Singapore, Vietnam and China.

‘In Singapore and Vietnam, the prices are still a bit sticky so the (management) guidance is that not at the moment,’ said Mr Chua, adding that while China seems like ‘the best bet’, a lot hinges on the price and the developments in the Chinese property market.

It could be a safety precaution to shore up the balance sheet now for a ‘rainy day’, he added.

Analysts have argued that property firms are in a stronger cash position compared with earlier crisis periods. The company has $4.2 billion in its coffers as at Sept 30, 2008.

But the sector is bracing for a double whammy pullback as demand is set to fall against an oversupply of units, with some analysts expecting about 20 per cent fall in prices over the next few years.

This potential right issue follows one by DBS last December. The bank said that it would raise about $4 billion to boost its balance sheet and for organic growth. The issue price was at a hefty 45 per cent discount to its closing price on the day before the announcement.

Source : Business Times – 24 Jan 2009

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Commercial rents feel the slowdown

Posted by luxuryasiahome on January 24, 2009

AFTER more than four years of steady increases, rents and prices of industrial space have finally caved in to the economic slowdown, falling 3.7 per cent and 6.5 per cent respectively in Q4 2008 from Q3.

The office sector also continued to weaken, with rents and prices sliding 6.5 per cent and 4.9 per cent respectively.

Falling rents are likely to provide some comfort to companies hit by slumping demand amid the downturn. And with the government pushing out cost-cutting measures in the Budget, some property owners could pass on savings to tenants.

Q4 data from the Urban Redevelopment Authority (URA) yesterday showed the first signs of weakness in the industrial property sector, as several consultants had expected. Until then, rents and prices had been rising quarterly since Q2 2004.

‘The economic turmoil and shrinking manufacturing sector slowed the take-up rate for factories and warehouses in the fourth quarter,’ said CB Richard Ellis Research’s executive director Li Hiaw Ho. For instance, the amount of occupied factory space jumped 175,000 square metres in Q4, but this increase was lower than the 344,000 sq m in Q3.

Still, industrial rents chalked up a 4.2 per cent increase year-on-year in 2008. Prices also rose slightly, by 1.5 per cent. Performance was buoyed by strong take-up in the first three quarters of the year.

Unsurprisingly, the office sector softened again in Q4. ‘The continued price for office space reflects limited investor interest in quality office buildings as economic sentiment remains pessimistic,’ said Knight Frank’s director of consultancy and research Nicholas Mak.

Office rents rose 5.8 per cent year-on-year in 2008, but this was disappointing compared with 2007, when they soared 56.1 per cent. Prices in the office sector fell 7 per cent in 2008, a striking turnaround from the 32.6 per cent gain in 2007.

Mr Mak expected the office market to continue to weaken this year, but said that he sees a silver lining. ‘Sombre economic conditions will encourage office space providers to be more understanding,’ he said. ‘Landlords will be more willing to retain tenants by renewing leases at lower rents, and offer more generous incentives such as longer rent-free periods.’

The Budget’s 40 per cent property tax rebate for industrial and commercial properties in 2009 could also help. ‘The government strongly urges landlords to pass on the benefits of this rebate to their tenants,’ Finance Minister Tharman Shanmugaratnam said in Thursday’s Budget statement.

To help reduce business costs, ‘we intend to pass on the property tax rebates to tenants of CapitaLand’s wholly owned commercial and industrial buildings as well as the portfolio of properties owned by CapitaCommercial Trust’, a CapitaLand spokesperson said. Similarly, ‘we will pass on the property tax rebates in full to our tenants in properties owned by CapitaLand Retail and CapitaMall Trust’.

City Developments also told BT that it is looking at various ways to pass on savings to its tenants.

Source : Business Times – 24 Jan 2009

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Ascott Reit’s Q4 distributable income falls 20%

Posted by luxuryasiahome on January 24, 2009

ASCOTT Residence Trust (ART) yesterday announced a distributable income of $10.32 million for the fourth quarter of 2008, a fall of 20 per cent from the previous corresponding period’s $12.85 million because of one-off expenses.

