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05-12-2010, 05:15 PM
I think I've said enough about property and the way the media plays up the "affordability" issue, and how "cheap" it is. Decide for yourself after reading these articles! 
Dec 4, 2010
Our First Home
Measures to cool market put resale flats within reach of first-time buyers
By Jessica Cheam & Daryl Chin
RECENT measures to cool the property market have received mixed reactions from home owners, but one group that has emerged better off comprises the young, first-time home buyers.
Property agencies and agents interviewed by The Straits Times say this group is returning to the Housing Board resale market, lured by the softening of cash premiums asked by sellers.
Dennis Wee Group director Chris Koh said the number of young buyers approaching the company's agents has started to rise.
'Young buyers now seem more keen to commit to a resale flat, instead of only new flats,' he said.
PropNex chief executive Mohamed Ismail agreed, noting that more young buyers have approached his agents, as resale flats are now increasingly within their budgets.
'Before the measures, many sellers were quite unrealistic and asking for high cash premiums. Since then, they have become more reasonable in their prices,' he said.
The public housing boom of the past two years had priced many first-time buyers out of the resale market. Most opted to buy cheaper new flats directly from the Housing Board.
But the trend seems to be reversing somewhat.
Application numbers at fresh launches under the Housing Board's Build-To-Order scheme have been lower than those at the launches before the cooling measures were announced in August.
At the recently concluded sale of Yishun Greenwalk, for example, there were about three bids for every new flat - lower than the six bids on average seen at previous launches.
Analysts say the key reason for this is that cash-over-valuation (COV) figures have fallen. COV is the amount over and above the valuation of a Housing Board resale flat. This is payable only in cash, and a major financial barrier for young married couples eager to buy a home.
Agency bosses said that, based on the latest Housing Board figures, the median COV has declined from $30,000 for the third quarter to about $20,000 to $25,000 in October and last month, based on their resale sales data.
National Development Minister Mah Bow Tan confirmed last week that Housing Board figures show that the median COV fell to $25,000 in October.
Industry analysts say the fall in COVs is most pronounced in suburban estates like Yishun, Sembawang, Bukit Batok, Jurong East and Jurong West.
They are also coming down for bigger flat types, such as five-room and executive flats.
ERA Asia-Pacific associate director Eugene Lim said an executive flat in Jurong, for example, used to command from $40,000 to $45,000 cash upfront, but the figure has now gone down to $30,000.
Mr Kelvin Teo, 28, and his wife Alberta, 21, for example, recently managed to buy a four-room flat in Bukit Panjang at a COV of $11,000 - much lower than the median amount (see story above).
This is in stark contrast to just six months ago, when the recovery of the economy and the property market pushed median COV levels to as high as $50,000 to $60,000 in mature estates such as Queenstown, putting the flats out of reach of most first-time buyers.
This had prompted many such buyers to complain via letters to the press and online feedback about the affordability of Housing Board flats.
In late August, the Government moved to stabilise the market by tightening rules on financing and home ownership. For example, private property owners were no longer allowed to simultaneously own Housing Board flats.
But even though COV levels have softened, agency bosses warn that they have to fall further before more first- time buyers can benefit.
Even at COV levels of $20,000 to $25,000, some first-timers - who may be just starting out in their careers - still may not be able to afford resale flats, said Mr Lim.
'There's a limit to how much these young buyers can fork out, unless they have parental support,' he added.
The absolute price of a flat also counts.
'Even if COV decreased by about $10,000 or more, it's still only a marginal 1 per cent to 2 per cent decrease in Housing Board resale flat prices,' said Mr Ismail.
Manager Valda Lee, 28, and her fiance are one such couple still waiting for COVs to fall in the estates which they want to live in.
New flats are not an option for the couple because they exceed the $10,000 household income ceiling which makes them eligible for higher-end executive condos or Design, Build and Sell units offered by the Housing Board.
'We are basically stuck, because the COVs for the places I looked at are at killer levels - $40,000 or more,' she said.
But Mr Lim added that even though valuations have not fallen drastically, the recent measures have at least helped to allay concerns of first-timers.
