Complete Property Market Updates of Singapore

May 31, 2007

Your Porsche in your living room

Filed under: Property Trends — Propertymarketupdates @ 5:00 pm

If you had a Porsche, wouldn’t you like to spend every single waking moment polishing and admiring it?

And if possible, park it right in your living room, instead of some basement carpark?

Well, wish granted.

Soon, you can drive into your estate, then get whisked from the ground level to your apartment by a car lift and reverse right into your unit.

You step out and you’ll be right inside your living room.

And if you do own a Porsche, what a great conversation piece it will be compared with, say, a boring antique table.

This private carpark in each unit is likely to be the most talked-about feature in a proposed 30-storey condominium on Scotts Road.

The yet-to-be-named project will be built on the former Hotel Asia site and will be the tallest development encompassing ‘car porches’ in the world, said developer Hayden Properties.

The loading limit for the car lift will be about two tonnes, and it will be big enough to accommodate a Rolls-Royce.

A normal four-door sedan weighs just over a tonne.

Hayden Properties director Leny Suparman said they first heard about the concept in New York and Dubai.

She added: ‘It’s high time that Singapore enters into a bold, new dimension of world class affluence living like… in New York and Dubai.

‘This is something ultra luxurious for home-owners and something they can relate to. It’s like living in a bungalow and it’s great for car lovers who want to be close to their prized possession.’

There will be 54 units and two penthouses in this development, which will be launched later this year.

Each three-bedroom unit will be about 3,000 sq ft, including the car-porch space of 400 to 450 sqft – big enough for two cars, said the developer.

Each 5,700 sq ft penthouse will have two car-porches.

The price will be about $4,000 psf, said the developer, so expect to pay about $12 million for the three-bedroom units.

The car porch and the living area will be separated, possibly with glass.

That is because not many will appreciate choking on exhaust fumes in the living room.

There will be two car lifts and two passenger lifts.

And for those who prefer their cars on solid ground, every unit will also be allocated parking space in the basement carpark, said the developer.

There will be a valet service for those who prefer the passenger lift and want someone to park their car for them.

What happens if the car lift breaks down?

Then the home-owner may not be able to move his car till the lift is fixed.

But the developer said the condo would have a lift maintenance system with 24-hour service.

The company said it has received a provisional planning permit from the Urban Redevelopment Authority and construction is expected to start at the end of this year.

The developer has not worked out the maintenance costs per unit yet.

Though the project has not been launched, prospective buyers, attracted to the concept, have begun calling.

Chesterton International research director Colin Tan said it’s the first time he has heard of such a concept for a residential property here.

There are mechanised carparks in commercial properties such as Peninsula Shopping Centre and Thomson Medical Centre.

LIKE LANDED PROPERTY

Said Mr Tan: ‘One of the best things about living in a private condo is parking right next to the lift lobby and taking the lift right to your doorstep. This takes it one step further.

‘This is a premium, a plus point for the development. It’s like living in a landed property.’

But Knight Frank research director Nicholas Mak wondered if such extravagance was necessary.

He said: ‘Do you really need to bring your car into your living room? If you argue that it’s for the purpose of security, you can always have garages with locks. I wonder if buyers will accept it.’

Businessman Leonard Wee, 49, liked the idea though.

He said: ‘It’s every car enthusiast’s dream to have your car parked right inside the living room. And what better way to show off your Ferrari? It’s like having your own car showroom.’

Source: The New Paper, 31 May 2007

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Property cycles remain alive and well

Filed under: Property Trends — Propertymarketupdates @ 4:59 pm

The property market’s ascent is welcome news to anyone who has lived through the boom and painful bust cycle of the 1990s. The relief would be acute for those who endured the black hole that a mortgaged property in negative equity would have put them. How long can this bull cycle last? For now, the signs are encouraging.

