Number of property agents set to fall

FEWER property agents will be plying the trade from next year, but they will - hopefully - be better informed.
The property industry is bracing itself for a mass cull of estate agents as the industry's first ever regulator, the Council for Estate Agencies (CEA), begins operations tomorrow.
Agency bosses estimate that the current national 30,000-strong pool of agents will shrink by a third to about 20,000 overnight because of stricter standards laid down by the new council.
The new regulations mainly involve the strict enforcement of industry exams, and are aimed at ridding the industry of errant, sub-standard agents who have tarred its reputation.
Industry watchers expect the rising number of complaints in recent years to decline as the quality of agents rises.
Agencies are expected to submit a final list of names of agents who make the cut to the CEA by midnight tomorrow.
Registration with the council, which comes under the Ministry of National Development (MND), will become mandatory from Jan 1.
PropNex chief executive Mohamed Ismail said his firm's headcount will slide from 6,000 to about 4,000.
HSR chief executive Patrick Liew said his firm will lose about half of its 7,000 agents.
It is the same story islandwide: Dennis Wee Group director Chris Koh said its number of agents will fall from 5,000 to 3,000, while ERA Asia Pacific will lose almost half of its agents, falling from 8,000 to 4,200. At OrangeTee, the 3,600 agent pool will shrink to 2,500.
The CEA was set up after legislation to regulate property agents for the first time was passed in Parliament last month. It was a milestone for the real estate sector here.
For many years, consumers had lobbied for greater regulation of an industry dogged by a rising number of complaints against agents who were attracted by Singapore's periodic property booms.
Complaints against real estate firms and agents shot up almost 60 per cent in recent years: from 670 in 2005 to 1,070 last year, according to the Consumers Association of Singapore.
To make the cut, agents must have passed existing industry examinations. Those who have not must have brokered at least three deals in the past two years. The latter group are given more time to pass the exams.
Agents who fail to meet these criteria will be treated like new applicants who must take new courses and a stricter exam set by the CEA.
Dennis Wee's Mr Koh said the agencies had been prepared for the new regime 'for some time' as a result of frequent updates from the MND.
'The quantity of agents will go down, but at least the quality will go up, because for the first time, all agents have to pass an exam before being able to practise in the property market,' he said.
HSR's Mr Liew noted that smaller to mid-sized agencies would have to spend money to ensure their systems were up to scratch to meet CEA standards.
Further industry consolidation is also expected. Already, C&H Realty has merged with its sister company C&H Properties to reduce overhead costs.
'There will be less competition in the industry now, which will be a good thing as service standards should go up,' said C&H Realty managing director Albert Lu.
The existing Institute of Estate Agents (IEA) and Singapore Accredited Estate Agencies (SAEA) will still operate.
Mr Ismail, who is also the IEA president, said the institute, which has about 2,000 property agents as members, will apply to be an approved trainer to offer training for new recruits to property agencies.
SAEA chief executive Tan Tee Khoon said the body, with the Singapore Institute of Surveyors and Valuers, will continue its enhanced accreditation scheme, which will complement the Government's mandatory licensing scheme.
Property agents interviewed welcomed the regulation of the industry, saying that for too long, inexperienced agents or part-timers made promises they could not deliver, and tarnished the profession.
Property agent Jasmine Png, 29, said agents who are experienced will not be affected by the rules. 'The regulations will make sure only the professionals make the cut,' she added.
jcheam@sph.com.sg
esthert@sph.com.sg

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WHO WILL MAKE THE CUT?

PropNex: 4,000 of its 6,000 agents

HSR: 3,500 of its 7,000 agents

Dennis Wee: 3,000 of its 5,000 agents

ERA Asia Pacific: 4,200 of its 8,000 agents

OrangeTee: 2,500 of its 3,600 agents
Source: The Straits Times © Singapore Press Holdings Ltd

Secondary home sales shrink under big chill

(SINGAPORE) Secondary market transactions of private homes slowed down considerably in September over the preceding month following the property cooling measures announced on August 30.

The number of subsales fell about 52 per cent month on month in September, while resales of private homes eased 42 per cent over the same period, an analysis of URA Realis caveats data as of Oct 19 shows.

The sales volumes are expected to increase over the next few weeks as more caveats are lodged for September's transactions. Nevertheless, market watchers reckon the preliminary numbers shown in the analysis by Credo Real Estate is an indication of the slowdown of activity in the secondary market for private homes following the government measures.

Subsales and resales are secondary market transactions; subsales involve projects that have yet to receive Certificate of Statutory Completion (CSC), while resales refer to developments with CSC.

Last Friday, Urban Redevelopment Authority (URA) unveiled data showing that the number of private homes sold by developers fell about 28 per cent month on month to 911 units in September. However, analysts cautioned against comparing this rate of slowdown with declines for secondary market deals.

