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Old 28-07-2003, 11:02 AM   #8
sunsetbay
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From ST, 26 Jul 2003

Private home prices at four-year low

With resale prices of big HDB flats rising and lower-end condominiums becoming more affordable, a trend of home upgrading has emerged, experts say

By Leong Pik Yin

PRICES of private homes are at a four-year low and property analysts expect them to bottom out by year-end.

Latest government figures show that while prices continue to fall, signs are emerging that they are beginning to level out.

Yesterday, when the Urban Redevelopment Authority released its quarterly figures, prices in the April-to-June period dipped 0.6 per cent against the previous quarter - less than the 0.9 per cent of the previous quarter-on-quarter comparison.

Resale prices of Housing Board flats continue to climb, rising by 2.1 per cent over the previous quarter, the biggest increase since prices started to inch up last year.

The shrinking gap has sparked signs of an emerging upgrading trend, said some industry experts.

Said Mr Chris Koh, director of Dennis Wee Properties: 'Some who bought their flats 15 years ago can make as much as $100,000 in profit if they sell their flat now.'

Associate director of Chesterton International Nicholas Mak, said the number of purchases made by HDB upgraders rose from 588 in the first quarter to 987 in the second quarter.

Confirming the trend, real estate agents point to the smaller price gap between lower-end condominiums and big HDB units.

An executive flat in Tampines, for example, costs between $400,000 and $450,000, while some lower-end, 99-year leasehold condos are going for $500,000, said Mr Tony Ho, associate director of real estate network PropNex.

The president of ERA Realty Jack Chua said enticements include cheap bank loans and the change in Central Provident Fund (CPF) rules last year, which allows home-buyers to use their retirement funds for half of a property's 20-per-cent cash downpayment. Before, the entire 20 per cent had to be paid in cash.

Lower condo prices, dropping by more than 40 per cent since the 1996 peak, have also drawn many HDB owners, who form the bulk of buyers of suburban private properties.

Seven out of 10 buyers of Grandeur 8 units, a 99-year leasehold project in Ang Mo Kio, are HDB upgraders, said ** Richard Ellis.

But some property consultants expect the upgrading wave to grow only later.

Colliers International managing director Dennis Yeo sees it happening only in the fourth quarter, if 'signs of the economy recovering become clearer'.

That said, developers sold 1,917 new homes between April and June, more than four times that in the first quarter.

Real Estate Developers Association of Singapore vice-president Chia Ngiang Hong said: 'We were expecting 1,500 units sold, so it was better than we expected.'

One HDB owner who has been drawn to buying a private home is Madam Aziah Bte Ahmad, a 42-year-old property agent.

Shortly after the CPF rules were relaxed, she bought a $430,000 Yishun Sapphire unit last September.

But she is holding on to her five-room HDB flat in Yishun, which she bought for $70,000 in 1985.

'If I sell it now, it may fetch about $270,000. But I think prices will still go up, so I want to wait. I'm hoping to get about $330,000.'

-- Additional reporting by Tan Hui Yee and Vladimir Guevarra
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