Plans to turn Singapore into a tourist capital, most visibly headlined by the billion dollar integrated resorts projects; coupled with the ongoing push to become a hub for private wealth management, higher education and various other initiatives are set to unleash structural changes that provide a solid underpinning for property values. These changes include new jobs and new expatriate residents who will be looking for homes. After all, Singapore’s home prices and rents, even with the recent spike, still lag those of developed markets.

The financial backdrop is also conducive. A thriving economy, relatively low interest rates and a buoyant stock market are conspiring to make risk taking seem a pretty easy proposition. The appetite for leverage, in particular, is growing, and recent data on home loans attest to this. In March, housing loans grew 3.6 per cent, the strongest pace in a year. The Credit Bureau’s preliminary data show a trend towards larger loans and banks report a rise in the number applying for second or third mortgages. For those who have invested and still are investing in property, the going looks good. Rising rents can easily cover loan instalments, and a reasonable holding period can produce profits in the triple digits. But those who think that ‘this time is different’ could rue their words. There are clearly a number of risks that could mar the Goldilocks scenario, even if these seem remote for now. Rising interest rates and job uncertainty can easily cause a heavily geared balance sheet to come undone.

Risk management is key, particularly for those who do not have the resources to hold the properties in the event of a downturn. A substantial number is likely to have bought uncompleted properties on deferred payment schemes and will be looking for a profitable exit. Timing will be critical, and yet timing is something even veteran fund managers get wrong. This is particularly so for individuals who tend to develop attachments to their investments.

The onus is then on individuals to exercise restraint. In this context, the recent move by the government to improve the transparency of the property market will be critical, as individuals count on publicly available data for their decisions. At the moment, developers often highlight record prices of homes sold, when average prices could present a far different picture. Details are currently being worked out by the Urban Redevelopment Authority.

Meanwhile, individuals would do well to remember that cycles are alive and recurring, even if the good times seem extended. Throwing prudence to the wind risks a recurrence of the black hole of negative equity, a prospect that is surely to be avoided.

EDITORIAL

Source: The Business Times, 31 May 2007

URA white site seen fetching more than $1b

Filed under: Commercial — Propertymarketupdates @ 4:58 pm

A white site behind One Shenton, launched yesterday and slated predominantly for office development, could fetch $850 to $1,000 per square foot of potential gross floor area, property consultants say.

This translates into bids of $1.22 billion to $1.43 billion. And some analysts reckon that the price could go even higher.

The tender for the 110,206 sq ft site – offered on a 99-year lease by the Urban Redevelopment Authority – closes on Sept 19.

At least 70 per cent of the maximum 1.43 million sq ft of gross floor area must be developed as offices. Assuming the successful bidder puts up an all-office development, the net lettable space could be just over one million sq ft.

The development can rise higher than 40 storeys. And if roof forms are included, the maximum height can go beyond 50 storeys.

CB Richard Ellis executive director Li Hiaw Ho says that the site could fetch around $900 to $1,000 psf per plot ratio (psf ppr), which would result in a breakeven cost of $2,300 to $2,500 psf for the completed office project.

Using a yield-based approach and assuming gross monthly average rent of $12 psf and a capitalisation rate of 4.5 per cent, the value of the completed project would be about $2,600 psf.

Mr Li also notes that $2,500-2,600 psf capital values are in line with current office transactions. BT reported last week that Hong Leong Group had received an offer of about $2,500 psf for 1 Finlayson Green and has since learnt that this offer, from a European property fund, may actually be higher.

Knight Frank managing director Tan Tiong Cheng predicts a slightly lower price of $850 to $900 psf ppr, saying that bidders may take a cue from last month’s sale of nearby UIC Building for $870 psf ppr. He expects the URA site to draw at least four to five groups of bidders.

Taking a more upbeat view, Credo Real Estate managing director Karamjit Singh predicts that the top bid is ‘certain to go over $1,000 psf ppr’ because of interest from overseas institutional investors like funds. ‘Their perspective on target returns and market outlook may be rather different from local developers,’ he said.