This is because URA primary market sales numbers are sourced from monthly surveys of developers, whereas data on the number of subsales and resales are collated from caveats lodged, and there's typically a lag of about 2-3 weeks or even more, between an option being granted and a caveat being lodged (the latter usually takes place upon exercise of option).

However, at least one seasoned property consultant was willing to say that the data is a 'good reflection' of what's happening in the market. DTZ executive director Ong Choon Fah said: 'Chances of successful sales in the secondary market these days are lower as people do not have that much control. It's not as organised, whereas in the primary market, a developer will first test the market to ensure there's a reasonable chance of good response before launching the project. It's a more managed process.'

Mrs Ong said another reason secondary market sellers were less successful than developers last month is that 'by and large, owners are trying to hold on to their prices, which is why we're seeing a standoff in the secondary market'.

'Whereas developers, if they want to launch, have to ensure there'll be sales activity. In recent weeks, we've seen them releasing new projects at the lower end of their original price expectations.'

Credo's caveats analysis showed that the number of caveats lodged for subsales of private homes slipped from 311 in August to 150 in September. The volume of resale caveats eased from 1,927 in August to 1,113 in September.

The last time the subsale figure was this low was in February 2009 (127 units) while the latest resale figure is close to the 1,009 transactions seen in April 2009, in the aftermath of the global financial crash.

Credo's executive director Ong Teck Hui also highlights that the 150-unit subsale volume for September is about half the 304-unit average for January to August this year, while the September resale figure of 1,113 units is down 37 per cent from the 1,767-unit average for Jan-Aug 2010.

The most expensive subsale of a landed home in September (in both absolute quantum and per square foot pricing) was a bungalow at Kasara - The Lake collection at Sentosa Cove, which sold at $16.75 million or $1,853 psf of land area of 9,042 sq ft. It was previously transacted for $14.428 million in December 2009, reflecting a profit of about 16 per cent.

In the non-landed housing segment, the priciest subsale in September based on psf of strata area was a 46th level unit at Marina Bay Residences which sold for about $7.4 million or $3,790 psf, after being previously purchased for about $5 million in January 2007. That works out to a 48 per cent gain over a period of three years and eight months.

In absolute price quantum, the most expensive non-landed subsale last month was a 3,251 sq ft unit at Parkview Eclat at Grange Road which fetched $9.95 million ($3,061 psf of strata area). This was 15 per cent below the $11.7 million at which the unit was previously transacted in August 2007.

Among resale deals, the priciest condo last month in absolute price was $14.24 million, for a 6,060 sq ft unit at St Regis Residences. In psf terms, the most expensive condo was a 2,885-sq ft apartment on the 23rd floor of Ardmore Park, which fetched $3,467 psf.

For landed homes, the most expensive resale deal in September was a good class bungalow at Jervois Road, which sold for nearly $27.2 million ($1,293 psf of land area). On a psf basis, the priciest resale was a bungalow at Lakeshore View at Sentosa Cove which fetched $1,899 psf (or $14 million in total).

Property consultants expect private home sales to remain slow for the rest of the year in both primary and secondary markets, due to the seasonal year-end slowdown. 'The market will take time to consolidate and adjust to the new policies,' says CB Richard Ellis executive director Li Hiaw Ho.

DTZ's Mrs Ong says: 'There has to be a marked and prolonged slowdown in activity before sellers reprice their units. Prices are always more sticky going down.'

Source: Business Times © Singapore Press Holdings Ltd.
Business Times: Thu, Oct 21

Cut ties with Singapore and lose your right to own land

Cut ties with Singapore and lose your right to own land
But PRs seem unperturbed by new ownership rules

SINGAPORE - Those who cut their ties with Singapore should not expect to own the city's scarce land resources.

That, according to analysts, is the message that the Government is sending through its Bill to amend the Residential Property Act, which was tabled in Parliament on Monday.

However, permanent residents whom MediaCorp spoke to said they were unperturbed by the new rules.

"I'm not concerned," said Indian hedge fund manager Samir Arora, who owns a house in upscale Sentosa Cove. "I have no plans to leave Singapore anyway."

Individuals who give up their citizenship or PR status in Singapore will now have to dispose of their landed properties within two years.

The Bill, which is expected to be debated in Parliament next month, could be passed by the end of the year. It seeks to impose a penalty of $20,000 or a three-year jail term for failure to adhere to the rules.

Foreigners inheriting landed property will have to sell it in five years instead of the current 10.

The new rules will be able to better respond to challenges presented by a population that is more mobile than in 1973, when the existing law came into force, analysts noted.

"Perhaps it will be a bit harsh for those PRs or citizens who inherited properties or who have since moved because of work or because of social reasons," said Dr Chua Yang Liang, head of research and consultancy at Jones Lang LaSalle. "But the issue is, if they have given up their citizenship or permanent residency, then they should be treated like a foreigner."