'Runaway prices seem to have been kept in check for now,' he said.
Dec 4, 2010
Our First Home
Measures to cool market put resale flats within reach of first-time buyers
By Jessica Cheam & Daryl Chin
RECENT measures to cool the property market have received mixed reactions from home owners, but one group that has emerged better off comprises the young, first-time home buyers.
Property agencies and agents interviewed by The Straits Times say this group is returning to the Housing Board resale market, lured by the softening of cash premiums asked by sellers.
Dennis Wee Group director Chris Koh said the number of young buyers approaching the company's agents has started to rise.
'Young buyers now seem more keen to commit to a resale flat, instead of only new flats,' he said.
PropNex chief executive Mohamed Ismail agreed, noting that more young buyers have approached his agents, as resale flats are now increasingly within their budgets.
'Before the measures, many sellers were quite unrealistic and asking for high cash premiums. Since then, they have become more reasonable in their prices,' he said.
The public housing boom of the past two years had priced many first-time buyers out of the resale market. Most opted to buy cheaper new flats directly from the Housing Board.
But the trend seems to be reversing somewhat.
Application numbers at fresh launches under the Housing Board's Build-To-Order scheme have been lower than those at the launches before the cooling measures were announced in August.
At the recently concluded sale of Yishun Greenwalk, for example, there were about three bids for every new flat - lower than the six bids on average seen at previous launches.
Analysts say the key reason for this is that cash-over-valuation (COV) figures have fallen. COV is the amount over and above the valuation of a Housing Board resale flat. This is payable only in cash, and a major financial barrier for young married couples eager to buy a home.
Agency bosses said that, based on the latest Housing Board figures, the median COV has declined from $30,000 for the third quarter to about $20,000 to $25,000 in October and last month, based on their resale sales data.
National Development Minister Mah Bow Tan confirmed last week that Housing Board figures show that the median COV fell to $25,000 in October.
Industry analysts say the fall in COVs is most pronounced in suburban estates like Yishun, Sembawang, Bukit Batok, Jurong East and Jurong West.
They are also coming down for bigger flat types, such as five-room and executive flats.
ERA Asia-Pacific associate director Eugene Lim said an executive flat in Jurong, for example, used to command from $40,000 to $45,000 cash upfront, but the figure has now gone down to $30,000.
Mr Kelvin Teo, 28, and his wife Alberta, 21, for example, recently managed to buy a four-room flat in Bukit Panjang at a COV of $11,000 - much lower than the median amount (see story above).
This is in stark contrast to just six months ago, when the recovery of the economy and the property market pushed median COV levels to as high as $50,000 to $60,000 in mature estates such as Queenstown, putting the flats out of reach of most first-time buyers.
This had prompted many such buyers to complain via letters to the press and online feedback about the affordability of Housing Board flats.
In late August, the Government moved to stabilise the market by tightening rules on financing and home ownership. For example, private property owners were no longer allowed to simultaneously own Housing Board flats.
But even though COV levels have softened, agency bosses warn that they have to fall further before more first- time buyers can benefit.
Even at COV levels of $20,000 to $25,000, some first-timers - who may be just starting out in their careers - still may not be able to afford resale flats, said Mr Lim.
'There's a limit to how much these young buyers can fork out, unless they have parental support,' he added.
The absolute price of a flat also counts.
'Even if COV decreased by about $10,000 or more, it's still only a marginal 1 per cent to 2 per cent decrease in Housing Board resale flat prices,' said Mr Ismail.
Manager Valda Lee, 28, and her fiance are one such couple still waiting for COVs to fall in the estates which they want to live in.
New flats are not an option for the couple because they exceed the $10,000 household income ceiling which makes them eligible for higher-end executive condos or Design, Build and Sell units offered by the Housing Board.
'We are basically stuck, because the COVs for the places I looked at are at killer levels - $40,000 or more,' she said.
But Mr Lim added that even though valuations have not fallen drastically, the recent measures have at least helped to allay concerns of first-timers.
'Runaway prices seem to have been kept in check for now,' he said.
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