MAS flags risks from 'excessive exuberance' in property market

[HP65]

Lets' look at the en bloc market in perspective. For most older estates, it is about 60% owner occupied and 40% investment. For every 100 units en bloc, we assume all the 40% investors will buy a replacement unit for investment. We can also safely assume that for the 60% owner occupiers who are usually elderly, 50% of the 60% will downgrade to HDB flats; 25% will stay with with children and keep the cash for retirement. The remaining 25% will buy a new unit. So effectively, for every 100 units being en bloc, there will be about 55 buyers need to buy private property.

However, for every 100 units being en bloc, there will be another 200 new units (conservatively) added to the supply because developers will build more smaller units. So it means that supply will be increased by about 3 times for every 100 units of units being en bloc with respect to the number of buyers buying replacement units.

With falling rents and increasing interest rate, the 55 potential buyers out of 100 units being en bloc may be less. Some will prefer to invest in bonds instead. The en bloc buyers are not going to put pressure on demand. In fact, it increases supply much more than creating demand.

Where will the displaced HDB dwellers who sold their place to the 50-60% elderly be buying? Your guess is as good as mine. Whatever percentage you use, is still just a speculation to suit your agenda. End of the day, it is not easy to gauge where the market is moving.

[tonymontana]

I find them very good to me.

I did not pay ABSD, SSD and TDSR help to prevent the market from crash.



Where to find when they even relax the TDSR so that I can re finance my mortgage.

http://www.businesstimes.com.sg/real...thdrawal-loans

THE Total Debt Servicing Ratio (TDSR) will no longer be applied starting 11 March 2017 for mortgage equity withdrawal loans that have a loan-to-value (LTV) ratio of 50 per cent and below.

MAS and MND even help to advise the property investor now is the time to buy before the next Bull run.

https://www.srx.com.sg/cooling-measures

you withdrew more equity after 11 mar 2017?

[tonymontana]

Arcachon, what is the reason people don't like condos at Balistier Road?
I see the location is quite near to the city center.

Balestier got a shady reputation. Especially those apartments on the shaw plaza side.
but for rental play wise, it can be a good proposition. I mean it's definitely better to buy a smallish apartment in balestier for rental compared to pasir ris or punggol (for eg).
for own stay, i wouldn't unless i grew up around that area (which i didn't).

[Amber Woods]

Where will the displaced HDB dwellers who sold their place to the 50-60% elderly be buying? Your guess is as good as mine. Whatever percentage you use, is still just a speculation to suit your agenda. End of the day, it is not easy to gauge where the market is moving.

It is an opinion based on my experience with older en bloc developments and subject to critics from people who also have similar experience with en bloc sales. There is no speculation nor any agenda.

[jwong71]

It is an opinion based on my experience with older en bloc developments and subject to critics from people who also have similar experience with en bloc sales. There is no speculation nor any agenda.

I’m one of them, wanna buy more but kena block.

[Arcachon]

you withdrew more equity after 11 mar 2017?

Lots of plan, depends on which come first. Meantime was planned to go oversea again for a short working trip.

[august]

MAS hinting cooling measures of some form imminent.

[teddybear]

Mmm, will it be more money generating cooling measures (like SSD and ABSD)?
And after that OCR private properties will continue to increase (like previously) and more GLS land will be sold at record price?

MAS hinting cooling measures of some form imminent.

[Kelonguni]

MAS hinting cooling measures of some form imminent.

Definitely not true. It might even mean relaxing of some cooling measures soon to boost tax collections, and to warn borderline buyers against "excessive" exuberance, while giving first time buyers final call.

But most likely, it means that the government will not do anything if people choose to be excessively exuberant, as the "supply" is believed to be sufficient to cope with the price rise.

The only thing I know is that there is no government that will openly ask its people to buy. It's forever about caution, and for one to bear his/her own risks. If you gain buying with governmental encouragements, would you share with the government? If you lose because government said its a good time to buy, what would you do? So, the politically correct answer is as always, buy within means, don't be excessively exuberant, even though economy is doing well, everybody's salary is increasing, the property market has trended down for years while comparable markets have spiked.

Be prudent, but not complacent.

[stl67]

Govt already took alot from property owners: Stamp duty, Property tax, income tax from rental. Cant imagine if they still want to implement more cooling measures. Really blood suckers. They should just let price rises instead. Even stock market has rises more than double now.

Yah, really day light robbery

[teddybear]

And you forgot ABSD, 30% water tariff increase, soon carbon taxes that will lead to electricity tariff increase........

Anyway, prices has risen at OCR, and they are near historical thousand years peak!

