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HDB demand gathers steam on a dream

Day One of latest BTO sees strong demand; new flat supply totals 6,500

WHEN the original Punggol 21 vision was unveiled 13 years ago, enthusiasts who bought homes in the sleepy estate became disillusioned when the model waterfront living failed to materialised and facilities were slow to appear.

But then the dream was revived with a bang two years ago – and since then, interest has been strong, with recent HDB Build-To-Order (BTO) projects seeing robust demand.

Yesterday was a case in point: The HDB launched 769 new Premium units under its BTO system, and by 5pm there were already 408 applications for the 615 four-room flats, and 185 applications for 154 five-room flats.

At previous BTO launches, such as Punggol Regalia in January and Punggol Arcadia last November, units were roughly three times oversubscribed.

ERA Singapore says Punggol features among its top five choice locations for resale five-room flats.

“The main draw is that the flats are affordable and (fairly) new,” said its Asia-Pacific associate director, Eugene Lim.

He noted that five-room flats in the estate were “struggling” with a selling price of $300,000 before Prime Minister Lee Hsien Loong’s announcement of the Punggol 21+ plan in 2007.

Now, those flats “easily” sell for $400,000 each, said Mr Lim. But even so, they are easier on the pocket than flats in mature estates.

According to data from Dennis Wee Group, a five-room resale flat at Toa Payoh Lorong 1 is valued at $520,000 – while a five-room resale flat at Punggol is valued at $390,000 to $410,000.

Much of the demand for Punggol resale flats is from permanent residents (PR), making up 40 per cent of PropNex’s sales in the estate, said chief executive Mohamed Ismail. “PRs don’t mind its (far-flung) location and they realise the benefits of a new estate,” he told Today. “They also don’t have any emotional attachment to mature estates, unlike Singaporeans.”

Not far from resale prices

But with the Government pushing out new flats in Punggol, would this put a downward pressure on resale flat prices in the area?

The supply at Punggol Residences launched yesterday brings total new flat supply in the estate to 6,500 since the unveiling of estate revitalisation plans in Aug 2007.

Property agents do not seem to think so, as BTO projects are targeted at first-time flat-buyers who can wait a few years for completion. Many who buy resale flats are looking to move in within three to four months.

Mr Mohamed Ismail further notes, the prices at Punggol Residences are just “marginally” lower than those of resale flats in the estate. He cited recent valuation figures of four-room resale premium units going for some $320,000, and five-room resale premium units going for up to $420,000.

Punggol Residences flats are priced at $264,000 to $322,000 for four-room and $344,000 to $409,000 for five-room units.

If market anticipation of the Punggol 21+ concept is anything to go by, prices are expected to remain steady, the analysts told Today.

“Punggol is basically a blank sheet of paper, it doesn’t have the clutter of mature estates so there’s a lot of scope for planners and Government to do many things as they bring about the waterways and so on,” said ERA’s Mr Lim. “I am sure it will be a very happening place in the future.”

Punggol resident Faith Toh is holding out hope for that vision. She and her husband bought into the original Punggol 21 idea when they shelled out for their executive flat seven years ago.

Launched in 1996 by then Prime Minister Goh Chok Tong, Punggol was to have been a model waterfront town with modern amenities such as watersport centres, clubs and libraries. But the 1997 Asian Financial Crisis and construction industry problems in 2003 put a crimp on plans.

“We thought when it becomes like East Coast or Tampines, it’ll be like living in town without having to go downtown,” said Ms Toh. Even now, she said, going home to Punggol’s “pretty” landscaping “feels like you’re staying in a resort”.

Source: Today, 31 July 2009

A late night property ballot … is this a sign of the times?

The showflat was only due to open today.

But on Monday, some, mostly property agents, were already lining up for units at the Optima condominium at Tanah Merah. They went home after developer TID made it clear the queue would not be recognised.

However, this did not stop hundreds from turning up early yesterday – leading to a massive queue and the occasional ugly spat over queue-jumping. The result? TID decided, at about 8pm, to open the showflat doors and, unusually, kick off open balloting.

The process began after 11pm last night and carried on well into the wee hours of the morning. Successful applicants paid the 5-per-cent deposit on the spot.

This came just a day after National Development Minister Mah Bow Tan had warned the Government would take action should property market speculation get excessive. Yet, it was apparent many aiming for a unit at the 99-year leasehold project yesterday were buying for investment.

