For Prudent Investors & Home Buyers

Alexis at Alexandra sold out?

2009-02-20T17:33:00.001+08:00

Property agents said Alexis@Alexandra was sold out within 3 days. The following are responses from forumers.

SmallTimer said:
"isit? can quote any report? i just got sms from agent that it is 80% sold so what is the latest? at first i laugh at the email from agent that markets this project saying that the value will appreciate by 2011 (TOP time) and rental can yield 5% .... i was wondering who the hell will believe all this bullshit. but i was wrong ... there are apparently a lot of people that take thing pretty much as the email says and dive into buying. good luck for them. me, i would rather miss the boat keep my cash then buying such over-priced property. "

Commentor#2 said:
"c'mon, common sense tells me that if the take up rate is so good, the paper will splash out immediately or at most the next day like the Caspian. I read the paper every day and till now did not see anything at all. Action speaks louder than Words, ALWAYS.

You are not sensibly talking but blatantly lying.

Actually I hope you are telling the truth because it is more of a Good News than Bad. Those Bullshitter, you think yourself, I am not going to explain why. "

Extracted from the Singapore Property Forum.

May also want to read:
99 Leasehold Property: Calculation of Depreciation Rate based on Singapore Land Authority Data
Spore Property History 1960-2008
Property Investment Tip: Don't put all your eggs in one basket
HDB Resale Price Index 1990-2008: Graph & Chart

Caspan at Jurong Lakeside selling hot?

2009-02-08T10:02:00.003+08:00

Caspan hot? said
"why the media make such a hoohah about Caspan... price drop but only sold 80 units ... economy is going down, more people loosing jobs, so why people stil have to pay high high price for property...making the poor suffer and the rich richer!! HDB flat price also more than half million..how to live"

Anonymous wrote:
"my guess is this going to be like Livia, only hot during initial launch and then sale die again..80 units out of 712 units is only about 10%.. nothing to hoohah about!"

Above comments on Caspan sale are extracted from the Singapore Property Forum.

News report: Business Times - 7 Feb 2009

Frasers Centrepoint brings cheer to market with sale of 80 units at Caspian’s preview at $580psf

THE year’s first major release of a private housing project has shown that there’s still demand for projects priced attractively. Frasers Centrepoint had sold close to 80 units at its Caspian condo near Jurong Lake by late last night, the company’s CEO, Lim Ee Seng, told BT.

About 70 per cent of buyers are estimated to be HDB upgraders; the rest had private addresses. Singaporeans accounted for more than 85 per cent of buyers. Only a fifth of the buyers so far have opted for the interest absorption scheme offered by the developer. This means that they pay 3 per cent higher for their units.

The project is priced at $580 per square foot (psf) on average for buyers who opt for normal progress payment.

Property market watchers expect sales in the 99-year-leasehold condo next to Lakeside MRT Station to pick up steadily over the weekend.

Frasers Centrepoint had meant to open its showflat for sales to staff on Thursday, but decided to start selling in the evening to other buyers who had started gathering outside. The average price of $580 psf - or $598 psf for those who opt for interest absorption - is for the 250 units being marketed in the first phase.

Knight Frank executive director Peter Ow, whose firm is not involved with marketing the project, said: ‘The response is very encouraging in today’s market. It goes to show that there’s still demand in the market, as long as the project is priced attractively. Those who want the location will buy. I believe buyers would be buying predominantly for owner occupation.’

The 712-unit Caspian is being built next to LakeHolmz, an earlier condo by Frasers Centrepoint that was completed about four years ago. Units in LakeHolmz are going for about $600 psf on average in the resale market, while further away, units at The Lakeshore, which was completed more recently, are fetching an average price of around $750 psf.

Frasers Centrepoint indicated that 80 per cent of the Caspian units sold are two and three-bedders.

A strong draw of the project is its location in the Jurong Lakeside District, for which the government has big growth plans as a unique destination for business and leisure, and a vibrant regional centre serving the west region of Singapore. The project’s location next to Lakeside MRT Station will also receive a boost from the extension of the East-West MRT Line with the opening of new stations this month.

Frasers Centrepoint’s Mr Lim said: ‘We’re happy with the positive response generated by Caspian, which will hopefully create some impetus to the otherwise sluggish market.

‘We did a thorough market research and survey, which resulted in a substantial number of potential buyers indicating firm interest within a certain price range. We then launched below this price range to further boost the demand.’

He did not indicate what the surveyed average price range was, but BT understands that it was in the low to mid-$600 psf range.

May also want to read:
99 Leasehold Property: Calculation of Depreciation Rate based on Singapore Land Authority Data
Spore Property History 1960-2008
Property Investment Tip: Don't put all your eggs in one basket
HDB Resale Price Index 1990-2008: Graph & Chart

Can government resilient package save the property market?

2009-02-07T11:49:00.004+08:00

GREED AND FEAR SAID:
"I am not a bull and want overpriced property prices in singapore to come to some sense. Unfortunately, prices will possibly rise because our pragmatic Government will get involved in helping whatever companies to obtain financing by taking a major amount of risk on their defaults.

Companies big or small or medium will rush in to get easy credit nowadays up to 4 years from S$5m to S$50m on the pretext of working capital needs and started to use this spare cash to speculate in shares and properties. The resilient packages have alot of loopholes and it is easy to exploit.

The abuse is starting and how you expect the bank or government going to control. Then the government has waived and help developers to delay their launching of projects by extension of construction dates and postpone land sales indefinitely.

You see all these are calculated to help the developers, the rich and vested people. We have the public funds and reserves to help them.

Then the developers will given a freehand to start to blow the horn about singapore growing into a GLOBAL CITY, Jurong, Kallang and Paya Lebar regional centres and MRTs, IRs, F1 and a Swiss standard of living in the making. Singaporeans all easily buy these and rush and drive property prices up and up.

You see it is all planned.

So if you want to speculate or buy, go go at your timing. But why when it is already overpriced and so artificial. If it goes up, it is not for the average, it is for the rich and speculators. "

MORE GREED AND FEAR SAID:
"It is a scary situation because there are billions available for speculation now and ready to be abused. it is going to be messy, deceptive, pretentious, greed and fear of losing out . Banks are swarmed with thousands and thousands of applications to process. More and more such loans are released into the system and the companies are rushing in to use these companies to speculate. Companies even Ok are pretending to be wanting to retrench and expand. They are taking advantage of the RESILIENT PACKAGES to speculate.
Good news for developers and speculators!!!!! Sorry bears! "

GUEST REPLIED:
"You think our govt is stupid or what? or are you stupid? You think our govt will lend money for companies to speculate? They only lend to companies with sound business lah!! Sorry bulls! Property crashing liao!!!! "

DAMNSHIT SAID:
"I am RICH, BASTARD i am very illiquid. DAMN if I can't sell my property at 2008 price and over time when I lost my holding power, I sure beome poor SHIT. "

GUEST SAID:
"I don't think the govt resilient package will cause property price to rise. It may help developers to delay launches but ultimately, developers must sell properties to be in business. With jobless rate climbing and household income dropping, demand will shrink, esp for private property. How long can the developers hold on to their unsold properties? How long can the speculators hold on? Even if economic recovery comes by the end of 2009, it will be slow. Household income will take a long time to catch up with sky-high property price. So the way I see it, either developers stop selling properties and be out of business for a long time or lower their prices to a more affordable level to move sale. The days of wild speculation using easy credits from the banks are over!!! So what's there to sustain the current high price even if govt gives developers more time? It'll take years for household income to catch up with current high property price and can the developers wait for years?"

Extracted from the Singapore Property Forum

May also want to read:
99 Leasehold Property: Calculation of Depreciation Rate based on Singapore Land Authority Data
Spore Property History 1960-2008
Property Investment Tip: Don't put all your eggs in one basket
HDB Resale Price Index 1990-2008: Graph & Chart

Ailing property sector got a special Budget boost but can it really revive the property market?

2009-01-29T07:20:00.000+08:00

I am happy for the developers that were given a thin lifeline through this bad times.

But alas, the budget did not address the buyers sentiments for today and tomorrow market. Think about it so what if the developers are given a special boost? People are still not buying! Inventory still stuck.

It is true that current prices have soften somewhat as compared to 2007/8 levels. For those who can afford, perhaps it's not bad a time to accquire your choice property. You can part away your money and help the developers pull through bad times. Your generosity will be much appreciated by them.

But for the average joe or bargainers, prices are still 50% higher than that of 2006/7 levels! For home owners, there's a major difference between a HOME and a HOUSE. When mortgage loan is at stake of repayment during such times, your HOME where one finds comfort, will become simply a HOUSE.

Read deeper my friends, the situation is so bad for real estate that the government had to give a lending hand to mitigate the impact. Demand are simply diminishing as we move deeper into 2009.

Even Tharman is not sure if 2010 will recover. And pls dont tell me abt Mr. Obama. 2 days after his inaugural, Dow Jones fell briefly below the psychological of 8000! "Change we must?!"

I am an optimistic person but yet realistic. I do wish things will recovery soon as I need a HOME over my head. But given all obvious indicators, the directions of the pole are clear, South.

If we continue to see demand trickle based on current bad market sentiments, a thin lifeline will simply becomes a thread. It snaps... Therefore?

The above comment is posted by Humble Bee in the Singapore Property Forum with reference to the news article below:

Jan 22, 2009
Budget 2009
Boost for property sector
By Fiona Chan
THE ailing property sector got a special Budget boost on Thursday, as a host of measures was unveiled to help real estate companies.

With more developers delaying their launches to wait out the downturn in buying demand, the Government focused mainly on extending aid to them in this area.

Property tax was deferred for two years for land approved for development, so developers sitting on their land bank will not have to pay this tax - which can amount to millions of dollars - for the time being.

Specific attention was also paid to developers who bought government land sites, and foreign developers who own private residential land here, as there are stricter rules that apply to them.

Normally, they have to develop the land within six years, in order to ensure that these developments are completed 'within a reasonable period after the land sale', said the Government. They also cannot resell the land without developing it.

But now, these developers have been given a one-year extension of this period so that they have more flexibility in building and selling their developments according to market conditions.

On top of that, those who have decided they want out of the business can now resell the land or dispose of their interest in it before Jan 21 next year.

Foreign developers also received more leeway. Currently, they are required to sell all the units in their project within two years of completion and are not allowed to rent out any unsold units.

Now, they have been given two more years to dispose of the units, and can also rent out any unsold units for up to four years.

May also want to read:
99 Leasehold Property: Calculation of Depreciation Rate based on Singapore Land Authority Data
Spore Property History 1960-2008
Property Investment Tip: Don't put all your eggs in one basket
HDB Resale Price Index 1990-2008: Graph & Chart

Singapore Government Budget to benefit more home-buyers of HDB flats

2009-01-23T11:50:00.012+08:00

Under the latest Singapore goverment budget announced yesterday, home-buyers will get more help to pay for their first home.

The Additional CPF Housing Grant for first time home-buyers will be increased from
S$30,000 to S$40,000. The additional housing grant is provided to help lower-income families buy their first HDB flat, which can be a new HDB flat or a resale flat.

The household income ceiling to qualify for this will also be raised from S$4,000 to S$5,000.

The above policies will likely provide some additional support to HDB resale flat prices during the current economic downturn given that more housing subsidy is available to more first-time home buyers. Smaller HDB flats will be the greatest beneficiary.

8,000 home-buyers are expected to benefit from this scheme each year, costing the government about S$150 million per year.

May also want to read:
99 Leasehold Property: Calculation of Depreciation Rate based on Singapore Land Authority Data
Spore Property History 1960-2008
Property Investment Tip: Don't put all your eggs in one basket
HDB Resale Price Index 1990-2008: Graph & Chart

Singapore private property prices fell 6.1% & rents fell 5.3% in Q4 2008 :

2009-01-23T10:58:00.003+08:00

Singapore private home prices fell 6.1 per cent in the fourth quarter as the city-state plunged into its worst ever recession, government data showed on Friday.

URA data also shows that rents in the fourth quarter slipped 5.3 per cent.

The drop marked the second quarterly decline in residential property prices following a 2.4 per cent fall in July-September.

The decline in prices during the fourth quarter was also steeper than the initial estimate of a 5.7 per cent drop made earlier this month.

Rents during the October-December period fell by 5.3 per cent, the Urban Redevelopment Authority (URA) said.

Singapore releases advance estimates on property prices shortly after the end of each quarter based primarily on transactions during the first 10 weeks of the period.

The government subsequently provides detailed data for the period that includes price changes by region as well as rental trends.

Singapore's gross domestic product shrank in the fourth quarter at a deeper-than-expected seasonally adjusted rate of 16.9 per cent, the biggest fall on record, and the government said the economy may contract as much as 5 per cent this year.

May also want to read:
99 Leasehold Property: Calculation of Depreciation Rate based on Singapore Land Authority Data
Spore Property History 1960-2008
Property Investment Tip: Don't put all your eggs in one basket
HDB Resale Price Index 1990-2008: Graph & Chart

HDB Resale Price Rose 1.4% but sales fell 24% in Q4 2008

2009-01-23T10:02:00.002+08:00

According HDB housing data, HDB’s Resale Price Index (RPI) rose by 1.4% in 4th Quarter 2008 over the previous quarter, lower than the 4.2% increase seen in 3rd Quarter 2008.

The median Cash-Over-Valuation (COV) amount among all resale transactions conducted in Q4 2008 was $15,000, which was $4,000 lower than that in Q3 2008. Cases requiring COV constituted 85% of all resale transactions in Q4 2008, 4% lesser than that in Q3 2008.

Resale transactions decreased by about 24%, from about 8,110 cases in Q3 2008 to about 6,190 cases in Q4 2008. The total number of resale transactions for 2008 was 28,419, about 3% lower than in 2007.

On the HDB rental market, HDB housing data shows that median sublet rents for HDB flats in Q4 2008 remained the same as those in the previous quarter, except for 2-room flats which have a median slightly higher by $100 compared to Q3 2008. However, HDB subletting transactions fell by 7% from about 3,960 cases in Q3 2008 to about 3,690 cases in Q4 2008 which may be an early sign of falling rental demand.

The latest housing data indicates that the recession may have started to take its toll on the HDB resale market.

May also want to read:
99 Leasehold Property: Calculation of Depreciation Rate based on Singapore Land Authority Data
Spore Property History 1960-2008
Property Investment Tip: Don't put all your eggs in one basket
HDB Resale Price Index 1990-2008: Graph & Chart

Which condo to buy? Meraprime or Park Valley? Recommendations and Discussions

2009-01-17T07:01:00.000+08:00

Hello Smart Buyer!
I would like to ask your expert opinion if value of property will likely appreciate more at Tiong Bahru (eg: Meraprime) where amenities are aplenty or tail-end of river valley (eg: Valley Park) when the market/economy recovers. Thanks.

Smart Buyer replied:
No doubt Meraprime has a good location but the current price a mind-blowing $12xx psf and it's a 99LH property. It reminds me of how hot nearby Central Green was in the mid 90s. Now it's going at about $8xx psf. So you can see a significant discount for older condos in the same locations. You may also like to take note that between 2002-2004, Central Green dropped as low as $4xxpsf. That will give some indication of the risk of entering at a high price.

Valley Park doesn't have the MRT-location of Meraprime but it's FH. Going price is still high at $1xxx psf. Prices fell to about $6xx psf in 2003.

In summary, 99LH property price falls faster in a downturn and with age but commands better rental rate. (If you like more info on comparing 99LH with FH, ps do a blog search here.)

Quite obvously, this is still not the time to enter the market. I don't know if prices will fall to an attractive level for these properties to make good investment value. I'm in no hurry. In fact, I'd simply turn to other types of investment if property remains over-valued. I don't know if you're in the same situation, so I can't tell what you should do.

Who's to know how long it will take the property market to recover? Whether they will appreciate or not, or more importantly by how much, would depend on your purchase price. At the current price level, I can see very little upside and plenty of risk.

Original post: Property Buying Advice: What to buy

Blog visitors are welcome to contribute their recommendations on which condo to buy.

May also want to read:
99 Leasehold Property: Calculation of Depreciation Rate based on Singapore Land Authority Data
Spore Property History 1960-2008
Property Investment Tip: Don't put all your eggs in one basket
HDB Resale Price Index 1990-2008: Graph & Chart

Buying Freehold Properties in Geylang: Pros and Cons Discussion

2009-01-12T07:33:00.000+08:00

Seng asked:
What is you opinion on FH property in Gelyang Loring 28? I heard banks will not give loan for such properties. What are the risk on investment returns on such properties?

Smart Buyer replied:
I've viewed some of the freehold properties there: greatest attraction is cheap. But they are not cheap for no reason. You'd probably have problem getting a bank loan. If you are thinking of staying there, take note that it's generally unsuitable for family-people. If you are thinking of buying a rental property, you may be dealing with certain category of tenants. The greatest risk is of course the difficulty of selling such a property.

Do consider carefully.

Original post: Property buyers lost? Buy or Don't Buy?

Chinamoon said:
I am man of modest means and cannot afford to spend too much on property.

Here are my thoughts:
PROS: (no pun intended)
1. Cheap because of rampant prostitution and gangland activities
2. Near town
3. Good yield as principal low
4. Possible redevelopment although this will be many years in future if it does happen

CONS:
1. Hard to take loan, banks unwilling to finance because of poor resale prospects, finance companies will provide but percentage of valuation not high
2. Prostitution and gangland violence everywhere, so very noisy and unsafe, not suitable for family
3. High maintenance as most property are rented out and tenants heck care the property

What are those I may have left out?

Anonymous replied:
no need to buy Geylang properties. People are backing off from options. Wait, there will be cheaper properties as Singapore enter into its worst ever recessions in history. Dont be fool by hypes of Sport Hubts, MRTs, near city, etc.

SmallTimer replied:
I have no experience buying propety in geylang area but would like to add a few points

1) the area tends to attract low life so when u rent aren't u afriad u will get one of them that would not only not pay rent on time but use your property to break the law?
2) even if your property is a few streets away from the vice activities there is no way to know if they will ever setup "shop" at your door step. all it takes is a few girls to decide to stand around there to parade their service or a popular massage place / nightclub to open nearby. or worst a cheapo hotel.

i would stay away from this area if i were u.

Extracted from the Singapore Property Forum
May also want to read:
99 Leasehold Property: Calculation of Depreciation Rate based on Singapore Land Authority Data
Spore Property History 1960-2008
Property Investment Tip: Don't put all your eggs in one basket
HDB Resale Price Index 1990-2008: Graph & Chart

URA Quarter 4 2008 Real Estate Statistics Flash: Private Property Price Fell 5.5%

2009-01-02T14:06:00.000+08:00

URA Quarter 4 2008 Real Estate Statistics Flash shows that private property price index slipped 5.7% in fourth quarter 2008 over the preceding quarter, following a 2.4% quarter-on-quarter fall in Q3.

Prices of non-landed private residential properties decreased by 6.3% in Core Central Region, 5.5% in Rest of Central Region and 4.7% in Outside Central Region in the quarter. In comparison, for 3rd Quarter 2008, prices of non-landed private residential properties decreased by 2.7% in Core Central Region, 2.4% in Rest of Central Region and 1.5% in Outside Central Region.

Homes in prime areas registered the biggest price fall, with apartments in the core central region declining 6.3 per cent compared with a drop of 4.7 per cent in outlying areas.

Many analysts expect Singapore property prices to keep falling in 2009. RBS predicts a price drop of 30 per cent in prime areas and a decline of 10 per cent in outlying areas.

May also want to read:
99 Leasehold Property: Calculation of Depreciation Rate based on Singapore Land Authority Data
Spore Property History 1960-2008
Property Investment Tip: Don't put all your eggs in one basket
HDB Resale Price Index 1990-2008: Graph & Chart

HDB Flash Estimate 4th Quarter 2008 Resale Price Index: HDB Resale flat price index rose 1.5%

2009-01-02T14:04:00.005+08:00

Housing & Development Board's resale flat price index rose 1.5% in fourth quarter 2008 over the preceding quarter. This was slower than the 4.2% quarter-on-quarter rise in Q3 2008. For the whole of 2008, the resale flat price index registered a 14.6% gain. The data indicates that HDB resale flat price is peaking, which does not come as a surprise given the increased momentum at which the economy is slowing.

Experts, however, said this resistance to downward pressure in the HDB resale market is expected to continue despite the economic downturn.

Eugene Lim, associate director, ERA Asia Pacific, said: "Buyers are coming from people who are upgrading (and) people who are downgrading... also, from the increase in the population of PRs (permanent residents). So the (demand for) HDB resale flats is very strong."

Observers said they expect flat or slow declines for public housing prices compared to steeper devaluations in the private home sector. They added this is the trend during times of uncertainty when home buyers opt for the safer option of HDB flats.

May also want to read:
99 Leasehold Property: Calculation of Depreciation Rate based on Singapore Land Authority Data
Spore Property History 1960-2008
Property Investment Tip: Don't put all your eggs in one basket
HDB Resale Price Index 1990-2008: Graph & Chart

Property Buyers' one reason for not buying: Private Property Prices are still too high

2009-01-01T07:15:00.002+08:00

Some comments on the article "Time to lower home prices; Straits Times 31 Dec 2008"...

"see who blinks first".
Its a seige. You rather starve than sell? OK, let's see if Singapore devlopers are somehow unique in being able to defy all history and the world in dissociating price from recessions and supply gluts. Already, once-proud markets have capitulated... from New York to London to Shanghai to HK... no one is immune.

"hunters pointed to just one reason: Home prices are still too high."
"Prices shooting beyond their (buyer's) means"
Its so funny. Like Bush, Pernanke and Paulson in early 2008 who, die, die also won't say the "R" word, developers won't admit that prices are too high even though its obvious to all. Machiam like "voldermort".
This denial still continues even when they tacitly admit to the realities.... sure, ok, I give in, you can have a 'rebate', a 'discount', a 'stamp duty absorption', 'furniture rebate' etc... just don't call it like what it is... a price fall.

"But the situation is set to worsen sharply for sellers as the economy contracts sharply"
Its not only worsening for sellers, but also buyers. As economy hits salaries, bonuses, and job-security of buyers, there will be fewer able or willing to pay the unrealistic price premiums commanded by sellers.

Posted by Ann in the Singapore Property Forum
May also want to read:
99 Leasehold Property: Calculation of Depreciation Rate based on Singapore Land Authority Data
Spore Property History 1960-2008
Property Investment Tip: Don't put all your eggs in one basket
HDB Resale Price Index 1990-2008: Graph & Chart

Time to lower home prices

2009-01-01T07:12:00.000+08:00

Property developers should consider this step to lure back buyers

WHEN a property boom here ends, the first casualty is usually home supply.

Sure enough, the Government put a stop to new land sales early this month, as it did in the last two downturns, making it as good an indicator as any that a property slump had arrived.

Developers have also been cutting supply throughout the year, pushing back en bloc redevelopments and putting some launches on hold indefinitely.

Reducing supply inadequate to prevent property collapse

But though reducing supply is necessary to prevent the market from collapsing, it is clearly inadequate as a cure at this point. No land plots have changed hands for months, new launches have slowed to a trickle - and yet buyers are still not biting. Property ads have dried up and showflats are starting to resemble ghost towns.

Property hunters' one reason for not buying: Home prices are still too high

When sales came to a standstill this year, developers blamed the financial crisis and government policy actions, such as the removal of the deferred payment scheme. But house hunters pointed to just one reason: Home prices are still too high.

Private property sales 18-yr low but price drop still small

The economy has shrunk for the first time since 2001, mass retrenchments are on the cards, and monthly sales of new homes have plummeted so much that experts warn total sales this year could reach an 18-year low. Yet private home prices - at least according to the Urban Redevelopment Authority’s (URA) price index - have not dropped by much.

In the third quarter, the URA’s price data registered a fall of 2.3% from the second quarter, after rising about 4% in the first half of the year. This means prices in September were still higher than in January.

