Showing posts with label 1.1 Property News Summary: May 2008. Show all posts
Showing posts with label 1.1 Property News Summary: May 2008. Show all posts
Tuesday, June 17, 2008
About this Blog
.. over 3,000 new units remained unsold. That was despite developers cutting their prices for homes in 18 developments last month. Median prices for The Verve along Jalan Rajah, for example, dropped 17 per cent from $1,187 per sq ft (psf) in March to $985 psf in May. ...
Mr Colin Tan, Chesterton International’s research and consultancy head, said: “Presently, the market is dominated by investors rather than owner-occupiers because current price levels are beyond the affordability of most owner occupiers. . “To nibble at this investors’ market, developers will have to lower prices and have to continue to lower them to sustain sales,”....
As for leasing, Cushman and Wakefield’s Singapore managing director Donald Han said: “Contrary to the widely held perception that the rental market is still hot, it has already stabilised. The overall vacancy level is slowly rising as more units are completed.”
- Today, June 2008
Note:
Some investors have expressed in the Singapore Property Forum that they'd consider buying properties only if property price falls by 40% or below $600 psf.
May also want to read:
History of Singapore Property 1960 to 2008
Buy or Not Buy: How to decide amid mixed market signals
Smart Buyers, 10 reasons to wait
Property Price Index Graph Plotter & Online Property Valuation
Private Property Now Investors' Market
Dismal private property sales despite lower prices.. over 3,000 new units remained unsold. That was despite developers cutting their prices for homes in 18 developments last month. Median prices for The Verve along Jalan Rajah, for example, dropped 17 per cent from $1,187 per sq ft (psf) in March to $985 psf in May. ...
Mr Colin Tan, Chesterton International’s research and consultancy head, said: “Presently, the market is dominated by investors rather than owner-occupiers because current price levels are beyond the affordability of most owner occupiers. . “To nibble at this investors’ market, developers will have to lower prices and have to continue to lower them to sustain sales,”....
As for leasing, Cushman and Wakefield’s Singapore managing director Donald Han said: “Contrary to the widely held perception that the rental market is still hot, it has already stabilised. The overall vacancy level is slowly rising as more units are completed.”
- Today, June 2008
Note:
Some investors have expressed in the Singapore Property Forum that they'd consider buying properties only if property price falls by 40% or below $600 psf.
May also want to read:
History of Singapore Property 1960 to 2008
Buy or Not Buy: How to decide amid mixed market signals
Smart Buyers, 10 reasons to wait
Property Price Index Graph Plotter & Online Property Valuation
Tuesday, June 10, 2008
About this Blog
As at 5pm yesterday, 2,397 applications had poured in for the 1,485 premium flats launched by HDB just last Thursday. Housing experts say demand looks likely to stay healthy, although the total number of applications may drop as HDB’s new rules begin to deter time-wasting and frivolous applications. The latest flats are likely to be three times oversubscribed, they say - a drop from comparable sales earlier this year, which were about five times oversubscribed. Straits Times - 28 May 2008
HDB Demand Strong: Over-subcription continues
DEMAND has been strong for the latest batch of Housing Board (HDB) flats - despite new rules designed to prevent frivolous applications.As at 5pm yesterday, 2,397 applications had poured in for the 1,485 premium flats launched by HDB just last Thursday. Housing experts say demand looks likely to stay healthy, although the total number of applications may drop as HDB’s new rules begin to deter time-wasting and frivolous applications. The latest flats are likely to be three times oversubscribed, they say - a drop from comparable sales earlier this year, which were about five times oversubscribed. Straits Times - 28 May 2008
Saturday, May 24, 2008
About this Blog
Inflation is even more threatening than the US impending recession.
Singapore Inflation 26-year High
Singapore inflation rate hits new 26-year high of 7.5% in April , ChannelNewAsia: 23 May 2008 1657 hrsInflation is even more threatening than the US impending recession.
About this Blog
Market Turmoil : Slowdown in Hiring
Foreign private banks slow hiring in S'pore: OCBC , reported Strait Times, May 23, 2008.
About this Blog
Posted: 23-05-2008
Post subject: Warning !
--------------------------------------------------------------------------------
Now it seems the US government is not going to cut down interest rate anymore. This is very bad news for the property market in Singapore.
It means soon you will witness the US government and then followed by Singapore government increasing interest rates bit by bit to check on inflation. That will be the next move. By increasing interest rate, people will save more money and cut down on their spendings. Thats the only way to combat inflation. Reduced demand and prices will go down.