For instance, a 62-year-old woman, who beat six other bids to snag a unit, told Today she was likely to rent it out.

Other buyers and property agents also said they or their clients were looking at a good investment, as the development was near the Changi Business Park, next to an MRT station, likely near the future fourth university, and was affordable – prices averaged $790 per square foot.

In all, 120 units were allocated yesterday, including some in the morning at a preview for staff and guests. Today understands that another 100 will be released today.

Asked why TID – a tie-up between Japan’s Mitsui Fudosan and Hong Leong Group – did not simply stick to the original launch today, Mr Gerry de Silva, spokesman for Hong Leong, said the big crowd was a factor, as was feedback from agents that they had “very interested” buyers with cheques ready.

“If we stick to our word, it may be good, but is it practical?” he told Today.

And the balloting, he said, was to “differentiate the genuine buyers” from the browsers. TID had earlier been pondering alternatives to the first-come-first-served system, he added.

Source: Today, 31 Jul 2009

A bubble that’s a gleam in specuvestors’ eyes

Mah Bow Tan’s caution aimed at averting pain later, property market watchers say

(SINGAPORE) Better to suck out the froth now than to burst the bubble later – that was what market watchers saw as the government’s intention in warning against rash property purchases.

National Development Minister Mah Bow Tan said on Wednesday that there are signs of speculation in the property market, and the government will act if it overheats. He also urged home seekers to buy only within their means.

On the surface, the message may seem puzzling. By most accounts, speculators from the boom years – those who ‘flipped’ their freshly bought units in the subsale market for a quick profit – have yet to make a huge comeback. Price increases have surfaced only at some projects, while several others still registered price falls.

At CapitaLand’s results briefing yesterday, group president and CEO Liew Mun Leong also observed that home demand is ‘healthy’, supported partly by home seekers whose estates were sold en bloc.

But dig deeper and the cause for concern becomes more apparent. Some industry watchers acknowledge that a group of ‘specuvestors’ is emerging. These are buyers who are prepared to keep and lease out their properties over the longer term, but are also open to selling them for capital gains if the opportunity comes along.

Although Singapore’s economy is shrinking, several factors are working in specuvestors’ favour. Notably, interest rates on bank loans are low, and more small apartments going for less than $1 million have become available. Many of them are also lucky enough to still have jobs, and some could have made a killing from the recent stockmarket rally.

These investors, together with genuine homebuyers, have raised market activity to a level that authorities feel is out-of-sync with weak economic fundamentals. The fear? That some would not be able to repay their loans if they lost their jobs, or if banks raised mortgage rates in the future.

‘I have seen sufficient cases in my Meet-the-People sessions, where people have over-committed and now find themselves in difficulty,’ Mr Mah recounted on Wednesday.

CIMB economist Song Seng Wun said in a note on Wednesday that Singapore’s Q2 09 jobless rate is expected to cross 5 per cent. The unemployment rate for Singaporeans and permanent residents rose to 4.8 per cent in Q1.

Falling rentals would also test buyers’ ability to support home loans, said Chesterton Suntec International’s research and consultancy director Colin Tan.

So to several industry watchers, the government is sounding a note of caution, just in case. As a developer told BT: ‘What if the green shoots turn brown?’ The formation of a bubble – particularly on shaky ground – would require overt intervention and the consequences are unlikely to be pretty.

Take a look back at 1996, when the government introduced a surprise anti-speculation package to curb sharp spikes in private home prices. Tighter credit, a tax on gains and higher stamp duty caused sentiment to sink and transaction volumes to plunge. This is history that most would not want to see repeat itself.

The key is whether the government’s words will help calm the buying frenzy at this stage. Here, views are mixed.

Some people may cool off, said Wheelock Properties (Singapore) CEO David Lawrence. ‘I think (Mr Mah is) more focusing on the greedy people who overgeared, took on too many liabilities, and he’s just saying ‘be careful’ . . . I think that’s a reasonable message to the market.’

But some also think the buying will continue as long as money from savings, banks or stockmarket winnings is around. A developer also suggested that a few people might bring forward their purchases in anticipation of anti-speculation measures coming on. ‘Singaporeans are a bit ‘gan cheong’ (panicky),’ he joked.

At Optima, where people started queuing days before the showflat was due to open, developer TID has conducted a ballot for the 120 units planned for release. All units have been tentatively accounted for with prices starting from $790 per square foot. TID is a tie-up between Hong Leong Group and Mitsui Fudosan. A Hong Leong spokesman said that the balloting process helps to sieve out genuine buyers and the crowds have thinned. BT understands that there were already plans to conduct a ballot when a queue first formed, before Mr Mah spoke to the press on Wednesday.

