Private home buyers cautiously optimistic about Singapore’s property sector
October 5, 2008
SINGAPORE: Early estimates show prices of private residential properties fell for the first time in four years in the third quarter. Concerns are that times ahead may be rough.
Still, about one-third of MCL Land’s latest mid-range condominium project - The Peak@Balmeg - was snapped up over the last two days during its private launch.
Among the visitors at the launch were Panneer Selvi and her family, who have been shopping for their ideal home.
Over the last four months, they have visited 12 condominium projects, comparing prices, features and home loan packages.
Panneer Selvi said: “We have not made up our mind to buy one, we are checking with the bankers, at the same time looking around for a suitable unit.”
Some visitors said they are not overly concerned with negative market sentiments. And with prices of private apartments expected to fall over the next six months, they hope to cash in on a good deal.
Michael Tan, a potential home buyer, said: “I am not plunging into it. Sometimes buying a home, if it’s for a home, then there are other considerations other than just pricing alone.”
Ronald Wee, a property investor, said: “I do not foresee a slump like in 2003 or 2004. It’s just that if you have a good piece of property with a good location and nice view, I guess mid- to long-term is still very promising, especially the IR (integrated resort) is coming up next one to two years.”
Wee Hian Woon, a potential home buyer, said: “The market condition is so bad, the financial market is in the news all the time, the general sentiments I think are quite weak, so the feeling is that prices are likely to drop, then go up.”
MCL Land said it has yet to decide whether the project will be launched for public sales. The 180-unit project, going for S$1,000 per-square-foot, will be completed in 2011.
Overall, many home hunters are still confident that Singapore will be able to weather the financial crisis and economic slowdown in the US because the country has strong fundamentals in place.
Source: Channelnewsasia.com
Who wins with no agent fee rules?
August 18, 2008
Jessica Cheam speculates on real estate… guidelines.
HOW much should you pay your property agent?
This has been the talk of the town this week, and no surprise, given how home ownership issues are tied so closely to the hearts of Singaporeans.
When the Institute of Estate Agents (IEA) first announced the Compeition Commission of Singapore’s (CCS) request to abolish a decade-old fee struture at a press conference: the initial mood all around was: “no biggie”.
IEA’s guidelines were non-binding anyway, said agency bosses. It was never compulsory, so its abolishment should have minimal impact. Many agencies, such as ERA, PropNex, C&H Realty told The Straits Times they will adopt IEA’s fee recommendations as their own agency guidelines anyway so the status quo is maintained.
But as the industry digests the news, it seems that the removal of these guidelines will have far-reaching effects.
Already, the CCS and consumer watchdog Consumer Association of Singapore (Case) has issued statements to alert consumers to their rights.
Consumers should not accept agents “that are harping on the old fee practices” and should be free to bargain, Case said. It encouraged consumers to report any evidence of collusion on the part of the agencies, and advised consumers not to give agents exclusivity to sell their houses.
Already, home buyers and sellers that The Straits Times spoke to said that with the wide publicity of the guidelines removal, they feel their bargaining power has been enhanced.
House-hunter Vivan Wong, for example, said agents used to wave the guidelines in front of her, to justify collecting a 1 per cent fee for HDB transactions. “Now I can wave the CCS statements back at them,” she said. She doesn’t see why she has to pay 1 per cent to the sellers’ agents. “Unless I specifically engaged a agent to hunt for a house for me, then I’ll be happy to pay.”
Generally, the mood on the ground is people are expecting fees in to dip in favour of the consumer. It’ll be interesting to see if agencies’ records on commission amounts will go down. PropNex agents collected $126 million in commission last year; ERA Asia-Pacific agents raked in $166 million. Both agencies are major players in the local property market. This was in the boom-time, of course, so any change in this year’s earnings will be a combination of factors due to market conditions and the removal of fee guidelines.
Agents, however, are quite adamant that they will stick to their rates. PropNex agent Damien Goh, who sells an average of five properties a month, said 2 per cent was “already a very reasonable rate”. Marketing just one property costs about $500 a month in advertisement costs, and another $100 in transportation costs, not to mention phone bills and overhead costs such as renting an office cubicle etc.
“I will show by actions and service, that I deserve that commission. If buyers or sellers still demand lower rates, I’ll have to decide on a case by case basis. But if the fees are too low, I’ll just look for another buyer and seller. I believe people will pay for good service,” he said.
Other agents are less optimistic. Some say Singaporeans, known for their haggling, will demand the same level of service at low prices. “This may lead to more errant agents, who have less loyalty to their customers,” said one agent who declined to be named. Complaints about agents to Case might even go up, he suggested.
PropNex chief executive Mohamed Ismail pointed out that the fees removal comes at a time where the industry is moving towards greater self-regulation, and agents are encouraged to move towards professionalism. “The impact of the fees removal can have two effects: agents will start to up their quality to be able to charge higher fees. Or two, a consumer-led dip in fees might lead to more irresponsible actions, if agents don’t feel they’re being paid enough.”