Agreeing, a seasoned market watcher – alluding to the office glut that plagued Singapore a few years ago – pointed out: ‘Local players know local history.’

Some investors may now be concerned that the government could release a slew of new office sites – on 99-year leases and short tenures for temporary structures – to alleviate the current shortage of space.

Still, CBRE’s Mr Li expects URA’s latest site to draw strong bidding. ‘The future CBD will be in the Marina Bay area and if you want to be in the office market, you have to be there,’ he said.

Knight Frank director and head of research and consultancy Nicholas Mak reckons that the authorities would only release additional office sites selectively, knowing that new developments can be completed only after the first phase of the Business and Financial Centre is ready in early 2010.

The government’s proposal to offer short-tenure sites for temporary or ‘transient offices’ will have limited appeal, he said. ‘Big international financial institutions and other users concerned about image will probably not find such premises appealing. However, perhaps some smaller local firms facing pressure from rising rents – like architectural firms and law firms – may consider them.’

Source: The Business Times, 31 May 2007

Bids could pass $1b mark for Marina Bay site

Filed under: Land Sale — Propertymarketupdates @ 4:58 pm

Blue-chip property players from across the region are expected to do battle for a prime piece of Marina Bay land released for tender yesterday.

Bids of well above $1 billion – although one expert tips $2 billion or more – are expected for the 1.02ha site behind One Shenton and The Sail @ Marina Bay condominiums.

A project of about 40 storeys can be built on the land, but 70 per cent of the gross floor area must be given over to offices. The rest of the space can hold more offices, hotel rooms, homes or shops.

Mr Nicholas Mak, the director of research and consultancy at Knight Frank, expects bids to come in at between $830 million and $1.09 billion, based on recent government land sales and an assumed rental yield of about 6.5 per cent to 7.5 per cent.

This range works out to $580 to $760 per sq ft per plot ratio (psf ppr), he said.

But Ms Tay Huey Ying, Colliers International’s director of research and consultancy, expects even higher bids – ‘upwards of $1 billion, or $750 psf ppr’, with the winning bid ‘likely to be above $2 billion’.

The likely contenders ‘include all the major local blue-chip developers’, Mr Mak said.

These would be CapitaLand, Keppel Land, Lippo Group, Far East Organization and City Developments, which is the developer behind One Shenton and The Sail.

Foreign funds could also tie up with local developers for the tender bid, he said.

The consortium building the nearby Marina Bay Financial Centre (MBFC) – Keppel Land, Hongkong Land and Cheung Kong Holdings – may also be interested, said consultants.

‘Other office players who have yet to have any presence in this new downtown of the future may also take this opportunity to form consortiums to participate in this tender,’ said Ms Tay.

She added that a winning bidder may want to build homes or service apartments along with the required offices.

But Mr Mak, who estimated that the project could accommodate 400 two-bedroom units, said homes were an unlikely option because the developer would also have to allocate more space for carparks.

The site, which opens up directly to a public open space, can be built up to 200m, or over 40 storeys.

It will be connected to surrounding developments such as One Raffles Quay, One Marina Boulevard, the MBFC and One Shenton through a network of underground walkways and second-storey links, the Urban Redevelopment Authority (URA) said.

The site will be served by a common services tunnel, a system of underground tunnels that house and distribute utility service lines such as power and telecommunication cables, the URA added.

This means future tenants will have an uninterrupted supply of major utilities and emergency back-up services.

The site – part of the Government’s plan to rejuvenate the Marina Bay area – will be awarded based solely on the tendered price, said the URA.

Developing the land ‘will help to build up the critical mass of office space in the Marina Bay area and develop the area as an international business and financial hub’, it added.

Source: The Straits Times, 31 May 2007

En bloc target? Leave Pearl Bank Apartments alone

Filed under: Community Voices — Propertymarketupdates @ 4:57 pm

A recent newspaper article mentioned that Pearl Bank Apartments may become an en bloc acquisition candidate.

