Any Fundamental to Support the Current Run-Away GLS/Enbloc Pricees

[Kelonguni]

Hmm! Good point there. But their data looks quite kosher lei. In fact, I think their portal captured some sales transactions that are not shown on ura ( somehow agents can see the options exercised, whereas ura website is based on caveats lodged).

Just to note that when I last did my check, in 2013, SRX index fell first before URA index fell later. You can verify their data. SRX measures resales (month by month), URA uses 5-quarter fixed weight method (revised index), and NUS resale only includes transactions from a basket of properties that are less than 10 years old.

There was a group of diehards in mid 2013 who also blamed the SRX for not being accurate, trying to encourage fire sales from owners when the property transaction volumes were very low. Can't remember which side I was on then.

Everything is captured online.

Not convinced, just continue to wait.

[Kelonguni]

https://www.srx.com.sg/price-index#

For your reference.

[Arcachon]

Die hard will say wait for another quarter than another than MTB.

Just Do it if you can still buy with all the CMs.

[HP65]

when price is declining, volume transaction is down.
how does it make easier to unlock value, seems to me in the exchange so far, unlocking value seems to be by selling ?
and i am not sure what do you mean by transition period, as prices is steadily declining as we all know value is 0 at the end.

would it not be easier when price is rising,and volume transaction is up. (correlation?)
it is easier for hdb owners to sell their hdb flats because buyers want to buy cheaper now rather than buy more expensive later.
and when price is rising, hdb owners get more money rather than when price is falling?

those who have sold probably have found out is it easier to sell in a rising market than a falling market. anybody disagree with this?

The best way to unlock an old HDB value is through SERS. However, it is harder (costly) to purchase an old block of 3rm / 4rm at $450-650k than $250-450k. Since the majority of these owners are treating their flat as commodity, it does not matter that the price decline now so that the govt can SERS them and then offer the owners a fresh lease apartment at the same low price. The unlocking will happen when the owners sell these fresh lease HDBs next time.

Thus, even when price is declining, it is still possible to unlock the value coz it is facilitated by the govt.

[tonymontana]

https://www.srx.com.sg/price-index#

For your reference.

The transacted chart looks toppish and the rental chart doesn't look so great either. That's why people like propertysoul are bearish I guess.

[tonymontana]

Is this the start of a gradual change of trend in the market? Your guess is as good as mine
https://www.srx.com.sg/singapore-pro...ease-04-in-may

[Amber Woods]

Is this the start of a gradual change of trend in the market? Your guess is as good as mine
https://www.srx.com.sg/singapore-pro...ease-04-in-may

Why peak residential sales are expected to be lower this cycle

There is no real housing demand.

The residential market has already changed following the recent tweaks in Singapore's property measures.

According to the takeaways from Jefferies’ meeting with property developer Roxy-Pacific Holdings, housing demand is not driving sales. Rather it was more of investment, better location and other factors which are boosting the sales in the housing market.

"Property measures need to be seen in historical context. Back in 2010, there was unmet real housing demand. So, private developers moved in fast and made money. HDB also boosted supply but unmet demand was huge and also amplified investment demand," Jefferies said.

In turn, peak sales and prices will be lower than the recent cycle, the report mentioned.

"In subsequent cycles, regulations will be about managing aspirations and investment demand of larger pool of population," it added.

Meanwhile, developers remain hungry for land while demand-supply does not allow developer to price up. More so, effective land cost has gone up as shadow gross floor areas such as bay windows, AC ledge, planter boxes, terraces, and corridors, has been disallowed.

Jefferies said the easing measures are more likely testing the water, as there is no expectation of any major changes for next 6-12 months.

"Prices are firm and buying momentum is coming back. There is unlikely to be any major change in immigration policies in near term," it concluded.

Do you know more about this story? Contact us anonymously through this link.

- See more at: http://sbr.com.sg/residential-proper....kCWW44Df.dpuf

[Kelonguni]

Unlikely 10%, 30% growth in a year.

But 2-4% annual growth is most likely unless construction costs surge!

[teddybear]

Well, currently the 10% balcony space and 10% air-con ledge free to Developers to sell already is killing enough for the newer private properties!

Why peak residential sales are expected to be lower this cycle

There is no real housing demand.

