Tuesday, September 23, 2008

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Private Property Market Increasingly Vulnerable to Downturn, say analysts

Private residential property prices may still be holding for now but analysts say the market is increasingly vulnerable to a sudden downturn.

Singapore Private Residential Property is Fully Priced

Global property investor LaSalle Investment Management, which has $6 billion of real estate assets in Asia, says Singapore residential property is "fully priced".

Singapore Luxury Residential Property are Expensive by global standards

Jack Chandler, LaSalle Investment Asia-Pacific Chief Executive Officer, said that by global standards, Singapore luxury apartments are very expensive and that at some point, affordability and common sense have to come in. Singapore property price increase has already surpassed those of regional rivals such as Hong Kong.

Sharp Decline in Private Property Sales

Property developers and agents say fewer deals were struck last month. Official data from URA shows that number of sales for private property has declined by more than 80% in August 2008 year-on-year.

Property Investors are getting nervous

"I'm nervous because I don't expect prices to rise anytime soon. The signals aren't good," said Charles Wong, who paid more than $1M for a one-bedroom downtown apartment in April 2008.

Excess Supply of Private Property by 2009

"In terms of actual occupants, there will be excess supply by 2009," said Jones Lang LaSalle Head of Research Chua Yang Liang. He estimates the number of private property units that will be completed in 2009 to be nearly four times that expected this year.

Foreign Investors More Selective, Focus Increasingly on High-End Properties

At least four out of five Singaporeans live in state-subsidised high-rise flats, leaving the private home market dependent on upper-income residents and foreigners. Investment firm Emirates Tarian Capital is betting these foreign investors, who comprise nearly half the buyers in most projects, will focus increasingly on high-end homes. "Demand is going to be selective and for branded, quality projects where the quantity is limited," said Kunalan Sivapuniam, managing partner of the firm, which is investing in two high-rises including one 30-storey block equipped with individual lifts to bring owners' cars up to each apartment.

Credit Crunch May Constrain Developers' Ability to Offer Deferred Payments

Analysts say a global credit crunch could constrain Singapore developers' ability to offer Deferred Payment Scheme (DPS) that allow buyers to make a 10%-20% deposit and delay the bulk of payment until the TOP of the property. Up to 90% of buyers for some projects opted for DPS during the recent property boom.

May also want to read:
History of Singapore Property 1960 to 2008
Buy or Not Buy: How to decide amid mixed market signals
Property Price Index Graph Plotter & Online Property Valuation
Your Property Investment Determines Your Financial Success in Your Life
HDB Resales: West Sees Highest Price Increase


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The blogger here has been affectionately named by close allies as "Smart Buyer" but really, he's not smart. Smart Buyer just believes that being prudent is smart. That's the essence of the message of this blog and Smart Buyer hopes it'll benefit other property buyers.

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