RESIDENTIAL MARKET
Domestic buys behind world home price hike
CITIES experiencing strong domestic demand for homes, such as Hong Kong, Moscow, London and Singapore, recorded the strongest growth in home prices in the first six months of the year. Hong Kong registered the sharpest jump in prices to top the chart as the most expensive city to buy a home in.
The report, which studies 10 of the world's leading cities, showed that the strongest price growth was reported in places with buoyant domestic demand, while international investor cash retreated to a few core markets with established, long-term investment credentials.
Singapore, which has been trying to cool its property market, recorded a more modest 1.5 per cent jump in the capital value of its homes in the first six months of this year from the end of last year, compared with a 3.6 per cent rise in the second half of last year. It was fifth in the list of cities that registered the highest jump in home prices.
Data from the Urban Redevelopment Authority (URA) released in July showed that developers had sold 11,928 private homes excluding executive condos (a public-private housing hybrid) in H1 2012 - three-quarters of the 15,904 units they sold in the whole of 2011. Analysts predict a full-year 2012 tally of 18,000 to 22,000 units, surpassing 2010's record of 16,292 units.
URA's benchmark private home price index rose 0.4 per cent in Q2 from the previous quarter, after declining 0.1 per cent in Q1.
Source: Business Times – 11 September 2012
INDUSTRIAL MARKET
URA keeping an eye on industrial sector
THE authorities are keeping a close eye on the transparency of marketing material in the hot new area of industrial property.
The Urban Redevelopment Authority (URA) says it may look at extending to the industrial market the practice in the residential sector of ensuring buyers get detailed information on floor areas.
It has also urged developers of commercial and industrial properties to provide more information to buyers to help them make their decisions.
Some investors are unhappy that property agents market the total floor area of some strata-titled industrial properties - which includes void areas - even though this space often cannot be used.
While it is legal to include void areas in advertising, URA wants to ensure buyers get clear information, especially as less sophisticated investors enter the market.
Experts say void areas are often found in high-ceiling units, giving owners the option to double the floor area, as a mezzanine level can be built in some cases.
Some developers, therefore, base the per sq ft (psf) price of an industrial unit on the total floor area - which includes the gross floor area and other areas such as air-con ledges and void space.
But confusion arises when the developer has maxed out the total gross floor area of a project and a buyer will not be able to build the mezzanine level after all, even after paying for the void space.
Experts say selling void space like this is allowed. However, buyers must be clearly informed about what exactly is usable area, especially now that many retail investors have entered the industrial market in response to residential cooling measures.
A URA spokesman said that advertising units for sale based on total area does not give prospective buyers a clear picture of the gross floor area of the property.
In private housing developments, rules require developers to give a detailed breakdown of key areas in a unit, such as bedrooms, balconies and bay windows.
"Traditionally, industrial and commercial property buyers are more sophisticated and discerning investors from the business sector," the URA spokesman added.
"We have, therefore, not amended our rules to mandate a more detailed breakdown of floor areas... We are monitoring public feedback to see if there is a need to do so."
Source: The Straits Times – 11 September 2012
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