The residential market has already changed following the recent tweaks in Singapore's property measures.

According to the takeaways from Jefferies’ meeting with property developer Roxy-Pacific Holdings, housing demand is not driving sales. Rather it was more of investment, better location and other factors which are boosting the sales in the housing market.

"Property measures need to be seen in historical context. Back in 2010, there was unmet real housing demand. So, private developers moved in fast and made money. HDB also boosted supply but unmet demand was huge and also amplified investment demand," Jefferies said.

In turn, peak sales and prices will be lower than the recent cycle, the report mentioned.

"In subsequent cycles, regulations will be about managing aspirations and investment demand of larger pool of population," it added.

Meanwhile, developers remain hungry for land while demand-supply does not allow developer to price up. More so, effective land cost has gone up as shadow gross floor areas such as bay windows, AC ledge, planter boxes, terraces, and corridors, has been disallowed.

Jefferies said the easing measures are more likely testing the water, as there is no expectation of any major changes for next 6-12 months.

"Prices are firm and buying momentum is coming back. There is unlikely to be any major change in immigration policies in near term," it concluded.

Do you know more about this story? Contact us anonymously through this link.

- See more at: http://sbr.com.sg/residential-proper....kCWW44Df.dpuf

[Kelonguni]

Well, currently the 10% balcony space and 10% air-con ledge free to Developers to sell already is killing enough for the newer private properties!

Actually cannot find info for the disallowed "shadow gross floor area". Anyone can advise?

And anyway, land cost continues to rise...

[Kelonguni]

Hey Fed just raised interest rates by .25% signalling one more hike this year.

No sound from the naysayers?

[teddybear]

Tell you my predictions:

US Stock prices will continue to increase!

Singapore OCR private property prices will crash -20-30% within next 5 years!

Singapore economy may continue to be bad (vs historically) as growing by 1-3% only (until next economic down turn and OCR property price crash)........

Hey Fed just raised interest rates by .25% signalling one more hike this year.

No sound from the naysayers?

[tonymontana]

Tell you my predictions:

US Stock prices will continue to increase!

Singapore OCR private property prices will crash -20-30% within next 5 years!

Singapore economy may continue to be bad (vs historically) as growing by 1-3% only (until next economic down turn and OCR property price crash)........

Teddybear, Your prediction is 20-30% drop in 5 years? Choy!! That is not crash, that is already drop already since 2013. already happened, no more crash.!

my definition of crash is value is halved in about 6 months.

So basically, one should Buy now .

[teddybear]

Tell you more........

CCR private property prices already crash >30% (some even up to 50%)!
OCR private property prices is still near THOUSAND YEARS HISTORICAL HIGH price, and 20-30% is just conservative estimate!

If you buy a property at say $1.5M, and it drop 30% to about $1M, means you lost $500k.

If your property is an aging 99-years leasehold, banks will come after you to top-up!

To get back to $1.5M in value, your property then needs to increase by 50%! How long will that takes when the government is quick to come in with COOLING MEASURES?

Think about it! Be sensible and nobody will care more about your money and whether you make or lose money (not even the concern of the government)!

Teddybear, Your prediction is 20-30% drop in 5 years? Choy!! That is not crash, that is already drop already since 2013. already happened, no more crash.!

my definition of crash is value is halved in about 6 months.

So basically, one should Buy now .

[cbsh38584]

Tell you my predictions:

US Stock prices will continue to increase!

Singapore OCR private property prices will crash -20-30% within next 5 years!

Singapore economy may continue to be bad (vs historically) as growing by 1-3% only (until next economic down turn and OCR property price crash)........

With the recent cooling measured implemented in UK , AUST , NZ , CANADA etc. Dont be surprise that the foreigner investors may buy SG ppty.

[teddybear]

If so, then SG property price will show significant increase.........

Then SG Gov will have to "eat their words" unless they implement more property cooling measures!

Net effect: SG OCR property prices will then drop much more!

With the recent cooling measured implemented in UK , AUST , NZ , CANADA etc. Dont be surprise that the foreigner investors may buy SG ppty.

[tonymontana]

Tell you more........

CCR private property prices already crash >30% (some even up to 50%)!
OCR private property prices is still near THOUSAND YEARS HISTORICAL HIGH price, and 20-30% is just conservative estimate!