Market sources also say that around 80 units have been sold at Centro Residences, out of around 110 released.

Source: Business Times, 31 July 2009

CapitaLand reports loss, issues $1.1b in bonds

PROPERTY giant CapitaLand yesterday posted its first quarterly loss in six years and announced plans to raise $1.1 billion by issuing convertible bonds.

The money raised will be used primarily to refinance existing debts, said South-east Asia’s largest developer. Any balance left over will go towards new investments and working capital. The firm announced a $156.9 million loss for the second quarter yesterday morning, its first red ink since the last quarter of 2003.

This was down from a net profit of $515.2 million in the same quarter last year. It was due to revaluations and impairment provisions for its office assets in Singapore, property in Australia and the former Char Yong Gardens estate here, CapitaLand said.

At 10pm, the developer issued a statement saying it plans to issue $1.1 billion in convertible bonds, which can be converted into new ordinary shares. The issue will be placed with institutional and sophisticated investors.

The latest bonds bear a coupon rate of 2.875 per cent per annum, lower than the previous two issues. This is not surprising given the low interest rate environment, which may be behind CapitaLand’s decision to issue bonds now. Their conversion price is $4.79, a 20 per cent premium over yesterday’s closing price.

This bond issue is CapitaLand’s fifth and its third billion-dollar one in three years, following a record $1.3 billion bond issue in February last year and another $1 billion bond issue in May 2007. In February this year, CapitaLand also launched a one-for-two rights issue to raise $1.84 billion, which the firm said would allow it to pursue acquisitions and other investment opportunities. Yesterday, the developer said it had a cash position of $4.2 billion as at the end of last month and maintained a net debt-to-equity ratio of 0.43.

But CapitaLand has had to meet cash calls from some businesses. On Monday, it said it would inject A$281.6 million (S$333 million) into its Australian unit Australand by taking up all its allotted shares in Australand’s latest rights issue.

Australand, which posted a net loss of A$268.8 million in the first half of the year, said the money would help strengthen its balance sheet as it goes into a challenging second half. For the Singapore property market, however, things are looking up, said CapitaLand chief executive Liew Mun Leong yesterday morning.

He believes the exuberance in the market could send prices up about 5 per cent to 10per cent by the year end and into next year.

Mr Liew told a results briefing that demand for private homes is in a healthy state at the moment and it does not appear there is a bubble forming.

‘If people are buying homes only as investment tools, then it’s a different story,’ added Mr Liew, who pointed to demand from newly-weds needing homes and affordability as drivers of the recent buying activity.

He added that CapitaLand has been waiting on the sidelines while other developers launched projects to capitalise on the renewed buying interest.

The firm is waiting ‘to pull the trigger at the right time’, said Mr Liew. It will launch projects at the former Gillman Heights in Alexandra Road and the former Char Yong Gardens in Cairnhill for sale by the end of this year.

CapitaLand has seen strong buyer interest at the relaunch of The Wharf Residence, where 94 per cent of the 173 apartments have been sold, he added.

While the immediate future looks rosier than it has been for months, the second quarter was painful for CapitaLand.

Apart from revaluation and impairment costs, revenue also declined: It was down 27.9 per cent to $591.1 million for the three months to June30. Excluding revaluation and impairment costs, profit during the quarter was $124 million.

China continued to be a growth area, with healthy sales from new launches in Beijing, Chengdu and Foshan. In Vietnam, the group sold more residential units at The Vista in Ho Chi Minh City. Loss per share for the second quarter was 3.7 cents, down from earnings per share of 15.1 cents a year ago, while net asset value stood at $2.86, down from $3.78 as of Dec 31.

For the first half, the firm lost $114.1 million compared with a net profit of $762.7 million last year. Revenue dropped 25.7 per cent to $1.08 billion.

CapitaLand’s stock, which has jumped about 55 per cent this year, closed 1 cent down at $3.99 yesterday.

Source: Straits Times, 31 July 2009

HDB launches 769 new flats in Punggol

Premium development includes 154 five-room flats, 615 four-roomers

THE Housing Board has launched a premium project offering 769 new flats in Punggol in a bid to build up critical mass in the estate.

