View Full Version : Housing market set for prolonged downturn: Daiwa
Geylang OKT
20-11-11, 20:59
Daiwa downgrades property outlook
Business Times - 19 Nov 2011
It predicts multi-year downturn that will slash private home prices by 22-26% in a 3-year period
By FELDA CHAY
AT LEAST one research house has turned thoroughly negative on Singapore's private property sector, predicting that it will see a multi-year downturn that will slash private home prices by between 22-26 per cent within a three-year period.
Daiwa Capital Markets' David Lum and Tony Darwell believe that a potent mix of factors such as an economic slowdown and a build-up in unsold inventory in the primary market will hit the private homes market here, and have downgraded their outlook to negative from neutral in a Nov 16 report.
They are among the most bearish of analysts covering the Singapore property market.
Others have expressed similar concerns about the uncertain economic climate and jump in unsold inventory, but most have not turned so decidedly pessimistic.
Nomura, in a report released yesterday, said that inventory build-up is expected to increase further and is a 'key risk', but did not make the cuts on the sector that Daiwa did.
Citibank, in its Property Insights report on activity within the sector in the third quarter, said that 'if the global outlook worsens and the economy continues to slow down, this will eventually affect buying sentiment and lead to less exuberant purchase activity'.
Daiwa believes that the build-up in unsold inventory 'would reach record levels' and 'would keep home prices . . . in check for several years'.
It based its prediction on the currently high unsold inventory level, and a forecast influx of new supply that together will flood the market.
Already, new private housing supply at the end of September hit the highest level since pre-global financial crisis levels at 86,332 units, noted Daiwa.
It added that just 43 per cent, or 37,114 of these units have been sold.
'This implies that developers still have to sell (or launch eventually) the remaining 49,188 unsold units', of which 11,480 are under construction while the others are 'planned', said Daiwa.
'Although developers have the flexibility to hold back the launches of private land projects, GLS (government land sales) sites awarded to developers would have to be launched for sale eventually (the typical stipulated project completion period is 60 months from the award of the site, after which the government would impose onerous penalties for slippage).'
It believes that the unsold inventory of private homes totalled 12,035 units as at end-September, which is nearly back to figures seen during the peak of the global financial crisis at the end of March 2009.
Its estimate took in unsold units in completed developments, those that were launched for sale in uncompleted developments but were not sold, and the remaining unlaunched units in uncompleted developments which have been partially launched.
'But unlike the previous peak, the build-up this time has been due to a rapid increase in units launched . . . and not a collapse in demand,' it said.
Daiwa also expects considerable new supply to hit the market, with between 12,043 and 17,000 new private homes likely to be completed annually from 2012 to 2015.
'The robust pipeline of completions for 2012-2015 is a reflection of record home sales in 2009-2011, as well as the record new supply injected in recent GLS announcements,' said Daiwa.
Its forecast for new private homes is lower than the Urban Redevelopment Authority's (URA), which project that 12,043 to 25,593 new houses will be built annually from 2012 to 2015.
Daiwa's negative view of the local property market comes after figures from URA released on Tuesday show that private home sales fell 15 per cent in October from September - although property consultants said that transactions in October were still relatively strong given the spike in sales that September drew.
pity those who paid 1300 - 1500psf for the new launches in GEYLANG recently..:doh:
Geylang OKT
20-11-11, 21:43
pity those who paid 1300 - 1500psf for the new launches in GEYLANG recently..:doh:
That is why lemmings deserve to fall off a cliff :banghead: :beats-me-man: ;)
pity those who paid 1300 - 1500psf for the new launches in GEYLANG recently..:doh:
What about those who paid 1000psf for punggol and serangoon? Lol
$1k psf in Serangoon is a steal man... well at least in terms of today's market. Many projects are already demanding $1100 to $1300 psf in that vicinity! ;)
buttercarp
20-11-11, 21:58
Why does the report sound so basic?
Anyway, if property prices drop, COE better drop together, then it won't hurt so much.
Does property prices drop equal drop in rental?
Why does the report sound so basic?
Anyway, if property prices drop, COE better drop together, then it won't hurt so much.
Does property prices drop equal drop in rental?
Depends. Rental of mass market condos are almost always pegged in relation (x% above like flat types) to HDB rentals...