If you buy a property at say $1.5M, and it drop 30% to about $1M, means you lost $500k.

If your property is an aging 99-years leasehold, banks will come after you to top-up!

To get back to $1.5M in value, your property then needs to increase by 50%! How long will that takes when the government is quick to come in with COOLING MEASURES?

Think about it! Be sensible and nobody will care more about your money and whether you make or lose money (not even the concern of the government)!

bear-bear,

i really don't know which data you are talking about?

Go here:

https://www.squarefoot.com.sg/trends.../market-trends

select any OCR district, (say jurong, or hougang D19 ) then move the slider to max (10 year),

i used jurong D22, in mid 2013, prices are about 12xx psf, now prices average < 1000psf, so that's about 20-30% drop since 2013. (btw, i'm ignoring the large spikes in the psf due to launches of small units for eg: J Gateway in jul 2013)

[teddybear]

You quoted the squarefoot website and cannot interpret the data?

Never mind, let me attached 2 pictures captured from this squarefoot website of new sales, 1 for CCR D9 and the other for OCR D19.

CCR D9 has dropped from historical peak AVERAGE PRICE of S$3600 psf (in 2007) to S$2100 psf now (2017)(a drop of -42%), and MUCH LOWER than 2012-2013 PEAK of S$3400 psf!

On the other hand, OCR D19 is now at THOUSAND YEARS HISTORICAL PEAK average PRICE of S$1400 psf now (2017), MUCH HIGHER than 2007 PEAK of S$880 psf (an increase of +59%)!
Even the 2012-2013 PEAK price before all the relentless PROPERTY COOLING MEASURES is only S$1340 psf! That is to say, after all the property cooling measures implemented, D19 has increased by another +4.5%!

OCR private property buyers, BEWARE getting BURNT until become charcoal!

bear-bear,

i really don't know which data you are talking about?

Go here:

https://www.squarefoot.com.sg/trends.../market-trends

select any OCR district, (say jurong, or hougang D19 ) then move the slider to max (10 year),

i used jurong D22, in mid 2013, prices are about 12xx psf, now prices average < 1000psf, so that's about 20-30% drop since 2013. (btw, i'm ignoring the large spikes in the psf due to launches of small units for eg: J Gateway in jul 2013)

[DC33_2008]

SRX: Suburban condo rents down 4.8% in May
15 June 2017

Private apartment and condo rents in the suburbs have fallen at a faster clip between May 2016 and May 2017 compared to units in the prime areas and city-fringe locations.

Based on SRX Property's flash estimates data for last month released on Wednesday, its rental index for non-landed private homes in the Outside Central Region or OCR eased 4.8 per cent year on year. This was followed by a 3.7 per cent decline in the index for the Core Central Region (CCR) and 3.2 per cent drop in the Rest of Central Region (RCR).

OrangeTee's head of research and consultancy Wong Xian Yang attributed the bigger rental decline in OCR to the fact that the region made up the bulk or about 58 per cent of the record volume of 20,803 private homes (including landed properties but excluding executive condos) that were completed last year, according to data from the Urban Redevelopment Authority (URA). The RCR's share of this figure was 31 per cent and the CCR, 11 per cent.

"With the majority of incoming completions also expected to be located in the OCR, the pressure on OCR rents is expected to continue," he added.

Going by URA's figures, 34,911 private residential units are slated for completion from Q2 2017 to Q4 2020. Of this figure, around 51 per cent would be located in the OCR, with CCR and RCR taking 17 per cent and 31 per cent of the pie respectively. (The percentage share figures do not add up to 100 per cent due to rounding.)

SRX's overall rental index for non-landed private homes for May 2017 was down 3.9 per cent year on year and also 19.7 per cent below its peak in January 2013.

On a month-on-month basis, the flash estimate index value for May 2017 reflected a 0.8 per cent drop, after remaining unchanged in April 2017.

Based on data collated by SRX, an estimated 4,650 non-landed private homes were rented last month - up 12.5 per cent from the 4,134 units rented in April 2017 and also 6.1 per cent higher than the 4,381 units in May 2016.