And guess what will happen to your property mortgage interest rates ?? Up, up and up. And your property prices ? Down, down and down.
Be prepared for the worst to come soon.
Mortgage Rate to Rise : Property Price to Dip
Posted by: SeanPosted: 23-05-2008
Post subject: Warning !
--------------------------------------------------------------------------------
Now it seems the US government is not going to cut down interest rate anymore. This is very bad news for the property market in Singapore.
It means soon you will witness the US government and then followed by Singapore government increasing interest rates bit by bit to check on inflation. That will be the next move. By increasing interest rate, people will save more money and cut down on their spendings. Thats the only way to combat inflation. Reduced demand and prices will go down.
And guess what will happen to your property mortgage interest rates ?? Up, up and up. And your property prices ? Down, down and down.
Be prepared for the worst to come soon.
About this Blog
Posted: 23-05-2008
MTI says prices have peaked, GIC says property market is being affected, Credit Suisse, Barclays and others have said prices will fall up to 40%...
it all's consistent with the view that now would NOT be the right time to buy.
As for recent announcements regarding building thousands and thousands of new homes both public and private in central and sub-urban districts, that represents massive SUPPLY that will match any increase in population the government intends to import.
Singapore Property Authorities Forecasts Consistently Gloomy
By GuestPosted: 23-05-2008
MTI says prices have peaked, GIC says property market is being affected, Credit Suisse, Barclays and others have said prices will fall up to 40%...
it all's consistent with the view that now would NOT be the right time to buy.
As for recent announcements regarding building thousands and thousands of new homes both public and private in central and sub-urban districts, that represents massive SUPPLY that will match any increase in population the government intends to import.
Friday, May 23, 2008
About this Blog
The Jurong Lake District is made up of 2 precints: A commercial zone in Jurong East that'll be named Jurong Gateway and a waterfront leisure zone in Lakeside.
Here are my 2-cents worth off from my head:
1. Those people who are looking at investment property should focus more on the Jurong East commercial zone where large number of employments will be found. That will bring good rental housing demand, not only from the International Parks and the commercial areas, but also, from the up and coming New Jurong General Hospital with their healthcare professionals. The development of this zone is also morely likely to happen faster because of the urgency to relieve the commercial property shortage in the CBD areas (That's my guess based on logical deduction).
2. Home buyers looking for waterfront lifestyle would naturally be more attracted to the to the Lakeside zone. Just watch out what you are buying though, cos the lake view you pay for may be no more when the hotels start sprouting aroung the lake.
The Paya Lebar Centre, in comparison, is already an established old town. Its distinct attraction is the proximity to city - just about 10 mins to CBD. But properties around the Paya Lebar MRT, where growth will be intensified, are already rather expensive.
While developers and sellers in these areas will naturally want to hype up the growth potential, buyers must bear in mind that we're talking about 10 - 15 years or longer down the road. It may not make sense to pay a huge premium for such a distance future.
These are just my views. Feel free to share yours.
The new Master Plan 2008 will be put up for public feedback by the middle of next year.
Master Plan 2008 - Forecast of Hot Spots for Growth
The hot spots for growth include the still ulu Jurong and Paya Lebar. The move, said Mah Bow Tan, Minister of National Development, would provide an alternative to the overcrowded Central Business District (CBD) area.The Jurong Lake District is made up of 2 precints: A commercial zone in Jurong East that'll be named Jurong Gateway and a waterfront leisure zone in Lakeside.
Here are my 2-cents worth off from my head:
1. Those people who are looking at investment property should focus more on the Jurong East commercial zone where large number of employments will be found. That will bring good rental housing demand, not only from the International Parks and the commercial areas, but also, from the up and coming New Jurong General Hospital with their healthcare professionals. The development of this zone is also morely likely to happen faster because of the urgency to relieve the commercial property shortage in the CBD areas (That's my guess based on logical deduction).
2. Home buyers looking for waterfront lifestyle would naturally be more attracted to the to the Lakeside zone. Just watch out what you are buying though, cos the lake view you pay for may be no more when the hotels start sprouting aroung the lake.
The Paya Lebar Centre, in comparison, is already an established old town. Its distinct attraction is the proximity to city - just about 10 mins to CBD. But properties around the Paya Lebar MRT, where growth will be intensified, are already rather expensive.
While developers and sellers in these areas will naturally want to hype up the growth potential, buyers must bear in mind that we're talking about 10 - 15 years or longer down the road. It may not make sense to pay a huge premium for such a distance future.
These are just my views. Feel free to share yours.
The new Master Plan 2008 will be put up for public feedback by the middle of next year.