The unique design of the building is highly regarded by the architectural community, and the building has a worthy place in the architectural history of Singapore. It is considered by some locals as a landmark.

The apartment complex is suited for restoration, refurbishment and retro-fitting, and not suited for a complete tear-down and re-build.

The structure of the high-rise Pearl Bank Apartments is still solid. To attain such a structure today from ground zero, the developer must spend a great deal of money.

It appears somewhat strange to consider demolishing such a building to construct another one, when the surroundings are empty open land that is ready to be offered by the authorities for new construction.

In the case of Pearl Bank Apartments, how much net economic value will be created in a complete tear-down and re-build?

I assess that there will be an actual significant loss of economic, cultural and historical values.

Whatever apparent gain is merely the reallocation of financial resources from one party of the community to another, with no net gain to the community as a whole

It makes so much more sense for a new building to be built on adjacent empty sites, and for Pearl Bank Apartments to be refurbished.

Dr Chng Nai Wee

Source: The Straits Times, 30 May 2007

Small band of dissenters fights en bloc sale frenzy

Filed under: Community Voices — Propertymarketupdates @ 4:57 pm

Retiree Mary Chan, who is in her 70s, does not own or know how to use a computer.

But it has not stopped her from making it known that she opposes the collective sale looming in her housing estate.

The feisty former teacher, who declined to give her real name, hand-wrote letters and got them typed up by a friend.

‘I spent about $20 on photocopying 350 letters and had the help of friends to put them in the estate’s post boxes,’ she said.

Home owners like her are in the minority camp in housing estates up for collective sale – the minority fighting to stop the sale going through.

But she appears to have lost the fight for the 618-unit Farrer Court, put up for sale this month for a whopping $1.5 billion. More than 80 per cent of the owners there gave the approval needed for the sale to proceed.

Collective sales, which largely fizzled out after the market downturn in 2000, have come back strongly in the past two years.

Increasingly bigger residential deals have been sewn up this year. Two weeks before Farrer Court was put up for sale, for instance, the 314-unit Leedon Heights was sold for $835 million.

The rising property market has fuelled developers’ demand for choice sites now occupied by ageing estates, residents of which hope to make far more than if they were to sell their units individually.

Those who say ‘no’ to such windfalls typically argue that they cannot find another home of similar size in the same area. They prize their homes, which are often large units in prime areas.

Others say ‘no’ because they are attached to their homes and have less need for riches.

As Farrer Court’s Madam Chan said: ‘How much money do I want? I can only eat three meals a day and sleep on one bed. I have a few good friends who live here and who are my exercise partners.’

These dissenters are typically comfortably off, well-educated and fluent in English.

Some, but not all, are retirees.

For example, ‘Mr D’, 39, a resident in a Holland Road condo, has a full-time profession.

His approach is slightly different from Madam Chan’s.

He knew little about collective sales before, but has since done his homework – he has read up on the statutes, researched previous sales, sent letters to the media and even to opposition political parties, and gone online to discuss the issue.

In his blog, he warns people about the ‘implications’ of collective sales.

Even tenants in estates going through the collective sale mill have joined in. Permanent resident ‘Mr H’, who rents a unit in an estate that has gone en bloc, blogs about it.

He will soon have to move, and is upset as he will have to pay higher rent on his next apartment. He is even mulling over his future in Singapore, where he has spent eight years.

What peeves him is that tenants – with valid leases – have to move out, and legislation makes no mention of them or their rights.

The one thing these dissenters have in common is that they are secretive. They do not want to be ‘outed’ as the ones blocking the majority group’s way to a jackpot – or worse, being accused of egging on others to do the same.

They also do not want to be hounded by ‘predatory’ agents eager for a deal to be struck.

One dissenter, who declined to be named, said there is a sort of witchhunt against minority owners.