Anecdotally, analysts estimate that prices in the fourth quarter fell by up to 20% in some developments. But prices jumped so much in the recent upturn - 31% last year alone - that even if the URA’s index does log an unlikely 20% drop this quarter, prices at year-end would still be higher than at the start of last year, and far above the pre-boom levels in 2005.

Not all developers can cut prices for their projects without incurring big losses, especially those who bought plots at the peak of the boom last year. But developers who were canny enough to pick up land at the trough of the market have plenty of room to manoeuvre.

One example is CapitaLand’s Latitude condominium at Jalan Mutiara. The developer bought the site for about $500 per sq ft (psf) in 2005 and sold units up to last month at $2,400 to $2,500 psf.

But down the road, Mutiara View is going for under $1,200 psf, while across the street, the new boutique condo RV Suites has been sold for $1,300 to $1,400 psf. According to agents, CapitaLand has quietly lowered prices recently to $2,000 to $2,100 psf.

Hong Leong’s Aalto along Meyer Road is another example. The site was bought for about $410 psf in 2005, but units were sold for well over $2,000 psf last year and this year. No new units have been sold since May, according to URA data.

To be sure, there are valid reasons for developers not to cut prices.

For one thing, selling homes at lower prices could result in a fall in the valuations of their properties, which could in turn hurt their balance sheets and make it more difficult for them to raise funds in an already tight credit market. And some argue that slashing prices could also set off a price war.

see-who-blinks-first game is in favour of buyers

But there are also compelling reasons to start lowering prices. Key among them is that the see-who-blinks-first game is clearly turning in favour of buyers. Prices are already falling, pushed down by smaller developers squeezed for cash and individual home sellers anxious to offload their units.

A boutique condominium in the Novena area reportedly gave significant discounts - from over $1,300 psf down to just under $1,000 psf - after the financial crisis hit hard in October. At soon-to-be-completed developments such as City Square Residences in Kitchener Road, prices have fallen from a high of over $1,000 psf last year to less than $800 psf for some units in recent months.

Lowering prices will bring buyers back into the market

Developers have said for months that they will maintain prices and ride out the storm. But the situation is set to worsen sharply for sellers as the economy contracts sharply. Even developers who can hold out are likely to find their property valuations hit anyway as prices come down throughout the market.

Lowering prices will bring buyers back into the market. Many have been waiting on the sidelines since early last year, when prices starting shooting up beyond their means.

Evania, a 35-unit condo in Upper Paya Lebar, moved 15 units last month after dropping prices from nearly $900 psf in March to just above $600 psf.

More positive news like this is exactly what is needed to restore sentiment in the market.

‘Realistic’ prices that will tempt buyers back into the market

As for the threat of price wars, there is little basis in the argument. Prices are going to fall in any case, with or without a price war. The suggestion here is not for steep price cuts, just ‘realistic’ prices that will tempt buyers back into the market.

City Developments took some flak from its rivals after it priced its mass market condo Livia in Pasir Ris at an attractive $650 psf on average. But the launch was a huge success - and it has not caused a downward spiral.

Industry players have suggested that the Government step in with demand-boosting measures such as waiving, discounting or deferring stamp duty; resurrecting a fine-tuned version of the deferred payment scheme; and tweaking CPF rules to allow buyers more financing leeway.

Developers themselves have already started absorbing stamp duty and interest for selected projects, and rolled out gimmicks such as renovation allowances and vouchers for electrical appliances.

These measures might help make the buying environment more conducive, but nothing would speak more persuasively to potential buyers than a discount.

In a year when everything is going to go on sale, property developers should consider joining the crowd.

ST 31 Dec 2008
May also want to read:
99 Leasehold Property: Calculation of Depreciation Rate based on Singapore Land Authority Data
Spore Property History 1960-2008
Property Investment Tip: Don't put all your eggs in one basket
HDB Resale Price Index 1990-2008: Graph & Chart

S'pore economy may contract further, expect more retrenchments

2009-01-01T07:11:00.000+08:00

Singapore's economy will probably contract further and more retrenchments can be expected in the next few months as companies are forced to downsized, Singapore's Prime Minister Lee Hsien Loong said in his New Year message on Wednesday.

Mr Lee said the economic outlook is highly uncertain. At each stage of this crisis, events have turned out worse than the experts predicted.

Governments everywhere have been implementing monetary and fiscal measures, rescuing troubled financial institutions and key corporations and pumping money into the economy. But no one is sure how the financial systems and economies will respond, or which policies will work.

'There is a loss of business and consumer confidence and, hence, one thing is certain: things cannot turn around overnight. Quite likely the global recession will be followed not by a quick rebound, but by several more years of slow growth,' Mr Lee said.

'We must therefore prepare for a difficult year ahead, and especially the first half of 2009. Our economy will probably contract further. More companies will be forced to downsize. So far we have not seen many job losses, but I expect more retrenchments in the next few months. We must be psychologically prepared,' he added.

In response to this economic crisis, Mr Lee said Singapore government's key focus is jobs - keeping people in jobs, helping workers who lose jobs find new ones, and retraining them with new skills.

Apart from lowering corporate taxes in 2008, two initiatives have also been implemented. One is the Skills Programme for Upgrading and Resilience (SPUR) which helps businesses pay for their staff training. More than 120 companies have come on board, which together will train more than 4,200 workers.

The second initiative is enhancing the government financing programmes for companies to ensure that basically sound firms, especially the smaller ones, can still obtain financing despite the tight credit climate, and so keep their operations going.

The government has also recently reduced interest rates and increased insurance premium subsidies under the schemes. These measures will benefit some 13,500 existing loans worth $550 million (US$381 million) and an estimated $3 billion in new loans.

Business Times - 31 Dec 2008
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HDB upgraders to private properties increased by proportion but decreased by absolute number: Even HDB upgraders are cooling

2008-12-30T09:25:00.009+08:00

BT reported on 30 Dec 2008 that according to DTZ's analysis, the percentage of HDB upgraders continued to grow. In 2008, a higher proportion of purchasers with HDB addresses was registered with 37 per cent of all buyers expected to be HDB upgraders in 2008 compared to 22 per cent in 2007. Based on available caveats in URA's REALIS, the number of buyers with HDB addresses in Q408 is 582. While this is a preliminary number, it represents 43 per cent of total caveats lodged so far in the fourth quarter. DTZ noted that this is higher than the 41 per cent in Q308, 36 per cent in Q208, and 28 per cent in Q108.

However, if we look at the absolute number of HDB upgraders of 582 in Q4 2008, the number has actually plunged to the lowest level this year and a far cry from the almost 3000 in Q2 2007 during the property peak. The sharp decline in the number of upgraders may reflect that despite the rising HDB resale prices, even HDB upgraders are cooling off from the private property market.

It maybe more accurate to interpret the data as a decline in the proportion of other types of buyers which include speculators, specuvestors, home-buyers etc; rather than an increase in the proportion of upgraders. In a nutshell, I'd see the data as being more reflective of the fleeing of speculators from the private property market, rather than an increased interest in private property among HDB upgraders.

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Private Property Price in 2009: Analysts forecast further decline of 15%-20%

2008-12-30T09:09:00.004+08:00

Based on its preliminary analysis of official data, DTZ said that prices of non-landed freehold private homes in the prime districts fell by 14 per cent quarter-on-quarter (qoq) in the fourth quarter of 2008.

This follows two consecutive quarters of declines of around 4.5 per cent each.

The prime districts include District 9, 10 and 11.

Prime property prices fell 21.6% year-on-year

Overall average prime prices fell 21.6 per cent year-on-year (yoy) to $1,160 per square foot (psf), below the level of $1,200 psf registered in Q207.

Freehold non-landed homes outside the prime districts fell in Q408 but at a lower rate of 9.3 per cent qoq or 10.5 per cent yoy.

Landed housing prices also fell 5.7 per cent qoq, or 2.9 per cent yoy, islandwide in Q408.

The fall in prices follows dismal developer sales in October and November with only 112 and 192 units sold in the primary market respectively, compared to the monthly average of 444 units sold in the first nine months of the year.

DTZ said that based on caveats lodged, preliminary data from URA's REALIS showed that the number of transactions in the year is only about 35 per cent of last year's 38,100 units.

DTZ forecast property price to further decline by 15%-20% in 2009

DTZ is also forecasting a further decline of 15-20 per cent for this segment of the market in 2009.

DTZ said that the downturn in the economy will deter buyers from committing to property purchases and sales are expected to continue to remain low in 2009.

Lower rental returns will not help either.

DTZ said that average monthly rents of prime non-landed homes decreased in Q408 by 9.4 per cent qoq or 9.2 per cent yoy to $4.36 psf.

Outside the prime districts, rents held up better with an increase of 2 per cent yoy, despite a fall of 1.2 per cent qoq.

Nomura forecast property price fall of 43.8% in high end market and 32.1% in mass market

The extent of price corrections is still uncertain but Nomura has already adjusted its forecasts. In March, it forecast average prices in the luxury sector to fall by 32.3 per cent from the 2007 peak over 2008-2010 - 16.9 per cent in 2008, 10.3 per cent in 2009 and 9.3 per cent in 2010.

It now expects luxury prices to fall 43.8 per cent from the peak, and mass residential prices to fall 32.1 per cent as yields move out by an additional 25-50 basis-points.

OCBC forecast high-end propety price to fall by 15-20% and mass market by 5-10%

OCBC analysts also believe that high-end property prices could decline by 15-20 per cent in 2009 due to weak sentiment, unsold inventories and potential risks of buyers' default and fire-sales.

OCBC expects mass market property prices to remain resilient, supported by the stability in HDB prices. For the mid-market properties, it expects prices to fall further in 2009, with a projected decline of 5-10 per cent.

Extracted from BT 30 Dec 2008
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Private home sale, price, rent falls SHARPLY Q4 2008

2008-12-30T08:58:00.004+08:00

According to a report released Monday by property consultant DTZ, only 112 private homes were sold in the primary market in October, and 192 units sold in November.
This, compared to the monthly average of 444 units sold in the first nine months of the year. The October sales volume is the lowest since the release of official monthly sales data by the Urban Redevelopment Authority (URA) in June 2007.

Private property sales in 2008 only 35% of 2007's

For the full year, DTZ estimated that the number of home sales in the primary and secondary markets will only make up about 35 per cent of last year's sales, which saw some 38,100 units sold. The figure is based on caveats lodged with the URA so far.

Prime non-landed properties hardest hit

At the same time, the fall in private home prices have started to gather pace in the fourth quarter, with prime non-landed properties the hardest hit. Prices of non-landed freehold private homes in the prime districts fell by 14 per cent quarter-on-quarter in the three months ended December, according to DTZ Research. Overall, average private home prices have fallen 21.6 per cent year-on-year to S$1,160 per square feet, below the level of S$1,200 per sq ft in the second quarter of 2007.

Rents of prime non-landed homes have fallen 9.2%

Meanwhile, average monthly rents of prime non-landed homes have fallen 9.2 per cent to S$4.36 per square feet.

DTZ expects home sales to remain low next year as the recession takes its toll and homebuyers are concerned over job security.

Posted by anonymous in the Singapore Property Forum

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Rising HDB Price will support private property price?

2008-12-26T06:04:00.005+08:00

Bull:
FYI,i have been waiting since 2002 but the price of both HDB & private condo had risen almost every year. Recently,i am eyeing a three room HDB flat in clementi, Queentown or even marine parade but all these almost 30yrs old public housing are asking more than 200k. Do you think think if i have to wait for another one or two yrs will the price of these flats will drop by 30%.

Bear:
Don't bluff lah. Condo prices in 2004 and 2005 were so low - I bought one myself from a seller who made 30% loss. I think you are Mr Lan Lan, throwing red herrings to mislead people again.

Bull:
Mislead people????Any HDB three room flat more than 25yrs in Ang Mio Yio ,Clementi,Queentown or marine parade which are selling below 200k.Please let me know.Merry X'mas.

Bear:
HDB price has been going up steadily only from 2007. It's true that 25 yr old 3-rm HDB are selling above $200K now. Private property also recover only in 2007 but has dropped since Q3 2008, and data continues to show falling prices. These are facts.

You can't use rising HDB price to justify that private property price will also rise. Reason? Though there is real demand for housing, private property price has become unaffordable esp in the years to come as economy gets worse, and even the recovery is expected to be slow and spore will be having years of low growth. Income will drop and affordability will drop further. Plus difficulty in getting bank loans with the credit crunch. What will people with real housing needs do? Go for cheaper, smaller HDB flats! So smaller HDB flats will benefit most, that's why govt is building more of such flats. They have foresight and the data to know that people will be downgrading. As people downgrade, private property price will suffer even more..

Extracted from the Singapore Property Forum

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Will DPS Property Buyers default come 2009-2010? Property buyers' discussion

2008-12-24T13:00:00.000+08:00

The following are some forumers' views on the recent news reports on defaulting DPS property buyers ( "Size of the DPS behemoth" and "D-Day for Home-Buyers") extracted from the Singapore Property Forum:

unfounded wrote:
Even all the uncompleted units are bought under DPS, there is no effect because these speculators or buyers bought under DPS in 2005/2006 are still sitting pretty with between 50% to 250% capital appreciation . Most of these speculators are rich and dont underestimate them, they have more wealth than you think. When they go to the bank, the valuation is still much higher than the purchase price and most of them get financing easily unless they got burnt badly in the stock or currency markets. The full impact of worldwide recession do not seem to hit Singapore too badly. With bank loans, what is the problem ? It is at low interests. Do you think property prices can drop by more than 50%? Impossible in politically safe Singapore, a Global city with IRs, Sport Hubs, YOG, F1,growing foreigners and rich migrants and so much to offer to investors. The Singapore government with billions in reserves will never let this happen and they will intervene strongly to prop up the market as they are also biggest property owners. Property market in Singapore is safe and unique, even for speculators of 2005/2006.

bull wrote:
come next month budget, govt is going to approve S$5B or more for infrastructure projects, the more the better, can create jobs, drive our GDP, eventually these development will make your property appreciate their value much more.
Like Jurong lake, if govt can complete it within 5 yrs from now on, that will be nice when it completes, Punggol marina center, Buona Vista R&D hub, MRT line, expressway.....

Guest wrote:
Buyers under DPS has to pay more in total, so those with cash will not opt for this. We can conclude many of these DPS buyers are shallow-pocket flippers. What makes it worse is the unexpected credit crunch. Besides, flippers are normally people with a risky-income profile like bankers, remisers, property agents ... who make a lot of money in the 2007-boom and became too optimistic about the property market. These people will be faced with sudden loss of income and will find it very hard to get a bank loan.

bear wrote:
DPS buyers cannot just walk away from the deals and think their maximum loss is the 10-20% downpayment. Developers can resell at any lower prices and the defaulting buyers will have to pay the difference plus all legal fees. So these shallow-pocket flippers will have to sell their units at whatever prices the market will pay. I see a property price crash coming from middle 2009.

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Important information on Deferred Payment Scheme not released by URA

2008-12-24T07:53:00.004+08:00

Last week, URA released information on private housing units sold under the Deferred Payment Scheme. The more useful data, however, have been withheld as requested by developers, which in turn suggest they are not positive.

Among the additional information we would have liked are:

Break down between local buyers and foreign buyers

,
Break down between local buyers and foreign buyers is important on the basis that the former are more likely to honor the transactions unless they really can’t afford to. Developers are understandaby reluctant to provide such information on a
project-by-project basis, eg CapitaLand’s Orchard Residences (launched in Apr ‘07), SC Global’s The Marque (Jun ‘07), City Developments’ Cliveden (Jun ‘07); and Keppel
Land’s Marina Bay Residences (Dec ‘06), which would have a higher percentage of foreign buyers.

How many original buyers and how many from sub-sales

How many of the 10,450 were the original buyers and how many from sub-sales is not known. URA noted that the number of units still under DPS may change over time as developers may not extend the scheme to sub-purchasers when the original purchasers sub-sell their units.

Percentage of DPS buyers who have secured financing

The percentage of buyers who have secured financing reflects the proportion of buyers who bought for owner occupation since they would likely have arranged for financing at the time of purchase, even if they have opted for DPS.

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Enbloc Properties put back on rental market: Expected to further depress rental market

2008-12-22T08:38:00.006+08:00

At least 1,000 projected new apartment units can be expected to be withdrawn from immediate supply in Singapore's property market, as properties that were sold en bloc in recent years are put back on the market for rental.

Enbloc sites rental units expected to further depress rental market

The increasing number of en bloc sites put back on the rental market is expected to further depress already weakening rentals.

CDL: Lucky Tower @ Grange Road leased to master tenant

The latest of these is Lucky Tower at Grange Road which was bought by City Developments Ltd (CDL) in May 2006. A CDL spokesman said that the entire development of 91 units has been leased to a master tenant that intends to sub-let the units.

According to data complied by Savills Singapore, Lucky Tower was expected to be redeveloped into a 178-unit condominium. However, with redevelopment pushed back, these units are not expected to come on to the market anytime soon.

192-unit The Grangeford at Leonie Hill on the rental market

Another development, the 192-unit The Grangeford at Leonie Hill, acquired by OUE in 2007, has also been put back on the rental market.

OUE is controlled by the Lippo Group and Malaysian tycoon Ananda Krishnan. Lippo Realty executive director Thio Gim Hock said that approximately 70 per cent of the units have already been leased, mainly to expatriates.

On why it decided to defer redevelopment, Mr Thio said: 'The market does not look good for this year or the next.'

It is understood that asking rents for The Grangeford start at about $3,500 for 1,110 square foot two-bedroom units and about $4,500 for a 1,700 sq ft three-bedroom unit.

Pontiac Land Group started to lease out Pin Tjoe Court

The Pontiac Land Group has also started to lease out Pin Tjoe Court, which it acquired in September 2006. Senior vice-president (residential leasing) William Teh said that it expects to redevelop the site next year. 'Till then, we are offering very short-term leases, and this is not representative of typical rental in the market,' he added.

Frasers Centrepoint: Flamingo Valley 60% leased out

Frasers Centrepoint said that Flamingo Valley, which it acquired in early 2007, has been put on the rental market with close to 60 per cent of the 185 units leased out.

Other en bloc developments back on the rental market include Furama Towers, Fairways Condominium, Sophia Court, and Lincoln Lodge.

Rental yield helps cover developers' holding costs

Referring to this 'hidden leasing supply', Japanese investment house Nomura said: 'The move by developers to return en bloc units back to the leasing market to cover to a degree of the holding costs is not unanticipated.'

Regardless of 'hidden leasing supply', rentals are already expected to fall. Still, Knight Frank director (research and consultancy) Nicholas Mak believes that the 'hidden supply' of leasing units will not make much of a dent on the rental market. For starters, he notes, many of these en bloc developments have already reached a state of disrepair.

Pointing out that the 108-unit Fairways is about 10 per cent leased, he says that many of the units have been 'stripped bare'.

He also noted that these units have short leases and tenants may be given only one-month's notice to vacate

Rental Yield of 2.3%

In the case of Grangeford, assuming a gross rent of $3.40 psf for the 396,483 sq ft apartment block, Nomura estimates that it could secure net income of $14.6 million, equating to a 2.3 per cent yield over its $625 million acquisition price, 'providing some relief to covering the site's holding costs'.

Continue with Deferred Enbloc Redevelopment cuts supply of 1000 new units

Extract:BT 22 Dec 2008
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Deferred Enbloc redevelopment cuts supply of 1,000 new apartments

2008-12-22T08:01:00.000+08:00

Continue from Enbloc Properties put back on Rental Market: Expected to further depress rental market

Another consequence of deferred en bloc redevelopment is the impact this has on future supply.

Savills Singapore estimates that based on the en bloc deals between 2005 and 2007, over 23,000 new units could be added to the market.

But, as Nomura notes, supply has been increasingly pushed to 2012. As at the third quarter of this year, it found that some 16,762 units are scheduled for completion in 2012, versus the previous quarter's estimate of 14,179 units.

Based on an analysis of official data since Q499, it also found that actual completions lagged behind forecast completions.

The Urban Redevelopment Authority (URA) has also clarified that while developments are deemed 'under construction' in its database, this does not necessarily mean construction has begun.

A spokesman for URA said that it considers a project to be 'under construction' once the Building and Construction Authority records indicate that a project has been issued a permit to commence structural works.

As at Q308, there are 10,007 units under construction. URA said: 'As developers do not have to inform the government of actual ground-breaking after obtaining the permit to commence structural works, URA does not have information on the number of units, expected to be completed in 2009, which have actually broken ground.'

However, it added that it understands that actual construction for a project typically begins within 1-3 months after the developer obtains the permit to commence structural works for the project.

The number of developments that could be deferred will remain unknown. CB Richard Ellis executive director Jeremy Lake pointed out: 'Even if the property has been demolished, a meaningful number of projects will be delayed as construction costs are expected to fall over the next 18 months.'

Extract:BT 22 Dec 2008
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Size of the DPS behemoth

2008-12-20T07:59:00.001+08:00

10,450 sold & uncompleted private homes under the DPS now; analysts worried about those getting TOP in 2010-11

SOME 10,450 sold and uncompleted private homes are now under the deferred payment scheme (DPS), according to official data released yesterday.

Of the amount, close to half - 4,560 units - will be completed in 2009, while another 2,540 homes will be completed in 2010, the Urban Redevelopment Authority (URA) said. Under the DPS, which was introduced by the government in October 1997 and withdrawn in October 2007, the bulk of the purchase price of a property is due only after a project obtains its temporary occupation permit (TOP).

The data was welcomed by both analysts and the Real Estate Developers' Association of Singapore (Redas). Over the past several months, many market watchers and analysts have been estimating how big an impact the DPS will have on developers' cashflow and earnings if buyers default on their homes as TOP approaches.

'I think it provides a clearer picture as to the extent of the problem,' said Citigroup's head of Singapore equity research, Chua Hak Bin. 'And it is good that the government acted to stop the system when it did. If not, things would have got a lot worse.'

Said Redas: 'URA data, together with data compiled by Redas, helps to allay concerns that speculators may repudiate their DPS purchases at below-market prices as the completion date nears.' In its statement, Redas highlighted 10 projects - including City Developments' The Sail and Keppel Land's Park Infinia - where the DPS was offered but full payment was still made to the developers once TOP was obtained.

For now, the real area of concern is thought to be the 2,540 units under the DPS that will obtain TOP in 2010.

Redas also said that while units may be affected by market sentiments, sales contracts cannot be repudiated easily.

URA's data proves that the DPS scheme was 'very popular', Citigroup's Dr Chua said. To arrive at its numbers, URA did a survey among property developers of uncompleted DPS-approved projects. In total, developers of 605 projects, comprising 72,384 units, were granted approval to offer the DPS. Of this amount, there were 18,208 sold but uncompleted units as at end-November this year. And of this figure, 10,450 (57 per cent) were still under the DPS.

The fact that the bulk of DPS units will be completed in 2009 is cause for some concern, analysts said. '2009 is going to be a tough year for the economy, and there are 4,650 units under the DPS that will be completed,' said Ku Swee Yong, director of marketing and business development at Savills Singapore.

But assuming a three-year construction period, a large proportion of the units that will obtain TOP in 2009 were probably launched and sold in 2006 and early 2007, at prices that are relatively lower than today's level or the expected level in 2009. So even if the property market continues to weaken in 2009, the owners of these 4,560 units could still lease out the homes or sell them, analysts said. However, if developers had offered the DPS to many sub-purchasers when the original purchasers sub-sell the units, then defaults could be expected.

But for now, the real area of concern is thought to be the 2,540 units under the DPS that will obtain TOP in 2010. Of this number, 1,270 of the units are located in the core central region (CCR), which includes Sentosa and Marina Bay.

'Generally, I'm more concerned over the units which will receive TOP in 2010-2011, which could have been purchased in 2007 at the peak of the property market,' said DMG & Partners Securities analyst Brandon Lee.

And while developers have the legal right to pursue buyers who walk away from their deals, it could be harder to do this when it comes to foreigners, said Knight Frank managing director Tan Tiong Cheng.