Sunday, May 18, 2008
About this Blog
Regional economist Leong Wai Ho of Barclays expects rentals to fall by 5 per cent this year, with a more severe price correction beginning from next year. His justification: Rising vacancy rate. Official data from URA shows that vacancy rate has risen to 6.3 per cent in the first quarter of this year. Mr Leong said: "The vacancy rises are not strong this year, but it will be exceptional next year due to the huge supply hitting the market." Almost 13,000 new homes could be completed next year, rising to 18,000 the year after. All this, at a time when the global economy is slowing.
Some Smart Buyers at this Singapore Property Forum thread have been reporting that rental units are taking much longer time to lease since quarter 1 of 2008.
Here is one such anecdotal evidence provided by a Smart Buyer:
"Personally, I'm observing more "FOR RENT" banners hanging on condos and they are there for a longer time."
Another Smart Buyer predicted:
"High rental comes partly from foreigners, but mainly from 2006-2007 enblokers. If these two factors disappear more or less in the property market, I believe rental will come down. Then follow by property price."
TODAY carried the headline:
Rental rate to fall 25%: Bank - 17 May 2008
The newspaper reported that Barclays Capital's forecast that Singapore rental housing market has peaked, and rent is expected to fall 5% this year and could fall by as much as 25 per cent by 2010.
Singapore Rental to fall 25%?
Barclays Capital's ForecastRegional economist Leong Wai Ho of Barclays expects rentals to fall by 5 per cent this year, with a more severe price correction beginning from next year. His justification: Rising vacancy rate. Official data from URA shows that vacancy rate has risen to 6.3 per cent in the first quarter of this year. Mr Leong said: "The vacancy rises are not strong this year, but it will be exceptional next year due to the huge supply hitting the market." Almost 13,000 new homes could be completed next year, rising to 18,000 the year after. All this, at a time when the global economy is slowing.
Some Smart Buyers at this Singapore Property Forum thread have been reporting that rental units are taking much longer time to lease since quarter 1 of 2008.
Here is one such anecdotal evidence provided by a Smart Buyer:
"Personally, I'm observing more "FOR RENT" banners hanging on condos and they are there for a longer time."
Another Smart Buyer predicted:
"High rental comes partly from foreigners, but mainly from 2006-2007 enblokers. If these two factors disappear more or less in the property market, I believe rental will come down. Then follow by property price."
TODAY carried the headline:
Rental rate to fall 25%: Bank - 17 May 2008
The newspaper reported that Barclays Capital's forecast that Singapore rental housing market has peaked, and rent is expected to fall 5% this year and could fall by as much as 25 per cent by 2010.
Saturday, May 17, 2008
About this Blog
Excerpt of Kwek Leng Beng's view:
Property tycoon Kwek Leng Beng has warned that most property investors follow the herd instinct and wait too long in a cautious market - then make a wrong move.
The executive chairman of City Developments (CDL) said he remains upbeat about prospects for the real estate scene in Singapore, despite recent weak sales volumes.
Mr Kwek, who was a panellist at the Financial Times Asia Property Summit held at his St Regis Hotel yesterday, said the property market is just consolidating.
The mood in the Singapore property market is cautious in the wake of the United States sub-prime crisis, with many buyers and sellers preferring to remain on the sidelines.
He said he was waiting for the opportunity to 'go in and buy at the right time, be a bottom fisher'.
But most people will do the opposite, he said. 'You notice (people) will keep on waiting ... until it's too late,' he said.
'It's the herd instinct ... the majority will be wrong.' A shrewd investor will act on his own, he said.
Response 1
I agree with Kwek Leng Beng: act on your own. So the more he asks you to buy, the more you shouldn't buy. Think for yourself: why he's making all these media appeals recently?
Response 2
He is desperate lah ... The herd instinct can make him rich, the herd instinct can also make him poor. So now he's trying to use the media to play on the "herd instinct".
Response 3
I call this the battle of the herd against the rich.
Response 4
Sorry I am not going to let the biggest conman take my money not even a cent . Let him suffer from last year's greed. Greed is the downfall of man. See how far Singapore prices can go up ? To $5000psf ?? You optimists are really dumb fools.
Market is going down a lot soon. No one is buying. Maybe the only buyers are KLB friends and families. No more speculators left. Please, if KLB still hoping for speculators to come in with the above pathetic article, he must be making a big mistake ! If he is not desperate, he wont post this article in Straits Times. Just leave us buyers alone. Enough of his brainwashing tactics.
Response 4
bears are worry, panic & tense now.