Mr Wong predicts private residential rents will still trend lower this year as "demand struggles to catch up with new supply introduced over the past three years". Based on URA figures, the number of private homes completed in 2014, 2015 and 2016 was 19,941 units, 18,971 units and 20,803 units respectively.

In 2017, another 15,629 units are expected to be completed which is still 17 per cent higher than the annual average over the past 10 years (2007-2016) of 13,319 units.

"However, private residential rents could potentially find their footing in 2018, as the expected number of completions in 2018 would fall steeply to 9,014 units."

Moreover, Mr Wong highlighted, private residential occupancy rates have risen for the past three quarters (Q3 2016 to Q1 2017), despite the high number of completions in 2016. "This suggests that the rental market may be more resilient than expected," he added.

In the HDB rental segment, SRX Property's flash estimates for May 2017 showed that the rental index for mature estates slipped 2.8 per cent year on year from May 2016. This was a smaller rate of decline compared with the 4.5 per cent drop in non-mature estates over the same period. "Mature estates tend to be more centrally located and have more amenities in the vicinity, leading to higher rental demand," said Mr Wong.

SRX Property's overall rental index for HDB flats for May 2017 was 3.6 per cent lower year on year and also 13 per cent below its peak in August 2013. That said, the flash estimate for May 2017 reflected an increase of 0.7 per cent month on month, after remaining almost unchanged in April 2017.

"The rental trend for HDB flats remains negative for 2017 in the face of continued stiff competition from the private property market and constrained growth in the number of foreigners," said Mr Wong.

SRX Property estimated that 1,873 HDB flats were rented in May 2017, close to the 1,872 units in April 2017, but 3.5 per cent lower than the 1,940 units in May 2016.

[walkthetiger]

You quoted the squarefoot website and cannot interpret the data?

Never mind, let me attached 2 pictures captured from this squarefoot website of new sales, 1 for CCR D9 and the other for OCR D19.

CCR D9 has dropped from historical peak AVERAGE PRICE of S$3600 psf (in 2007) to S$2100 psf now (2017)(a drop of -42%), and MUCH LOWER than 2012-2013 PEAK of S$3400 psf!

On the other hand, OCR D19 is now at THOUSAND YEARS HISTORICAL PEAK average PRICE of S$1400 psf now (2017), MUCH HIGHER than 2007 PEAK of S$880 psf (an increase of +59%)!
Even the 2012-2013 PEAK price before all the relentless PROPERTY COOLING MEASURES is only S$1340 psf! That is to say, after all the property cooling measures implemented, D19 has increased by another +4.5%!

OCR private property buyers, BEWARE getting BURNT until become charcoal!

Several D27 were transacted over $1.4k psf last month. Brave soul.

[Kelonguni]

Correct... If confuse Hillview with RCR still can understand, but to transact outskirts of outskirts at these prices scares the hell out of people excluding the impact of eyewatering enbloc and GLS prices.

Land and construction costs are indeed going to go up very much (one other major component driving this round of increase will be water prices).

The interesting scenario is that rents are still going down, which challenges the profitability but not the viability of rent collection.

So we have opposing forces ahead which translates to moderate expenses for expats and non-locals, as well as those intending to stay (forfeiting rent) - interesting strategy.

Several D27 were transacted over $1.4k psf last month. Brave soul.

[DC33_2008]

To rely on rent to pay for mortgage is not viable anymore especially for new condo with higher $psf, higher interest rate and higher maintenance fee if you can find tenants.

Correct... If confuse Hillview with RCR still can understand, but to transact outskirts of outskirts at these prices scares the hell out of people excluding the impact of eyewatering enbloc and GLS prices.

Land and construction costs are indeed going to go up very much (one other major component driving this round of increase will be water prices).

The interesting scenario is that rents are still going down, which challenges the profitability but not the viability of rent collection.

So we have opposing forces ahead which translates to moderate expenses for expats and non-locals, as well as those intending to stay (forfeiting rent) - interesting strategy.

[Kelonguni]

To rely on rent to pay for mortgage is not viable anymore especially for new condo with higher $psf, higher interest rate and higher maintenance fee if you can find tenants.

Still viable but not very profitable I guess. Another way to see it is if a larger downpayment is placed until tenant still pays out the mortgage. But a larger investment sum is required. Referring to 3BRs and above.

May be able to achieve better yields with stocks.