Indeed, there have been stories going around that dissenters have received nasty messages, or had their cars scratched.

This is why they do not want their names – or even that of their estates – mentioned.

Still, they want their say. Aside from Madam Chan and her low-tech method, other dissenters have been busy.

Another retiree who wanted to be known only as Madam Tan has fired letters to the Government and the media against collective sales.

She began a blog on the subject in March and made instant online friends out of depressed or angry strangers in the same boat.

She said that although she had written to officialdom, her blog would get her view into the public arena in the interest of ‘greater public knowledge’.

She declared: ‘I am hanging by my claws to my maisonette. It is the only roof I have.’

Her 1,600-sq-ft home is in a prime area near Orchard Road, where sweet collective deals have been sealed in the past year.

The ‘en bloc fire’ in her 13-year-old estate has, for now, been tamed because under 80 per cent of owners are keen.

But she said she is not out of the woods yet: Last week, another agent made a vastly better offer for the estate.

In Meyer Park, meanwhile, dissenters, besides trying to persuade their neighbours not to sell, have hired a lawyer to fend off overtures from those in favour of a sale, said a source.

But ‘Mr D’ said he is not hopeful minority owners will hold out forever.

He said: ‘I doubt you’ll ever get minority owners chaining themselves to the gates of their estate in the path of bulldozers like Greenpeace activists. Local lobbying fizzles out when it is seen as ineffective.’

Still, despite this and the rude (anonymous) e-mail messages he has received about his bid to stop the sale of his estate, he is not giving up.

He sees his efforts as ‘balancing the unequal power agents, lawyers and seasoned en bloc investors have against disadvantaged owners who are new or not in favour of en bloc sales’.

Property consultants have noticed that minority owners have become more aggressive.

DTZ Debenham Tie Leung’s director of investment advisory services, Ms Tang Wei Leng, said a consultant’s role in a collective sale is to help owners make informed decisions, but ‘there will always be owners who, for different reasons, will not want to sell, no matter the price, and we respect that’.

But another consultant said urban renewal is a continual process, and, depending on what the majority wants, everyone just has to ‘move on’.

The dynamic between the pro- and anti-en bloc camps could change soon, when legislation governing such sales is tightened.

The Ministry of Law closed a public consultation exercise this month, and changes – which are thought to make it tougher to push through such sales – are expected to be implemented by the third quarter of this year.

‘Mr D’ hopes something will come of this.

As he put it: ‘There are social consequences to en bloc sales. There are issues of communal identity, the notion of community, the notion of home.

‘Some weeks I’m tired out from the sense of helplessness, but the ‘activist’ part of me won’t let the profiteering people get away with systematically destroying legitimate owners’ homes.’

Source: The Straits Times, 30 May 2007

Ruling will save companies taxes

Filed under: Tax Matters — Propertymarketupdates @ 4:55 pm

Companies which have plant and machinery used for manufacturing, processing or other industrial purposes may be able to save tax dollars following a High Court decision, tax lawyer Tan Kay Kheng says.

As a result of the ruling, they may not have to pay property tax based on an annual value enhanced by the value of the plant and machinery.

Companies which have pipelines that extend beyond their premises also do not have to pay property tax for them, says Mr Tan, who heads WongPartnership’s tax practice.

Last week, the High Court said that district cooling service company First DCS does not have to pay property tax for the machinery in its building. The machinery includes generators, transformers, a cooling tower system and a 4km underground pipeline system that extends beyond the boundaries of its premises.

The court found that the legislative aim of a section in the Property Tax Act, Section 2(2), is to encourage investment in plant and machinery for manufacturing, processing and other industrial purposes.

It also found that the machinery which produces chilled water and sends it to customers and back through the pipeline system comes under one of the exclusions provided by S2(2) of the Act. The section sets out the instances when machinery can be excluded from the annual value of the premises it is on.