Kwek LB don't anyhow talk, money don't mean a lot to him now, reputation & respect worth more.
Believe wrong person, take the responsibility to accept the consequence, just like the koyok salesman here.
If govt want 3 parties to work closely, govt, businessman & workers, for the good of Spore, make sure they do the right thing, 1 mistake, they will have to pay heavily for it.
Response 5
If money dont mean anything to him, then why bother post article on Straits Times ? Just leave us alone to make our own decisions. Apparently, KLB is going to lose millions of dollars if property downturn lasts more than 2-3 years which is very likely. He has a huge landbank as well as units still not sold. And he is apparently getting very nervous now.
Everyone is certain price coming down. Even if next month, price were to go up a bit, it wont convince anyone that property market will be like last year again. No way ! No one now cares about property. People are dying all over the world by the thousands, and another calamity is about to happen, and u talking about property speculation. Just look at Classified Ads...sellers are bringing down their prices by 10-20% and yet still no takers. Except for a handful of prime units, I am also wondering who are these buyers ? Are they reliable sources or just made up by developers like a stage show.
Dude, you better spend your time more wisely ! Dont waste your time here convincing people cause no matter wat u do, we are not convinced.
Response 6
CDL chief Kwek Leng Beng awaiting right time to buy, mean he is not buying but selling. So do you want to buy now? The 'suckers' rally is over. We are now in the hot potatoes period.
Response 6
you can keep your money, nobody interested, can bring them to heaven or hell too.
CityDev Q1 result just out, profit up 30% to S$165M. Although transaction down in Q1, but they have many channel of incomes, without you buying, they still make big money from rental, hotel, services, maintenance.....
Why you worry their income for next 2-3 yrs, worry for yourself better, 1% FD in the bank keep till no value lah.
Sporean not interested, CityDev can just move all their money to help to develop other country, Taiwan, VIetnam, China, HK, Japan.....go oversea to help others better than these pathetic sporean, thought they are smart, just a bunch of cheapo.
Hope this can continue for next 20 yrs, then we see 20 yrs later, what is the difference between spore & regional countries.
All big developers should pour all the money to invest oversea since people here are not interested.
Response 7
Buy & hold for capital appreciation.
Sell to kiasi at 300% of today's price in 2015.
Response 8
well said, KLB.
We will support you all the way.
Response 9
He has said he is very confidence in Spore property in long run, so he will buy for capital appreciation, buy, rent & sell at a right time in future.
I think he will make a move before IR readiness, let wait for his push & drive in next round property buying spree.
Response 10
From wat i know KLB is a major property developer and not a property buyer. As such, he is pushing hard to sell all his condos to naive buyers whom he can con. He is still left with a few thousand units for sales.
If you want to continue to get conned by these billionaires who made money by cheating other people money, go ahead.
Cause property is definitely not a good buy now unless its 40% cheaper than current price. Cause Singapore has the lowest return on investment in the whole world, currently at only 3-4% of purchase price. Its not a good investment.
Response 11
Funny thing Mr Kwek said nothing in 2007 when the herd instinct was at its senseless bull run.
If he really believes that "'It's the herd instinct ... the majority will be wrong.' he said; Should Mr Kwek have stepped out then, on the ground of doing public justice, like he's doing now, to tell people not to buy property especially CDLs, because like he said, 'It's the herd instinct ... the majority will be wrong.'
Response 12
whatever happen to US today, US still a great country, who in the world have all the US brand, MS, Coca-cola, Apple, Boeing, Starbuck, Intel, IBM, Dell, Walmart, GE, Exxon, HPQ, Citi.....all the 6 biggest audit company, Morgan Stanley, Disney, Warner, Mcdonald......a whole long list...
You name it they have it & they are the creators of so many technology, internet, telco, semicon, car, theory, nuclear weapon......without them, you are just living in the 60s.
The spirit of in creativity, courage to think out of box, brave to do it, that is human, humanity, civilisation, culture.....
Do Spore have any big brand? product? SQ?....a lot is nothing, no patent, no new idea.....system, process.....can be copied easily.
what we lack of? courage, boldness, brave, balls....power to do thing.
Just kiasi, timid, no risk......
Response 12
Kiasi are not die-die must buy people .. what for buy when you'll only end up sponsoring foreigners to live in the properties .. better invest the money with better return, less risk and more liquid.
Battle of The Herd vs Developer
The following are some forum responses to a report in The Straits Times (16 May 2008) on a view expressesd by property tycoon Kwek Leng Beng on Singapore's real estate market.Excerpt of Kwek Leng Beng's view:
Property tycoon Kwek Leng Beng has warned that most property investors follow the herd instinct and wait too long in a cautious market - then make a wrong move.