How about a bullish analyst report? Ha ha ha! :p
CityDevs’ The Palette sees strong sales
CityDevs stock price surged 4.3% yesterday, outperforming the real estate index, FSTREH
gain of 2.3% and STI’s 1.4% increase. We believe this is because of robust sales at its newly
launched The Palette at Pasir Ris, which achieved sales of 200 units out of the total of 300
launched over the weekend. The 892-unit project is priced at S$870 psf, or 2% higher than
the ASP for nearby NV Residences, also by CityDevs. Additionally, Sim Lian sold 200 out of
its 452 units of Parc Vera at Serangoon which was launched on 28 October.
October primary home sales continue to be robust
Developers sold 1,638 units (+2.6% yoy; -20.6% mom) of private homes and executive
condos (EC) in October, in line with the average monthly sales of 1,674 units in 10M11. This
brings primary home sales in 10M11 to 16,739 units, up 21% yoy. Mass private and EC
segments continue to outperform and accounted for 70% of sales, followed by mid (25%)
and prime (5%) segments. We believe strong price appreciation in the HDB market and low
interest rates should lend support to demand for mass residential launches in 4Q11. Notable
launches in December include UOL’s 577-unit Bedok Reservoir site and MCC Land’s
Sembawang site. CapitaLand is expected to launch Bedok Residences this week.
Developers on the lookout for acquisitions despite sombre mood
Most developers under our coverage issued cautious statements during the 3Q11 results
briefings in view of the deteriorating macro outlook. But unlike in 2009, companies such as
CapitaLand, Keppel Land, UOL and OUE are keen to buy land, given their low gearing,
which averages 30% on our estimates. Most are still positive on the long-term outlook for
China despite the weak market there. Meanwhile, we note that CityDevs is still actively
participating in Singapore state land tenders.
Expect a re-rating of residential stocks
We maintain Overweight on the residential sector, with CityDevs as our top pick. We expect
a rerating of residential stocks, spurred by continued robust primary sales, which have a
strong positive correlation to developer stock prices. We expect homes sales to be supported
by low interest rates and tight supply completions in the mass residential sector. We are
Underweight the office sector.
Daiwa downgrades property outlook
Business Times - 19 Nov 2011
It predicts multi-year downturn that will slash private home prices by 22-26% in a 3-year period
By FELDA CHAY
AT LEAST one research house has turned thoroughly negative on Singapore's private property sector, predicting that it will see a multi-year downturn that will slash private home prices by between 22-26 per cent within a three-year period.
Daiwa Capital Markets' David Lum and Tony Darwell believe that a potent mix of factors such as an economic slowdown and a build-up in unsold inventory in the primary market will hit the private homes market here, and have downgraded their outlook to negative from neutral in a Nov 16 report.
They are among the most bearish of analysts covering the Singapore property market.
Others have expressed similar concerns about the uncertain economic climate and jump in unsold inventory, but most have not turned so decidedly pessimistic.
Nomura, in a report released yesterday, said that inventory build-up is expected to increase further and is a 'key risk', but did not make the cuts on the sector that Daiwa did.
Citibank, in its Property Insights report on activity within the sector in the third quarter, said that 'if the global outlook worsens and the economy continues to slow down, this will eventually affect buying sentiment and lead to less exuberant purchase activity'.
Daiwa believes that the build-up in unsold inventory 'would reach record levels' and 'would keep home prices . . . in check for several years'.
It based its prediction on the currently high unsold inventory level, and a forecast influx of new supply that together will flood the market.
Already, new private housing supply at the end of September hit the highest level since pre-global financial crisis levels at 86,332 units, noted Daiwa.
It added that just 43 per cent, or 37,114 of these units have been sold.
'This implies that developers still have to sell (or launch eventually) the remaining 49,188 unsold units', of which 11,480 are under construction while the others are 'planned', said Daiwa.
'Although developers have the flexibility to hold back the launches of private land projects, GLS (government land sales) sites awarded to developers would have to be launched for sale eventually (the typical stipulated project completion period is 60 months from the award of the site, after which the government would impose onerous penalties for slippage).'
