S'pore property prices drop by 12.1 percent

S'pore property prices drop by 12.1 percent

SINGAPORE (AFP): Singapore property prices fell by an average of 12.1 percent in 1997, a land management agency said yesterday amid fears that many new developments would be frozen this year due to a glut and an economic slowdown.

The Urban Redevelopment Authority (URA) said prices in the private residential sector fell 12.5 percent, with landed property prices falling 11.3 percent, and non-landed properties declining 13.4 percent.

Prices of commercial properties fell 11.3 percent while industrial property prices were down 4.7 percent last year.

The statistics added to the gloom in the sector following reports that up to 70 percent of new housing launches in Singapore could be postponed this year, and that developers were delaying payments for state-owned land parcels.

In a statement yesterday, top developer Far East Organization confirmed that it had asked the URA for a deadline extension of the remaining 75 percent of 363 million Singapore dollars (US$226 million) owed for three sites.

But it vowed to pay the balance when it is due and stressed that it was "not the first developer to seek such an extension," adding that "we wish to dispel all malicious rumors" that Far East was unable to pay the balance.

The Straits Times newspaper reported yesterday that delayed development launches would cut the number of new private homes to fewer than 10,000 units but would still leave a 20,000-unit oversupply.

"Some entire projects are also being put in cold storage," Philip Ng, chief executive of Far East, was quoted as saying.

Speculation was rife last month that Far East-related property groups in Hong Kong and Singapore had defaulted on loans. Their stock counters dropped despite repeated denials by Far East.

Two other Singapore developers are also said to have received similar extensions from the Urban Redevelopment Authority.

This is believed to be the first time since the mid-1980s property glut here that developers have been allowed payment extension on state land sales. The current extensions carry a nine percent per annum interest charge.

Ng of the Far East group said most developers were staggering their launches this year.

Another property heavyweight, City Developments Ltd., was also reviewing its property launches in view of the current market conditions, the newspaper said.

Real Estate Developers' Association of Singapore President Daniel Teo was quoted saying that private residential prices had slipped 20-to-30 percent since anti-speculation measures were introduced here in May 1996.

He said that it might take "another year or so before prices settle down."

Singapore's residential property market has been increasingly battered over the last year in the face of a supply glut and the region's economic woes.

Market confidence has been dampened by the plunging property and stock markets, rising interest rates and volatile regional currencies.

A recent report by international property consultancy Richard Ellis said that close to 10,000 new housing units were launched in 1997, while the total number of new units sold was estimated to be 5,500 units.

According to data from the URA, there were 15,661 unsold units at the end of the third quarter of 1997.