The executive chairman of City Developments (CDL) said he remains upbeat about prospects for the real estate scene in Singapore, despite recent weak sales volumes.
Mr Kwek, who was a panellist at the Financial Times Asia Property Summit held at his St Regis Hotel yesterday, said the property market is just consolidating.
The mood in the Singapore property market is cautious in the wake of the United States sub-prime crisis, with many buyers and sellers preferring to remain on the sidelines.
He said he was waiting for the opportunity to 'go in and buy at the right time, be a bottom fisher'.
But most people will do the opposite, he said. 'You notice (people) will keep on waiting ... until it's too late,' he said.
'It's the herd instinct ... the majority will be wrong.' A shrewd investor will act on his own, he said.
Response 1
I agree with Kwek Leng Beng: act on your own. So the more he asks you to buy, the more you shouldn't buy. Think for yourself: why he's making all these media appeals recently?
Response 2
He is desperate lah ... The herd instinct can make him rich, the herd instinct can also make him poor. So now he's trying to use the media to play on the "herd instinct".
Response 3
I call this the battle of the herd against the rich.
Response 4
Sorry I am not going to let the biggest conman take my money not even a cent . Let him suffer from last year's greed. Greed is the downfall of man. See how far Singapore prices can go up ? To $5000psf ?? You optimists are really dumb fools.
Market is going down a lot soon. No one is buying. Maybe the only buyers are KLB friends and families. No more speculators left. Please, if KLB still hoping for speculators to come in with the above pathetic article, he must be making a big mistake ! If he is not desperate, he wont post this article in Straits Times. Just leave us buyers alone. Enough of his brainwashing tactics.
Response 4
bears are worry, panic & tense now.
Kwek LB don't anyhow talk, money don't mean a lot to him now, reputation & respect worth more.
Believe wrong person, take the responsibility to accept the consequence, just like the koyok salesman here.
If govt want 3 parties to work closely, govt, businessman & workers, for the good of Spore, make sure they do the right thing, 1 mistake, they will have to pay heavily for it.
Response 5
If money dont mean anything to him, then why bother post article on Straits Times ? Just leave us alone to make our own decisions. Apparently, KLB is going to lose millions of dollars if property downturn lasts more than 2-3 years which is very likely. He has a huge landbank as well as units still not sold. And he is apparently getting very nervous now.
Everyone is certain price coming down. Even if next month, price were to go up a bit, it wont convince anyone that property market will be like last year again. No way ! No one now cares about property. People are dying all over the world by the thousands, and another calamity is about to happen, and u talking about property speculation. Just look at Classified Ads...sellers are bringing down their prices by 10-20% and yet still no takers. Except for a handful of prime units, I am also wondering who are these buyers ? Are they reliable sources or just made up by developers like a stage show.
Dude, you better spend your time more wisely ! Dont waste your time here convincing people cause no matter wat u do, we are not convinced.
Response 6
CDL chief Kwek Leng Beng awaiting right time to buy, mean he is not buying but selling. So do you want to buy now? The 'suckers' rally is over. We are now in the hot potatoes period.
Response 6
you can keep your money, nobody interested, can bring them to heaven or hell too.
CityDev Q1 result just out, profit up 30% to S$165M. Although transaction down in Q1, but they have many channel of incomes, without you buying, they still make big money from rental, hotel, services, maintenance.....
Why you worry their income for next 2-3 yrs, worry for yourself better, 1% FD in the bank keep till no value lah.
Sporean not interested, CityDev can just move all their money to help to develop other country, Taiwan, VIetnam, China, HK, Japan.....go oversea to help others better than these pathetic sporean, thought they are smart, just a bunch of cheapo.
Hope this can continue for next 20 yrs, then we see 20 yrs later, what is the difference between spore & regional countries.
All big developers should pour all the money to invest oversea since people here are not interested.
Response 7
Buy & hold for capital appreciation.
Sell to kiasi at 300% of today's price in 2015.
Response 8
well said, KLB.
We will support you all the way.
Response 9
He has said he is very confidence in Spore property in long run, so he will buy for capital appreciation, buy, rent & sell at a right time in future.
I think he will make a move before IR readiness, let wait for his push & drive in next round property buying spree.
Response 10
From wat i know KLB is a major property developer and not a property buyer. As such, he is pushing hard to sell all his condos to naive buyers whom he can con. He is still left with a few thousand units for sales.
If you want to continue to get conned by these billionaires who made money by cheating other people money, go ahead.