It believes that the unsold inventory of private homes totalled 12,035 units as at end-September, which is nearly back to figures seen during the peak of the global financial crisis at the end of March 2009.
Its estimate took in unsold units in completed developments, those that were launched for sale in uncompleted developments but were not sold, and the remaining unlaunched units in uncompleted developments which have been partially launched.
'But unlike the previous peak, the build-up this time has been due to a rapid increase in units launched . . . and not a collapse in demand,' it said.
Daiwa also expects considerable new supply to hit the market, with between 12,043 and 17,000 new private homes likely to be completed annually from 2012 to 2015.
'The robust pipeline of completions for 2012-2015 is a reflection of record home sales in 2009-2011, as well as the record new supply injected in recent GLS announcements,' said Daiwa.
Its forecast for new private homes is lower than the Urban Redevelopment Authority's (URA), which project that 12,043 to 25,593 new houses will be built annually from 2012 to 2015.
Daiwa's negative view of the local property market comes after figures from URA released on Tuesday show that private home sales fell 15 per cent in October from September - although property consultants said that transactions in October were still relatively strong given the spike in sales that September drew.
devilplate
20-11-11, 22:49
That is why lemmings deserve to fall off a cliff :banghead: :beats-me-man: ;)
hahaha....ur biz surely boom ....many nid to release stress later:D
How about a bullish analyst report? Ha ha ha! :p
CityDevs’ The Palette sees strong sales
CityDevs stock price surged 4.3% yesterday, outperforming the real estate index, FSTREH
gain of 2.3% and STI’s 1.4% increase. We believe this is because of robust sales at its newly
launched The Palette at Pasir Ris, which achieved sales of 200 units out of the total of 300
launched over the weekend. The 892-unit project is priced at S$870 psf, or 2% higher than
the ASP for nearby NV Residences, also by CityDevs. Additionally, Sim Lian sold 200 out of
its 452 units of Parc Vera at Serangoon which was launched on 28 October.
October primary home sales continue to be robust
Developers sold 1,638 units (+2.6% yoy; -20.6% mom) of private homes and executive
condos (EC) in October, in line with the average monthly sales of 1,674 units in 10M11. This
brings primary home sales in 10M11 to 16,739 units, up 21% yoy. Mass private and EC
segments continue to outperform and accounted for 70% of sales, followed by mid (25%)
and prime (5%) segments. We believe strong price appreciation in the HDB market and low
interest rates should lend support to demand for mass residential launches in 4Q11. Notable
launches in December include UOL’s 577-unit Bedok Reservoir site and MCC Land’s
Sembawang site. CapitaLand is expected to launch Bedok Residences this week.
Developers on the lookout for acquisitions despite sombre mood
Most developers under our coverage issued cautious statements during the 3Q11 results
briefings in view of the deteriorating macro outlook. But unlike in 2009, companies such as
CapitaLand, Keppel Land, UOL and OUE are keen to buy land, given their low gearing,
which averages 30% on our estimates. Most are still positive on the long-term outlook for
China despite the weak market there. Meanwhile, we note that CityDevs is still actively
participating in Singapore state land tenders.
Expect a re-rating of residential stocks
We maintain Overweight on the residential sector, with CityDevs as our top pick. We expect
a rerating of residential stocks, spurred by continued robust primary sales, which have a
strong positive correlation to developer stock prices. We expect homes sales to be supported
by low interest rates and tight supply completions in the mass residential sector. We are
Underweight the office sector.
Thank you for your balancing report! :spliff:
Why does the report sound so basic?
Anyway, if property prices drop, COE better drop together, then it won't hurt so much.
Does property prices drop equal drop in rental?
I don't see how COE prices will drop if the govt continues to restrict supply. Govt wants to keep housing prices in check, but not cars. They want you to go public.
Interest rates are low and many people will want to buy cars because the MRT is simply too crowded. Unlike property, car interest rates are fixed for the entire 10 years. Currently around 1.88% only. So, if you don't buy now, when economy recovers and car growth cut to 0.5% or less, COE might hit $100k liao.
Many going for conti cars now because the price gap has narrowed and for Jap or Korean cars, the COE is 50% of the car price which means you are really buying a piece of paper and not a real car.