Normally, about 75-90 per cent of uncompleted private residential units will be bought by Singaporeans, said DMG's Mr Lee. But in 2007, the proportion fell to 63-68 per cent, with the remaining purchases made by PRs, foreigners and companies. 'We see this segment as the most likely to return their units,' he said. His back-of-the-envelope figure puts the amount expected to be returned as possibly somewhere between 20-30 per cent.

URA said that it provided the data to enable the public to make a better assessment of the private housing market. 'This information was provided by developers in confidence and with the understanding that data for individual projects would not be released to the public. Hence URA is only releasing aggregated data and not data for individual projects,' the government agency said.

'Conducting a survey of developers of all uncompleted DPS-approved projects requires a lot of time and resources from the developers as well as the government. Given that the number of uncompleted units sold under DPS is likely to decline as projects are completed over time, we will monitor the situation and consider whether there is a need to conduct further surveys in future,' URA said in response to a query from BT.

BT 20 Dec 2008
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D-Day for homebuyers

2008-12-20T07:57:00.002+08:00

7,100 units ready in next two years, buyers may face difficulties: Analysts

JUST how vulnerable is Singapore’s :souring economy to a wave of defaults from private home buyers who had made use of the popular Deferred Payment Scheme (DPS)?
.
:It’s a question that continues to split analysts, even as the Urban Redevelopment Authority (URA): on Friday released, for the first time, data on private homes sold under the DPS, a decade-old plan scrapped in October last year.
.
To “provide transparency”, the agency revealed that 10,450 uncompleted private homes had been sold under the scheme as at end-November.
.
As the DPS tends to be used by speculators, the data breakdown reflects the potential number of homes that could be returned to developers, should buyers fail to secure financing by the time a project is completed and receives the Temporary Occupation Permit (TOP).
.
For many, D-day approaches: Most of the units — 4,560 — will be ready next year, followed by another 2,540 units in 2010.
.
With these two years likely to be weighed down by a global economic slump, buyers with shallow pockets will have difficulty coughing up the bulk of the price tag by the TOP date, especially as banks have become tight-fisted. If the purchase falls through, units will return to the market, possibly depressing prices.
.
To Chesteron Suntec International research director Colin Tan, the statistics paint a grim picture.
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“If we assume all the people buying under DPS meant to flip, the 4,560 units represent one year of supply for a bad year. It’s bad,” Mr Tan told Today.
.
Only 4,000 to 5,000 new private homes are expected to be sold this year, he said, way below last year’s 14,800.
.
Under the DPS, the downpayment is :only 10 to 20 per cent of the unit’s price and the customer makes no other payments during the construction period — typically two to three years — until completion. The arrangement appeals to speculators who, during boom time, made just a small payment upfront and managed to “flip” the unit for a quick buck before the TOP date.
.
:Some feel the DPS may create a local version of a sub-prime meltdown. Will the market soon be flooded with desperados cancelling purchases or defaulting? Developers are putting up a brave front.
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:“We note that DPS cases will peak in 2009. These units would have been purchased in 2005/6 before property prices peaked in late 2007. As the purchase prices of these units are likely to be below current market price, we are confident that such property purchasers will want to proceed with completion of ====:their sale, upon their unit’s grant of the TOP,” the Real Estate Developers’ :Association of Singapore (Redas) said in a statement.
.
:Redas also stressed that buyers have no right to cancel sale-and-purchase agreements; only the developer does. So if the buyer fails to adhere to the contract, the developer could not only keep the downpayment but also demand claims and resell the property.
.
:Redas did not say if their members were witnessing an increase in customers asking to repudiate contracts.
.
:According to Knight Frank director of consultancy and research Nicholas Mak, people who bought units outside the Core Central Region – plum areas including Orchard and Sentosa – are “less at risk of default because a relatively higher proportion of these homes were bought for owners’ occupation”.
.
:Two-thirds of the unfinished homes bought on DPS are outside the Core Central Region.
.
:In the first place, said Savills Singapore director of marketing and business development Ku Swee Yong, DPS customers do include genuine home buyers, not just speculators.
.
:Mr Mak said even if the property market weakened further next year, homebuyers collecting their keys “could either lease out the homes at relatively good returns or sell the homes at their breakeven level or with a profit”.
.
:As for those taking delivery in 2010, they are unlikely to be pressured to sell at distress prices as “we expect the property market to stabilise in 2010 and may show some signs of recovery”:.

CNA 20 Dec 2008
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Impact of US Dollar Crash on Property Price

2008-12-19T09:27:00.002+08:00

Extracted from the Singapore Property Forum :

Citizen wrote:
if US$crash and very likely it will, interest rates will skyrocket and a panic ensue, creating a BIG rush out of US$ assets in billions and even trillions. The market will be in another turmoil Assets and economies invested heavily in US$ can be destroyed and the consequences are disastrous. Dont dream that Singapore overpriced property is a hedge and all these major economies and investors cannot find a safe heaven and divert to Singapore. when investors are so badly hit, there is a spiral effect and it will create even more fear. Affected economies will look after their domestic problems and investment before looking outside. Look around and do some serious research in other countries, there are far more safer, cheaper and attractive options than investing in Singapore overpriced properties. Even our Temasek and GIC if you see are investing overseas and they haven proven correctly that their return is still better so far. Think about it carefully what so attractive and competitive of overpriced properties in Singapore. It has not even fallen to meaningful level and probably not because the budget next month should again likely to aim at propping up properties prices and improve sentiment and some unwary speculators and investors can be trapped or does it really matter. Better to stay away from such BIG financial commitment. No big deal to miss the boat except for the wealthy and rich speculators who always want more. Ordinary citizens and small invesors :Be safe than sorry, no need so much or show off or envious about. Humble opinion.

Anonymous wrote:
US$ crash is for sure, funds of US$Trillin will flow to Asia for sure, this is the reverse of 1997 Asia financial crisis. China will push demand till 2-4x of current US demand, want to do biz, want infrastructure projects....80% is in Asia. RMB$4Trillion development is just the beginning, another 5 round of bigger size stimulus packegae is on the way in coming months to years.
Why US property drive to big bubble in 2007? The bubble started to build up in 1998, influx of Millions of Asian flew to US afetr Asia crisis, that is the beginnig of Silicon Valley...wall st.....every corner of US, you will immigrants & foreign talents. US property up all the way from 1998 to 2007. When Asia crisis started for 1 yr, US property escalate. So later next year, we will start to see influx of ang mo.
Quesstion now is US drop in demand can be pick up by Asia? US drop in dmand is the most 1-2%, is not drop by 10-20%, with China + India= 10x US population, can't the govt stimulate the economy to achieve a small drop in US demand?
Cheap US$ with 0% rate is everywhere in the world next year, they are printing it unlimitedly, Obama will have to print more, when the effect of these money surface, tyhe begin of another big bubble, especially in Asia which have US$Trillion of reserved & is going to cash out when times come, plus all the rush of coneversion of US$ to asian currency to flock here.....worse than tsunami when it triggers....

Guest wrote;
Money needs to be constantly circulated as efficiently as possible to maintain economic productivity. Right now, too much money is idle in banks and reserves, and not being put to productive use.

As Americans spend less, China knows already that it needs to start spending more to hasten economic recovery, else if this trend continues, it will lead to ever slowing growth and eventually social instability as more people go out of work and can't afford basic necessities.

The US can only do so much as reduce their interest rates to near-zero so it needs China to do it's part as well as all the economies are interconnected. I expect in the next one year we will start seeing increased spending from the Asian powers, better flow of liquidity and recovery in the health of the global economy.

So what does this mean for Singapore property 2009? Prices will probably remain above 2006 levels, but not as exuberant as 2007. A good time to upgrade or purchase for own-stay, especially if there are urgent sales from owners of multiple properties (and there are plenty of such these days). I see a great future for Singapore as a global city for the wealthy, but private property is still too expensive an investment option for most people, and unlikely to be able to "flip" for quick profits.

May also want to read:
99 Leasehold Property: Calculation of Depreciation Rate based on Singapore Land Authority Data
Spore Property History 1960-2008
Property Investment Tip: Don't put all your eggs in one basket
HDB Resale Price Index 1990-2008: Graph & Chart

HDB's Dew Spring @ Yishun: Supply of more smaller flats at affordable prices

2008-12-19T08:12:00.007+08:00

THE Housing and Development Board (HDB) has launched Dew Spring @ Yishun where a good number of units are smaller two and three-room flats.

2-room at $76,000-$90,000 and 3-room at $120,000 to $146,000

There are 144 two-room flats priced between $76,000-$90,000; and 216 three-room flats priced between $120,000 to $146,000.

The board said that in pricing new flats, it considers several factors such as location, individual attributes of the flats, design of the project and the prevailing market conditions.

'To ensure public housing is affordable for first- time home buyers, new HDB flats are priced below their equivalent market prices,' it added.

HDB priced 3-room flats 20%-30% less than resale flat prices

HDB says that prices of nearby resale flats (which are about 20 years old) are about $175,000 to $180,000 (on a pro-rated basis with units of the same 65 square metre size). As such, HDB has priced the three-room flats at about 20%-30% less than comparable resale prices.

HDB priced 4-room flats 7%-12% less than resale flat prices

There are 504 four- room flats and these have been priced between $197,000 and $238,000. HDB says that resale prices are between $225,000 and $257,000 (on a pro-rated basis with units of the same 90 sq m size) for the four-room flats nearby. As such, Dew Spring four-room flats are about 7%-12% cheaper.

HDB did not have comparable resale prices for two-room flats.

HDB's supply of smaller flats for Lower Income families & Downgraders

Including Dew Spring, HDB has launched a total of 883 units of two-room and three-room flats this year and plans to launch another 100 smaller flats soon. It also plans to offer about 4,000 smaller units over the next two years. The launch of Dew Spring follows National Development Minister Mah Bow Tan's announcement in Parliament on Nov 18 that lower-income families and those who need to downgrade to smaller flats can look forward to a steady supply of smaller flats.

Extract: BT, 19 Dec 2008
May also want to read:

HDB Resale Price Index 1990-2008: Graph & Chart
99 Leasehold Property: Calculation of Depreciation Rate based on Singapore Land Authority Data
Spore Property History 1960-2008

Private Property Sales increases in November: Rosewood Suites and Newton Edge sold most

2008-12-19T06:51:00.000+08:00

The launch of new developments helped pull up developer sales to 192 units in November, up from just 112 units in October. The number of units launched by developers increased from 159 units in October to 382 units in November.

Launch-ready units hit 6,512 units in November

Urban Redevelopment Authority's (URA) monthly real estate data also revealed that the number of launch-ready units hit 6,512 units in November, a marginal rise over October but an increase of 3,840 units from a year ago.

Rosewood Suites and Newton Edge sold most

Rosewood Suites in Woodlands by EL Development (ELD) sold 42 units in November, the most units sold, followed by Newton Edge (34 units) and RV Suites (19 units).

ELD is a unit of local builder Evan Lim & Co. Managing director Lim Yew Soon said that the pricing - at an average of $580 psf - 'may be on the low side' but added, 'We expect construction costs to come down next year so we took a bit of a risk with a lower margin'.

Developer says may raise price and price war not likely

Still, Mr Lim conceded that, 'the price may not be sustainable in the long run', and ELD could begin to raise prices.

He also believes that a price war among developers is not likely because most developers bought sites at about the same price. 'And unless a developer goes bust, there is no reason for them to sell at a loss,' he added.

Rosewood Suites' Prices extremely attractive: Property Agents

PropNex CEO Mohamed Ismail said that prices for existing developments in the same area such as Casablanca are going for between $500-$550 psf. He said that Rosewood Suites is 'extremely attractive in today's market' especially considering that new public housing flats are about $300 psf with Design, Build and Sell Scheme (DBSS) flats at about $450 psf.

PropNex was the marketing agent for Rosewood Suites and Mr Ismail added that most of the buyers were HDB upgraders.

Already, Knight Frank notes that the lowest priced non-landed unit sold in November was in Rosewood Suites at $512 psf while the highest priced non-landed unit is Orchard Scotts, which sold for $2,006 psf (The highest-priced unit sold in Orchard Scotts was $2,407 psf).

Rosewood Suites and Newton Edge both in Central Core Region

Both Newton Edge and RV Suites are in the core central region (CCR) and Colliers International director for research and advisory Tay Huey Ying noted that more than half the 382 units launched were in the CCR.

Launch of Prime Properties may indicate small developers' weak holding power

She added: 'Developers have been stepping up launches of prime properties since August 2008, in a reversal of the first half's trend where developers tended to hold back launches of prime properties. This could be an indication of weakening holding power amongst smallish and mid-tier developers with prime development sites.'

Launch momemtum expected to continue

Ms Tay believes developers are likely to continue with the current launch momentum and could launch some 450-500 new units in December 2008, bringing the total launch volume for 2008 to some 6,500 units, less than half of last year's launch volume of more than 14,000 units.

Ms Tay expects developers' sale volume to hover between 150-200 units. This would bring sales volume for the year to less than 4,500 units, or less than a third of last year's volume of more than 14,000 units.

Other developments that registered better sales in November were Evania at Upper Paya Lebar Road and a landed housing project at Andrews Terrace.

Price remains a critical factor to move sales

CBRE Research executive director Li Hiaw Ho said: 'Price remains a critical factor to move sales, as seen by the good response to these projects.' He also said that prices for units in Evania have apparently been reduced from above $800 psf when it was first launched in March to $610 psf-$650 psf.

'Buyers will remain very cautious even if some re-pricing sets in,' he added. 'Since the economic drag is expected to persist into 2009, developers may be increasingly open to considering creative marketing tactics and soft discounts to attract buyers,' Nicholas Mak added.

Home-buying sentiments to remain subdued to Jan after Chinese New Year

Knight Frank director (research and consultancy) Nicholas Mak expects home-buying sentiments and launch activity to remain subdued until after the Chinese New Year in January.

DTZ executive director Ong Choon Fah also reckons the market is seeking 'clarity' on the economy and could wait for the January Budget measures before moving.

Extract:BT,16 Dec 2008
May also want to read:
Newton Edge: Buyers' Review
Launch of Rosewood Suite at $580 psf
Spore Property History 1960-2008
HDB Resale Price Index 1990-2008: Graph & Chart

Impact of US Dollar Crash on Property Market

2008-12-18T09:34:00.000+08:00

Extracted from the Singapore Property Forum :

ann wrote:
Certainly, indiscriminate printing of US$ will lead to devaluation of the US$. Thus far, Asians have picked up the slack, but recent comments from China and Singapore seem to indicate Asia's patience is wearing thin....

PM Lee:
www.straitstimes.com/Breaking%2BNews/Singapore/Story/STIStory_307925.html

imbalances which had built up over the past five to seven years between the United States, which has run up huge budget deficits, and Asia, with burgeoning surpluses.

'We can't go back to where we were before, which is, Asians lend money to Americans... Americans borrow money to spend,' said Mr Lee. 'So how do we get savings and consumption back in balance?'

With the American consumer cutting back, someone else - whether the Chinese or the Indians - has to pick up the slack. The whole world would need to adjust to the new situation forced upon it by the crisis, he said.

The China Daily
www.straitstimes.com/Breaking%2BNews/Money/Story/STIStory_315471.html

BEIJING - CHINA warned on Wednesday it would not keep lending money to the US economy indefinitely, even as new data showed it had consolidated its position as the top buyer of American government bonds.
'China's increased purchase of US Treasury securities should not be interpreted as an endorsement of the assumption that the US can borrow its way out of the current financial crisis,' the China Daily said in an editorial.

The warning from the state-run newspaper, an English-language daily that mainly addresses a foreign audience, came after the US Treasury Department reported a steep increase in Chinese holding of US Treasury bonds.

The China Daily said that, given the global economic crisis, the consequences would be serious if China and other nations stopped channelling money into the US economy.

'Interest rates in the US would rise to undermine that government's efforts to bailout distressed financial institutions and companies,' it said.

Anonymous wrote:
Much as China, and perhaps, Singapore, are getting impatient and possibly, fed-up with being at the mercy's of the US economy, their economies are so entrenched that to stop lending to US is easier say than done. The middle class populations in India and China are still too small to pick up the slack. The way I see it, it'll take another decade at least to balance the savings and consumptions imbalances in the current global economy.

Guest wrote:
Money needs to be constantly circulated as efficiently as possible to maintain economic productivity. Right now, too much money is idle in banks and reserves, and not being put to productive use.

As Americans spend less, China knows already that it needs to start spending more to hasten economic recovery, else if this trend continues, it will lead to ever slowing growth and eventually social instability as more people go out of work and can't afford basic necessities.

The US can only do so much as reduce their interest rates to near-zero so it needs China to do it's part as well as all the economies are interconnected. I expect in the next one year we will start seeing increased spending from the Asian powers, better flow of liquidity and recovery in the health of the global economy.

So what does this mean for Singapore property 2009? Prices will probably remain above 2006 levels, but not as exuberant as 2007. A good time to upgrade or purchase for own-stay, especially if there are urgent sales from owners of multiple properties (and there are plenty of such these days). I see a great future for Singapore as a global city for the wealthy, but private property is still too expensive an investment option for most people, and unlikely to be able to "flip" for quick profits.
Contine with: Impact of US Dollar Crash on Property Price

May also want to read:
99 Leasehold Property: Calculation of Depreciation Rate based on Singapore Land Authority Data
Spore Property History 1960-2008
Property Investment Tip: Don't put all your eggs in one basket
HDB Resale Price Index 1990-2008: Graph & Chart

Property agents to do financial risk-profiling of potential property buyers?

2008-12-18T06:39:00.005+08:00

The following letter is published in several mainstream media. I've reproduced it for blog visitors' comments. For discussion of this topic, read also the post:
Is there sufficient government regulation to deter a subprime crisis in Singapore

Risk profiling for homebuyers? - Letter from Ee Teck Siew

Such checks would minimise impact of sudden economic downturn on investors
MANY Singaporeans who bought properties during the boom years have since been caught up by the sudden financial turmoil and found themselves in a bind as the property market has taken an about-turn and some banks have frozen lending.
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Such investors stand to lose a lot of money should they sell in this declining market. The problem is compounded for “flippers” who are stuck with properties bought under deferred payment schemes, which they had every intention of selling as soon as prices went up. At its worst, economic turmoil can bring about the collapse of the property market, causing severe consequences to the economy at large.
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Many people do not consider whether they can truly afford a long-term asset such as property when prices skyrocket, and blindly jump into the market hoping to get a good bargain — either to buy a dream home while it’s available, or to make a windfall by flipping the unit.
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As with the financial advisory and insurance industries, maybe it is time that the Government and the relevant industry body implement a fact-finding process for potential home buyers. Under the Financial Advisers Act/Financial Advisers Regulations, the fact-finding process is mandatory before any investment product can be sold. The objective is to ensure consumers buy what they can afford, taking into account their needs and risk profiles.
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Buying a property involves substantial financial resources and, for the Average Joe, probably a lifetime of commitment to service the loans. Many could end up enslaved to their properties. They could face significant financial losses when a negative equity situation occurs, in that their outstanding mortgage loans could exceed the market values of their properties.
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It is high time a more rigorous regulatory regime, one with a focus on educating consumers, be added to help Singaporeans in their financial decisions.

May also want to read:
99 Leasehold Property: Calculation of Depreciation Rate based on Singapore Land Authority Data
Spore Property History 1960-2008
Property Investment Tip: Don't put all your eggs in one basket
HDB Resale Price Index 1990-2008: Graph & Chart

Growth may be below 2.5% in '08: Hng Kiang

2008-12-16T07:11:00.001+08:00

SINGAPORE'S economic growth this year may miss the government's forecast as the global economy worsens amid a credit crisis, Trade Minister Lim Hng Kiang said.

Mr Lim: Says the nation's monetary policy stance is conducive to growth
'The economy is very volatile and very vulnerable to global conditions,' Mr Lim told reporters here yesterday.

'We believe that the growth for this year will come slightly below our earlier projections of 2.5 per cent because since September, there has been an unprecedented drop in world market conditions.'

Still, the nation's monetary policy stance is conducive to growth, he said.

The island's economy has shrunk for two straight quarters and companies such as DBS Group Holdings Ltd and Parkway Holdings Ltd have announced job and wage cuts.

The export-dependent country has been battered by declining orders from its biggest customers in the recession-hit nations of the US and Europe, as well as emerging markets.

The South-east Asian nation will expand 2.5 per cent in 2008, lower than an October forecast for 3 per cent growth and less than a third of 2007's pace, the trade ministry said last month.

The economy, already in recession, may shrink by as much as one per cent next year, the first time since 2001, it predicted then. -- Bloomberg

May also want to read:
99 Leasehold Property: Calculation of Depreciation Rate based on Singapore Land Authority Data
Spore Property History 1960-2008
Property Investment Tip: Don't put all your eggs in one basket
HDB Resale Price Index 1990-2008: Graph & Chart

Bank Loans for Property see Credit Crunch

2008-12-15T08:43:00.003+08:00

Financial institutions are not admitting to it, but they appear to have turned shy in granting loans, especially for property and motor vehicles, some observers say.

‘We do feel they are a shade conservative now. It used to be easy if you wanted to buy a second property,’ said Mr Eugene Lim, associate director of real estate firm ERA Asia-Pacific.

Banks pay more attention to stability of income for loans assessment

‘Now, they actually pay more attention to the buyer - like the stability of his income, whether the household is one or dual income,’ he said.

Mortgage take longer to be approved

Property loans, which used to take three days to be approved, may now take a week, noted MrReeve Ho, senior vice-president of property firm HSR International.

There is now more to-ing and fro-ing in processing loans too, he observed.

‘In the past, they would give the nod if all the documents were in order. Now, even with all the documents in order, they may grant a smaller loan,’ he said.

Banks grant mortgage only 60%-70%, instead of 90%

The Monetary Authority of Singapore (MAS) allows a home buyer to take a loan of up to 90% of the home’s purchase price or valuation, whichever is lower.

But banks are granting 60%-70% of the price, said those in the property business.

ERA’s Mr Lim added that a salaried applicant with not more than one property, and hence less likely to be a speculator or to be overstretched, would find it easier to get a loan than someone whose income is commission-based.

DBS, OCBC, UOB and Citibank say no credit tightening

But banks such as DBS, OCBC, UOB and Citibank insisted that it is business as usual and they have not tightened credit.

‘Our prudent consumer credit assessment process helps us evaluate the applicant’s ability to service a credit facility such as a car or housing loan, regardless of market conditions,’ said a UOB spokesman.

‘These credit facilities should never become a financial burden to our customers, in good or bad times. Customers with good credit records and stable income should not face problems getting a credit facility from us.’

Citibank said it continues to see steady growth for its credit card and personal credit line, Ready Credit, applications.

‘While we are cognisant of the environment, we make every credit line assignment tailored to the individual customer’s situation.

‘We continue to use rigorous credit criteria which take into account credit history, sources of income and employment status, among others,’ said Mr John Denhof, its business director for credit payment products.

Extract:Sunday Times, 14 Dec 2008

May also want to read:
99 Leasehold Property: Calculation of Depreciation Rate based on Singapore Land Authority Data
Spore Property History 1960-2008
Property Investment Tip: Don't put all your eggs in one basket
HDB Resale Price Index 1990-2008: Graph & Chart

Unsold condo units increase with TOP at The Sea View, Lakeshore, Icon, Park Infinia, St Regis Residences

2008-12-15T08:36:00.006+08:00

At the end of the third quarter, the number of unsold units in completed non-landed developments stood at 759, up from 461 a year ago.

Number of unsold condo units may continue to increase with weak sentiment

‘This number may increase given the weak homebuying sentiment which is expected to persist,’ said Knight Frank director of research and consultancy Nicholas Mak.

Seller of TOP condos eager to let go of unoccupied units

Going ahead, there could also be a pool of sellers of newly completed, unoccupied developments eager to let go of their units. Because of the economic uncertainty, some owners of newly completed developments may be looking to offload their property instead of holding on to a big investment.

Potential Buyers may have more choices by 2009

Although most of the projects targeted for completion next year received a good take-up rate during the good years in 2006 and last year, some of them would have been sold at high prices.