First DCS produces chilled water for the air-conditioning needs of other buildings in Changi Business Park.

In any case, even if the machinery is not excluded from property tax under the Act, the court found that First DCS does not have to pay tax on its pipelines through which water is sent to customers and back.

This is because even though the pipelines are part of First DCS’s machinery, they extend beyond its premises and are used by its customers. In fact, the 4km pipeline system also improve its customers’ property in providing them district cooling services.

Mr Tan, who represented First DCS with colleague Leung Yew Kwong, says that the decision by the High Court saves the company about $200,000 in taxes per year.

He says that the decision is not limited to companies in the same industry and would certainly benefit companies in any industry where their plant and machinery is really for manufacturing, processing and industrial purposes.

Source: The Business Times, 30 May 2007

Greed or just human nature?

Filed under: Community Voices — Propertymarketupdates @ 4:49 pm

DEAL NO DEAL DEAL NO DEAL (Property sellers keep changing minds as they hold out for more cash)

He was all set to rent a unit in a condominium in the east.

And had already agreed on the rental amount set by the owner.

Then the owner changed his mind and wanted to sell it instead.

IT consultant Ryan Lim consulted his wife and they agreed on the asking price of $430,000.

But the owner changed his mind again. He decided not to sell after all.

Mr Lim, 32, said: ‘We were upset because I thought we had an agreement. He put us through so much trouble and wasted all our time and effort.’

The owner wanted to rent the unit out for $1,800, but Mr Lim decided not to take up the offer.

He said: ‘It’s a matter of principle. I refuse to deal with anyone who can’t keep their word.’

Mr Lim then found a 1,500 sq ft unit in that same development, and was willing to match the asking price of $550,000. But he said the seller upped the price to $570,000.

EXASPERATED

A similar-sized unit was sold for $485,000 last month.

He has given up on the second property and is now in discussion over a third one in the same estate.

Said an exasperated Mr Lim: ‘It’s really frustrating looking for a place now. It seems like the sellers are either not sincere about letting go of their place or they’re just plain greedy.’

In Mr Lim’s case, there was only a verbal agreement. So, legally, there’s nothing a buyer can do, property agents said.

However, industry watchers said that this take-it-or-leave-it attitude by the sellers has been frustrating buyers and property agents in the last couple of weeks.

Property agents whom The New Paper spoke to claim deals are now more difficult to close because sellers keep changing their prices and minds.

It’s reminiscent of the run-up to the property peak in 1996, although this time, the phenomenon seems more rampant, they said.

This is happening not just in private properties in prime districts 9, 10 and 11, but those in the suburban areas as well.

So are sellers getting more greedy and unrealistic went it comes to pricing their units?

Property agent Sally Kong said she encountered three such sellers in a week earlier this month.

She said: ‘Even though I had willing buyers, the owners suddenly increased their asking prices. It frustrates the buyers and also agents who can’t close the deals.

‘In one case, I had already received the buyer’s cheque and was doing the paper work when the seller called and said, ‘My heart was beating very fast this morning. I think God is telling me that I should wait for a month later and then sell’. Can you imagine that?’

ERA assistant vice-president, Eugene Lim, described it as the ’shifting goal-post’ syndrome.

He explained: ‘We had one seller who increased his asking price without any rational reason. The agent asked the seller how he arrived at the new price and he said ‘because my brother said we can sell for this amount’.

‘It’s just ridiculous when people increase their prices based simply on emotions.’

Dennis Wee Properties director Chris Koh said: ‘The market is moving and these sellers know that. It could be greed stepping in. That’s why they keep increasing their prices. But there are also some who are just testing the market.’

Mr Eugene Lim warned that sellers should be realistic about their properties.

‘Every property has its own attributes such as location and ambience. You can’t read about the premium properties and just assume it applies to your place. Yes, the market may be doing well but you also have to be reasonable about your asking price.

‘The euphoria has created an unrealistic state of mind for some people.’