That is why lemmings deserve to fall off a cliff :banghead: :beats-me-man: ;)
This exemplifies my view that CCR and RCR will be worst hit especially wannabe 'atas' areas like balestier and telok Kurau.
hahaha....ur biz surely boom ....many nid to release stress later:D
bedok reservoir aso high volume, all go release stress:eek:
Geylang OKT
21-11-11, 09:57
hahaha....ur biz surely boom ....many nid to release stress later:D
Late night bookings are now open. We may later co-opt FEO and Knight Frank (they will akan datang be very free) in our marketing strategies :D
devilplate
21-11-11, 10:05
Late night bookings are now open. We may later co-opt FEO and Knight Frank (they will akan datang be very free) in our marketing strategies :D
r u expanding into kallang or balestier?
Geylang OKT
21-11-11, 10:07
r u expanding into kallang or balestier?
Balestier sounds good. Kallang maybe later on. :D
devilplate
21-11-11, 10:12
Balestier sounds good. Kallang maybe later on. :D
best time for u to expand biz during crisis!!! also prevent ppl from gg to reservoir:D :cheers1:
Geylang OKT
21-11-11, 10:18
best time for u to expand biz during crisis!!! also prevent ppl from gg to reservoir:D :cheers1:
If they have no money to pay the mei mei we will still bring them to the reservoir later! :D :cheers1: :cool:
Balestier sounds good. Kallang maybe later on. :D
Waterfront xxx?? Or Riversxx
How about some latest news & analysts' comments for you about CCR?
The luxury segment of the property market appears to have continued its record-breaking spree with the latest sale of a 3,003-sq-ft four-bedroom unit for $20.5m, or nearly $6,850 psf. The apartment is in the Premier Tower at SC Global’s flagship project, The Marq on Paterson Hill, and the sale marks the third time the project tops the price chart this year.
Overall, while the transaction volume in the luxury segment is low vis-à-vis its heyday in 2007, we do not think prices will come off.
The cost for developers to replenish their luxury landbank in today’s market is as high as $4,700 psf, taking into account 30% profit margins, and developers do have much stronger balance sheet now, thanks to the strong sales in 2009-10 as the property market rebounded from the trough.
This exemplifies my view that CCR and RCR will be worst hit especially wannabe 'atas' areas like balestier and telok Kurau.
If they have no money to pay the mei mei we will still bring them to the reservoir later! :D :cheers1: :cool:
why like that? just like u know cannot lend money to gambler(never return back), so the best way is Pay money first before transaction :D :D as long as your goods are in demand, people will pay in advance first:D
Geylang OKT
21-11-11, 15:26
why like that? just like u know cannot lend money to gambler(never return back), so the best way is Pay money first before transaction :D :D as long as your goods are in demand, people will pay in advance first:D
we must all make a living :D
Geylang OKT
21-11-11, 21:51
Properties will now stabilise and moderate (euphemism for cheong backwards) :D
devilplate
21-11-11, 22:01
Properties will now stabilise and moderate (euphemism for cheong backwards) :D
not steep crash meh?:(
Geylang OKT
21-11-11, 22:04
not steep crash meh?:(
IMHO, very super duper steep crash coming up indeed!
But this forum is populated by hordes of existing condo owners (so say stablise and moderate to pacify them but actually mean the same thing as steep crash) :D :D :D
devilplate
21-11-11, 22:20
IMHO, very super duper steep crash coming up indeed!
But this forum is populated by hordes of existing condo owners (so say stablise and moderate to pacify them but actually mean the same thing as steep crash) :D :D :D
better crash faster:D :D :D .....i nearly wana tied up my fingers liao:sleep:
better crash faster:D :D :D .....i nearly wana tied up my fingers liao:sleep:
buy a few more watches to ease the itch.