‘Some buyers who have stretched their financial limits and bought multiple units may sell these units on the resale market, so potential buyers will have more choices,’ said Mr Mak.

Unsold completed units at The Sea View, Lakeshore, Icon, Park Infinia, St Regis Residences

For example at The Sea View, a recently completed condo near the bustling Parkway Parade mall, there are unoccupied high-floor units going for $930 per sq ft (psf). Caveats filed this year showed that deals had been done at $1,000 psf and above.

Other recently completed condos that still have new units available include Lakeshore in Jurong West, Icon in Tanjong Pagar, Park Infinia at Wee Nam in Lincoln Road and St Regis Residences Singapore in Cuscaden Road.

Extract:Sunday Times, 15 Dec 2008
May also want to read:
99 Leasehold Property: Calculation of Depreciation Rate based on Singapore Land Authority Data
Spore Property History 1960-2008
Property Investment Tip: Don't put all your eggs in one basket
HDB Resale Price Index 1990-2008: Graph & Chart

Punggol's waterfront HDB flats and private homes from 2010

2008-12-13T11:07:00.002+08:00

PUNGGOL, which started out as a sleepy fishing village, will get a new lease of life from 2010 onwards, with thousands of waterfront HDB flats and private homes planned alongside the soon-to-be bustling 4.2km Punggol Waterway.

Launch of Punggol waterfront site by 2010/2011

'HDB plans to offer about 3,000 flats for sale annually in Punggol, subject to demand,' said Minister for National Development Mah Bow Tan yesterday. 'By end-2011, there will be about 23,000 flats completed. Our plans to launch the first sale site at the Town Centre for a mixed commercial and private residential development are also on track. We will be launching this waterfront site by 2010/2011.'

Right now, there are about 17,000 HDB flats in Punggol. Since August last year, HDB has launched over 5,000 flats under seven Build-To-Order (BTO) projects in the town.

Construction on the $25 million project to revamp the waterway will begin next year and be completed by 2010, HDB said.

Housing along the Punggol Waterway

After that, plans for special housing designs that will capitalise on the views along the waterway will be developed, Mr Mah said. The idea, he said, is to bring the waterway closer to residents. 'With the waterway landscape proposals completed, we can focus on another important milestone in our Punggol journey: shaping the housing along the Punggol Waterway.'

With this in mind, HDB yesterday launched a new design competition for Punggol's Waterfront public housing. Competing firms will have to come up with a masterplan for some 6,000 HDB flats during the first stage. Five finalists will be chosen to proceed to the second stage, where they will have to come up with a more detailed plan for a smaller plot of land, with an estimated 1,300 units, within the bigger site.

Extract: BT, 13 Dec 2008

May also want to read:
99 Leasehold Property: Calculation of Depreciation Rate based on Singapore Land Authority Data
Spore Property History 1960-2008
Property Investment Tip: Don't put all your eggs in one basket
HDB Resale Price Index 1990-2008: Graph & Chart

Park Central @ AMK 70% sold

2008-12-13T11:01:00.001+08:00

UE managing director of integrated facility management and property development business David Liew said that all the four-bedroom and penthouse units in the 578-unit development have been sold with only five-room units left.

Mr Liew added: 'Now that the bulk of the units has been sold, our next goal is to make sure we deliver a quality home, and on time, to our customers.'

Park Central @ AMK is expected to get TOP (temporary occupation permit) in mid-2011.

The development is the third Design, Build and Sell Scheme (DBSS) development in Singapore.

The Housing and Development Board ( HDB ) scheme, which allows private developers to sell homes under HDB terms, was first announced in 2005.

UE says that since the launch in July, Park Central @ AMK received more than 2,300 applications. Its showflats also saw more than 23,000 visitors in the first two weeks.

A spokesman for UE added that most of the buyers have opted for HDB loans.

Last month, Chinese firm QingJian Realty launched the fourth DBSS development, Natura Loft at Bishan, with units going for around $450-$570 psf.

On Nov 14, it was reported that Natura Loft received about 600 applications for 480 flats a day before the close of applications.

BT, 12 Dec 2008
May also want to read:

HDB DBSS 6 Sites Detail Information
99 Leasehold Property: Calculation of Depreciation Rate based on Singapore Land Authority Data
Spore Property History 1960-2008
HDB Resale Price Index 1990-2008: Graph & Chart

Property investment sales slow to a trickle

2008-12-12T08:10:00.003+08:00

Players wary of big bang deals amid weaker sentiment, tighter financing
The weak property market sentiment and tight financing have combined to compress the total investment sales of Singapore real estate to just $17.8 billion, year-to-date. This is a third of the record $54 billion achieved for the whole of last year, according to CB Richard Ellis data.

Just $290 million of investment sales have taken place in Q4 this year (up to Dec 9).

What is Investment Sales
Investment sales are a gauge of developers' and investors' medium- to long-term confidence in the property sector.

CBRE defines such deals as transactions with a value of at least $5 million, comprising government and private sales of land and buildings (both strata and en bloc). It also includes change of ownership of real estate via share sales.

Market watchers are not upbeat about the investment sales climate in the near future. CBRE forecasts the tally for next year could come in at a modest $5-10 billion, a level last seen in 2004.

Investors will remain on the sidelines
CBRE executive director Jeremy Lake says: 'With market uncertainty and economic risks appearing to be on the downside, many investors will remain on the sidelines of the property market, waiting for signs of price stabilisation before investing. With the global economy likely to enter a protracted downturn on the back of the deepening financial crisis, transaction volumes in property are expected to remain low over the next few quarters.'

Agreeing, DTZ senior director Shaun Poh says: 'I would not be surprised if we don't see any major transactions for the next three to six months. Potential investors are waiting for property prices to come down. Even property funds that have raised money can't make acquisitions because of the difficulty of raising the debt component to pay for the purchase - despite trying to source for financing in overseas markets like Hong Kong and London in some instances.'

Capital available for property investment become even scarcer
CBRE's Mr Lake too notes that 'as credit market conditions worsen and lenders further reduce their risk appetite, capital available for property investment would become even scarcer'.

'In addition, cheap investment opportunities may arise in other asset classes, diverting capital away from property,' he added.

The property consultancy group's quarterly breakdown of investment sales shows that they have been sliding since Q3 last year, when a whopping $16.5 billion of deals were sealed. The performance in each quarter of this year has been lower than the corresponding periods of 2007, sliding to $290 million this quarter.

Residential sector still accounted for the lion's share
While the residential sector still accounted for the lion's share or 35 per cent of total investment sales deals so far this year, this was lower than the 61 per cent share last year. Also, the $6.25 billion transacted value of residential investment sales year-to-date (as of Dec 9) was 81 per cent below the full-year 2007 figure.

Collective sales market was dormant
The collective sales market was dormant as developers remained mindful of the lukewarm response to new residential launches, rising construction costs and tighter credit measures, CBRE observed. Only seven collective sales worth a total $371 million have been sealed so far this year, against the record $12.4 billion from 111 transactions in 2007.

Landed property sale slows
The Good Class Bungalow (GCB) market has also slowed considerably in 2008. A total of 48 GCB transactions worth $763.7 million have been done this year, down from $1.2 billion from 90 deals in 2007.

Office investment sales in 2008 62% below 2007
Office investment sales of $5.4 billion so far this year are 62 per cent below the $14.3 billion for full-year 2007. Ongoing turmoil in the global economy contributed to further deterioration in business sentiment, which subsequently had an impact on the office leasing market and capital flows in the local office sector.

'This resulted in no major en bloc office transactions in the second half of 2008. Hence, the office investment market is expected to remain quiet in the next few months,' CBRE said.

Sizeable office investment deals in the first half of this year included One George Street ($1.7 billion or $2,600 per square foot of net lettable area), Singapore Power Building ($1.01 billion or $1,836 psf), The Atrium @ Orchard ($839.8 million or $2,249 psf), Hitachi Tower ($811 million or $2,901 psf) and 71 Robinson Road ($743.75 million or $3,125 psf).

Industrial property sector in 2008 66% higher than 2007
Bucking the trend was the industrial property sector which contributed $3.32 billion of investment sales deals this year, 66 per cent higher than last year and also the best showing since 2002. About half of the tally for this year was accounted for by JTC Corporation's $1.7 billion divestment of its industrial portfolio to a joint venture involving Mapletree Investments, Arcapita and Mapletree Industrial Fund.

BT, 12 Dec 2008

May also want to read:
99 Leasehold Property: Calculation of Depreciation Rate based on Singapore Land Authority Data
Spore Property History 1960-2008
Property Investment Tip: Don't put all your eggs in one basket
HDB Resale Price Index 1990-2008: Graph & Chart

Developers to woo HDB Upgraders as foreign buyers pull out

2008-12-12T07:26:00.000+08:00

WITH foreign buyers pulling out of Singapore’s property market on the back of deteriorating global economic conditions, Housing Development Board upgraders are forming an increasingly important group of buyers here.

“Developers are more likely to launch projects in suburban areas or projects with smaller units so that the absolute amount is affordable,” an analyst said.
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However, others believe there are likely to be better bargains in the secondary market, where individuals may be under pressure to offload their properties in a downturn.
.
Noting that prices for mass-market condos now average between $650 to $750 per square foot in suburban locations, ERA Asia-Pacific’s assistant vice-president Eugene Lim said that developers, especially those with the financial strength, will probably not cut prices until after the 2009 Budget at the end of January next year.

Extracted from BT 11 Dec 2008

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Property Investment Tip: Don't put all your eggs in one basket
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Property Repricing expected after Jan's Spore Budget to break stalemate

2008-12-11T09:17:00.004+08:00

Overall current thin private residential transaction volume is being caused by a 'price mismatch between unwilling sellers and unwilling buyers' and the stalemate is expected to last 'until repricing takes place', DTZ executive director Ong Choon Fah says.

'The uncertainty has to go away first. Companies will make a lot of decisions after the Singapore Budget in January.'

'Hopefully after that, some of the dust will settle and things will get clearer.'

Agreeing, the seasoned property agent said: 'It's easier to match buyers and sellers when things are more stable and we should start to see volumes improving from mid-next year.'

Extracted from Singapore Property Forum

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99 Leasehold Property: Calculation of Depreciation Rate based on Singapore Land Authority Data
Spore Property History 1960-2008
Property Investment Tip: Don't put all your eggs in one basket
HDB Resale Price Index 1990-2008: Graph & Chart

High-End Condos fared worse than Mass Market Condos

2008-12-11T08:18:00.001+08:00

Credo's study shows that average prices of high-end projects generally posted declines, ranging from 12%-28% during the period. In contrast, the average prices of units in selected projects in the mass market generally rose 1%-7% between second-half 2007 and second-half 2008.

What goes up faster will come down faster

Market watchers note that high-end residential property prices climbed much earlier during the bull-cycle and the price gains recorded were also much steeper. In contrast, mass-market home prices have lagged. 'So what goes up faster during the bull-run also tends to fall faster during the downturn; its physics,' as one seasoned residential property consultant put it.

High-End Condos' Demand More Elastic

Credo Real Estate managing director Karamjit Singh feels that high-end condo prices tend to be more elastic in relation to property cycles compared with mass-market projects. This is partly due to differing buyer profiles in the two segments. 'Suburban condo buyers usually make their purchases for their own use and less as a tool for investment or speculation, unlike buyers in the high-end segment,' Mr Singh says.

'Prices are not a perfect science at the high-end due to the profile of the rich and foreign buyers who make up a good proportion of demand. They're less price sensitive and the products are less homogeneous; if there's something they like, even if it is priced at a premium, they're quite happy to buy it,' Mr Singh says.

Mass Market Buyers for own occupation

Agreeing, another property consultant says that during the downward slide, 'investors, if they need to keep themselves liquid, will exit. In many cases, they may still make a profit even if price drops, as they entered the market early. But even if they need to cut losses, they will. Suburban home buyers, however, are likely to have purchased for their own occupation or upgrading, so they can't sell so readily.'

Global crisis impacted the rich much more than the man in the street

Credo's Mr Singh points out that the dramatic volatility in high-end prices over the past three years has also been shaped by the large number of prime district en bloc sales in 2006-07. This led to a chunk of the physical stock being withdrawn and driving high-end prices up astronomically. On the flip side, this global crisis in 2007-08 has actually impacted the rich much more than the man in the street, thereby dampening demand for high-end homes.

High-End Property Price Fell 12%-28%, Mass Market Condos Up 1%-7%

Credo's sample looked at Four Seasons Park condo, Ardmore Park and Cairnhill Crest in the Orchard Road belt, which showed average transacted prices fell 27, 12 and 17 per cent respectively in H2 2008 over H2 2007.

At Sentosa Cove, Credo's sample basket comprised The Azure, The Berth and The Oceanfront condos. The declines were 22 per cent for The Azure and 28 per cent for The Oceanfront. The sole unit transacted this half for The Berth was at $1,590 psf, down 5 per cent from the $1,679 psf average price achieved for 20 deals in H2 last year.

In the city centre, the average price at Marina Bay Residences fell 17 per cent to $1,985 psf in H2 2008 with five deals done. At The Sail @ Marina Bay, the average price slipped 14 per cent to $1,811 psf, with 42 deals in H2 2008.

In the mid-priced segment - defined as the low-$1,000 psf price range - One Amber, Sky@Eleven and The Tessarina - saw average transacted prices fall 19, 21 and 17 per cent respectively.

However, suburban Singapore demonstrated greater price resilience. Average transacted prices of eight of nine projects studied in the west, east and north posted 1 to 7 per cent gains in H2 2008 over H2 2007.

Trends to continue to 2009

Credo's analysed caveats captured by Urban Redevelopment Authority's Realis system up to early November. 'We selected projects we felt symbolise their respective location-based categories, are large enough with sufficient transactions relative to the project size to reflect a clear trend, and were ideally not affected by en bloc sales initiatives last year as that could distort price patterns,' Mr Singh explains.

Property analysts generally expect the trend of high-end home prices being less resilient than mass-market prices to continue in 2009.

Price gap between high-end property and mass market will eventually close

However, DTZ executive director Ong Choon Fah argues that the decline in the high-end segment has to slow down at some stage. 'There has to be a price gap between the mass-market and high-end; otherwise, we'll start seeing a trade-off and demand may shift to the upper segments under market dynamics,' Mrs Ong says.

Extracted from Singapore Property Forum

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99 Leasehold Property: Calculation of Depreciation Rate based on Singapore Land Authority Data
Spore Property History 1960-2008
Property Repricing Expected After Jan's Singapore Budget

Deferred Payment Scheme (DPS) buyers to unload properties on credit crunch

2008-12-10T10:15:00.004+08:00

HSR Property Consultants said there’s been an 8% jump in the number of private homes being put up for sale recently compared to previous two quarters; and about half of the sellers have bought units under the Deferred Payment Scheme (DPS).

Eric Cheng, executive director, HSR Property Consultants, said: “They are afraid that the current loans may not sustain the current price which they bought. There’s also concern that the banks may not want to loan them at least an 80% loan. So they are afraid they have to top up more cash.”

Sellers still make marginal profits or breakeven

Calculations, however, show that these sellers will still make marginal profits or break even if they cash in on their properties now. Agents expect the market to hold up without heading to a fire sale situation where assets go at 20% to 30% below valuation.

No widespread fire sales, said property agents

Despite the negative sentiment, market players said there’s still demand for properties especially those that are realistically priced. These are sold at between 3%-5% below market value. Eugene Lim, associate director, ERA Asia Pacific, said: “There are cases of fire sales but they are confined to sellers who generally need to raise cash fast. For example, they may be running a business and run into some cashflow problems.”

Extract from CNA - 9 Dec 2008

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HDB New Flats not a safe bet as Resale HDB prices fall

2008-12-08T08:19:00.004+08:00

It used to be that one could never lose out buying a new HDB flat from the Government. It was a sure-win bet to a better life for many as they sold their flats for windfall gains after five years, as allowed under HDB rules, and upgraded to newer or bigger and nicer homes. This, however, may no longer be the case these days.

New HDB flats are subsidised and priced below those of resale flats in the same area. But there has been a shift in the market cycle, and the HDB resale market is seen heading south because of the current recession. ‘This is more or less the peak for HDB flat prices,’ said C&H Realty managing director Albert Lu.

New HDB flats not a safe bet as seen in 1996 Peak

While new flats have always been a safe bet, some who bought or are buying them now may find themselves with a paper loss soon.

The situation is similar to that in the previous 1996 peak. Back then, those who bought new flats in the new town of Sengkang found themselves ‘under water’ a few years later, said Mr Eugene Lim, an associate director of ERA Asia Pacific. The prices they paid were higher than those of resale flats in the area.

Experts say that as the HDB resale market slowly inches down, this scenario may present itself again. ‘Those who buy new flats when resale prices are high may have a higher probability of losing out,’ said Mr Leong Sze Hian, president of the Society of Financial Service Professionals.

‘In contrast, those who buy when resale prices are low may have a higher probability of a price appreciation. So, maybe a balanced cost-approach pricing may be better instead of market subsidy.’

Cost-Approach Pricing for HDB New flats

The balanced cost-approach is based on pricing the cost of building the flats. It will give rise to more stable prices that reflect inflation and wage increases, he explained.

Buyers of new build-to-order flats will have to wait about three years, by which time the market may have changed completely. They may end up in a position where their new flat’s price is similar or higher than resale prices, MrLu said.

Experts, though, are quick to add that it will be only a paper loss, if any. ‘If you don’t sell your flat, you will not see any loss,’ explained ERA’s Mr Lim. ‘There is a downside risk to buying a new flat, but it is very small.’

In any case, buyers of new flats have to occupy their units for at least five years before they can sell them. Many often continue to live in them for years after that, experts say.

HDB flats capital appreciation likely be smaller than in the past

In the next five to 10 years, if the world economy strengthens, the next peak for HDB flat prices may be higher than where they are right now, said Mr Lu.

There is, therefore, the possibility of a capital appreciation, but any gains will likely be smaller than before, since today’s buyers are paying a lot more for their HDB flats.

‘It’s no longer the $100,000 to $200,000 types of gains that were easily attainable in the past,’ said Mr Lim.

Mr Lu said that for those seeking a new flat to live in, it would not really matter when they buy. If they were to buy high and sell low, they would also be able to buy a replacement home at a low price, he pointed out.

Ultimately, new HDB flats remain the cheapest form of housing in Singapore.

Still, buyers have to work out their sums first.

Regardless of the economic situation or any potential capital appreciation gains, the key is to buy a flat that one can afford, experts advise.

Extracted from Sunday Times - 7 Dec 2008

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Recovery from Recession a long, long one

2008-12-08T06:54:00.001+08:00

Posted by Concerned Singaporean in the Singapore Property Forum

We can roughly said that there are some events which will likely to derail whatever efforts the world governments have done. The repercussions to the world and small city like Singapore will be very serious:

1) the financial system in the world have been broken so severely that it impairs the US and Europe economy ability to relevage and completely mute the strength of its cyclical recovery. These are major economies and the richest of the richest in the past. THis is very bad for Singapore who is totally dependent on the two sinful casinos and constructional activities to spur economic growth and jobs. Singapore do not have a motherland like HK or Sydney to fall back and we are just compliant citizens and not entreprenuers. We need the government to hold our hands.

2) as more jobs are lost (soon in millions) in major economies, it is a liquidity trap and any fiscal or interest cuts have no effects resulting in fear and people not spending or hoarding cash. More layoffs is coming to Singapore as Singaoreans will be hard hit. Worst in Singapore, people are heavy in assets and as they age and easily "kiasu" they become more conservative, lonely and withdraw, not willing to spend. They will save for fear of ill health (high hospital bills) thanks to our non-welfare state.

3) the US is now a debtor nation and owes the rest of the world more than US$2trillions. the US$ can crash and there is a real risk of a major currency crisis as investors shun dollar based assets resulting in more deflation of assets denominated in US$. Another crisis is now looming as the rise in US$ is too steep like another bubble in the making.

4) Look at China, yes mighty and GDP of 7 to 9 % growth even at this time. But they have to generate 24m jobs every year. It is a very difficult country to manage (nothing compare to managing Singapore) and how you expect a slowdown will bring jobless youth and workers there with no social problems in a billion population country? Factories after factories are closing and some places are ghost towns and white elephants. Dont forget the Chinese are smarter and sophisticated than compliant Singaporeans and their talent is unlimited. We have so much investments privately and publicly there. The repercussion is unimaginable and our country could be swamped by them and rich and educated FTs.

5) we have invested so heavily in ailing overseas banks and corporates overseas at a "rock bottom" prices for the "long term" and left with the choice of selling Power Seraya and SFI (which are jewels in Singapore) to raise cash or improve our finance. THis is a very sad state as i cant imagine that we have to tap our foreign reserves sooner or later.

6) We have not discounted the political and social or even terrorists lurking around at our door steps. Where is MAS SELAMAT? You think he just relax under a coconut tree> Such dangerous man who can outwit our world class security system, could possibly be inspired by the Mumbai attack and planning for a return in an more organised and intricate manner? We cannot rule this out. It can be a serious threat!

Our government can introduce a string of fiscal and monetary policies to stimulate property demand to help the cash rich developers preserve their cash and capital gains but we have to set priority on helping the people, the aged, sick, the national servicemen and true Singaporeans instead of investing, investing, property, property, Casinos and Casinos, F1 and F1 or FT or FT, and always wants to be the best in the world. We dont really need all these. We just hope that there is no nasty surprise to derail everything otherwise the bottom could really be unreachable in the coming years. Not trying to be pessimistic but really we dont know and it looks like a recovery will be a long long long one.

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Singapore's current recession will last to 2009 making it the longest recession ever

2008-12-06T07:35:00.002+08:00

THE current recession here will last till at least the middle of 2009, making it Singapore's longest recession ever, according to Chua Hak Bin, Head of Equity Research, Citigroup. Speaking at a forum organised by the Singapore Press Club yesterday, he added however that there could be a few silver linings for Singapore.

Shipping rates falling over 90 per cent

At the same forum, Manu Bhaskaran, CEO of economic consulting and advisory firm Centennial Asia Advisors, painted a gloomy outlook for the economy, noting that trade financing has been badly affected, with shipping rates falling over 90 per cent from their peak. This would have a significant impact on Singapore's trade-dependent economy, he noted. Monetary and fiscal easing by governments around the world, while appropriate, would take around 12 months to start having positive effects, he said. 'But we need more demand right now,' he added.

banks are being extremely cautious about approving loans

In the local context, Mr Bhaskaran pointed out that banks are being extremely cautious about approving loans, and thus foreign investors - even if they are interested in coming into Singapore - might have problems getting the funding they need for projects here. Many large projects have already been postponed, and more are likely to suffer the same fate, which would put further downward pressure on growth. He added that the IMF's forecast of 2 per cent growth for Singapore next year was 'highly optimistic'.

60% of the world now in recession

Mr Chua pointed out that up to 60 per cent of the world - China and India being the exceptions - is now in recession, which points to the slowest global growth since the global recession of 1981. He pointed out that in the US, asset values are still dropping, with housing prices set to fall about 33 per cent from their peak before bottoming out. He estimated this would happen by around the end of 2009.

Downward pressure on some Asian currencies

With the sharp cutbacks in spending by Americans as well as Europeans, Asia would inevitably be affected. There would also be downward pressure on some Asian currencies, including the Singapore dollar, he said, which could go to 1.60-1.65 to the US dollar next year.

Extracted from BT

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HDB Resale Price may take another 9 months before falling

2008-12-05T07:51:00.002+08:00

Going by past recessions, it could take nine more months before prices fall, said a news report.

