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Old 29-08-2003, 08:09 PM   #31
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property news on impact of CPF cut!

Fm CNA, 28 Aug 2003 2257 hrs(GMT)

CPF cut expected to hit private property market in short-term

By : Dawn Teo

The CPF cut is expected to dampen sentiments in the property market in the short term, especially for cheaper condominiums that are sought after by HDB flat owners looking to upgrade.

But on the other hand, more home buyers are expected to go after more affordable 3, 4 and maybe even 5-room HDB flats.

And that means, the prices for these housing types should remain strong.

Lower-end 99-year leasehold condominiums have been selling well in recent months, thanks to attractive prices that tend to fall between $500,000 and $800,000 a unit.

But the buying spree will probably slow down, as the impact of the CPF cuts hit home.

Nicholas Mak, Chesterton International, said: "Probably there will be some buyers that will probably be buying more affordable units, smaller or cheaper units than they initially planned. And perhaps some young couples, newly formed households might have to postpone that dream condo for a while."

But analysts reckon property developers in general will not drop their prices sharply.

For those still shopping around, analysts say developers are likely to offer more incentives like absorbing the stamp duty or deferred payment schemes, to attract home buyers.

But if you have just taken out a big loan for your new home and are now feeling squeezed, the experts say, try not to sell it as it will be difficult to find a buyer.

Roy Varghese, Ipac Financial Planning, said: "My advice to everybody is, do not panic. There's no need to sell your homes. I think there has to be a real change in mindsets in Singaporeans. They have to live within their means. We tend to spend money on luxury items be it mobile phones, or vacations or the coffee that is not at the kopitiam. We really have to look out for where we can get value for money. So if there are any luxury items that we can give up, so be it."

In fact, the experts say if you can afford it, this could be a good time to buy a private property as interest rates are on the way up but still relatively low.

And prices, already at a 4-year low, probably have not hit the bottom yet.

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