I have been hearing the word " crash" since the first cooling measure till now...can check all the threads last time...did it happen? I have seen and know people cashing out due to this and now renting paying mroe than S$3k to $4k/month renting HDB or condo and still waiting for price to crash 40 to 50% ...what happen is even the price drop 10 to 20% , those fellows who sold during the cooling measures still buy at the price close to what they have sold ..he he ...less than 10% net gain my god... if anyone can predict the market so accurate...dont need to work become god already...:cheers1:
I have been hearing the word " crash" since the first cooling measure till now...can check all the threads last time...did it happen? I have seen and know people cashing out due to this and now renting paying mroe than S$3k to $4k/month renting HDB or condo and still waiting for price to crash 40 to 50% ...what happen is even the price drop 10 to 20% , those fellows who sold during the cooling measures still buy at the price close to what they have sold ..he he ...less than 10% net gain my god... if anyone can predict the market so accurate...dont need to work become god already...:cheers1:
was also wondering what happen to the previous "would-be" crash, but it kept going up...
I have been hearing the word " crash" since the first cooling measure till now...can check all the threads last time...did it happen? I have seen and know people cashing out due to this and now renting paying mroe than S$3k to $4k/month renting HDB or condo and still waiting for price to crash 40 to 50% ...what happen is even the price drop 10 to 20% , those fellows who sold during the cooling measures still buy at the price close to what they have sold ..he he ...less than 10% net gain my god... if anyone can predict the market so accurate...dont need to work become god already...:cheers1:
The point here is that property market is very sentiment driven. Once there is clear sign of economy slow down, job lost or confirmed crisis, only then the market will react. Those waiting to buy will likely to wait longer hoping for lower price.
Remember that in the stock market people buy on rumor and sell on fact; whereas, in the property market, people will only react on fact and ignore rumor because there is so much at shake. Of course by the time the facts arrive, it is usually too late for the average people.
those caught are usually those who bought at peak price of the district where the downside is more likely to happen than upside and usually not for own stay and not loan free..meaning using rental to cover mortgage loan for the investment unit/s and at the same time still servicing the HIGH loan of the current accomodation...if u belong to this group, high risk...
another group, sell their only place and wait for crash to buy back..also high risk..as when the price is dropping is everyone Guess...and at the same time contributing to landlord coffer using the gain which is fast depleting if it is a prolonged wait.
paya lebar site bids too low, URA not selling as it is not fair value..(micro level-another signal given to market that garmen will do whatever it can to preserve the minimum price in this land scarce country ..);)
let see some side news of china property market which is very near to Sg for some reprieve...
-----------------------------------------------------------------------------------------
China may ease property controls in the second quarter of next year due to concerns a steep drop in prices will push economic growth below 9 per cent – an unspoken but key target for Beijing, a prominent Chinese university said in a report published yesterday.
Property prices, transactions and investments will fall in the first quarter due to the tightening measures, a Renmin University of China report published in the state-run China Securities Journal said. However, the likelihood of a market collapse is slim.
“Given local governments’ high reliance on land sales for fiscal revenue and the 9 per cent bottom line for China’s economic growth, the correction in the property sector won’t exceed 25 per cent,” the report said.
“Local governments are likely to take numerous easing measures in the second quarter of 2012, while in the following quarter the central government may gradually loosen restrictions on credit and home purchases,” it added.
China has launched a raft of measures since April last year to curb property prices. Government data released last Friday showed average property prices in 70 Chinese cities posted their first monthly decline since the cooling campaign, suggesting the start of a much-anticipated price correction that could help officials tame housing costs.
During a visit to Russia earlier this month, Premier Wen Jiabao reiterated that the government would not waver on its tightening measures and pledged to bring prices down to a reasonable level.
it all boils down to expectations. 2 examples
1) when prices climb one wants to sell at the peak hoping will not regret if sold at 20% off peak price
2) when prices fall, one wants to buy at bottom hoping will not regret if bought at 20% above bottom price.
Why those who sold, and hoping for market crash, waiting to buy - could not get one (whether stock or property - but stock easier amt smaller and more liquid) they are those under example 2
it all boils down to expectations. 2 examples
1) when prices climb one wants to sell at the peak hoping will not regret if sold at 20% off peak price
2) when prices fall, one wants to buy at bottom hoping will not regret if bought at 20% above bottom price.
Why those who sold, and hoping for market crash, waiting to buy - could not get one (whether stock or property - but stock easier amt smaller and more liquid) they are those under example 2
those are the ones who missed the boat and panic when market rebounds and on top of it, have to think to renew lease or not.....
Powered by vBulletin® Version 4.2.2 Copyright © 2024 vBulletin Solutions, Inc. All rights reserved.