According to analysts, the impact on the market is expected to be minimal, as PRs currently own only 3 per cent of landed homes and landed housing makes up just some 5 per cent of Singapore's total real-estate market.

But rules are also being tightened for foreign property developers - developers with foreign directors or any amount of foreign ownership - who may feel the squeeze.

Developers who fail to complete and sell developments within the current stipulated period will now have to pay for any extension of their time frames.

Said Cushman and Wakefield managing director Donald Han: "I think the measures are being updated to create more of a 'hurt aspect' so that developers will be incentivised to use the two-year period to fully sell off their units."

HDB imposes 7-day cooling-off period for flat sale

SINGAPORE: From November, sellers of Housing & Development Board (HDB) flats will have to observe a seven-day cooling-off period before they can grant an Option-to-Purchase (OTP) to the buyers.

The cooling-off period starts after they complete a resale checklist which will have to be submitted online to the HDB website.

The checklist was introduced in 2008 to ensure flat sellers and buyers are aware of the key resale and financial policies before they commit to sell or buy a resale flat.

The HDB said the enhanced resale checklist would also require sellers to state their next housing arrangement.

HDB added if sellers intend to buy another flat, they have to work out their estimated sales proceed of their current flat, and submit a financial plan for their next flat purchase

Buyers of resale flats, acting with or without agents, will also be required to complete and submit the resale checklist.

The HDB said the enhancement was part of regular reviews to better protect the interests of sellers and buyers and help them make informed and prudent decisions.

Currently, agents engaged by sellers or buyers are required to go through a resale checklist with the sellers or buyers to highlight key policies and procedures before the sellers or buyers would grant or exercise the OTP.

After the OTP is granted or exercised, sellers or buyers are required to submit the completed checklist to HDB together with the resale application form.

Sellers and buyers without agents are encouraged, but not required, to go through a separate Do-It-Yourself (DIY) resale checklist.

They also do not need to submit the checklist to HDB.

-CNA-

Five reasons why you should buy a property now

With house prices on the rise, despite the new cooling measures, is now really the right time to buy a property? Award-winning property agent Kelvin Fong thinks so. Here are his five reasons why buying a property today could be the best decision you ever make.

1. Low interest rates
People with money to invest can use the current low interest rates – which are as low as 0.88% at present – to leverage a passive income from their purchased property. In fact, the returns from a property can be more than what a bank’s fixed deposit account can offer.
For example, a unit at Southbank costing about $1.2million could generate a rental income of about $4800 per month, while the mortgage is about $3000. The buyer would enjoy a passive income of $1800 per month, as compared to depositing it in the bank to get 0.4% of around $1000 per year.

2. Property is an appreciating asset (eventually)
Barring any dramatic economic upheavals, property prices will likely stabilise or slowly, but progressively, increase from now till 2011. Most sellers will not want to sell at a lower price today, and will not suffer when paying a relatively high mortgage due to low borrowing costs. The 30% down payment rule will actually act as an incentive because purchasers, having come up with this capital, will not want to sell.
Provided you do not sell your property during the downturn – as you will almost inevitably lose money on it – the value should increase. The key is that the buyer must have holding power when the market deteriorates and should not buy until they have the holding power to weather any market conditions. Prices will eventually rise again – as witnessed in 2008, when prices were down but did eventually rise to and, in some cases surpass, the 2007 peak.

3. Assets beat playing the market
Many people will choose to purchase an asset like property because the market liquidity – essentially the asset’s cash value – is still strong and, due to the last financial crisis in 2008, people felt safer putting the money in asset rather than financial instruments. The asset will always be there, and even when market conditions are not as good, as long as you do not sell it, you will not lose money.

4. Market conditions don’t matter
Buyers who are looking at property as a long-term investment will be less concerned about the market’s movement up or down.. Property will – nearly always – appreciate in the long term in Singapore due to the scarcity of land and available real estate. While having a diverse portfolio is preferred, as a long-term investment, property is generally going to make more money than other comparable instruments. Investing in bonds, for example, is a safe investment instrument, but capital appreciation is weak.
Property is not the ideal market for speculators though – not only has the government introduced measures to discourage property speculation – but you will be much more at risk of market fluctuations.

5. Property keeps on giving
Buying public housing in today’s market is not cheap, with HDB’s executive condominiums going at around $600 – 700psf, close to mass market private property prices. A HUDC unit has already reached the $1 million mark, and the trend looks set to continue. Parents may see buying an asset, not only as a hedge against inflation, but also as an eventual inheritance to their children. If house prices continue to rise – and with the cost of construction materials inevitably going to rise too – there is the fear that the younger generation could be priced out.