The new project, called Punggol Residences, offers 615 four-roomers and 154 five-room flats in a central location just five minutes from Punggol MRT station.
HDB is launching the project under its build-to-order (BTO) scheme – flats are built only when certain demand is reached.

It has so far offered about 6,500 new flats in Punggol since it unveiled grand plans for the former fishing village to become the only waterfront public housing project in August 2007.
This is in line with the board’s commitment to build up the population in the estate to attract and support new facilities, it said.

Punggol Residences is a premium development with enhanced architectural designs, interior fittings and landscaping, said HDB.

Four-room flats of 91 to 96 sq m are going for $264,000 to $322,000, while five-roomers of 114 sq m are on sale from $344,000 to $409,000.

According to HDB, premium resale flats in the vicinity are selling for a pricier $330,000 to $350,000 for four-roomers and $380,000 to $439,888 for five-roomers.

PropNex chief executive Mohamed Ismail said that, despite the higher prices, resale flats might still be more attractive given that buyers can enjoy a CPF housing grant of up to $80,000 depending on their income, and do not have to wait three years for new flats to be built.
On the other hand, buying new flats direct from HDB will attract those who prefer not to fork out any cash for resale flats.

This amount, known as cash-over-valuation, has started creeping up for premium resale flats in Punggol to about $15,000 to $20,000, noted Mr Ismail.
As of 5pm yesterday – the latest update from HDB – 593 applications for the 769 flats have been received.

Applications for the new flats can be submitted online at HDB’s website www.hdb.gov.sg until Aug 12.

Source: Straits Times, 31 July 2009

HDB launches 769 new flats in Punggol

THE Housing Board has launched a premium project offering 769 new flats in Punggol in a bid to build up critical mass in the estate.

The new project, called Punggol Residences, offers 615 four-roomers and 154 five-room flats in a central location just five minutes from Punggol MRT station.

HDB is launching the project under its build-to-order (BTO) scheme – flats are built only when certain demand is reached.

It has so far offered about 6,500 new flats in Punggol since it unveiled grand plans for the former fishing village to become the only waterfront public housing project in August 2007.

This is in line with the board’s commitment to build up the population in the estate to attract and support new facilities, it said.

Punggol Residences is a premium development with enhanced architectural designs, interior fittings and landscaping, said HDB.

Four-room flats of 91 to 96 sq m are going for $264,000 to $322,000, while five-roomers of 114 sq m are on sale from $344,000 to $409,000.

According to HDB, premium resale flats in the vicinity are selling for a pricier $330,000 to $350,000 for four-roomers and $380,000 to $439,888 for five-roomers.

PropNex chief executive Mohamed Ismail said that, despite the higher prices, resale flats might still be more attractive given that buyers can enjoy a CPF housing grant of up to $80,000 depending on their income, and do not have to wait three years for new flats to be built.

On the other hand, buying new flats direct from HDB will attract those who prefer not to fork out any cash for resale flats.

This amount, known as cash-over-valuation, has started creeping up for premium resale flats in Punggol to about $15,000 to $20,000, noted Mr Ismail.

As of 5pm yesterday – the latest update from HDB – 593 applications for the 769 flats have been received.

Applications for the new flats can be submitted online at HDB’s website www.hdb.gov.sg until Aug 12.

Source: Straits Time 31 July 2009

No property bubble forming, say developers

They say buying frenzy hasn’t reached point where Govt needs to intervene

PROPERTY developers are enjoying the surge in interest from buyers but they do not believe that speculation has reached a stage where the Government needs to step in.

They also maintain that the prevailing economic conditions will begin to cool the buying frenzy and stop a bubble forming in its tracks.

‘It’s not a bubble, it’s just a blister after the pain we experienced in the global financial crisis and it comes before a recovery,’ said Cushman and Wakefield managing director Donald Han.

But some developers and industry insiders acknowledge that the comments from National Development Minister Mah Bow Tan this week are timely.

Mr Mah cautioned about a bubble forming, hinted at intervention if speculation got out of hand and advised buyers to tread carefully and not charge headlong into the market.

‘The Government’s message is quite clear: Don’t rush as there is a lot of supply coming onstream,’ said Sing Holdings chief executive Lee Sze Hao.

‘It’s good as a reminder so that people do not over-buy, over-chew. Developers do not want irrational exuberance,’ said Mr Han.

A property consultant who declined to be named told The Straits Times: ‘There shouldn’t be panic-buying. Buyers may pull back a bit, not knowing whether the Government will step in or not. The fact is that the Government has opened its mouth; it can do things indirectly.