According to industry players, the wait could be at least another nine months — if prices do come down at all — no thanks to the slew of foreigners and private property downgraders eyeing the HDB rental and resale markets respectively, which indirectly pushes up the prices of new HDB flats.
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“Whenever you have a recession, the first to be hit would be the private property market. So, a lot of people will start downgrading from private homes to HDB flats.”, said Dennis Wee Group director Chris Koh.
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HDB’s “market-based” pricing approach for new flats takes into account several factors, including a project’s location, its individual attributes and the prevailing market conditions. The new flats are sold according to the prices they would fetch on the resale market minus the Government’s subsidy.
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And in the first nine months of the year, HDB’s resale price index rose 12.4 per cent, rising by 4.2 per cent in the third quarter.
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While HDB resale prices are expected to stabilise in the year ahead, the recession has yet to hit the man-in-the-street, saidMr Koh. A case in point: The latest Built-To-Order project Punggol Arcadia was more than three times oversubscribed, despite having five-room flats going for as much as $356,000 to $416,000.
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Still, ERA Asia-Pacific’s assistant vice-president Eugene Lim noticed in recent weeks that prospective home buyers are now trying to get more bang for their buck. Said Mr Lim: “If your house is not near an MRT station, people are offering you prices that match the valuation or even lower.”
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National Development Minister Mah Bow Tan explained in 2002 that prices of new HDB flats rise and fall more slowly than do resale flat prices. This was necessary to maintain a stable property market and protect the value of the flats, the minister said.
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Prior to last year’s property bull-run, which saw HDB’s resale price index matching its previous peak of 1996, resale flat prices fell by 30 per cent in the aftermath of the 1997 Asian financial crisis. But prices for new flats dropped just 10 to 15 per cent.
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Some market experts believe it could be the same story this time round — with prices of new flats in the outlying areas expected to fall faster.
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But Mr Lim, for one, doubted that prices of new HDB flats would fall at all, given the perpetually high demand for housing here.
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Reiterating how HDB “followed the market and moved prices downwards” in the aftermath of the Asian financial crisis a decade ago, a HDB spokesperson reiterated that the Government “remains committed to ensure that HDB flats are affordable to the vast majority of our citizen families, especially young married couples and the lower-income households”.
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Still, in view of the current economic climate, the spokesperson advised flat seekers to “buy a flat within their means, bearing in mind how their future earnings may be impacted”.
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The spokesperson added: “Given the current economic climate ... They may have to start off with something more modest in size or less than ideal in location if prudence calls.”
Going by past recessions, it could take nine more months before prices fall

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PRs bought 53% of Singapore Private Properties in Q3 2008

2008-12-04T09:24:00.002+08:00

Malaysians continued to be the largest group of foreign buyers
For the second consecutive quarter, Malaysians continued to be the largest group of foreign buyers (including permanent residents or PRs) of private homes here.

Clover by the Park: Drew the largest numbers of foreign buyers in the third quarter

They bought 201 private homes, or accounted for 22 per cent of the total 903 caveats lodged for private home purchases by foreigners in Q3, a DTZ caveats analysis shows.

Indonesians form 19% foreign buying share
Indonesians bought 170 units, giving them a 19 per cent foreign buying share, followed by mainland Chinese (13 per cent), Indians (12 per cent) and UK citizens (6 per cent).

Most foreign buyers projects in Q3 2008: Clover by the Park, Livia and Kovan Residences
Projects that drew the largest numbers of foreign buyers in Q3 were Clover by the Park (40 units), Livia (30 units) and Kovan Residences (20).

However, in terms of projects where foreign buyers had the largest share of caveats lodged in Q3, the chart toppers were The Lakeshore in Jurong and Nassim Park Residences.

Foreigners took 55% of Lakeshore Sales
Foreigners took 55 per cent or 17 of the 31 units that changed hands at The Lakeshore, and accounted for 48 per cent of the 31 caveats also lodged for Nassim Park Residences during the July to Sept quarter of this year.

Non-PR foreigners made up the bulk of the foreign buying at The Lakeshore, Nassim Park Residences, Kovan Residences, Dakota Residences and Park Infinia at Wee Nam in Q3. However, PRs bought more units than non-PR foreigners at Livia (in Pasir Ris), Clover by the Park in (Bishan) and Beacon Heights (at St Michael's Road).

The total 903 units that foreigners (including PRs) acquired in Q3 was a 6 per cent drop from the previous quarter, and made up 22 per cent of total private home deals in Q3, down from a 25 per cent share in Q2.

Foreign investors to continue to be cautious
DTZ executive director Ong Choon Fah expected foreign investors to continue to be cautious about buying properties in Singapore in the near term. 'There's a lot of frightened money around. Some investors have the money but fear that if they buy today, tomorrow it may be cheaper. This is keeping them away. However, foreigners, especially PRs buying for their own occupation, are more likely to adopt a longer term view and make a commitment,' she added.

PRs bought 53 per cent or 476 of the total 903 private homes picked up by foreigners in Q3, with non-PR foreigners accounting for the remaining 47 per cent. The PR share was similar to the 54 per cent in Q2.

Source: BT, December 2, 2008
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HDB Resales: West Sees Highest Price Increase

Where's the Property Bottom? Property Buyers' Discussion

2008-12-02T07:35:00.003+08:00

Forum discussion on "Where's the Property Bottom" extracted from the Singapore Property Forum:

Derrek wrote:
"While I realise that catching the bottom of the market requires luck more than anything else, there is no harm in trying to improve the odds, is there?

I'll start first. Please feel free to chip in and/or correct me if any of the information presented is inaccurate.

All of us have thrown out numbers about how far we think the market will fall, from 20% to 60%. I would like to suggest that we standardise the discussion by referring to the Private Residential Property price index:

Current Index (based on Q3 2008 Figures)
Index uses Q4 1998 as benchmark. i.e. Index = 100

Overall : 173.3

Landed : 158.8
Detached: 167.4
Semi-D : 150.2
Terrace : 154.3

Non Landed: 176.7
Apartment: 182.0
Condo : 174.0

The million dollar question is: Where do we think the index will drop to?

Will it go below 100? That was the level largely due to the Asian Financial crisis. Although the signs are that this crisis is larger and more widespread, it does not automatically translate to the PPI falling below 100.

For starters, from what I can see about the methodology, the PPI captures absolute numbers, not numbers adjusted for inflation (pls enlighten if I am mistaken). Does that mean that any estimates (guesstimates) will also have to consider median/mean (debatable which is a better measure in this case given we are looking at private property prices) incomes levels currently vis a vis 1998?

There are so many factors to consider, and I look forward to having a healthy online discussion about it. "

Ferrari wrote:
"Let me be your first visitor to comment. I think index-wise will take a long time to drop due to the time lag between the actual buy/sell decision point (usually option to purchase) to the time coveat lodge and finally to be calculated into the index. Also, index usually take into consideration only those property that have transaction. For those without any transaction, it will only 'dilute' the actual price movement. Anyhow, I think the index will drop below 100 if crisis will to prolong (which I think it will be the case)."

Anonymous wrote:
"I don't know where exactly is the bottom but I think next year is very, very likely to be worse than this year. So I think it pays to wait to see how next year goes."

Smart Buyer wrote:
"Derek, indeed, this is the time to discuss about the property's bottom. Impossible as it is to identify exactly where the bottom is, it's still a constructive and helpful discussion.

I agree with the view that next year is very likely going to sink further. Beyond that, there's no visibility.

Here are some pointers to signal the bottom:
1. After 3 to 4 quarters of recession
2. High unemployment rate
3. High vacancy rate
4. High bankruptcies
5. Property & Bank stocks plunge
(ps add to the list)

Only point 5 has happened. "

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Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Property market now shows classic signs of downturn

2008-12-02T07:08:00.000+08:00

Analysis of Q3 caveats by DTZ points to new trends relating to subsales, foreign buying, HDB upgraders. Three classic signs of a Singapore property downturn have emerged in the third quarter:

Slide in subsales

Slide in Foreign buying

But bigger share of HDB upgraders in the private home buying market

Drop in Subsales Signals less interest from Specuvestors

Property consultancy DTZ's analysis of caveats for private home purchases shows that total subsales of non-landed private homes fell 8 per cent to 473 units in Q3 from the previous quarter. Subsales also accounted for a smaller 13 per cent share of purchases of non-landed private homes in Q3, compared with 16 per cent in Q2.

Subsales of high-end condos/apartments slowed down even more in Q3 2008. The number of subsale purchases involving units priced at least $1,000 psf fell 24.2 per cent quarter-on-quarter to only 213 transactions, accounting for 45 per cent of overall subsales of non-landed private homes in Q3, against 54 per cent in Q2 2008.

Falling Property Prices attract less foreign buyers

The number of foreign buyers (including permanent residents) of private homes (both landed and non-landed) slid 6 per cent quarter-on-quarter to 903 in Q3. Also, these buyers made up 22 per cent of total private home deals in the quarter, down from 25 per cent in Q2.

DTZ senior director (research) Chua Chor Hoon said: 'A large proportion of foreigners buy for investment. Hence when prices are falling, there is less interest. Furthermore, with economies and property markets slowing down all over the world, many of the foreigners have been affected back home and they may pull out their overseas investments.'

Competition from other Overses Properties

DTZ executive director Ong Choon Fah also points out that attractive property values are emerging in other cities which Singapore will be competing with. 'Foreign investors have lots more opportunities to consider where to invest,' she added.

HDB Dweller Increase Share of Private Property Buyers

HDB dwellers tend to make up a bigger proportion of private home buyers during a property downturn. 'Many of them are buying for owner occupation. Some may be sitting pretty on gains on their existing HDB flats which they bought directly from the HDB some years ago. Together with CPF savings, it may be easier for them to cross over to private homes,' notes Mrs Ong.

Buyers with HDB addresses picked up 1,718 private homes in Q3, up 34 per cent from the previous quarter.

Their share of caveats lodged for private home purchases rose to 41 per cent in Q3, from shares of 34 per cent in Q2 and 28 per cent in Q1 this year. HDB upgraders' 41 per cent share of private home purchases in the July-Sept quarter was the highest quarterly share in four years.

'The trend was supported by the narrowing gap between HDB resale flat prices and private home prices in Q3, as HDB resale prices continued to increase while private home prices fell,'

Ms Chua said the latest Q3 jump in private homes bought by HDB dwellers was mainly in the primary market. The number of units these HDB dwellers picked up from developers leapt 89 per cent from Q2.

Livia in Pasir Ris and Clover by the Park in Bishan were the two most popular projects among HDB buyers in Q3, with 192 units and 142 units respectively sold to HDB upgraders.

Analysts say HDB upgraders' share of total private home purchases may rise further. In Q2 2002, their share surged to 81 per cent and at the trough of the Asian Financial Crisis property slump in Q4 1998, the figure was 68 per cent.

Subsales refer to secondary market deals in projects that have yet to receive their Certificates of Statutory Completion. This may be anywhere from three to 12 months after the project gets its Temporary Occupation Permit (TOP).

DTZ said that for total subsale deals of non-landed private homes, the median price continued to fall in Q3, easing 11 per cent quarter-on-quarter to $941 psf - the lowest since Q3 2006, according to DTZ. 'In view of softening market demand, owners are more realistic in asking prices,' it said.

The Sail @ Marina Bay got the strongest subsale interest in Q3, with 30 deals (compared with 34 in Q2). The median subsale price for the project slid 6 per cent quarter-on-quarter to $1,719 psf, following a 14 per cent slide in Q2.

Median subsale prices also fell 3 per cent for Park Infinia at Wee Nam to $1,380 psf, The Esta (slipping 5 per cent to $910 psf) and City Square Residences (down 6 per cent to $960 psf).

Mrs Ong expects subsales to continue trending downwards although there will be spikes as major projects get their TOP. That's when there's usually more sales activity as the finished product can be viewed by potential buyers and the prospects of renting the units would increase the appeal of such homes to potential investors.

Soucre:BT,December 2, 2008

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Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

HDB Resale Flats Buyers Paying Less COV

2008-12-01T08:10:00.000+08:00

According to the report,
Buyers paying less cash for HDB resale flats
by Sunday Times, November 30, 2008, HDB resale flats buyers are paying less cash above valuation (COV). This may be yet another sign that the financial crisis would eventually impact all market segments. The private property market is at a standstill and prices have fallen as the global financial crisis scares buyers away.

While HDB resale flat market remains active and prices are still fairly strong, there are increasing signs that this segment of the market is no longer immune to the economic slowdown.

While prices have not dropped, the cash amount that buyers typically pay on top of the flat’s valuation has fallen more significantly, according to market analysts. ‘In view of the current sentiment, HDB resale flat valuations should stay flat going forward. If COV is coming down, prices will eventually come down.’ said Mr Eugene Lim, associate director of ERA Asia Pacific

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Newton Edge @ Makeway Road : Buyer's Review

2008-12-01T07:37:00.002+08:00

Just visited the Newton Edge showflat today. My honest review:
1. Location - Very good, about 8 min walk to Newton MRT station and Newton Hawker Centre
2. Surrounding - Acceptable, residential zone
3. Car Park - 1 unit to 1 lot. OK given that you can take the MRT
4. Price - Reasonable but not yet a steal
5. Take-up: About 30%-40% sold, mostly smaller units going at about $6xxK reflecting a cautious market, so don't expect to do a profitable subsale quickly.
6. TOP 2011, with DPS only need 20% downpayment (5% cash + 15% CPF)
7. Studios going at $6xxK attractive for small-budget investors but note that these units either face east or west sun.

Conclusion: For eager property investors who are afraid to miss the boat, maybe OK to buy but for the die-hard bargainers who don't mind missing the boat altogether, can wait for market to plunge further.

Extracted from the Singapore Property Forum

Brief Description of Newton Edge @ Makeway Road

Private New Launch Project 29 November 2008
Prices Starting from high $5xxk up
Price Starting from $11xx psf to $13xx psf. Excellent investment development.

Include 1 / 1+study / 2 / 2+Study / 2 bedroom penthouse / 3 bedroom penthouse / 1 unit 4 +1 strata house
Register your interest now and Get earliest VIP invite for showflat viewing

Freehold development with private pool and two towers of 104 units, sited at District 9.

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Jurong East White Site on reserve list

2008-12-01T07:03:00.001+08:00

According to the report,
Jurong East ‘white’ site joins reserve list
by Business Times - 29 Nov 2008, the Urban Redevelopment Authority has made available for application a reserve list site in an attractive location, despite the cool market.

The site is a 1.9-hectare ‘white’ site next to Jurong East MRT Station. At least 30 per cent of the 1.15 million square foot maximum gross floor area must be set aside for office use and the rest for additional office use or other uses permitted under the white site zoning such as commercial (like retail and entertainment), hotel and residential uses. The 99-year leasehold plot is the first sale site being offered in URA’s Jurong Gateway precinct since Singapore’s planning authority unveiled plans for the Jurong Lake District earlier this year.

However, market watchers said the site is not likely to be triggered anytime soon. ‘Given the current uncertain business environment, it’s unlikely there will be any interest in the Jurong East site. There’s also difficulty in getting funding. Investors would rather go for completed, income-generating assets that can give immediate returns than to embark on a fresh development with higher risks,’ DTZ executive director Ong Choon Fah said.

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Jurong East 'white’ site joins reserve list

2008-12-01T07:00:00.000+08:00

Unemployment Rate Up at 3.3% in Sept 2008

2008-11-29T07:50:00.003+08:00

SINGAPORE'S resident unemployment rate has risen from 2.4% last December to 3.1% in June and an estimated 3.3% in September this year, according to the latest Singapore Workforce 2008 report released by the Ministry of Manpower (MOM) yesterday. The report, based on a mid-2008 labour force survey, said that the higher unemployment rate reflects 'more cautious hiring sentiments amid the economic slowdown'.

By industry, unemployment rates rose for those previously employed in wholesale and retail trade, information and communications, financial services, as well as administrative and support services.

Most of the jobs created went to resident professionals, managers, executives and technicians - known as PMETs - who typically earn more. 'There were fewer residents employed in non-PMET jobs in manufacturing and services, but more in construction,' said the report, which attributed this partly to a more educated workforce.

Median monthly income for full-time employed residents jumped 11% to $2,590 this year, compared with 2007's rise of 7.7%. According to the report, this 'partly reflects the spillover effect from the strong economic performance last year and the higher proportion of PMETs among employed residents in 2008'. But adjusted for higher inflation, the growth in median monthly income was a smaller 4.6% compared with 2007's 5.5%.

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Developers want sales, Drop the Price

2008-11-27T08:39:00.005+08:00

"There, official slap in the face for REDAS. Good riddance to their hubris. See what $2 COE has done for cars? You want sales, drop prices. "; was Ann's straight-forward response to the following news report (extracted from the Singapore Property Forum) :

Property market to soften
PROPERTY prices are set to soften and demand will weaken as the Singapore economy slows down, Minister for National Development Mah Bow Tan said on Wednesday evening. Private housing prices have declined by 2.4 per cent in the third quarter of this year, and further price movements will 'depend on the severity of the economic slowdown', he added. Speaking at the 49th anniversary dinner of the Real Estate Developers' Association of Singapore (REDAS) at the Shangri-La Hotel, Mr Mah said: 'Going forward, price movements will depend on the...ability of the industry to make adjustments in response to the changes in economic conditions.' The good news is that home-ownership rate is high in Singapore - at more than 90 per cent - and the government has an important role in ensuring the long-term stability and smooth functioning of the property market, he said. Among the measures it should take, he said, is to guard against 'irrational market behaviour such as excessive speculation that is not in sync with economic fundamentals.' But there are limits to what the government can do. The government cannot, for example, dictate to banks that they should extend loans to companies or individuals with weak financial standing. It also cannot work against market forces and try to prop up property prices artificially. Mr Mah explained: 'Such efforts are not sustainable and will not be beneficial to the health of the property market in the long-run. Any measure seen to be knee-jerk or excessive might even weigh market sentiment down further. 'It is in our interest to ensure that the property prices move in line with economic fundamentals, as it affects home ownership, asset values, retirement savings and other sectors of the economy.'

The situation is so obvious that the govt has never felt the need to say it. The speech is probably in response to the recent calls to prop up prices, and of course, it's a big NO because the fundamentals reveal a big property bubble. And bubbles have to burst before the economy can move ahead. The high housing cost makes Singapore business uncompetitive and the govt worries that FT are leaving. (Posted by Anonymous in the Singapore Property Forum)

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Singapore Property Market Outlook in a Nutshell

2008-11-27T07:49:00.000+08:00

SUMMARY:
GDP down
Manufacturing down
Exports down
Tourism down
Hotels down

Jobs lost
Bonuses cut
FTs going home

Debts rising

Buyers not buying
Rents falling

Housing prices falling

Posted by Anonymous in the Singapore Property Forum.

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Property Buyers and Investors, Know the Risk of Leveraging

2008-11-26T10:17:00.001+08:00

Current turmoil has few beneficiaries

MARKET crashes are the greatest redistributor of wealth. This has been true of previous crashes. But in the current turmoil, there are few beneficiaries, a friend noted. It is more a great destruction of wealth on a global scale so far.

Well, okay, some short-sellers may have profited from some of their trades. But many get wiped out in their next trade. Perhaps it is those who are not invested at all and who have the cash to pick through the carnage in the next few years who will really come out ahead. Who knows? Nobody is certain of anything anymore.

Why people have been hit hard this time around?

A lot of people have been hit hard this time around. There are a few reasons for this. One, prior to this, we've had four years of a bull market where prices had gone in only one direction. Success, notes a friend, is one of life's worst enemies. It engenders overconfidence and, as a result, one tends to let down one's guard - in some instances, to the extent of recklessness. Economist Hyman Minsky sees the cycle of risk-taking in the economy as following a pattern: stability and absence of crises encourage risk-taking, complacency, and lowered awareness of the possibility of problems.

High Inflation, Low Interest Suggested Being Invested

But even for those who are conservative and have their heads centred and feet firmly planted on the ground, the economics just a few months back suggested that being invested was the right course of action. Then, inflation was running at 5 or 6 per cent and banks' interest rates were at less than one per cent.

For someone who didn't want to have his or her purchasing power eroded, keeping the money in the bank wasn't the most logical of options. Which was why a lot of people are invested - and, worse, a lot took loans to invest. If the borrowing cost was so low, and one was expecting to make a return higher than that cost of borrowing, it made sense to borrow.

Of course, we know now that a lot of people had underestimated or even ignored the risk of trying to earn those extra percentage points of returns.

Continue with: 'Lessons learnt from many investments that have gone wrong ..real life stories'

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Tales of fortunes made and lost in recessions

2008-11-26T10:11:00.000+08:00

Riches gone in a flash

A friend shared with me some of the horrendous stories of how an enormous amount of wealth was destroyed in the last few months.
Up till last year, one man had $100 million of his worth in only one stock. Towards the end of last year, that stock started to decline. By early this year, the stock was down more than 50 per cent from its peak just a few months before. The man picked up quite a few additional shares - on margin - thinking that the stock had bottomed and would eventually rebound. Since then, the stock has plunged by another 80 per cent. The $100 million is more than wiped out! The stock is Cosco Corp, which went from 10 cents in March 2003 to $8.20 in October last year - an 82 times jump. It is now trading at less than 70 cents.

He bet all he had

Another guy had relatively much more modest means. His net worth was estimated at $2-3 million. He heard from 'reliable' sources that a particular company would be taken over by another at a significantly higher price than the stock's then market price. He bet all he had and, if I remember correctly, also took margin financing to buy that stock. The stock was FerroChina, which has since been suspended because it had run out of money to pay its suppliers and debtors.

The value investor

One value investor thought Thailand was cheap a few years back. One particular company, a very big one, was trading at 1.2 baht - significantly below its book value. The investor concentrated his bet on that company. And, indeed, the market began to recognise the value of the company and the stock tripled to over 3 baht. The value investor's portfolio grew to $26 million. In the last year or so, the stock has plunged to below 0.7 baht. The investor is now down some 50 per cent on his original capital.

The Smartest Guy In Town

Another man was shrewd enough to think that the market was overvalued towards the end of 2007. So he got out of the market, and even shorted it. He was happy that the market went the way he predicted. He was the smartest guy in town.

By June or July, thinking that the market had fallen enough, he loaded up on shares. Like the guys above, he too used margin financing to pick up the shares. As we know, the market took an even more severe turn in September and October. He too was dealt a severe blow.

The Investor who Reversed His Trades

A friend was also bearish about the market towards the end of last year. He had put in some shorts. Then last October, the market went on to hit record highs. He lost his resolve, and reversed his trades and got hit as well.

The Investor Who Made Money, His confidence Grew

Another made quite a bit of money in the Singapore market. His confidence grew. He wanted a bigger stage. He bought US shares on margin. US stocks took a precipitous plunge a few months back. He has had a few rounds of margin calls.

The Young Banker Investor Saddled With Huge Mortgage

A young banker in his late 20s made $2-3 million from the property market in the last few years. He ploughed all the profits into a $10 million property, and took loans of some $7 million. He's now saddled with a mortgage payment of some $30,000 a month.

Many of the real-life examples above show just how lethal leverage can be. In a rising market, leverage is your friend; in a down market, the blow dealt by leverage can knock one out for good.

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Developers want govt to turn back clock on several policies

2008-11-21T10:39:00.000+08:00

Wish-list includes reinstatement of deferred payment, old formula for DC

Some property industry players are yearning for the good old days, hoping the government will reverse some of the changes in property policies made in the past two years and thus go beyond the usual exemptions and rebates on property taxes with its off-Budget/Budget packages.

Such a strategy may be timely in helping to stimulate currently flagging property demand given that the measures were rolled out when the market was sparkling.

Deferment of stamp duty until TOP

Developers are hoping the government will reinstate the deferment of stamp duty on property purchases where the property is under development (this was removed in December 2006) and revert to the old formula for computing development charge (DC) rates, based on 50 per cent of the appreciation in land value arising from changing the use of a site or building a bigger project on it. This was raised to 70 per cent in July last year.

Following the December 2006 rule change on stamp duty, property buyers are now required to pay stamp duty within 14 days from the date that the option to purchase is accepted.

The previous concession, introduced in June 1998, had allowed stamp duty payment to be deferred to the date of issuance of Temporary Occupation Permit for a project or date of sale of interest in the property, whichever was earlier, for properties under development.