Govt already took alot from property owners: Stamp duty, Property tax, income tax from rental. Cant imagine if they still want to implement more cooling measures. Really blood suckers. They should just let price rises instead. Even stock market has rises more than double now.

[tonymontana]

Definitely not true. It might even mean relaxing of some cooling measures soon to boost tax collections, and to warn borderline buyers against "excessive" exuberance, while giving first time buyers final call.

But most likely, it means that the government will not do anything if people choose to be excessively exuberant, as the "supply" is believed to be sufficient to cope with the price rise.

The only thing I know is that there is no government that will openly ask its people to buy. It's forever about caution, and for one to bear his/her own risks. If you gain buying with governmental encouragements, would you share with the government? If you lose because government said its a good time to buy, what would you do? So, the politically correct answer is as always, buy within means, don't be excessively exuberant, even though economy is doing well, everybody's salary is increasing, the property market has trended down for years while comparable markets have spiked.

Be prudent, but not complacent.

you are probably right. Govt needs to say something while doing something exactly opposite. It's called "C.Y.A".
For example, engaging with stakeholders about tweaks to the minimum stay period, while simultaneously slapping charges on an airbnb host

[bargain hunter]

developers continue not to give MAS face, will start a new thread on the 2 latest bids.

[thomastansb]

Prices declined for 15 quarters. And just went up 0.7% for ONE QUARTER. I think they are nuts if they implement CM now.

MAS hinting cooling measures of some form imminent.

[Kelonguni]

Benchmarked to 2009 levels, the average increase is about 4.5% annually, or 4% compounded over 8 years. More or less acceptable (in fact superior in stability) compared with all comparable cities.

As long as we do not overshoot 4% increase annually, it is a level that matches the income growth of the top quartile.

The risk is if we go beyond 10% in a year. Then authorities might be pressured to do something. Either way, I am happy to watch on.

[CCR]

Whatever cooling measures the government imposed, developers are banking that the cyclical property market cannot stay down for more than 10 years.... 4 years down cycle so far + 7 years to build and fully sell the condo... so they just bid aggressively... looks like prices will go up 20% all over the island with the GLS and enbloc sites sold far...

IOI price for marina bay 16xx psf was considered high when they bid for it then came Guocoland 17xx psf at beach road.... then 17xx psf for a residential site at jiak Kim...

Looks like CCR LH and FH sites whether GLS or enbloc minimum 15xx psf ppr if it's pure residential and 17xx if it's mixed use and I am sure the next plot of mixed use at marina bay will go for 2000 psf ppr....

Guocoland laughing all the way to the bank as their tanjong pagar centre land cost was 1100 psf ppr

[buyer_east]

Whatever cooling measures the government imposed, developers are banking that the cyclical property market cannot stay down for more than 10 years.... 4 years down cycle so far + 7 years to build and fully sell the condo... so they just bid aggressively... looks like prices will go up 20% all over the island with the GLS and enbloc sites sold far...

IOI price for marina bay 16xx psf was considered high when they bid for it then came Guocoland 17xx psf at beach road.... then 17xx psf for a residential site at jiak Kim...

Looks like CCR LH and FH sites whether GLS or enbloc minimum 15xx psf ppr if it's pure residential and 17xx if it's mixed use and I am sure the next plot of mixed use at marina bay will go for 2000 psf ppr....

Guocoland laughing all the way to the bank as their tanjong pagar centre land cost was 1100 psf ppr

Doing search over the last few months. It seems prices of the property I might look at all rose 10% already.
This year's pay is wasted in this indecision if I were to buy again now.

[thomastansb]

But those searches you did are only a few properties. Perhaps of your interest only. If you factor in all transactions, then maybe 2-3% at most for the past Q.

Anyway, even upper changi/flora area (esso station there) will be selling 1.5 -1.6k psf soon. Just opp the prison there. At 888 psf/ppr, breakeven is 1350 to 1400 psf. So a profit of $200 psf sounds reasonable.

Doing search over the last few months. It seems prices of the property I might look at all rose 10% already.
This year's pay is wasted in this indecision if I were to buy again now.

[buyer_east]

But those searches you did are only a few properties. Perhaps of your interest only. If you factor in all transactions, then maybe 2-3% at most for the past Q.

Anyway, even upper changi/flora area (esso station there) will be selling 1.5 -1.6k psf soon. Just opp the prison there. At 888 psf/ppr, breakeven is 1350 to 1400 psf. So a profit of $200 psf sounds reasonable.

usually when stocks index rose 3%, underlying stocks mostly rose 10% already. The majority of the stocks never move much.