‘But if the market hype continues to rise, they will have to do something.’

Many feel the hype, which centres on several condominiums, will likely be short-lived amid a recession.

‘Inevitably, there will be speculative buyers, but they are for the smaller units…If the market is too speculative, you build up a bubble and that’s not real demand,’ said Mr Lee.

The market is seeing cashed-up investors ready to spend, which is different from speculators looking to buy another apartment to make a quick buck, he said.

The Government will do something only if there is a queue at every project and every unit is snapped up, he added.

The Real Estate Developers Association of Singapore (Redas) pointed out on Wednesday that only a selected few launches have been highly successful for various reasons.

Buyers have certainly been out in droves visiting the new showflats and buying new homes off the plan. Queues have been forming and developers have raised prices in response.

The interest was evident last night at Tanah Merah, where crowds gathered at the 297-unit Optima showflat although the public launch is scheduled for today.

The response was so strong that the developer TID held a ballot at midnight for about 300 genuine buyers who were queueing outside the showflat earlier so they did not have to stay overnight.

They had submitted cheques together with their application form by 9.30pm for the 120 units on offer at an average early-bird price of $790 per sq ft (psf), said a spokesman.

Another suburban launch, the 329-unit Centro Residences in Ang Mo Kio apparently attracted more than 80 buyers, even though it is priced at $1,150 psf and above – levels more suitable for prime or city-fringe projects.

Such enthusiasm for new projects, which is reminiscent of boom times, and the sudden spike in prices are likely causes for concern, said a developer who declined to be named.

Prices of some new mass market projects have gone above the peak 2007 levels, he said. ‘But can the market sell 1,500 units every month in the next 12 months? I don’t think so.

‘The Government is observing, but it will cease to be overly concerned when things return to normal.’

CapitaLand chief executive Liew Mun Leong said at its results briefing yesterday that there is ‘exuberance’ in the market but no bubble. ‘If it’s investment driven, you could call it a bubble…but in our case, it is demand driven.’

He also said he would be the first to be worried if this frenzy is being driven by speculative demand.

He said there are buyers flushed with cash from collective sales in the recent property boom.

Mr Liew estimated there were about 13,000 home owners displaced by en-bloc deals from 2005 to 2007 and these buyers have ready cash of anywhere between $1million and $2 million each to spend.

Source: Straits Times, 31 July 2009

No property bubble forming, say developers

PROPERTY developers are enjoying the surge in interest from buyers but they do not believe that speculation has reached a stage where the Government needs to step in.

They also maintain that the prevailing economic conditions will begin to cool the buying frenzy and stop a bubble forming in its tracks.

‘It’s not a bubble, it’s just a blister after the pain we experienced in the global financial crisis and it comes before a recovery,’ said Cushman and Wakefield managing director Donald Han.

But some developers and industry insiders acknowledge that the comments from National Development Minister Mah Bow Tan this week are timely.

Mr Mah cautioned about a bubble forming, hinted at intervention if speculation got out of hand and advised buyers to tread carefully and not charge headlong into the market.

‘The Government’s message is quite clear: Don’t rush as there is a lot of supply coming onstream,’ said Sing Holdings chief executive Lee Sze Hao.

‘It’s good as a reminder so that people do not over-buy, over-chew. Developers do not want irrational exuberance,’ said Mr Han.

A property consultant who declined to be named told The Straits Times: ‘There shouldn’t be panic-buying. Buyers may pull back a bit, not knowing whether the Government will step in or not. The fact is that the Government has opened its mouth; it can do things indirectly.

‘But if the market hype continues to rise, they will have to do something.’

Many feel the hype, which centres on several condominiums, will likely be short-lived amid a recession.

‘Inevitably, there will be speculative buyers, but they are for the smaller units…If the market is too speculative, you build up a bubble and that’s not real demand,’ said Mr Lee.

The market is seeing cashed-up investors ready to spend, which is different from speculators looking to buy another apartment to make a quick buck, he said.

The Government will do something only if there is a queue at every project and every unit is snapped up, he added.

The Real Estate Developers Association of Singapore (Redas) pointed out on Wednesday that only a selected few launches have been highly successful for various reasons.

Buyers have certainly been out in droves visiting the new showflats and buying new homes off the plan. Queues have been forming and developers have raised prices in response.

The interest was evident last night at Tanah Merah, where crowds gathered at the 297-unit Optima showflat although the public launch is scheduled for today.