RECORD HIGH

En-bloc deals hit a record high of $6.38 billion up to 15 May this year, just 18 per cent shy of the $7.75 billion record achieved for the whole of last year, according to figures from Jones Lang LaSalle.

Housing loans by Singapore banks also reached $64.3 billion in March, the highest on record so far, according to a Business Times report earlier this week.

Meanwhile, in the HDB market, expatriates are also having problems getting a flat to rent due to a supply crunch and picky landlords, according to the Sunday Times.

One expatriate said that whenever he viewed flats, there would be at least 10 other expats viewing the same unit at the same time.

And these sellers also forget that they could sabotage their own deals with their unreasonable prices because it may not match the bank’s valuation.

For example, if the seller wants

$1.2 million for his place, but if the bank’s valuation is only $1 million and they’re willing to lend only that amount, the buyer will have to cough up the remaining $200,000 in cash.

Mr Eugene Lim said: ‘For those buying properties in the $1 to $2 million bracket, the bank’s valuation is very important. The buyers won’t pay too much above valuation unless the place has very good attributes. And most people still need bank loans to buy property.’

For one seller though, it’s just a waiting game for him.

Business development manager Roy Wee, 39, is now considering offers for his 1,130 sq ft condo unit in Serangoon.

The last transacted price was about $470,000 for a similar same unit last month and he is asking for about $500,000 now.

He said: ‘I’ve turned down a few offers because I believe prices will go up even more. I don’t mind waiting because it’s no loss to me.’

Source: The New Paper, 29 May 2007

I regretted asking for more

Filed under: Community Voices — Propertymarketupdates @ 4:49 pm

In 2001, property agent Daniel Chua, 48, was offered $1.13 million for his 1,700 sq ft terrace house in Bedok.

It was a good price, he reckoned, considering that he paid $970,000 for the place in 1998.

A similar-sized unit near his place was sold for $750,000 in 2000.

Mr Chua thought he would never be able to recoup his losses.

But when the property market recovered briefly in 2001, he got the offer. But he wanted more for his freehold property.

He said: ‘I thought the person would pay $1.15 million so I asked for more. In the end, the buyer got angry with me and decided not to buy. I would have settled for $1.13 million and I really regretted opening my mouth.’

To make things worse, a neighbouring unit was sold for about $740,000 later that year.

Today, a wiser Mr Chua cautions against making unreasonable demands to buyers.

He said he’ll now consider offers above $1 million for his place, even though he’ll still suffer a loss after taking into account his bank interest of about $300,000, and the $180,000 he spent on renovation.

That is still lower than the $1.13 million he was offered six years ago.

Source: The New Paper, 29 May 2007

The deal’s sealed only when you sign

Filed under: Legal Ground — Propertymarketupdates @ 4:46 pm

What can a buyer do when he is given the roundabout by the seller?

He can’t do anything, property agents said.

So long as the seller has not received the buyer’s cheque (with the 1 per cent option fee) and signed the option to purchase agreement, the deal is not on.

This agreement usually provides buyers with an option period of two weeks to consider their prospective purchase.

Once the buyer exercises this option, a binding contract is entered into between the seller and buyer for the sale and purchase of the property.

In today’s sellers’ market, either you walk away from a potential bidding war and look elsewhere or you just have to meet the seller’s price, said property agents.

Dennis Wee Properties director Chris Koh said: ‘In this case, the buyer is basically at the mercy of the seller. The buyer has to move quickly and offer more to seal the deal. There’s no point negotiating.

‘If you don’t have the option to purchase agreement, there’s no deal.’

But once the seller signs the agreement, the deal has to go through.

If the seller changes his mind, the buyer can sue for the transaction to go through or claim for damages, said MrKoh.

For instance, if the seller changes his mind about selling his $1 million property, the buyer can buy a similar unit for $1.1 million and try to sue the seller for the difference.

Source: The New Paper, 29 May 2007

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