50% Discount?

The owner bought the 3.3k sf hse in 2006 at US$90m. However, as mkt continues to fall, the hse near Victoria Peak, one of the most prestigious addresses in Hong Kong, was sold at HK$76m which was less than half its asking price of HK$190m.

Analysts are expecting a 30% drop in prices for the city's high-end properties as banks tighten mortgage policies.

* AsiaOne-HK *

High-end Projects Hardest Hit

A DTZ report showed tt prices of some high-end projects launched in 2006 & 2007 have started to dip in 3Q07 and are now 4 - 26% lower than their highs.

Based on a low caveat of abt 10 transactions/project, Oceanfront @Sentosa Cove dived 26.4%, whereas Scotts Sq fell by 3.6% only.

Knight Frank's in-house data indicated abt 12% fall in prices for luxury properties in prime districts since early 2008. The drop is more than the expected 10%.

Official data for the core central region in 3Q08 showed a dip of only 2.7% bcos it takes into account all properties.

Banks used to give up to 80% loan to investors in 2006 & 2007. But now, this amount has reduced to 60 - 70%. With more projects going TOP soon, investors may want to sell their properties fast and drive the prices even lower. But most agents have yet to see fire sales.


Source: DTZ

* AsiaOne - High-end *

3Q08 Real Estate Data

Prices:
(A) Pte Residential: -2.4% (LastQ: 0.2%)
- (i) Non-landed: -2.5% (LastQ: 0.1%)
- (ii) Landed: -1.9% (LastQ: 0.6%)
(B) Commercial
- (i) Office: -3.9% (LastQ: 0.7%)
- (ii) Shop: -0.3% (LastQ: 0.7%)
(C) Industrial: 0.9% (LastQ: 4.1%)

Rental:
(A) Pte Residential: -0.9% (LastQ: 2.5%)
(B) Commercial
- (i) Office: -0.8% (LastQ: 6.3%)
- (ii) Shop: -0.6% (LastQ: 5.2%)
(C) Industrial: 0.1% (LastQ: 2.3%)

Supply:
(A) Pte Residential:
- (i) Uncompleted: 66,422 units (LastQ: 67,569)
- (ii) Unsold: 42,918 uncompleted units
- (ii) Launches: 2,244 uncompleted units (LastQ: 1,814)
[Livia @Pasir Ris, Clover by the Park @Bishan, Beacon Hts @Mar Thoma Rd]
- (iii) Sold: 1,452 uncompleted and 106 completed units
- (iv) Sub-sales: 492=11.5% of all sales (LastQ: 518=12%)
- (v) TOP: 2,195
[The Sail @Marina Bay, The Cosmopolitan @Kim Seng Rd]
- (vi) Vacancy rate: 5.8% (LastQ: 6.1%)

(B) Commercial
- (i) Office: 1,407k sqm GFA (LastQ: 1,334k sqm), Vacancy rate: 8.2% (LastQ: 7.8%)
- (ii) Shop: 731k sqm GFA (LastQ: 668k sqm), Vacancy rate: 6.3% (LastQ: 6.3%)

(C) Industrial
- (i) Total supply: 4.80m sqm GFA
- (ii) Vacancy rate: 6.6% (LastQ: 6.9%)



Source: URA

HDB
- RPI: 4.2% (LastQ: 4.5%)


Source: HDB

* URA-RealEst , HDB-ResalePx , HDB-COV , HDB-Rental *

Troubled US Homes

More and more Americans' homes are worth less than the mortgages that they have taken, and may threaten the US economy with another wave of foreclosures and bankruptcies.

This number has increased from 6.6m homeowners last yr to abt 12m now, and is expected to increase with home prices continue to fall. If these houses go into foreclosure, the oversupply of homes will delay housing mkt recovery and add pressure on banks.

Many people got into trouble when they refinanced their mortgages when property values rose, to pull out cash to support their lifestyles; and now with a mortgage worth more than their homes, some choose to walk away and return their keys to the banks.

For those who bought US homes in early 2003, nearly 1 in 3 now have -ve equity; and nearly half of the buyers in 2006 are under water now.

* ST-US Mortgages *

Prices of High-end Condo Are Falling

High-end apartments are selling at discounted price as stock market losses have forced some owners to dump their properties. The situation is worse for those under deferred payment scheme and are not eligible for loans as they have to make payment upon TOP.

Last yr, one owner sold his 29th flr unit at Twin Regency for $1.4m. But recently, he was selling his 27th flr unit at $1.05m even though it could fetch $1.3m. The Sail @Marina Bay, which were selling for $2k psf, are now selling at $1,450 psf. But buyers are asking for $1,100 psf.

* AsiaOne-Condo *