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.