Deferring payment of stamp duty for projects under development once more would lower upfront cash commitment for home buyers, some of whom may be stretched, especially since it could take a few years for the new homes they've bought to be completed, says Knight Frank managing director Tan Tiong Cheng.

Most developers are hoping the government will reinstate the DPS. They say DPS helped genuine home buyers, especially upgraders who may be able to sell their existing homes only when their new private home has been built.

Revival of the deferred payment scheme

Also high on the developers' wish-list is a revival of the deferred payment scheme (DPS) - which was scrapped in October last year - to boost home purchases, with a qualifier that safeguards be introduced to address concerns that such schemes had spurred speculation.

Old formula for DC

Although developers are currently not in a race to redevelop their sites given the property slump, many argue that going back to the pre-July 2007 formula for computing DC rates - which creamed off a smaller portion of the enhancement in land value - 'would provide greater incentive for land owners to explore more productive use for their properties and could spur some activity', the head of a listed property group said.

Economic Development Board's Global Investor Programme to allow a higher quantum for property purchase

A major property developer also suggested a demand-boosting measure in the form of changing the investment criteria for Economic Development Board's Global Investor Programme to allow a higher quantum for property purchase or even lowering the total threshold value.

Under a new option to the Programme announced in July 2005, a foreigner can be considered for permanent resident status if he invests at least $2 million in business set-ups, other investment vehicles, and/or private residential properties, with up to half of the investment allowed in private residential properties.

'More people taking up permanent residence or citizenship and landing on our shores will help the property market,' said the developer.

Exemptions or rebates on property taxes for completed commercial and industrial buildings

KPMG Tax Services executive director Leonard Ong said that granting exemptions or rebates on property taxes for completed commercial and industrial buildings will help landlords and hopefully they will pass on some of the savings to their tenants.

'Earlier this year, when property prices were on the rise, the government also raised Annual Values of properties. So based on this, owners would be paying more property taxes than last year. This makes it all the more important to introduce exemptions or rebates for property taxes,' he added. Property tax is calculated as a percentage of a property's annual value.

Property tax exemption for vacant land and land under development

Developers are also hoping for property tax exemption for vacant land and land under development to reduce costs.

'During this period, the market is so quiet we cannot launch projects,' notes Ho Bee Investment chairman and CEO Chua Thian Poh.

Require the buyer to secure a housing loan

Ho Bee's Mr Chua suggests modifications be made to DPS to allay concerns that it also facilitated speculation in the past.

'The most important thing is to require the buyer to secure a housing loan even if he does not need to draw down the loan immediately, to ensure a credit assessment of the buyer is done by the banks,' he said.

However, Ho Bee's Mr Chua disagreed with the suggestion by some analysts that the initial payment by the buyer - before the deferred payment kicks in - be raised from 10-20 per cent previously to 30 per cent, as that 'would not help home buyers much'.

Developers are also concerned about banks tightening financing to home buyers and to businesses in general, and hope the Monetary Authority of Singapore will use 'moral suasion' to send the right signal to banks.

Source: B.T. Published November 19, 2008

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Singapore's GDP contracted by 0.6% in 3Q2008: MTI's GDP 2008 Forecast Reduce to 2.5%, 2009 Economic Growth -1% to 2%

2008-11-21T08:45:00.010+08:00

The Performance of the Singapore Economy for 3rd Qtr 2008 has been released today by MTI. Singapore's GDP contracted by 0.6%, lower than the earlier estimate of 0.5%, with the largest contraction coming from the manufacturing sector

Highlight:

Singapore GDP Forecast for 2008 reduce to 2.5%

MTI has also revised Singapore GDP Forecast from 3% to 2.5%.

Singapore GDP Forecast for 2009 between -1% to 2%.

MTI said Singapore economy is likely to face a broadbase slowdown in 2009. It has forecasted Singapore GDP Forecast for 2009 between -1% to 2%.

Inflation in 2009 to decline

MTI has revised the forecasted inflation rate for 2009 from 2.5%-3.5% to 1%-2%.

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

HDB Mortgage Defaults Up 33,000 in October: More 2-room HDB flats to be built

2008-11-19T07:18:00.001+08:00

The Housing and Development Board (HDB) will continue to keep tabs on flat owners who default on their HDB mortgage payments.

It stressed that long-term measures to help these owners manage their mortgage payment is the best solution, and that compulsory acquisition of the flat is a last resort.

As of October 2008, some 33,000 flat owners owed HDB arrears of three months or more. They make up less than 8 per cent of the 420,000 households with outstanding HDB loans.

Giving this update in Parliament on Tuesday, Parliamentary Secretary for National Development Mohamad Maliki Osman said home owners should buy within their means.

But he recognised that there are some who are affected by the economic downturn and one option for them is to downgrade to a smaller unit.

More 2 and 3-room HDB flats will be coming on stream next year to cope with the growing demand for smaller flats.

Dr Maliki also said heavily subsidised rental flats should be given to those who are in dire need. - CNA

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Private Property Buyers Backing Out of Sale for Concourse Skyline, The Peak @ Balmeg, Silversea @ Amber, Tresalveo at Marymount, VIVA @ Thomson

2008-11-18T12:05:00.003+08:00

Goodness, developers sold 112 units in October, and 50 got returned!
Bull is getting increasingly marginalised. Even buyers are backing out.

About 50 homebuyers walked away from deals in October
Business Times - 18 Nov 2008

But trend not likely to escalate as it was a month when bourses tanked

THE number of private homes returned to developers shot up last month on the back of a sharp dive in confidence due to the stockmarket crash.

Homebuyers returned 50-odd units to developers in October, compared with 10-plus units each in the preceding month and in October last year. The figures were estimated by BT from statistics on developers’ sales released by the Urban Redevelopment Authority (URA) yesterday. The figures exclude executive condos.

October also saw developers launching and selling the lowest number of private homes since URA started making monthly housing sales data available in June last year. Developers sold 112 private homes in October, down about 70 per cent from 376 units in the preceding month and 80 per cent below the 566 units sold in October last year. The 159 private homes developers launched last month was also 79 per cent lower than September and 75 per cent below that in the same year-ago period.

Buyers who returned the 50-plus units last month probably did so before the options were due to be exercised, industry observers reckon. Buyers who walk away from a deal before the option is exercised forfeit a quarter of the 5 per cent option fee, equivalent to 1.25 per cent of the purchase price of the unit.

‘The stock market was at its worst in October. So some buyers may have got jittery and decided it was better to forego 1.25 per cent of the purchase price - that’s $12,500 for a $1 million property purchase - than to be saddled with uncertainty. They worry that property prices may drop much further in the next six months. So it’s a matter of weighing risks, even for people who can afford to take the hit,’ said a seasoned property agent.

Another industry observer said another factor for the forfeitures could be if buyers failed to secure the required quantum of housing loan from banks, which have become more cautious in lending. ‘Some buyers may also have observed developers trimming prices and got cold feet,’ he added.

On a brighter note, he does not expect the number of units returned to developers to keep rising in the months ahead. ‘Anybody who buys now must have done his homework. Things are a lot clearer now.’

Agreeing, DTZ executive director Ong Choon Fah said: ‘October was an exceptional month with so much stockmarket turmoil and fear all around. Hopefully, we won’t get a repeat of this. People will be much more considered when buying homes henceforth and therefore the number of units returned should revert to a more normal situation.’

October saw a total of 14 units returned at Concourse Skyline at Beach Road, 11 units at The Peak @ Balmeg in the Pasir Panjang area and five units each at Silversea at Amber Road, Tresalveo at Marymount Terrace and VIVA at Thomson Road/Suffolk Walk. Nonetheless, all these projects still saw units being sold in October.

CB Richard Ellis (CBRE) said, based on transacted prices, prices have ‘remained fairly stable for the past two months, with due consideration that factors such as floor height, orientation and liveable space affect prices’.

‘However, it is very likely that the persistent thin volume will have a downward effect on prices. The sluggish sales momentum is likely to remain for the rest of the year as macro factors such as the economic recession and retrenchment will erode consumer confidence,’ CBRE’s executive director Li Hiaw Ho added. He predicts Q4 may see sales volume of around 500 units, a level last seen in Q1 2003.

Knight Frank director Nicholas Mak said that homebuying sentiment is expected to weaken in the face of economic and job market uncertainties. ‘Launches are expected to be held back till at least after Chinese New Year 2009,’ he added. The lowest-priced apartment/condo sold in October was a unit at The Linear ($554 psf) while the highest-priced unit was an apartment at Orchard Scotts ($2,407 psf).

Savills Singapore’s Ku Swee Yong noted that despite a weak month, The Lakeshore in Jurong and Hillvista in the Hillview area crossed $1,000 psf. The $2,169 psf of land area achieved at Sandy Island on Sentosa Cove is probably the highest price for a landed home in Singapore, he added.

Around 63 per cent of the 112 units sold in October were in Outside Central Region. However, in terms of the 159 units launched in the month, the lion’s share (46.5 per cent) were in the Core Central Region.

Posted by Anonymous in the Singapore Property Forum
May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Private Property Sales Fell 70% in October

2008-11-17T14:36:00.004+08:00

According to URA latest data, developers sold just 112 private homes in October, down from 376 units in September. 159 private homes were launched in October, a fifth of the 767 units they released in September. The fall was not unexpected given the upheaval in Wall Street banks in late september to october which saw the Fed's rescue of Freddie Mac and Fannie Mae, the near-collapse of AIG, and the bankruptcy of Lehman.

URA quaterly report for past quarters compared to October:
2Q: 1417 (sold), 1814 (launched)
3Q: 1814 (sold), 2244(launched)
October: 112 sold, 159 launched

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Home loans harder to get as property prices fall

2008-11-17T09:30:00.004+08:00

If you had read the article below, this is the same events that is going on in US mortgage market. Banks had turn very conservative in lending and it is not due to the shrinking money supply but rather fear, and it is a feature of depression economics when the normal monetary tools (i.e lowering interest rates) are not working anymore....Fyi, the SIBOR rate is now 1.25% and yet banks are afraid to over-stretch themselves...Conclusion is less transaction (let's just wait for the 08 4th quarter figures) and dropping prices...

Nov 16, 2008
Home loans harder to get as prices fall
Check if bank can meet unit's valuation to avoid overpaying for the property

A couple of telling anecdotes illustrate the unexpected glitches that home buyers can face as property prices start to fall.

A Spring Grove condominium unit owner was denied the chance to take advantage of lower interest rates by refinancing his devalued property without coughing up more hard-earned cash.

The owner had to make up the shortfall because the reduced value of the Grange Road unit meant the bank could not extend a large enough loan.

Another buyer had to cancel his purchase recently after he learnt that banks' valuation of the property was less than what he was supposed to pay.

The banks could not offer him the loan he needed as the collateral was inadequate.

This is the brave new world of home loans as property values fall amid the global financial crisis and banks tighten lending.

Banks are still dishing out home loans but are much more selective these days, mortgage consultants said.

Banks can grant only up to 90 per cent of the purchase price or valuation, whichever is lower. So if the sale price of a property exceeds the valuation - which is determined by an independent professional - the buyer will have to make up the shortfall.

Amid poor demand and falling prices, banks are sticking to lower property valuations in anticipation of further price falls.

'OCBC Bank engages independent, third-party valuers to determine the open market value of properties and there has been evidence of a fairly strong downward trend in property valuation,' said its head of consumer secured lending Gregory Chan.

The buyer who cancelled his property deal realised that the yet-to-be-completed 1,000 sq ft condo unit was worth less than the $2 million he was going to pay.

'No bank can match the property's valuation as there was a recent sub-sale deal done at 15 per cent below the developers' price of $2,000 per sq ft,' said Mr Dennis Ng, spokesman for mortgage consultancy portal www.HousingLoanSG.com

Buyers can avoid overpaying for a property by checking to see if the banks can match the valuation to the property's purchase price, he said.

In today's market, those still keen on taking out a loan for a home they intend to live in should also know that most banks now prefer to offer up to only 80 per cent financing, said Ms Ally Yang, a chief mortgage consultant at www.homeloan.com.sg

OCBC Bank said it continues to offer housing loan packages for 80 per cent financing. It also offers 90 per cent financing on a case-by-case basis if the applicant meets its credit assessment criteria.

HSBC Singapore's head of personal financial services, Mr Sebastian Arcuri, said: 'Customers can still obtain home loans of up to 90 per cent valuation or purchase price if their financial profile can support it and their application meets the bank's criteria.'

But there are signs that banks are starting to be more stringent in their credit criteria and they are very selective in granting a 90 per cent loan, said Mr Ng.

'A 90 per cent home loan is now more selectively granted to consumers with very good profile who are buying a property as their first home.'

Investors will find it tougher to get a bigger loan these days. Banks used to offer more than 85 per cent financing for investment properties but all of them, except DBS Bank, no longer do so, said Ms Yang.

This means buyers have to be prepared to cough up more cash for investment property buys.

Those looking at refinancing may be in for a surprise if they bought their properties in last year's booming market.

The Spring Grove unit in question was bought by a South Korean expatriate for $2.58 million or $1,442 per sq ft on a floating rate package.

He now pays 3.5 per cent interest on his 80 per cent loan and was looking to halve his interest payments by switching to a package pegged to the three- month Singapore Interbank Offered Rate, said Ms Yang.

But a check with two banks found that the valuation for his property was $2 million or $2.22 million. If he wants to refinance at these valuations, he would need to pay up to $180,000 to top up his loan, currently at $1.78 million.

Consumers seeking a loan for their property purchase should get prior approval or have more cash on hand. 'They should approach a mortgage specialist for a joint assessment if they are unsure whether they can afford the home purchase,' said OCBC's Mr Chan.

'Things are quite fluid these days so buyers should re-check their loan eligibility after one month,' said Mr Ng.

Posted by Anonymouse in the Singapore Property Forum
May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

PM Lee: Singapore in recession .. expect a U-shaped recovery with a fat U

2008-11-17T07:49:00.001+08:00

Forum discussion extracted from the Singapore Property Forum:

"Just read in today Straits Times "Surge in layoffs expected" and numbers likely to jump beyond the peak suffered during the 1998 Asian financial crisis. About 30,000 jobs were lost then... This spells doom for Singapore private property market, most people will go for HDB be it for newly weds or down grading, it's a safer choice."

"Singapore has yet to feel the full force of the ongoing crisis but there are already signs that it would be ugly and long—drawn. Apart from sharp dips in export figures, job cuts have already hit the manufacturing, finance and banking sectors. "

"With unemployment expected to rise, Singaporeans are bracing themselves for more bad news on the job front... Be prepared for the worst don't commit to those overpriced condo."

"Agreed .....save for a rainy day buying HDB is a safer choice. "

"Agree .. PM just said this recession is going to be a fat-U recession ... it's haunting"

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Singapore Economic Outlook: Singapore October Exports Fell 7.4%, worse than expected

2008-11-17T06:28:00.000+08:00

Singapore's non-oil exports fell an unexpected 7.4% in October from the previous month after seasonal adjustments, the latest evidence that the worsening financial crisis has reduced demand for Asian exports. Electronics shipments fell by 15% from a year ago while drugs exports fell unexpectedly, down 38.9% in the same period
October's fall compared with market expectations for marginal growth of 0.3 per cent, and followed a worse-than-expected revised 0.9 per cent drop in September.

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

River Valley condo Luma relaunches with prices halved

2008-11-14T08:58:00.001+08:00

Units going for $1,450 psf, down from $2,800 psf at launch last year

The big property sale has begun. Prices have been slashed by half at Luma, a 75-unit freehold luxury condominium at River Valley Grove. Relaunching this weekend, units at Luma are being offered at $1,450 per square foot, down almost 50% from $2,800 psf when it was first launched last year. The relaunch of Luma at halved priced is believed to be the first among luxury condominiums.

SISV-Realink data shows two units on the 25th floor changed hands at $2,837 psf and $2,586 psf in April this year. These prices were already much lower than those for two units on the 20th and 26th floors, which went for $3,349 psf and $3,291 psf in August 2007. At that time when the property market was feverish, some people even speculated that prices could reach $4,000 psf.

Luma (which will be completed in 2011) has three units on each floor, ranging from 743 sq feet to 1,173 sq feet. The developer behind the project is the mid-sized Novelty Group. Luma sits on an en-bloc site at St Thomas Walk which Novelty bought in 2006 for $76.5 million, or about $810 psf of potential gross floor area. The Novelty Group also bought White House Park Apartments in Stevens Road for $22 million from Asia General Holdings. It also has developments in Pasir Panjang, Geylang, Yio Chu Kang and Pasir Ris.

Nicholas Mak, director of research and consultancy at Knight Frank, said more of the smaller developers could be relaunching at lower prices. 'The bigger ones are discreetly offering soft discounts, such as lifestyle vouchers,' he said. 'I think the chief aim is to move units, to increase sales. They've probably done their sums - they expect to do a level of sales to achieve breakeven point, which will lower their borrowings and feel more comfortable,' Mr Mak added.

Banks are probably repricing loans, and some developers especially the smaller ones that have revolving facilities or variable-rate loans may feel the pinch.

Comments on the above article extracted from the Singapore Property Forum:
"WOW! Cheap Sale!"

"If you look in terms of % drop is WOW but if you look in terms of returns, it's not so WOW .. URA data shows rental rate is about $4 psf for river valley area like Aspen Ht, Valley Park, .. even at halved price, rental yield works out to be only 2% lah.. for such a high risk?!"

"it just goes to show how over-valued spore property is"

"Luma today relaunch at half the price....Hahaha! What do you think the price of condo around that area now? it will be around $1400 in no time.....You think buyers stupid is it? Novelty is droping price becasue they have at least 6 other developments haven't sell or not selling well. Do you think he can hold all these units....through the crisis? That's why. You will see another developer doing the same in the next couple of days and next follow suit...... then, afterthat, owners will have no choice but to follow.....that is how the market will crash! Hahahaha! "

"Lol.. You sound really happy.. And how will that benefits you? Or did you had beer.."

"I am happy because I live in a hdb. I'm always an advocate of prudency. I think buying a condo is like buying a Ferrari. Will you burn your money like buying and depreciating a Ferrari? Singaporean have such a liking for condo that he don't mind burning away hard earn money into something that really make no sense compared to a hdb. If he is a businessman making lots of money.....I agree. But most of the S'porean who buy condo are wage earner. They don't know how to invest other than buying property. They will end up working for 3 persons in their whole life: Bank, govt and boss. Their life revolve around working, pay loan and working harder. In crisis time, they might not even keep their jobs. Even dbs is axing people. Rich man make the money FIRST, then spend. Poor man spend the money first, then try to make payment. Singaporean will wake up one day, just like how the American woke up 2 months ago."

"moron, this is marketng gimmick & a irresponsible small company selling.
They bought the land at $800 psf, development cost of $500 psf, they are still making money at $1500 psf.
This is just a blood-suc-ker company, should let them bankrupt.
What so good about River Valley area? walking distance no ammenity, no MRT, in/out of ERP, bad traffic, no good school, no big megamall, no sport hub....."

"but once upon a time during the boom, morons were even thinking about paying $4000 psf for it ... now both bulls and bears can see how over-valued property has become with all the speculation ... even at $1500psf your return is only at about 2% lah."

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Higher-end HDB market cooling: Natura Loft at Bishan sees far fewer applicants

2008-11-14T08:26:00.003+08:00

I'm not surprised, are you?

And on 29 Oct in ST, the developer had said
'We're very confident that there'll be a strong demand for our flats, which are new and attractively priced compared to resale flats in Bishan.'

Well, lets see how many percent of applications actually convert finally into real sales. If there's one thing previous DBSS launches have taught us, do not count your chickens before they hatch.

Nov 13, 2008
Higher-end HDB mkt cooling? (I'd replace the "?" with a ".")
By Jessica Cheam
THE higher-end of the public housing market is showing its first signs of cooling, with the Housing Board's latest condo-style flats receiving a lacklustre response.
With only one day left to the closing of applications, Natura Loft at Bishan has drawn about 600 applications for 480 flats, its developer told The Straits Times yesterday. This is in stark contrast to the previous three projects built under HDB's design, build and sell scheme (DBSS), which attracted overwhelming demand.
The first project, Premiere @ Tampines, was a hit, with 6,000 applications for 616 homes; City View @ Boon Keng had 3,500 buyers vying for 714 flats while the third project, Park Central at Ang Mo Kio, drew 2,300 bids for 578 units.

Industry watchers say Natura Loft is a victim of the latest turn in market sentiment, which has seen companies retrenching staff and economies worldwide entering recession.

'Announcements such as DBS Bank laying off 900 jobs has caught everyone off-guard, and local sentiment has turned very bad,' said Mr Colin Tan, head of research and consultancy at Chesterton Suntec International.

Other analysts such as ERA Asia-Pacific's assistant vice-president Eugene Lim said Natura Loft's pricing was 'on the high side'. (Hmm, you don't say! Well, someone has to send the developers this message)

'The pricey units were launched at a time when the market is jittery, making a double whammy for the project,' he said.

Posted by Ann in the Singapore Property Forum

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

200-unit Rosewood Suites to launch at $580 psf

2008-11-14T07:57:00.000+08:00

EL Development is launching the 99-year leasehold Rosewood Suites at an average price of $580 psf this weekend. Rosewood Suites is a five-storey development with 1-4bedroom apartments. Prices start from $435,000 for a two-bedroom unit and go up to $1.1 million for a four-bedroom ground-floor unit.

The developer held a sneak preview to test the market a fortnight ago and then a soft launch last weekend, when it sold half of the 60 units launched.‘We tested the market…and we were pleasantly surprised that the response was good, so we are going ahead with the launch,’ said Mr Lim Yew Soon, managing director of EL Development, a unit of local builder Evan Lim & Co.‘If we had waited till next year, there would be a lot of competition. It’s better to have a first-mover advantage.’

‘Our earlier price expectations were higher. We benchmarked current prices against the prices of older condos in the area,’ said Mr Lim. Those who bought at the soft launch received a 2% discount from these price levels, he said. Mr Lim said the buyers were mostly dwellers of nearby flats and condominiums.

There are two other condominiums in Rosewood Drive - Casablanca and Rosewood. At Casablanca, two caveats lodged in September and October showed that two 1,184sqft units were sold at $541psf and $549psf, or $640,000 and $650,000. Caveats lodged in the same months at the 437-unit Rosewood showed that two 1,173sqft units were sold for $537psf to $550psf, or at $630,000 and $645,000.

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

HDB BTO Punggol Arcadia Priced Higher than Punggol Sapphire

2008-11-14T07:09:00.000+08:00

The Housing and Development Board (HDB) has launched the 750-unit Punggol Arcadia with five-room flats going for as much as $356,000 to $416,000. This represents an increase of between 7-8% compared to the nearby Punggol Sapphire which HDB launched six months ago. Punggol Arcadia and Punggol Sapphire are both are about the same distance to the Punggol MRT/LRT station.

In February this year, HDB also launched Punggol Spring, which is twice the distance away from the MRT/LRT station. Launch prices of Punggol Spring were about 20 per cent lower in comparison to Punggol Arcadia.

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

MM Lee: Property Price will continue to rise in the long term

2008-11-10T11:49:00.003+08:00

In response to the news reportby CNA 9 Nov 2008, "MM Lee believes property values will continue to rise in long term"; forumers in the Singapore Property Forum wrote:

"Here are the good words of our own MM Lee whom some Bears had reminded us that property will go down in cyclical..seems like MM Lee is very optimistic of Singapore property market. And the fact that the government is controlling supply and ensuring stability, a crash is extremely unlikely. So who to believe now? The bears or MM Lee? Hahaha ... Minister Mentor Lee said property values are bound to go up in the long run because the government is continuously building more infrastructure and attracting higher-value investments that provide higher wages to employees. "

"well said, MM. The surge time will come, swift & just happen overnight.
Global rate cut is good for property, globally is trying to flood US$10 Trillion... Spore govt also will come out with a stimulus budget to drive Spore economy. Once engine starts, you will see buyers coming back."

