DAILY MARKET UPDATES 11th August 2008

Property market haunted by Hungry Ghost?
Maybe not
The past few years have shown that practicality largely overrides superstition when buyers are presented with attractive options. The property market was active last year during the Hungry Ghost. Market watchers say this year’s festival appears to be having a more significant impact as it is largely weak sentiment causing the current quiet market. Savillis Singapore said that generally people are not keen to commit so developers are not launching but there are still many individual sellers. Colliers International commented that buyers might be kept away by the bad news but some sellers have become more realistic after waiting in vain for half a year for the market to pick up. When the sentiment is poor buyers will ask for discounts regardless of the period. They will use the sub prime crisis slower economic growth and so on to ask for discounts. A reasonable discount would be around 5 to 10%. Owner occupiers can look for older developments which are typically realistically priced or check out developments that have obtained TOP.

- The Sunday Times, P24


Private home prices starting to dip
Local market is trading at a higher range based on the country's rosier long-term prospects. Prices are being kept up partly by low mortgage rates and the ability of developers flush from last year's bumper returns to hold off launching new flats. However, new sales have slowed significantly, and prices are starting to reflect this. URA showed that private home prices inched up just 0.17% in Q2 and well below the 3.8% in the Q1. Market watchers say with price growth disappearing amid sluggish demand, a downtrend seems inevitable. Chesterton International commented that any correction is likely to be gradual as interest rates are low and the economic outlook is not that bad. Home prices will take a long time to fall because the decline is being led by individual investors. They will be forced to sell when their rentals cannot meet mortgage payments. Investors who bought low under the deferred payment scheme will be able to sell below developers' asking prices and still make a profit. If the market remains weak in the next 6 months, prices could easily fall 20% to 30% with the high-end sector bearing the brunt. Savills Residential said this is an unlikely scenario here as fundamentals have been good and look to remain stable. - The Straits Times, P3
Hope for owners fighting en bloc
A forum, https://webmail.fareast.com.sg/exchweb/bin/redir.asp?URL=http://www.hope4stayers.com/, was set up by people who are worried about losing their homes in a collective sale. The Hope group's objective is to minority owners with information about the en bloc process so they can fight to keep their homes. The site started in February with about 5 or 6 members from estates on the chopping block. Today, it has a core group of 25 flat owners scattered in 15 estates which include Bayshore Park, Green Lodge and Pine Grove. The website includes a compilation of the collective sales law, legal tips for minority owners and a list of confirmed, on-going and failed en bloc deals. - The Straits Times, P4
US law firm opens S'pore office, its 5th in Asia
US law firm O'Melveny & Myers LLP announced that it has opened an office in Singapore. The Singapore office - O'Melveny's fifth and newest in Asia - will start off with a focus on the finance, merger and acquisition, private equity, restructuring and distressed investment, and capital markets. The office will service the greater South-east and South Asia markets.
- The Business Times, P14

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