Cause property is definitely not a good buy now unless its 40% cheaper than current price. Cause Singapore has the lowest return on investment in the whole world, currently at only 3-4% of purchase price. Its not a good investment.
Response 11
Funny thing Mr Kwek said nothing in 2007 when the herd instinct was at its senseless bull run.
If he really believes that "'It's the herd instinct ... the majority will be wrong.' he said; Should Mr Kwek have stepped out then, on the ground of doing public justice, like he's doing now, to tell people not to buy property especially CDLs, because like he said, 'It's the herd instinct ... the majority will be wrong.'
Response 12
whatever happen to US today, US still a great country, who in the world have all the US brand, MS, Coca-cola, Apple, Boeing, Starbuck, Intel, IBM, Dell, Walmart, GE, Exxon, HPQ, Citi.....all the 6 biggest audit company, Morgan Stanley, Disney, Warner, Mcdonald......a whole long list...
You name it they have it & they are the creators of so many technology, internet, telco, semicon, car, theory, nuclear weapon......without them, you are just living in the 60s.
The spirit of in creativity, courage to think out of box, brave to do it, that is human, humanity, civilisation, culture.....
Do Spore have any big brand? product? SQ?....a lot is nothing, no patent, no new idea.....system, process.....can be copied easily.
what we lack of? courage, boldness, brave, balls....power to do thing.
Just kiasi, timid, no risk......
Response 12
Kiasi are not die-die must buy people .. what for buy when you'll only end up sponsoring foreigners to live in the properties .. better invest the money with better return, less risk and more liquid.
Friday, May 16, 2008
About this Blog
5 May 2008
Asia Pacific/Singapore
Equity Research
Real Estate Management & Development (Real Estate) / UNDERWEIGHT
All buyers please read the link below from Credit Suisse
http://star.walagata.com/w/ghisallo/42339025.pdf
Vacant real(i)ty
We believe the Singapore residential property sector could see a bursting
of a bubble that has been created from exuberant expectations and
liquidity over the past two years. With a potential economic slowdown that
may last through 2009, and historically high supply looming, we turn more
negative on this cyclical sector, which has seen price declines of 40% and
stocks trading at up to 70% discounts to RNAVs in previous down-cycles.
■ Housing prices have started falling. Secondary transactions already show
prices of like-for-like units down 5-25% from peak levels. Our previous zero
growth assumption seems to be too optimistic.
■ Prices could come off 40%. We believe further consolidation will be triggered
by: 1) withdrawal of the liquidity; 2) dumping by marginal speculators;
3) potential price cuts by small developers; 4) rising vacancies with rising
supply; 5) a deterioration of the local employment situation. In addition, low
rental yields and slowing capital inflows offer little buffer, and the strong
S$ erodes the attractiveness of Singapore properties.
Our housing supply demand model suggests that vacancy rates may rise from the current 5-6% to 9.8-19% in our base and worst cases, prompting rent and price declines of more than 40%, based on historical trends, in our opinion.
■ Bad news not fully in yet; downgrade sector to UNDERWEIGHT. We
have revised all RNAVs on base-case assumptions of average selling price
(ASP) declines of 30%, 20% and 10% in the high-end, mid-end and massmarket
segments from end-2007 levels, respectively. With the recent
20-30% rebound in stock prices, developers are now trading close to or
above RNAVs. We downgrade CDL to UNDERPERFORM, Keppel Land and
Allgreen to NEUTRAL, and we keep Wing Tai as UNDERPERFORM. We
upgrade CapitaLand to NEUTRAL, as it is defensive against Singaporespecific
headwinds. Our bear-case RNAVs assume a further 10 p.p. cut to
each segment’s ASP.
■ Switch to REITs. We advocate switching from riskier residential exposure to
S-REITs. Among them, we prefer the retail REITs for their more defensive
nature, in particular CapitaMall Trust and Frasers Centrepoint Trust.
Credit Suisse: Rent & Price to fall 40%
Article information:5 May 2008
Asia Pacific/Singapore
Equity Research
Real Estate Management & Development (Real Estate) / UNDERWEIGHT
All buyers please read the link below from Credit Suisse
http://star.walagata.com/w/ghisallo/42339025.pdf
Vacant real(i)ty
We believe the Singapore residential property sector could see a bursting
of a bubble that has been created from exuberant expectations and
liquidity over the past two years. With a potential economic slowdown that
may last through 2009, and historically high supply looming, we turn more
negative on this cyclical sector, which has seen price declines of 40% and
stocks trading at up to 70% discounts to RNAVs in previous down-cycles.