"the mean property price of a country with sound economy will rise in tandem with its economic growth is pretty much common sense .. MM Lee said property price will rise in the long run .. he didn't say it'll surge from where it is now, in fact he implies that it'll crash in the short term .. and he's trying reassure ppl that after the crash, it'll again rise in the long run. "

"MM Lee mentioned of our reserve to see us through this crisis is chilling. He has said NO to touching the reserve in past recessions...global rate cut is not going to save spore overvalued-property price because banks are tight with their lendings because of a credibility crisis, not just a credit crisis .. China stimulus is to boost its domestic economy ... if it can save itself is already very good .. don't depend on china to save our economy, much less our property...Spore stimulus package is likely for public spendings on long-term infrastructure as we have seen in the past .. and as tharman mentioned, to help business's cash flow .. we've never seen a recession this bad that cash flow of business is severely impaired that it needs to be in our budget .. it's frightening .. the more the govt is doing way more than past recessions, the more it signals the severity of this recession. BEWARE!"

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

DPS can create Singapore sub-prime crisis, analysts caution

2008-11-06T11:44:00.003+08:00

Some developers hopeful that the government will reintroduce DPS

(SINGAPORE) When Ministry of National Development announced last week that it was suspending sales of state land through the confirmed list till June next year, jubilant developers lauded the swiftness of the government action that will hopefully stem the poor sentiment in the property market.

Some developers were also hopeful that the government will reintroduce the Deferred Payment Scheme (DPS), which was scrapped in October last year to deter speculation.

Under DPS, home buyers had to pay only 10 per cent, or more typically 20 per cent, of the price of the residential property they bought from developers.

The next payment would be made when the project was completed, perhaps two to three years down the road. Very often, buyers could make the 10-20 per cent initial downpayment using cash and CPF savings, without having to commit to a bank loan, which could be delayed till the project was closer to completion, when the bulk of the purchase price had to be paid to the developer.

Under a normal progress payment scheme, buyers have to secure a housing loan much sooner, as they are billed by the developer in stages, according to the progress of the project's construction.

When DPS was scrapped in October 2007, many industry watchers said it had come too late as sentiment in the Singapore property market had already started to soften with the onset of the US sub-prime crisis.

Property Agents said Restoring DPS will bring back Foreign Buyers

And now, most property agents agree that restoring the scheme will help bring some buyers back into the market, especially foreign buyers - although not in as great a number as during the height of property fever in early 2007.

The head of a big property consulting group estimated that in some instances, up to 70 per cent of foreign buyers in luxury residential projects bought on deferred payment schemes in 2006-2007.

Buyers have to pay up to 5 per cent more under the DPS compared with the normal progress payment scheme. Yet the ease of making a small initial downpayment made buying attractive for speculators eyeing huge gains from disposing of their properties before the projects were completed.

DPS Restoration may create Singapore's Sub-prime crisis

However, other market watchers and analysts say a restoration of DPS could potentially create Singapore's own version of a sub-prime crisis.

When home buyers purchase a property on DPS, without committing to any bank loan, there is no credit assessment done to see if they have the means to complete the purchase. So this scheme could draw less credit-worthy buyers who may have difficulty securing housing loans later when it is time to pay up.

If substantial numbers of buyers default and return their units to the developer, the banks that had extended loans to the developers may not be too happy.

'The land loan and construction loan may be required to be priced differently because the risk has increased,' as Savills Singapore's director of marketing and business development Ku Swee Yong puts it.

Agreeing, the head of the major property consulting group said: 'There will be implications for banks' exposure to property loans extended to developers, and that was probably a major reason the authorities considered in scrapping DPS in the first instance.'

Ku Swee Young: DPS is helpful to genuine home buyers

To be sure, DPS is helpful to genuine home buyers. For instance, an HDB upgrader who buys a private home under construction would prefer to sell his existing HDB flat only when the private condo he's moving into has been completed; so DPS helps him to tide over until then, says Mr Ku.

DPS has a tendency to draw speculators

But market watchers point out that DPS - because it does not entail credit checks - also has a tendency to draw speculators. 'There's a penchant for optimism, especially among the young. Whereas if you take a housing loan, you will be psychologically more aware of your financial obligations and tend to be more careful,' says a property veteran.

Ku Swee Yong: DPS could be reincarnated but with modifications

To cut this risk of fuelling speculation, the DPS could be reincarnated but with modifications, suggests Savills' Mr Ku. For one, home buyers making a purchase under the DPS could be required to sign up for a housing loan first, even if they need to make a drawdown only a few years later. 'That way, the credit assessment is done upfront. And secondly, such home buyers will have to pay a penalty to the bank in the form of an admin charge of $3,000 to $6,000 if they decide to sell their property before the project is completed and not use the home loan or if they make an early repayment,' Mr Ku says.

Another way to reduce the negative effects of DPS is to raise the initial payment from 10-20 per cent previously to 30 per cent, Mr Ku suggests. 'That way, the developer would have collected more equity and that will provide a bigger cushion to protect the developer as well as its banks in the event of a default by buyers not able to hold on to their units,' he adds.

Another view: Leave banks to offer innovative housing loans to home buyers

Then there's another view. The government should continue to keep DPS at bay and instead leave banks to offer innovative housing loans to home buyers that replicate the benefits of DPS - if it makes commercial sense to them. The interest absorption and zero instalment schemes offered by some banks highlighted in a BT article in September allow buyers to make a 20 per cent downpayment and then nothing until the project is completed.

Under such schemes, buyers have to sign up for a bank loan for the property, thus entailing a credit-worthiness check to ensure they are not dabbling in properties beyond their means. Afterall, nobody wants a sub-prime crisis here.

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Impact of Singapore Government's Land Sales Halt

2008-11-06T08:03:00.000+08:00

The Singapore government recent announcement to halt land sales in view of the plunging sales of private property market bring to mind the same measure that was carried out during the 97-Asian Financial Crisis. The following is a forum-exchange on the impact of the measure extracted from the Singapore Property Forum:

"我已經說過，那股已經上岸的心態使到自己已無當年之勇，更何況金融海嘯的確是生平所未見，多年來幸運地賺到一些錢，目前想買樓的念頭可能強過買股票，仍打不定主意。樓價只要特區政府堅守「勾地」政策，土地供應有限，價格不可能大跌。
買樓與買股最大的分別是：股價波幅太大，影響心理健康，樓價只要能夠做到毋須樓按，則不會有甚麼壓力。買樓收租是我將來的退休大計，兩千年來，中國的地方鄉紳就是靠買地收租當地主而一代傳一代，這是最簡單的保護財富方法。"

"He is right.
As long as Govt stop selling land, cut out the supply in near future, property price wil be sustainable.
Demand will still be there, new family, marriage, FT, immigrants, 6.5M population, Sporean back from US & Europe......
Market just waiting for signal to up again."

"govt also stop land sales during the 97-Asian financial crisis but private property price plunged neverthelessly by 40%-50% by developers and in some cases, 70% by sellers ... when the govt acts, it's usually because they already see the crash!!!
in fact, in the 97-crisis, the overhanging supply is only half of what we see today .. it took more than 10 years for property price to recover .."

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Private Property Buyers' Tip: Points to consider before buying

2008-11-06T08:00:00.000+08:00

Let me state based on my own understanding why I think prices have not bottomed out and it is worth it to wait a little longer at this current time.

Singapore Economy heading towards "real" recession

1. Singapore is an open economy that is export driven. We are in a technical recession and heading towards a "real" recession. Jobs will be lost and people displaced. It is not wise to buy private property when your rice bowl is uncertain.

Credit Crunch

2. Banks have necessarily tightened credit conditions. Buyers may not be able to get the amount of loan that they want. Instead of 80%, they may only get 60-70%. Cash/CPF upfront payments will get bigger and current prices therefore will have to fall to a sustainable level.

Global Crisis Still Cloudy

3. The global financial crisis is unprecedented. We still do not know the full effects of the bailouts yet. The current euphoria regarding the US election will eventually wear off and reality will set in when callus hands meets the yoke.

Marginal Property Flippers yet to emerge in full force

4. The TOPs are only just starting. The flippers with no holding power are only just starting to sell. Many are still holding out for "Hai Gong's". Let them wait for several months more until they are really desperate before you do a massive price slash.

Hypes Surrounding Real Estate Boom have faded

5. The hype about the Olympics, IR, YOG and Foreign Talent has officially died. All the potential upsides have been more than priced in.

Home buyers' Downgrading may cause private property price to be unsustainable

6. Young couples, even the middle to higher income have shifted to HDBs because condo prices have gone beyond their reach. There are fewer and fewer real buyers to sustain prices.

Condos are not really value for money

7. Condos are luxury items. Real owner buyers want to live a "good" and comfortable life in their condos. However, newer condos may even be inferior to HDB in terms of comfort. Some of them don't have enough carpark lots for residents. Some are so small and cramped as to be little more than a pidgeon hole. Some are located in places that are inconvenient without nearby food places, amenities. I think property developers may have got it wrong in this respect. People want to upgrade to Private from HDB by and large because they want a more comfortable lifestyle. Living in an expensive and tiny pidgeonhole where your car has no lot to park in, where your bedroom is so tiny that you can't have bedroom cabinet doors that swing out... instead, they have to be sliding, where facilities are overcrowded, maintenance fees are high, etc. etc. is more torture than an upgrade of lifestyle. Therefore, some developments are just not worth the money...

Impending Supply Glut

8. There is a glut coming from the projects whose launch dates can't be pushed back further.

Posted by Anonymous in the Singapore Property Forum

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

HDB Flat vs Private Condo: Which is better value?

2008-11-06T07:21:00.002+08:00

A forum exchange extracted from the Singapore Property Forum:

"Condos are luxury items. Real owner buyers want to live a "good" and comfortable life in their condos. However, newer condos may even be inferior to HDB in terms of comfort. Some of them don't have enough carpark lots for residents. Some are so small and cramped as to be little more than a pidgeon hole. Some are located in places that are inconvenient without nearby food places, amenities. I think property developers may have got it wrong in this respect. People want to upgrade to Private from HDB by and large because they want a more comfortable lifestyle. Living in an expensive and tiny pidgeonhole where your car has no lot to park in, where your bedroom is so tiny that you can't have bedroom cabinet doors that swing out... instead, they have to be sliding, where facilities are overcrowded, maintenance fees are high, etc. etc. is more torture than an upgrade of lifestyle. Therefore, some developments are just not worth the money..."

"Must say I really agree with you this. Although they're marketed as 'luxury' (and priced as such), many new condos are in more ways a regression. Rooms are now so small they don't even dare to put a bed in the showflat for fear you'd realise just how cramped the rooms are. Huge bay windows in every room consume what little precious space is left. Downstairs, there are no open areas to walk on, or for kids to play. The little space between blocks is used for the pools. The plots are built right up to the edge so that your window opens straight into the window/wall of the adjacent property. Clubhouse is more of a 'room', and 'gym' can barely take more than 4-5 people at once. These make new condos bad deals compared with older developments. I actually know a family who own both a condo and HDB, but decided to 'downgrade' back to the HDB after the novelty of condo living wore off, and they realised they actually got a BETTER quality of life staying in their huge HDB flat."

"I really agree with the point. The quality of life of modern S'porean living in new crampy condo is really bad. They work their shit out of their busy day and the only thing to do is just to pay off their loan for the condo and car. As though the whole world and whole life is to live in a crampy, lousy condo. How sad. They have no life! "

"Yes and your HDB units door is just 2 metres away from your neighbor, and the rubbish chute is just downstairs with the huge foul smell every afternoon when the garbage collectors came....And every Chap Goh Mei, you will see thrashes and thrashes of paper being burnt with no containers without due consideration for neighbors upstairs.... and the lift has lots of saliva, kids urine and its bloody cramp and smelly...plus the fact that the void deck is full of scum. And your neighbors will be foreign workers from India and China who will make noise every hour and hang their clothes right in front of your door....Hahahah which one is better living now? HDB or condo....what a fool !! "

"beside points above, many single lady drive back late at night dare not walk from car park to home, security is an issue, compared to walk fence up in condo with guards. O$P$ is so common inside lift, walls near lift in every floor, re-paint again & again.
No facility, it's convenient if you exercise regularly, track-mill, swimming, common air-con study room. Nicer surrounding, walking path, nice tiles in corridor, higher ceiling, better environment....
It's just totally different living comfort & condition, don't talk about status.
HDB is good, but just can't compare."

"I've spent equal amount of my adulthood living in HDB flats and condos. Strictly as a consumption good, condos do offer a more interesting lifestyle and better security than HDB. Of course, you've to pay maintenance and sinking funds for all those facilities in private condos, whereas HDB landscaping and regular painting come free. Also, because of the government's HDB upgrading, common areas in HDB with their covered walkway and tiled pavements are a lot more appealing than private estate. Most of all, if living in a condo means you've to work all your guts out to pay for it, then you'd be better off living in a HDB flat than be burdened with all those financial worries. Finally, if you're looking at investment returns, then no doubt HDB is better than condos esp 99LH condos."

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

HDB Rents to Fall as Private Property Rents fall

2008-11-03T19:35:00.000+08:00

Downward slide in HDB rents may take a few months
HDB rental market will be the next segment of the local property market to be hit by the global financial crisis, reported Straits Times today. This may very well mark the beginning of the weakening in the HDB market.

Rents of Housing Board flats, which have been climbing steadily, largely on demand from foreigners squeezed out of the private homes market, are up only slightly in the third quarter even as rents of private homes fell. But property experts say HDB rents have likely peaked. They will hold steady for the next several months before they begin to crack from the pressure of falling rents in the private homes market.

'Any decline in private rents is going to contribute to the downward slide in HDB rents, but it may take a few months for the impact to filter down,' said Knight Frank's director of research and consultancy Nicholas Mak.

Downward Pressure on HDB Rents Already Showing
The pressure is already starting to show: Rents for HDB flats have shown smaller increases in the third quarter. Median rents for five-room flats have risen by $100 every quarter this year to $2,000 in the third. But median rents for three-room flats remained unchanged at $1,500 in the three-month period to Sept 30 while median rents for four-room flats showed a smaller $50 rise to $1,800, from $1,750 in the second quarter and $1,600 in the first.

May also want to read:
Singapore Property Forecast: HDB and Private Property will trend in opposite direction until ..,
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Global Economic Crisis Worsens by the day

2008-11-03T07:03:00.001+08:00

Just some of today's Straits Times reports... see a trend?

Nov 3, 2008
Global downturn quickens
LONDON - PROFITS evaporated at top European banks on Monday and authorities worldwide pressed on with efforts to bolster weakening economies as data from Europe and China suggested a sharp global downturn was gathering pace.

Nov 3, 2008
Slowdown hits Australia
CANBERRA (Australia) - AUSTRALIAN house prices rose at their slowest pace in almost three years, September retail sales slid, and job advertisements fell for a sixth consecutive month in new evidence on Monday that the economy is slowing.
House prices in state capitals fell by 1.8 per cent on average in the three months to September for an annual growth rate of just 2.8 per cent, the latest Australian Bureau of Statistic's house price index shows.

Nov 3, 2008
China's export orders fall
BEIJING - CHINA'S manufacturing activity slowed sharply in October amid weaker export demand despite a flurry of official measures to boost flagging growth in the world's fourth-largest economy, an industry group reported on Monday.

Nov 3, 2008
HK retail sales slow to 6.9%
HONG KONG - HONG KONG retail sales growth slowed to 6.9 per cent year-on-year in September as weak consumer spending linked to the world economic crisis began to bite, the government said on Monday.

Nov 3, 2008
Eurozone in recession?
BRUSSELS - THE 15 countries using the euro have slumped into a shallow recession in the face of the worst financial crisis in generations, the European Commission estimated on Monday.

Nov 3, 2008
S.Korea unveils stimulus
SOUTH Korea unveiled an economic stimulus plan on Monday and markets geared for more interest rate cuts in Europe and Australia in a frantic campaign to keep the financial crisis from plunging the world into its worst recession in decades.

Nov 3, 2008
Vietnam to cut prime rate
HANOI - VIETNAM'S central bank said it would cut the benchmark interest rate by one percentage point to 12 per cent on Wednesday in a bid to free up credit for businesses amid the global financial turmoil.

Nov 3, 2008
Indon inflation rises 11.77%
JAKARTA - INDONESIA'S inflation rate eased to 11.77 per cent year on year in October, the Central Statistics Agency said on Monday.

Nov 3, 2008
Consumer debt goes up
It indicates more people are unable to meet payments as crisis worsens

Posted by Anonymous in the Singapore Property Forum

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Property Buyers be Prudent: Fewer Jobs, More Retrenchments Ahead

2008-11-01T11:37:00.006+08:00

The following is a forum exchange on the deterioriating job market in Singapore (extracted from the Singapore Property Forum):

"AIA S'pore lays off 20: More job losses expected in cost-cutting exercise begun before crisis hit its US parent."

Bull said:
What is 20 retrenchment??? compare to 200,000 new jobs we created this year.If you are not choosy, be realistic with your pay & jobs, no problem lah.

Bear said:
don't forget we've thousands of fresh-grad looking for jobs every year?

don't forget most new jobs created are in the construction industry .. can our retrenched bankers or even factory operators now go and take over blanga's constructional workers' positions?

be realistic with your pay and job... well said ... but how are you going to pay for the million dollar condo you committed earlier this year?

Another Bear said:
Moral of the story do not over commit to those overpriced condo..

Yet Another Bear said:
AIA axes 20 ... just slightly more than a week ago, Merrill Lynch also axed about 20 persons. i heard that very recently, standard charted also axed some (anyone care to confirm??)...

while I am not surprised that banks are cutting fat, these few... maybe 50 people are the "higher income" whose salaries and bonuses combined can easily be used to pay for 1000 workers in the construction and services industry... see the comparison???

so we create 200,000 jobs. Yeah, these are majority the low paying ones. But at the top line, our best paying industry (i.e. banks) are retrenching, most of it on the quiet and not so "visibly" like right now. This looks to me like incomes are going to shrink. The people in the banking & finance industry that were laid off... they were also the very same people that had the money in the first place to buy the condominiums. Many of them did indeed buy during the boom and they aren't necessarily going to be able to get a job with similar pay... let alone better pay to finance their earlier purchases. In fact, the higher up you are, when you are axed, the more difficult it is to find an equivalent job.

Guess what... this is going to be a vicious cycle. When their jobs are unstable, even the ones with loads of cash in the bank will think thrice about buying expensive properties.

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Property Buying Advice: Confirm Bank Loan Before Putting a Deposit

2008-10-30T09:56:00.000+08:00

A friendly advise for all buyers:
Get a confirmation from your banker about loan availability for desired amount for desired property before you put down any deposit. DO NOT under any circumstances put down a deposit hoping that your loan will be approved. Now a days bank's are valuing property very conservatively. For example - you are viewing a property worth 1mil (seller might tell you thats the valuation/or below valuation price). - So your estimate is that you need 200K cash/cpf and 800K loan (max 80% loan available these days). - You put in some token deposit to confirm purchase. - You check with your banker now. He values the property at 900K and approves 720K loan. - You suddenly find yourself in a position to put up 80K cash extra. - If you cant get that, you have to forfeit your deposit Please avoid such situation. Agents will always tell you to put a deposit, telling you that unit is hot and other buyers are also in queue. Dont believe them. Its better to let a unit go than to let your deposit go. Take your time before you confirm any purchase. Be financially prudent. God bless.

Posted by Anonymous in the Singapore Property Forum in the response to the article reproduced below:
He buys condo for a windfall but takes a big fall instead

AMONG the legion of burnt investors is a buyer of a million-dollar condo apartment who should have known better. He jumped into a then hot property market without weighing the biggest 'if' of all - what if you lack the cash to complete the purchase? Now Mr Byron Nifakis, 39, is bankrupt. He wanted to buy a $1.2 million four-room flat in the Casa Merah condominium, as an investment. The Singapore permanent resident was working as the IT director of a restaurant here, earning $10,000 a month. Now he is reminded of his bankruptcy whenever he peers out of his rented home, which faces the Casa Merah on Tanah Merah Kechil Avenue. He eyed the condo development to cash in on the rising property market last year. But, by his own admission, his 'naivety and -censored-' resulted in his owing the condo developers $18,000 for his botched purchase. Mr Nifakis, who came to Singapore from Canada in 2001, thought he was 'safe' as he had not signed any documents committing himself to the deal. But he had handed over a $60,000 cheque as deposit, and what he did not know was that this was sufficient proof of his option to buy the property. His cheque bounced, but lawyers and property agents told The New Paper he was still obliged to buy the unit. Mr Nifakis, who had only about $6,000 in his account then, could not proceed with the purchase because money he was counting on from overseas partners did not come in. He said: 'It was only because my property agent promised me that I could get more time to process the $60,000 payment that I even decided to go to the showroom that day to try my luck.' But by 4pm, he was unable to raise the money from his partners. So he returned to the showroom to back out of the deal and get his cheque back. When the agents refused to return the cheque, Mr Nifakis left the showroom. 'I thought they could keep my cheque, because they would not be able to use it against me,' he said. But he was wrong. A purchasers' particulars form he had signed stated that he had to pay 25 per cent of the $60,000, or $15,000, if he backed out of the deal. And, to his horror, he learnt later from his lawyer that the cheque could be used as evidence that the option had already been granted to him. He said: 'I should have refused to leave the showroom until it was closing time so that I could speak to someone who could return me my cheque. 'My agents kept telling me 'I'm sure you will find a way to get the money'.' Trying to make the best out of a bad situation, he 'scrambled' to get the money by applying for a bank loan, but failed to get approval. Desperate Desperate for more time, Mr Nifakis wrote to the developers, but failed to get an extension. They insisted that he had to pay the $15,000. Mr Ling Tien Wah, the lawyer acting for the developer, explained that since Mr Nifakis did not exercise his option to buy the apartment, the developer was entitled to 25 per cent of the $60,000 booking fee. In February this year, a judge ordered Mr Nifakis to pay the developer $18,000, including legal fees of $3,000. The developer took out a bankruptcy application against him in July when he failed to pay up. To make matters worse, his company laid him off the same month because it had run into financial difficulties and had shut down the restaurant. On 9 Oct, the court issued Mr Nifakis a bankruptcy order as he was unable to come to a compromise with the developers on a repayment scheme. He asked to pay them $300 a month over five years, but the developer rejected the offer, noting that if he wanted to, he could clear his debt in just 12 months. A bitter Mr Nifakis said: 'This is the biggest investment I have made; it is also the biggest lesson I have had to learn. 'I try not to think about it too much. There's a bit of resentment. After all, that property could have been mine.'

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Property Buying Tip: When to Buy? Wait for the Bottom?

2008-10-30T07:58:00.000+08:00

Tina wrote:
Bears are waiting for property prices to reach its lowest. But they are truly stupid. The answer is simple. When property prices reach its lowest, that will be the time when the property market will start recovering. By then interest rate will pick up back again ! Imagine buying a property now and taking up a loan of interest rate less than 2.5% a year. Say, the downturn lasted for 2 years. That means a huge savings in interests. 2 years later, interest rate pick up to 5%, and when the bears bought, they are tying themselves up with a higher interest package loan while old timers enjoy a good rate package. At the end of the day, no such thing as losing or winning cause the banks will still earn the same amount from you. Also, with the current high construction costs, its very unlikely property prices will drop more than 20% from now till end 2009. 2010 property market will recover so does the stock market.....To wait to buy at 20% discount but ending oneself paying higher interest package for property loan is simply not worth it....In addition, no one knows when the property market will reach its lowest...its simply a gamble, a risk to take..

Anonymous wrote:
Housing loan rate will cut to 1% soon with US Fed rate going to 0-0.5% within next 2 moths. Bears will say rate is not a consideration, let them be, they do not know the significant. This rate will here to stay for a long period. Construction & material cost is still on high side, it will down a bit & shoot up to historical high in next 12-18 months due to hyper-inflation kick in. Rental yield of HDB at 7-10% now, price will be sustainable for a while for low to mid end condo. This yield will be here to stay due to strong demand. Wait till China take action on global economy within next 12 months, will see a good run, wait, it will come.