The one-off expenses amounting to about $1.7 million related mainly to a refurbishment cost. ART said that excluding this one-off item, distribution could have been just 6 per cent lower due to higher finance costs.

Distribution per unit (DPU) for the quarter also fell 20 per cent year-on-year, to 1.69 cents.

For its serviced residences, the Pan-Asian residence real estate investment trust registered a 4 per cent year-on-year in revenue per available unit (RevPAU) to $133 for the three months ended Dec 31, 2008. This was mainly because demand for serviced residences in China saw a fall after the Beijing Olympics.

For the full year, distributable income was 19 per cent better at $53.7 million. As Ascott Residence Trust Management Limited (ARTML) chief executive Chong Kee Hiong said of ART’s FY2008 performance, ‘everything is still up’. ARTML, the trust’s manager, is a subsidiary of CapitaLand.

DPU for the full year rose 14 per cent to 8.78 cents, a distribution yield of 17.4 per cent based on ART’s closing price of 50.5 cents per unit on Thursday.

The higher distribution was due to strong operating performance in 2008, a result of organic growth as well as contributions from new acquisitions.

However, rental income might decrease the coming year, as Mr Chong expects tenants to renew on shorter terms. ‘It is quite clear that people are renewing for shorter stays, and the average length of stay will drop.’

Revenue for the quarter came to $47.7 million, 11 per cent higher year-on-year. Full-year revenue was $192.4 million, a 24 per cent increase. Upon completion of its latest acquisition in Vietnam, ART’s portfolio will expand to 38 properties worth $1.53 billion in 11 cities.

Mr Chong said: ‘We will continue to apply cost containment measures as well as control our discretionary capital expenditure to maximise asset yield.’

ART expects its operating performance in 2009 to ‘remain profitable but lower than 2008′.

Source : Business Times – 24 Jan 2009

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Suntec Reit distribution income surges

Posted by luxuryasiahome on January 24, 2009

SUNTEC Real Estate Investment Trust (Suntec Reit) has reported a distribution income of $44.1 million for the quarter ended Dec 31, 2008, a jump of 31.7 per cent.

The distribution per unit (DPU) for the quarter came to 2.858 cents, up 25.4 per cent year-on-year. This works out to an annualised DPU of 11.339 cents, representing a yield of 17.4 per cent based on Suntec Reit’s closing unit price of 65 cents on Jan 21.

Suntec Reit has changed its financial year-end from Sept 30 to Dec 31, and for the 15 months ended Dec 31, achieved a DPU of 13.303 cents.

For the October-December 2008 quarter, gross revenue rose 16.8 per cent to $63.5 million and net property income jumped 28.1 per cent to $47.9 million.

Regarding Suntec Reit’s dividend payout ratio, CEO of ARA Suntec, Yeo See Kiat, said: ‘We’re giving 100 per cent. We’ve been giving 100 per cent since day one.’ ARA Suntec is the manager of Suntec Reit.

When asked about the request by some Reits to the government for a reduction in the minimum payout ratio to Reit unit-holders to as low as 50 per cent and yet still enjoy tax concessions, Mr Yeo said temporarily lowering the cap would give Reits a bit of flexibility in these tough times. However, Suntec Reit is not considering such a temporary measure, Mr Yeo noted, adding that if Suntec Reit had wanted to, it could have lowered its payout ratio to the currently-permissible cap of 90 per cent.

When asked whether Suntec Reit intends to pass the Budget’s tax rebates to retailers seeking to benefit from the government measure, Mr Yeo said that he might be willing to talk to the retailers on an individual basis but Suntec Reit had to go through the Budget concessions in detail before it could give a clear answer.

Asked about refinancing, Mr Yeo said: ‘We have worked very hard to maintain our credit rating.’ Suntec Reit’s average all-in financing cost for the quarter was 3.26 per cent and its gearing stood at 34.3 per cent as at Dec 31, 2008.

‘Whilst our next major refinancing is only due in December 2009, we are currently working on the refinancing ahead of its maturity,’ Mr Yeo added.