On the other hand, home-buyer Tania Goh said unscrupulous agents who have a gem of a property could also jack up commissions if they know buyers or sellers are desperate.
Ultimately, the onus is on the consumer to be informed and educated about what the market rates and decide for themselves what are reasonable rates they should pay their agents.
The CCS move encourages competition in the market, and if agencies or agents can offer the same services for less money, there’s no reason why market-based rates cannot prevail.
Time will soon tell who will be the real winners: consumers, or agents - or perhaps, both.
Source: Straits Times
Removal of property fee guidelines unlikely to have deep impact
August 7, 2008
SINGAPORE: Market players said on Wednesday that the move to scrap guidelines on property agents’ fees by September 25 is unlikely to leave a deep impact on the real estate sector. However, they warned against rogue agents who may try to cash in on the change in rules.
The Competition Commission of Singapore (CCS) ruled on Tuesday that the fee guidelines adopted by the Institute of Estate Agents (IEA) should be removed as they are uncompetitive. Under the current guidelines, property agents stand to pocket a commission of 2 per cent of the transacted price.
With the removal of the guidelines, buyers and sellers will be free to negotiate the fee payable to their agents. Real estate agencies are generally supportive of the move, but they are concerned that the lack of fee guidelines could trigger more rogue practices.
Chris Koh, director of Dennis Wee Group, said: “If the owner is not aware of what the market price of his property is, then he may fall into a trap where the rogue agent says, ‘Ok, you want a million dollars, that’s what you said you want, I will get you that S$1 million.
“But if I sell your property at S$1.2 million, then that S$200,000 is for me to keep since there is no guideline that it must be a percentage’.”
Another real estate company, Propnex, warned against agents who offer unnecessary services just to quote a higher commission.
Without any fee guidelines, market players said it is down to the agencies to set their own commission structure. Propnex said consumers must assess their agents based on their commitment, track record and knowledge of the market.
Some industry players said the removal of the commission guidelines will not spark a price war because the cost of marketing a property has nearly doubled in the past ten years, and it will not be sustainable for agents to start under-cutting each other.
On average, about 10 to 20 per cent of the agent’s commission goes into marketing efforts, such as taking out advertisements to promote a property. Paying a lower commission does not necessarily mean a better deal as agents may not put in as much effort to sell a property.
Some Singaporeans prefer to sell their properties on their own. Rosanah Mon helped her mother sell her three-room flat at Jalan Bukit Merah for S$230,000, saving over S$2,000 in the process.
“I don’t see the necessity (to get a property agent), if you know the procedures well and you follow the guidelines,” she said.
In fact, the Housing and Development Board (HDB) said it has seen an increase in the number of such transactions – rising from 5.5 per cent of total resale transactions in 1998 to about 8 per cent now.
To boost greater understanding of the sales procedures, HDB holds monthly resale seminars, with the next one scheduled on September 6. More information is available online at www.hdb.gov.sg.
Source: Channelnewsasia.com
Singapore Property Watch - July 2008
July 20, 2008
A Singapore Real Estate Digest by Justin Ng Properties
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SINGAPORE: Office rents in Singapore are starting to show signs of peaking, said property analysts.
They noted that prime rental costs have generally increased at a far slower pace in the first half of this year, compared to 2007.
Looking ahead, they expect office rents to soften even more towards the end of 2009 and early 2010 as demand for prime space eases……………..
Singapore home sales in June up 80% from May
SINGAPORE: June was the best performing month in terms of home sales since the property market tumbled last September, according to numbers released by the Urban Redevelopment Authority (URA) on Tuesday.
Altogether, 801 private homes were sold, a jump of 80 per cent from May.
But there were also more units launched. The number of units launched in June leapt 125 per cent from May to 1,069 units, meaning that there were more unsold properties in the market……..
June’s Property Transactions
| Flat Type | Units Sold |
| 4 Room | 854 units |
| 3 Room | 628 units |
| 5 Room | 584 units |
| Condominium | 428 units |
| Apartment | 307 units |
| Executive | 192 units |
| Terrace House | 80 units |
| Semi-Detached House | 40 units |
| Executive Condominium | 39 units |
| 2 Room | 25 units |
| Detached House | 12 units |
| HUDC | 9 units |
| 1 Room | 5 units |
| Multi-generation | 2 units |
Property Trend (Based on Past 6 months Transactions)
Latest Featured Properties
| HDB 5 Rooms @ Toh Guan Road | HDB 5 Rooms @ Marine Drive |
| D11 - Novena Ville for Sale | D19 - Chuan Park for Sale |
| D12 - The Elysia for Sale/Rent | D09 - Mackenzie 88 For Sale |
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