■ Housing prices have started falling. Secondary transactions already show
prices of like-for-like units down 5-25% from peak levels. Our previous zero
growth assumption seems to be too optimistic.
■ Prices could come off 40%. We believe further consolidation will be triggered
by: 1) withdrawal of the liquidity; 2) dumping by marginal speculators;
3) potential price cuts by small developers; 4) rising vacancies with rising
supply; 5) a deterioration of the local employment situation. In addition, low
rental yields and slowing capital inflows offer little buffer, and the strong
S$ erodes the attractiveness of Singapore properties.
Our housing supply demand model suggests that vacancy rates may rise from the current 5-6% to 9.8-19% in our base and worst cases, prompting rent and price declines of more than 40%, based on historical trends, in our opinion.
■ Bad news not fully in yet; downgrade sector to UNDERWEIGHT. We
have revised all RNAVs on base-case assumptions of average selling price
(ASP) declines of 30%, 20% and 10% in the high-end, mid-end and massmarket
segments from end-2007 levels, respectively. With the recent
20-30% rebound in stock prices, developers are now trading close to or
above RNAVs. We downgrade CDL to UNDERPERFORM, Keppel Land and
Allgreen to NEUTRAL, and we keep Wing Tai as UNDERPERFORM. We
upgrade CapitaLand to NEUTRAL, as it is defensive against Singaporespecific
headwinds. Our bear-case RNAVs assume a further 10 p.p. cut to
each segment’s ASP.
■ Switch to REITs. We advocate switching from riskier residential exposure to
S-REITs. Among them, we prefer the retail REITs for their more defensive
nature, in particular CapitaMall Trust and Frasers Centrepoint Trust.
Monday, April 28, 2008
About this Blog
By: uncertain
Posted: 28-04-2008
Well...I would wait at least another 6 months to a year.
We told clients and investors to sell all Singapore holdings (property, stocks and everything else) in June 2007. We determined that prices would never, ever be higher and were predicting a 15% drop in pricing by March 2008 and 25% drop by June 2008.
Rationale was simple and not rocket science.
#1. There was no demand for housing when the boom started.
The vacancy rates on existing housing were above New York, London, Hong Kong, Tokyo and other major urban market levels. A Singapore property boom made no sense at all.
#2. Singapore GDP...nice impressive numbers. But the growth was 99% construction related. There is no economic growth when the construction boom ends and those numbers are subtracted from the total.
#3. The existing luxury housing vacancy levels in Singapore were adequate to fill the needs of Singaporeans and any possible influx of new senior executives for the next 5 years. Thus, there was no demand for executive luxury housing in the market.
#4. Value for money on Singapore property for foreign investors is not good when compared to other projected growth economies. (several factors are weighed including psf, quality of workmanship, size of economy, projected growth of economy, lifestyle and culture of the market.)
#4. The targeted future population numbers of Singapore are pie in the sky and completely without substance. Singaporeans are not having kids and the demand for jobs in Singapore will be service led lower paying jobs to supply the planned tourism developments. Non of these new inhabitants will be buying or renting condo's, especially in the high-end. And tourists visit, they don't buy or rent.
#5. Singapore is not a supply/demand driven economy. It is a small, managed economy. Thus, the property development plans were lofty, risky, and not based on future real supply/demand realities.
#6. There is a lack of real, transparent, objective information available in the Singapore market about the Singapore market. This leads to investors belief in hype and speculation rather than economic principles.
#7. Global money supplies and markets are taking a beating and will continue to take a beating. The second call on the sub prime products happens this June so more big losses are expected. This will stall or even damage the Singapore economy.
We expect distress sales in the property market to start soon. The high-end rental market is non-existent and the higher % of all unit sales were high-end investment property, speculator driven.
These buyers need "wealthy" renters to subsidize the million dollar mortgages. Most locals cannot afford the rents the market is demanding.
Surveys of multinational companies and banks have indicated that there is no boat-load of expats with a big housing allowance arriving at the Singapore port anytime soon. The new owner is now stuck with 100% of a very expensive monthly mortgage.
Here is an example of one major high-end development I'm following to prove the point. These are some very telling numbers.
600+ units launched
20+ remaining at $2,000 per square foot via the developer.
100+ units previously sold are now for sale privately less than 7 months after launch for $1,300 to $1,600 per square foot.
The reason...no rental income.
That tells me that property owners are willing to admit that market prices are down 25%+ already. Unfortunately, even at a 25% discount, there are no buyers.