Anonymous wrote:
Reality has proved that bulls have been stupid buying properties at peak prices ... so who are the stupid ones to teach the smart ones ... Only stupid people will tell you that it is stupid to aim to buy "When property prices reach its lowest, that will be the time when the property market will start recovering." Anyone with some brains will know that's the best thing that can ever happen to a property investor. Even to buy when market has shown slight upturn is better to buy on the downturn when you have no idea when it'll end.. The downturn, according to most analysts, will reduce in property price plunging by 40% - 75%. Only stupid people will even consider mortgage rate gong from 2.5% to 5% as a sound reason for buying now. Commodities prices have already dropped as much 80%, so will construction costs in the longer as the global economy enters into a "savings" era from a "credit" era. In the new era of "expensive, tight credits", property have to come down because there is simply no money to chase up the property price. Best thing, when property price drop by 50%-75%, buyers may need only a small mortgage or no mortgage at all ... so you don't even have to consider mortgage rate.

Extracted from the Singapore Property Forum

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Demand Shifting to HDB flats from Mass-Market Private Property

2008-10-28T12:23:00.007+08:00

Result of housing inflation in a recession: People Downgrade

Notice that people are shifting from private housing to HDB and smaller and smaller HDB ... this is the result of housing inflation in a recession: people downgrade, rather than pay whatever the developers ask ... so bulls' theory of how inflation will chase up private property price is totally wrong.

Source : Business Times - 25 Apr

Demand shifting to HDB flats from mass-market private homes

HDB prices up as demand rises. Rents also rise,
Q3 data shows; prices and rents of private mass-market homes fall as demand shifts to HDB flats

DEMAND is shifting to HDB flats from mass-market private homes - pushing up HDB prices and rents, but causing mass-market home prices and rents to fall. Figures released yesterday by the Housing & Development Board (HDB) and Urban Redevelopment Authority (URA) show HDB’s resale price index rose 4.2 per cent in the third quarter. This means that in the first nine months of 2008, HDB resale prices climbed 12.4 per cent. The number of transactions also increased in Q3 to 8,110, from 7,760 in Q2.

Mass-market home prices will hold steady this year?

In contrast, private mass-market properties put up a decidedly lacklustre showing in Q3. Prices of non-landed properties in the outside central region - where most mass-market private homes are located - fell 1.5 per cent. The decline was not expected - most analysts have said mass-market home prices will hold steady this year.

‘In contrast to the private property market, despite the gloomy economic outlook, demand in the resale HDB market is still very active, with buyers coming from up-graders, down-graders and Permanent Residents,’ said ERA assistant vice-president Eugene Lim.

Buying HDB flat allow liquidity during uncertain time

Analysts attribute this to a shift in demand towards HDB flats and away from private mass-market projects. ‘Demand is moving towards the HDB market,’ said Nicholas Mak, director of research and consultancy at Knight Frank. ‘A greater proportion of new homeowners, such as newlyweds and new immigrants, are looking only at HDB flats.’ In the past, a greater proportion of new homeowners would have considered private mass-market apartments, he said: ‘Compared to purchasing private residential properties, buying an HDB flat may allow some to set aside funds for liquidity during this uncertainty.’

More people are eligible to buy HDB flats now

Statistics show the number of Singapore citizens and Permanent Residents (PRs) is set to hit a record this year. In the first half of 2008, there were 34,800 new PRs and 9,600 new citizens, up from 28,500 new PRs and 7,300 new citizens in H1 last year.

Another reason to choose HDB: HDB flat appreciating, private home prices are falling

Another reason homebuyers are choosing HDB flats over private mass-market homes is that HDB flat prices are still rising, while prices of private homes are falling. ‘People want the asset they buy to appreciate in value. In the HDB market there is still room for prices to move upsaid Ku Swee Yong, ,’ director of marketing and business development at Savills Singapore. At Sengkang, where HDB flats are going for around $250,000-$300,000, prices could climb 5-10 per cent in the next few quarters, he said.

HDB Rental Flats also hit Private Mass-Market Rents

Private mass-market rents have also been hit by the shift in demand. They fell 2.7 per cent in Q3, as demand switched to the HDB rental market. Overall median sub-let rents for HDB flats rose slightly in Q3.

HDB Resale Prices Expected to continue to increase but at slower pace as the economy worsens

But looking ahead, even growth in HDB prices is expected to slow as the economy worsens. ‘As such, although there is good demand for resale HDB flats, we expect buyers to turn more cautious and exercise more prudence by offering less for flats so as not to overstretch,’ said ERA’s Mr Lim.

HDB resale prices are expected to continue to increase, but probably at a more measured pace in the coming months. ERA’s Mr Lim said: ‘For 2008 we may see an overall price increase of 15-17 per cent, slightly lower than the 17.5 per cent increase for the whole of 2007. As for 2009, we are likely to see only marginal quarterly price increases, as current resale prices are a new peak.’ Likewise, PropNex’s Mr Ismail expects the HDB resale price index to increase about 15 per cent for the whole of 2008.

HDB Demand Shifting towards Smaller Flats

Because of this, cash-over-valuation (COV) figures will continue to decline in the coming quarters, analysts say. The median COV for resale transactions fell to $19,000 in Q3, from $20,000 in Q2 and $21,000 in Q1. The bigger drops in median COVs were for five-room flats (down 15 per cent) and executive flats (down 22 per cent), notes Mohd Ismail, chief executive of PropNex. ‘This is evidence of buyers resisting paying larger COVs for larger properties in this bleak economy,’ he said.

The increasing popularity of smaller three and four-room flats was also reflected in the median resale prices. The increase for smaller flats, at almost 5 per cent, outstripped the 1.5 per cent increase for larger flats.

May also want to read:
Singapore Property Forecast: HDB and Private Property will trend in opposite direction until ..,
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Singaporeans' debt increase 10%: Housing Loans Up $6.6B

2008-10-26T08:27:00.000+08:00

In the Singapore News report (Friday, October 24, 2008) "Singaporeans are piling on the debt ", total debt of Singaporeans has increased by 10%, with credit card rollover debt at $3.3 billion, and housing loans $6.6 billion. As a whole, preliminary statistics in August from the Monetary Authority of Singapore show that total debt to individuals rises to $112 billion — almost 10% up over a period of 12 months.

Credit Counselling Singapore (CCS) pointed out that these debts will push many individuals into financial difficulties as jobs and income become affected as Singapore economy weakens further and recession grows deeper.

CCS president Kuo How urged consumers to “urgently examine and make every effort to reduce or restructure” their debts, especially credit cards and credit lines, which are expensive and recallable.

May also want to read:
The days of Cheap, Easy Credits chasing after property is OVER!
Fire Sale: Owners Dump Condos
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

HDB Resale Price Index Quarter 3 2008: Price Rose 4.2% and Rent Rose marginally of less than 1%

2008-10-24T14:32:00.007+08:00

HDB’s Resale Price Index (RPI) rose by 4.2% in 3rd Quarter 2008 over the previous quarter, slightly lower than the 4.5% increase seen in 2nd Quarter 2008. Resale transactions increased by about 4%, from about 7,760 cases in Quarter 2 2008 to about 8,110 cases in Quarter 3 2008.

The median Cash-Over-Valuation (COV) amount of all resale transactions in 3rd Quarter 2008 was $19,000. This is a slight decrease compared with the COV of $20,000 in 2nd Quarter 2008.

Overall median sublet rents for HDB flats rose slightly in Quarter 3 2008. Subletting transactions fell slightly by about 4% from about 4,120 cases in Quarter 2 2008 to about 3,960 cases in Quarter 3 2008. The total number of HDB flats approved for subletting rose to about 21,400 units, compared to about 20,200 units in Quarter 2 2008.

May also want to read:
Singapore Property Forecast: HDB and Private Property will trend in opposite direction until ..,
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

URA Quarter 3 2008 Real Estate Statistics: Private Property Price Fell 4.2% and Rent Fell as much as 2.7% in OCR

2008-10-24T14:22:00.008+08:00

URA Q3 2008 real estate statistics shows that private property price fell 4.2%, worse than an initial estimate of a 1.8% decline.

Rents also fell during the July-September period by 0.9% compared to the increase of 2.5% in the three months to June. Rentals of non-landed properties in CCR, RCR and OCR fell by 0.7%, 0.5% and 2.7% respectively in Quarter 3 2008

Prices of non-landed properties fell 2.5% in 3rd Quarter 2008, compared with an increase of 0.1% in the previous quarter. Prices of apartments fell 2.4% and prices of condominiums fell 2.6%. Prices of non-landed properties in Core Central Region (CCR) fell 2.7% in Quarter 3 2008, and prices of non-landed properties in Rest of Central Region (RCR) and Outside Central Region (OCR) fell by 2.4% and 1.5% respectively.

Prices of landed properties fell 1.9% in Quarter 3 2008, compared with the increase of 0.6% in the previous quarter. Prices of detached, semi-detached and terrace houses fell by 1.9%, 2.1% and 1.6% respectively in Quarter 3 2008.

As at Quarter 3 2008, there were 66,422 private residential units in the pipeline, comprising supply from projects that are already under construction and those that have been granted planning approval but are not under construction yet. Of the 66,422 uncompleted units of private housing from projects in the pipeline, 23,008 units, 19,736 units and 23,678 units were expected to be completed over the next few years in CCR, RCR and OCR respectively.

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Singapore High End Properties Merely High Priced

2008-10-23T09:42:00.009+08:00

According to a news report from my paper today (shown below), some Singapore's high-end properties are merely high priced and not the sort of high-end properties pursued by high-net-worth-individuals.

Chesterton International research pointed out that a high end property should have 3 attributes: (1) prime location, (2) exclusivity and (3) spaciousness with area of 3000 sq ft or more. These are the attributes that high-net-worth-individuals would look for in a high-end property. In land scarce Singapore, properties with these attributes are few and far between; but it is precisely the scarcity of such properties that make them all the more desirable.

Many of the so-called high-end properties developed recently were enbloc developments of prime properties (in districts 9, 10,11) during the past two years. In many of these enbloc developments, there is really little value-add in terms of exclusivity or spaciousness. In fact, some of these properties were ordinary in design and downright small.

According Chesterton International research, the high prices of these properties were really the result of developers' high acquisition costs for these prime-location developments. Though these properties have been called high-end properties, they are in reality merely ordinary prime-location housing that do not really appeal to high-net-worth-individuals.

Knight Frank analyst said that not all high-end properties are of "grade A", some maybe of "grade A-minus". They provide condominium living that's do not necessarily meet high-end lifestyle. In a economic downturn, these "high-end" properties may not hold up as well as their other counter-parts. Developments like Sentosa Cove with a 99-lease may also not hold up as well. When supply of such properties increases, it depreciates their exclusivity that is needed to guarantee their values.

DTZ Tie Leung said that price decline in high-end properties is the result of low sale volume. Hence, owners will have to reduce their prices in order to sell their properties.

In the past, Singapore high-end properties are reckoned to be the "blue chips" of Singapore real estate, having withstood sharp price decline during crisis such as SARS. This maybe set to change with the current sub-prime crisis as both sales and prices of these high-end properties took the brunt of the economic turmoil.

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Singapore Marina Bay Sands IR threatened by Subprime Crisis

2008-10-23T08:32:00.001+08:00

Las Vegas Sands' share price fell a jaw-dropping 90 over pecent, from a 52-week high of US$144.15 to Tuesday’s price of US$12.43, on concerns about a slowdown at its US operations, profitability of its Macau casinos and high gearing. Doubts have been raised about the health of Las Vegas Sands and more importantly, for Singapore, its impact on the Marina Bay Sands Integrated Resort (IR) that is scheduled for completion end of next year.

In the worst-case scenario, if US Las Vegas goes bankrupt, Marina Bay Sands IR in Singapore is unlikely to escape unscathed, said market observers.

In the extreme scenario, if the parent company is liquidated, Marina Bay Sands IR needs to find a buyer for its stake in the subsidiary, which could affect the construction schedule, he said.

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Singapore Property Developers may have to write down assets and make provisions

2008-10-22T08:23:00.009+08:00

In the BT report today: "Lower profits for property developers expected", analysts continued to express pessimism over Singapore property developers' earnings.

Singapore property developers are facing pressure from all sides - slowing sales, increasing difficulty in obtaining credit and mounting pressure to cut property prices in Singapore and in overseas markets such as China and Vietnam.

Deutsche Bank expects continued earnings downgrades on weak sales and average selling prices (ASPs) and the risk of provisions.

DBS Vickers who recently downgraded 6 property stocks including City Developments, CapitaLand and Ho Bee Investment, said asset devaluation is a concern.

Goldman Sachs acknowledged that the real estate market outlook is deteriorating at home and overseas - in markets such as China and Vietnam - for Singapore developers.

May also want to read:
The days of Cheap, Easy Credits chasing after property is OVER!
Fire Sale: Owners Dump Condos
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase

Singapore Property Crash: Deferred-Payment-Scheme Property Buyers Not Eligible for Bank Loans Cannot Pay Developers Come TOP

2008-10-21T08:28:00.012+08:00

The New Paper reported in the article "FIRE SALE: OWNERS DUMP CONDOS" October 20, 2008; that stock market losses have forced some property owners to resort to 'fire sales' for a quick return to liquidity.

According to some property agents, some of their clients are willing to give as much as 20% discount or even more. Even with the hefty discount, these luxurious multi-million-dollar apartments are hardly a steal.

The situation is worse for those who opted for deferred payment schemes because some are no longer eligible for loans, and cannot meet payments once the developers issue the Temporary Occupation Permit (TOP). If they fail to sell off their properties before TOP, they may have to sell at even greater discounts.

The high-end property market seems to be hit the hardest, according to a property agent who said , 'My colleagues who specialise in high-end properties are not doing well. They do not have any transactions at all.'

Many of these high-end property speculators are stuck because they can neither sell their property, nor rent it out to cover their mortgages, as the rental market has slowed down a lot.

In response to the report, forumers at the Singapore Property Forum have these advice for property buyers:

"Not yet (time to buy), give it another 6 mth to 1 year, then you can see what "lelong lelong" is like ... bears be patient ... "

"Yes, be careful that all this lelong lelong shouts may not really be bargains at all .. for $1M you cannot even get a small studio ... look at the real investment value in terms of rental yield ... don't pay too much attention to the discount given .. after all, to begin with, these properties are really over-valued .. "

"Good advice - properties are still over-valued. Price has to come down more. "

"There are fire-sales already? 20% off. Although I am a bear but I didn't expect the drop to be quite so steep so fast. I was expecting a protracted argument with the bulls for at least 3-6 months or so and for prices to correct about 20-30% only in 2009.... OK, it looks like the crash may be bigger than expected. Would 50% be possible by end 2009? ... This is good for me because I can get a bigger unit with my budget after waiting for over a year but in a way, I feel bad for the people who have overcommitted on property."

"This is only the start of the mother of all meltdowns ... you've plenty to pick and choose from ..next year this time "

May also want to read:
History of Singapore Property 1960 to 2008
HDB Resale flats Price Index 1990-2008: Graph & Chart
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

Singapore Integrated Resorts (Spore IRs) may not live up to expectations

2008-10-20T08:31:00.002+08:00

In the BT report "Dicing with a downturn", Saturday October 18, 2008; Singaporeans are again asked if the Singapore’s Integrated Resorts (IRs) can beat a global slowdown?

Expectations initially on what the IRs could do to the Singapore economy were indeed very high, especially on the potential impact on the private property price. Property analysts had said it'd bring 40,000 jobs and the foreign talents needed would surely drive property price to yet another peak.

That, however, may be easier said than done.

To begin with, the Singapore Tourism Board is not confident of achieving this year’s target of 10.8 million visitors. Even if visitor numbers do pick up against the odds of an impending global recession, it remains to be seen whether these tourists will spend as freely as initially expected. The IRs have placed its bet in markets all over the world, the trouble is that almost each of these markets is in its downturn. The Shanghai index has fallen 69% from its peak in October 2007 and hit a 22-month closing low in September this year. Mumbai has not fared much better. Ultimately the success of the Singapore IRs will depend on tourist arrival which looks set to be hit by the global economic crisis.

In the light of the worsening global economic situation, analysts have cut back their projections on the IRs' contribution to Singapore to between 0.3% and 0.5% between 2010 and 2015.

May also want to read:
History of Singapore Property 1960 to 2008
HDB Resale flats Price Index 1990-2008: Graph & Chart
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

Real Estate Investment Outlook: The days of easy, cheap credits chasing after properties is OVER!

2008-10-20T08:30:00.002+08:00

We are facing the worst global financial crisis of the century, it doesn't take a lot of intelligence to gauge that its impact on the Singapore property price is going to be worse than the last 97-Asian financial crisis .. when property price plunged as much as 50% in the mass market ..

97-Asian crisis did not see the sort of credit crunch here that simply choked legitimate businesses into bankruptcies ..

97-Asian crisis was not accompanied the huge risk-aversion in the money market that we see today ..

I hereby pronounce, based on the above logics, that the days of easy, cheap credits chasing after properties is OVER!

Property price will now has to be fundamentally supported by the real wealth that a country can generate for its people.

Singapore property price will therefore has to correct downward by about 40-50% esp in the mass market to match the current affordability level of the masses, and if that affordability level declines with declining economic growth, property price may have to fall still further until a sustainable level is arrived at ..

from that sustainable price level, property price will then rise in line with economic growth in the absence of cheap, easy credits ..

WE ARE BACK TO BASICS.

Posted by Anonymoust in the Singapore Property Forum

May also want to read:
History of Singapore Property 1960 to 2008
HDB Resale flats Price Index 1990-2008: Graph & Chart
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

Economic Outlook: Singapore Government Guarantee Bank Deposits

2008-10-17T06:28:00.006+08:00

Singapore Government has joined other governments to guarantee bank deposits. The government's guarantee will cover deposits in any currency held in savings accounts, fixed deposits, current accounts and under the Supplementary Retirement Scheme; but does not include structured deposits and deposits pledged, charged or secured as collateral. Singapore Finance Ministry and Monetary Authority of Singapore (MAS) said in a joint statement yesterday that the guarantee would take immediate effect and cover until Dec 31 2010.

The governments' bank guarantee scheme was first initiated by the UK government and subsequently adopted by both the European and United States governments. In Asia-pacific; Hong Kong, Australia, New Zealand, Indonesia and of late, Singapore and Malaysia have adopted the policy to guarantee bank deposits. The governments' bank guarantee strategy has so far been successful in achieving its goal of stabilising the global financial system as it restores public confidence.

Singapore government said that while Singapore banking system remains stable and is functioning properly, the absence of such a guarantee may disadvantage financial institutions here.

Read more about: How to invest your money safely

May also want to read:

Singapore Economic Outlook 2008-2009: Singapore Recession likely to be long
Property Investment Advice: Don't put all your eggs in real estate
History of Singapore Property 1960 to 2008
HDB Resale flats Price Index 1990-2008: Graph & Chart
Property Price Index Graph Plotter & Online Property Valuation

HDB Market Outlook: HDB Flats Sale Remains Strong Amid US Subprime Crisis

2008-10-15T06:36:00.008+08:00

HDB Flats oversubscribed by more than 10 times

HDB flats demand remains strong amid the US subprime crisis. In two recent launches from the Housing Development Board, there are over 10 times more applicants than HDB flats for sale.

On 10 Oct 2008, last Friday, the half-yearly sale of three-room premium, four-room and bigger flats saw 7036 applications for 683 units, yet the offer ran until Thursday.

Smaller HDB Flats 16 times over-subscription as bigger HDB flats become unaffordable

From Oct 2 to Oct 8 2008, HDB put on sale 150 smaller flats including studio apartments and 2 to 3 room flats in Bukit Merah, Geylang, Jurong East, Sengkang, Ang Mo Kio and Marine Parade. There were 2426 applications for them; 582 for the studio apartments and 1844 for 2-3 room flats. This makes the supply of these smaller HDB flats about 16 times over-subscribed. Studio apartment prices range from $62,900 to $116,400. A 2-room flata goes for $74000 to $106300; and a 3-room flat $134500 to $275200.

The huge over-subscription seen for smaller HDB flats should not come as a surprise despite the gloomy economic outlook triggered by the US subprime crisis. In anticipation of the country's worsening recession which the Singapore government has warned may lead to retrenchment, many home-buyers are getting increasingly cautious about making their financial commitment. Besides, HDB prices have surged significantly over the last 2 years making bigger HDB flats increasingly less affordable and lower-income households may have no choice but to start with smaller flats.

May also want to read:
History of Singapore Property 1960 to 2008
HDB Resale flats Price Index 1990-2008: Graph & Chart
Property Price Index Graph Plotter & Online Property Valuation
HDB Resales: West Sees Highest Price Increase

Economic Outlook 2008-2009: Will Central banks' liquidity injection cause super-inflation?

2008-10-14T17:14:00.010+08:00

Central banks' move to guarantee deposits and inject liquidity may produce inflationary pressure, according to some market watchers.

Marc Faber, managing director of Asia-based investment advisory firm Marc Faber Ltd, said,"You have inflationary monetary policies, fiscal policies, and debt growth that will really accelerate."

When asked abot US situation now, Warren Buffett replied: "It's much easier just to inflate your way out of it. If you're a South American or Asian country that owes money in dollars, it gets very binding to pay back in dollars. But if you owe it in your own currency, you just print more currency. And we have the ability to print currency. We can denominate debt in our own currency, whereas many countries can't because people don't trust them."

Paul Volcker (chairman of the US central bank between 1979 and 1987 and credited for battling double-digit inflation that flared in the 1970s) when asked if the massive infusion of liquidity by the Federal Reserve could lead to inflation or stagflation, said, "It's not going to be a problem in the short run. Inflation doesn't flourish in the face of recession. It's something we have to worry about when we get out of this recession."

The question is: Will Central banks' liquidity injection cause super-inflation?

Here are some forumers' views from the Singapore Property Forum:

Bull wrote:
The whole world will reach a super-inflation stage very soon, run for life to dump US$, who throw late who will lose more. US$ will crash, inflation will shoot to sky, US$500/barrel of oil is nothing, so what is $30/plate chicken rice in hawker center, then what is the value of cash? Property in S$ will surge super high.

Bear wrote:
super-huge-inflation + severe-deep-recession = catastrophic-stagflation = Singapore property will crash like never seen before ... this is going to be many times worse than 1996.

Anonymous wrote:
Hyperinflation: bull's latest pet theory. Well, let's see. There will probably be inflationary effects from printing money, but recessions are deflationary. My guess, recessionary effects will probably predominate because governments know they can't afford to have their currecies collapse. (that's even worse than recession).

Derek wrote:
Some people here have been screaming hyper-inflation, whether this is from vested interest or whatever, it does not really matter. However, to dismiss the notion of inflationary pressure offhand from the actions of the central banks across the world may not be completely prudent... so I would really appreciate if other forumers could help chip in with reasoned comments and viewpoints. Thanks!

Anonymous wrote:
Under normal circumstances, injection of liquidity of this scale by central banks would have an inflationary effect. But this is NOT normal circumstances. We are having a credit freeze, a totally different situation from the easy, cheap credits that fuelled the subprime crisis. Banks are moving to the other extreme, they no longer talk about the returns ON their money, they want to be ensured of the return OF their money. Even banks who are willing to lend, they are going to be very stringent, in fact, overly stringent. As such, a flush of liquidity into the economy is unlikely. Besides loans by central banks will be backed by collaterals and other terms and conditions to ensure that banks do not once again become reckless in their lending. The deposit guarantee and liquidity injection by central banks is aimed at stabilising the banking system and once the desired effect is achieved, I'd expect a quick and swift reversal of policy by central banks. Both US presidential candidates have vowed to have greater regulations in the financial system. It's more likely that it becomes over-done in that direction. In other words, expect stringent credit condition to prevail for a very long time.

May also want to read:
History of Singapore Property 1960 to 2008
HDB Resale flats Price Index 1990-2008: Graph & Chart
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