MM units are still very viable depending on location, as calculated years ago...

[DC33_2008]

Still have to less property tax, agent's fee, etc.

Still viable but not very profitable I guess. Another way to see it is if a larger downpayment is placed until tenant still pays out the mortgage. But a larger investment sum is required. Referring to 3BRs and above.

May be able to achieve better yields with stocks.

MM units are still very viable depending on location, as calculated years ago...

[Kelonguni]

Still have to less property tax, agent's fee, etc.

Still viable depending on how calculations are made. As long as rent covers interest and all the costs mentioned, it is viable.

[walkthetiger]

Still viable depending on how calculations are made. As long as rent covers interest and all the costs mentioned, it is viable.

You know any condo brought during peak period, rental can covers all the costs?

REAL Rental Yield likely ZERO
http://frugalinsingapore.com/real-re...ingapore-zero/

More Realistic Example: The Total Cost of Property for a $1,000,000 purchase is:
Purchase Price $1,000,000
Loan Amount $800,000
Stamp Duty $24,600
ABSD $70,000
Legal/transaction fee $3,000
Renovation/furnishing $20,000
Total Cost $1,117,600

In this example, the rental income is $2800/month (or $33,600 per year) and rental expenses are roughly $47,000!!! (This assumes a mortgage interest rate of 1.8%, ˝ month agent commission, NO vacancies, NO repairs, $3000 in annual insurance, and $4500 in annual condo fees – see the table below.)
Mortgage payment
$34,536
Maintenance/sinking fund
$4,500
Insurance
$3,000
Commission
$1,400
Property tax
$3,360
Rental Expenses
$46,796

[Kelonguni]

Yes, that informs the way that is calculated differs from that for those who still subscribe.

In any case, if fewer people buy to rent out (meaning more are buying to live in), we also know the future impact it has on vacancy, prices and rental rates.

Not sure, just wait. Hindsight always clarifies.

You know any condo brought during peak period, rental can covers all the costs?

REAL Rental Yield likely ZERO
http://frugalinsingapore.com/real-re...ingapore-zero/

More Realistic Example: The Total Cost of Property for a $1,000,000 purchase is:
Purchase Price $1,000,000
Loan Amount $800,000
Stamp Duty $24,600
ABSD $70,000
Legal/transaction fee $3,000
Renovation/furnishing $20,000
Total Cost $1,117,600

In this example, the rental income is $2800/month (or $33,600 per year) and rental expenses are roughly $47,000!!! (This assumes a mortgage interest rate of 1.8%, ˝ month agent commission, NO vacancies, NO repairs, $3000 in annual insurance, and $4500 in annual condo fees – see the table below.)
Mortgage payment
$34,536
Maintenance/sinking fund
$4,500
Insurance
$3,000
Commission
$1,400
Property tax
$3,360
Rental Expenses
$46,796

[walkthetiger]

Yes, that informs the way that is calculated differs from that for those who still subscribe.

In any case, if fewer people buy to rent out (meaning more are buying to live in), we also know the future impact it has on vacancy, prices and rental rates.

Not sure, just wait. Hindsight always clarifies.

Those high rental period was long gone. Get all your houses fully paid, and u won't need to be bother about mortgage.

[PropVestor]

Yes indeed. A good reminder for those who buys at a less desirable location without much hope for capital appreciation within 5-10 years. Current entry prices versus rents are way off but that will change when demand catches up with supply. Takes a downturn for prices to adjust. This post is relevant now in current context. It depends on our acuity to NOT pick on the rotten fruits and hold it like cherries. I can only think of a handful worth buying. Bank on the wrong one and its a world of hurt.

[walkthetiger]

Yes indeed. A good reminder for those who buys at a less desirable location without much hope for capital appreciation within 5-10 years. Current entry prices versus rents are way off but that will change when demand catches up with supply. Takes a downturn for prices to adjust. This post is relevant now in current context. It depends on our acuity to NOT pick on the rotten fruits and hold it like cherries. I can only think of a handful worth buying. Bank on the wrong one and its a world of hurt.

Too much MM units were built during peak period, and many were built targeting at rental, these ain't the right houses for local family. These will no vanish from the market, but ended passing from owner to owner. You can only hope more foreigners coming here to fill it up. that's all.