Existing Singapore residents are keeping the rental market buoyant due to the fact they sold their old places and are waiting for the prices to drop...OR...waiting for their new unit to be completed. These people are relatively small in overall numbers and definitely not going to rent high end luxury units. They are driving HDB, middle priced housing rents up right now. They are also demanding 12 month leases or even less if they can get it proving that they are waiting to move or sitting on the sidelines waiting for prices to drop.
The Singapore property market is massively oversupplied today and more units are on the way. This is not good. This is should be extremely troublesome to anyone who owns property anywhere in that market. The potential valuation losses in the property market could be enormous, especially at the high-end. Overall prices could sink well below SARS levels and this could happen within 6 months to a year.
The short lived property boom was very much like a pyramid scheme.
It was all hype and no substance.
The first guys in are now smoking big cigars.
The last guys in are now left holding the ashtray.
Singapore Property Market: A forecast for 2008
Smart Buyers Collection is a collection of words of wisdom by various Singapore property watchers.By: uncertain
Posted: 28-04-2008
Well...I would wait at least another 6 months to a year.
We told clients and investors to sell all Singapore holdings (property, stocks and everything else) in June 2007. We determined that prices would never, ever be higher and were predicting a 15% drop in pricing by March 2008 and 25% drop by June 2008.
Rationale was simple and not rocket science.
#1. There was no demand for housing when the boom started.
The vacancy rates on existing housing were above New York, London, Hong Kong, Tokyo and other major urban market levels. A Singapore property boom made no sense at all.
#2. Singapore GDP...nice impressive numbers. But the growth was 99% construction related. There is no economic growth when the construction boom ends and those numbers are subtracted from the total.
#3. The existing luxury housing vacancy levels in Singapore were adequate to fill the needs of Singaporeans and any possible influx of new senior executives for the next 5 years. Thus, there was no demand for executive luxury housing in the market.
#4. Value for money on Singapore property for foreign investors is not good when compared to other projected growth economies. (several factors are weighed including psf, quality of workmanship, size of economy, projected growth of economy, lifestyle and culture of the market.)
#4. The targeted future population numbers of Singapore are pie in the sky and completely without substance. Singaporeans are not having kids and the demand for jobs in Singapore will be service led lower paying jobs to supply the planned tourism developments. Non of these new inhabitants will be buying or renting condo's, especially in the high-end. And tourists visit, they don't buy or rent.
#5. Singapore is not a supply/demand driven economy. It is a small, managed economy. Thus, the property development plans were lofty, risky, and not based on future real supply/demand realities.
#6. There is a lack of real, transparent, objective information available in the Singapore market about the Singapore market. This leads to investors belief in hype and speculation rather than economic principles.
#7. Global money supplies and markets are taking a beating and will continue to take a beating. The second call on the sub prime products happens this June so more big losses are expected. This will stall or even damage the Singapore economy.
We expect distress sales in the property market to start soon. The high-end rental market is non-existent and the higher % of all unit sales were high-end investment property, speculator driven.
These buyers need "wealthy" renters to subsidize the million dollar mortgages. Most locals cannot afford the rents the market is demanding.
Surveys of multinational companies and banks have indicated that there is no boat-load of expats with a big housing allowance arriving at the Singapore port anytime soon. The new owner is now stuck with 100% of a very expensive monthly mortgage.
Here is an example of one major high-end development I'm following to prove the point. These are some very telling numbers.
600+ units launched
20+ remaining at $2,000 per square foot via the developer.
100+ units previously sold are now for sale privately less than 7 months after launch for $1,300 to $1,600 per square foot.
The reason...no rental income.
That tells me that property owners are willing to admit that market prices are down 25%+ already. Unfortunately, even at a 25% discount, there are no buyers.
Existing Singapore residents are keeping the rental market buoyant due to the fact they sold their old places and are waiting for the prices to drop...OR...waiting for their new unit to be completed. These people are relatively small in overall numbers and definitely not going to rent high end luxury units. They are driving HDB, middle priced housing rents up right now. They are also demanding 12 month leases or even less if they can get it proving that they are waiting to move or sitting on the sidelines waiting for prices to drop.
The Singapore property market is massively oversupplied today and more units are on the way. This is not good. This is should be extremely troublesome to anyone who owns property anywhere in that market. The potential valuation losses in the property market could be enormous, especially at the high-end. Overall prices could sink well below SARS levels and this could happen within 6 months to a year.
The short lived property boom was very much like a pyramid scheme.
It was all hype and no substance.
The first guys in are now smoking big cigars.
The last guys in are now left holding the ashtray.
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