The response was so strong that the developer TID held a ballot at midnight for about 300 genuine buyers who were queueing outside the showflat earlier so they did not have to stay overnight.

They had submitted cheques together with their application form by 9.30pm for the 120 units on offer at an average early-bird price of $790 per sq ft (psf), said a spokesman.

Another suburban launch, the 329-unit Centro Residences in Ang Mo Kio apparently attracted more than 80 buyers, even though it is priced at $1,150 psf and above – levels more suitable for prime or city-fringe projects.

Such enthusiasm for new projects, which is reminiscent of boom times, and the sudden spike in prices are likely causes for concern, said a developer who declined to be named.

Prices of some new mass market projects have gone above the peak 2007 levels, he said. ‘But can the market sell 1,500 units every month in the next 12 months? I don’t think so.

‘The Government is observing, but it will cease to be overly concerned when things return to normal.’

CapitaLand chief executive Liew Mun Leong said at its results briefing yesterday that there is ‘exuberance’ in the market but no bubble. ‘If it’s investment driven, you could call it a bubble…but in our case, it is demand driven.’

He also said he would be the first to be worried if this frenzy is being driven by speculative demand.

He said there are buyers flushed with cash from collective sales in the recent property boom.

Mr Liew estimated there were about 13,000 home owners displaced by en-bloc deals from 2005 to 2007 and these buyers have ready cash of anywhere between $1million and $2 million each to spend.

Source: Straits Times, 31 July 2009

Stirring back to life

Analysts hopeful of recovery in US property market

AFTER a plunge lasting three years, houses have finally become cheap enough to lure buyers. That, in turn, is stabilising prices, generating hope that the real estate market is beginning to recover.

Eight cities, including Chicago, Cleveland, Denver and San Francisco, showed price increases in May, up from four in April and one in March, according to data released Tuesday. Two others, Charlotte and New York, were flat. For the first time since early 2007, a composite index of 20 major cities was virtually flat, instead of down.

“We have found the bottom,” said Mr Mark Fleming, chief economist for data firm First American CoreLogic.

The release of the surprisingly strong Case-Shiller Price Index, the most widely watched source of price information about the housing market, followed earlier reports that sales of existing homes rose last month for the third consecutive time, while sales of new homes rose in June by the largest percentage in eight years.

All of these improvements are tentative, and come after a relentless decline that knocked more than half the value off houses in the worst-hit cities.

Some sceptics say they believe the market is merely pausing before it resumes falling and that much of the life in the market is coming from speculators. Even the most enthusiastic analysts acknowledge that rising unemployment, another leap in foreclosures or a significant jump in interest rates could snuff out progress.

Still, hope is growing in some quarters. “Recession is over, economy is recovering – let’s look forward and stop the backward-looking focus,” Wells Fargo chief economist John E Silvia wrote on Tuesday in a research note.

Bargain hunting

A few weeks ago, Mr Kirit Shah, 64, a retired forensic chemist for the New York Police Department, closed on a house in Royal Palm Beach, Florida. “I’m on a lakefront. I never dreamed I would be on a lakefront.”

But the thing he likes best is this: He paid US$260,000 ($375,000) for the five-bedroom house, half of what that model was fetching during the boom. “An excellent deal,” he said. “Plus I got a good rate on my mortgage, under 5 per cent.”

But if Mr Shah was one reason new home sales were up 11 per cent in June from May, it is unclear just how many others like him are out there.

Mr Brad Hunter, chief economist for research firm Metrostudy, said the new home numbers appeared to illustrate less a return of buyers like Mr Shah and more a resurgence of investors and speculators.

Metrostudy’s own data showed that the number of buyers during the second quarter who actually moved into their new house declined 2.6 per cent.

“Investors are turning right around and putting the houses on the market for sale or for rent,” Mr Hunter said.

“What appears to have been an absorption of excess inventory can be just a changing of ownership of that inventory.”

One reason the market is perking up in some places, real estate agents say, is the encouragement offered by such measures as the first-time buyer’s tax credit of US$8,000. Another reason is the prevalence of foreclosures, which make up about a third of all existing home sales. In some troubled regions, agents say they cannot remember the last transaction that did not involve a bank disposing of a property.

These communities are not yet showing any improvement in prices. Las Vegas was the worst-performing city in the May Case-Shiller index, falling 2.6 per cent. Prices have fallen there by a third in the last year. THE NEW YORK TIMES

Source: Today, 30 July 2009