Source : Business Times – 24 Jan 2009

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FCT distributable income down 6% in Q1

Posted by luxuryasiahome on January 24, 2009

FRASERS Centrepoint Trust (FCT) has announced income available for distribution of $10.4 million for its first quarter ended Dec 31, 2008, which is 6 per cent lower than a year ago.

Distribution per unit (DPU), however, was 1.67 cents, higher than 1.61 cents previously, as DPU for the latest quarter was based on 100 per cent of FCT’s income available for distribution compared with 90 per cent in year-ago quarter.

FCT said that gross revenue for the quarter ended Dec 31, 2008 was $19.5 million, a decrease of 3.2 per cent over the corresponding period last year, mainly due to the planned vacancies at Northpoint as part of the additions and alteration work to re-position the mall. The decrease was partially offset by the higher rental rates for new and renewed leases achieved in Causeway Point and higher turnover rent.

It said that it continued to make positive rental reversions with the bulk of the rentals of new and renewed leases during the quarter contributed by Causeway Point, which showed an average increase of 18.9 per cent from the preceding period. The occupancy rate had improved from 87.7 per cent as at Sept 30, 2008 to 88.7 per cent as at the end of the December quarter.

Actual property expenses for the quarter ended Dec 31, 2008 were $6.7 million, higher than the previous corresponding period by $0.5 million or 7.5 per cent, mainly due to higher property tax and staff costs. Net property income for the December quarter was $12.8 million, which is $1.1 million or 8 per cent lower than the same period last year.

Commenting on the outlook, FCT said that its property portfolio is suburban in nature, located next to key transportation hubs, catering to local/regional needs where there are no or limited alternative shopping choices. Suburban malls have their own population catchment.

During the current economic conditions, FCT’s portfolio of suburban malls will likely provide defensive cashflow.

Source : Business Times – 24 Jan 2009

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Private home prices fall 6.1% in Q4

Posted by luxuryasiahome on January 24, 2009

BUYERS of new private homes don’t have to worry about not being able to move in on time even as some developers take advantage of incentives announced in Thursday’s Budget that allow them to extend the completion period of their projects.

To help developers improve their cash flow and give them more flexibility to plan their projects, the Ministry of National Development will allow developers of uncompleted Government residential sale sites to apply for a one-year extension of the completion period without having to pay an extension premium. But this only applies if none of the residential units in the project has been sold.

For projects in which homes have been sold, the extension will only be allowed up to the date of delivery of the sold units as stipulated in the sales agreement signed between the developer and the purchasers.

The Budget measure was announced just a day before the Urban Redevelopment Authority (URA) reported private home prices falling by the most a decade as they slipped 6.1 per cent in the fourth quarter last year.

This was much worse than the 5.7 per cent decline in the URA’s flash estimates and down from a 2.4 per cent decline in the third quarter. For the whole of last year, prices fell 4.7 per cent, compared to the 31.2-per-cent rise in 2007.

Rents for private homes also retreated along with home prices, declining 5.3 per cent in the fourth quarter, extending the 0.9-per-cent fall in the previous three months.

The URA data also showed there were 64,982 uncompleted units of private homes at the end of December, of which 31,004 units are expected to be completed between 2009 and 2011. Of the total, 43,414 or a hefty 66.8 per cent remained unsold, suggesting prices are likely to fall much further in the coming months.

Amid the gloomy prospects for the property market, analysts told Today developers – especially the larger ones – are likely to apply for the extension so that they can price their projects better at a later time.

City Developments (CDL), one of Singapore’s largest developers, welcomed the move. “The extended timeline gives us more flexibility in the way we market the property. We will certainly explore how best to utilize these measures in relation to the market conditions where necessary,” said a CDL spokesperson.

While prospects are bleak in the year ahead, Mr Li Hiaw Ho, executive director of property consultancy CBRE says the continued moderation of  prices will kick-start the market, especially in the mid-tier and mass-market projects.

Saying that home prices are likely to see a further correction of 10 to 15 per cent this year, Mr Li added: “We believe sales momentum will pick up gradually from the second quarter onwards so that the total number of new homes transacted this year should be higher than the 4,264 units chalked up last year, at around 5,000 to 6,000 units.”

Source : Today – 24 Jan 2009

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