View Full Version : Record number of new private homes sold in Feb
http://business.asiaone.com/Business/My%2BMoney/Property/Story/A1Story20120316-333771.html
Friday, Mar 16, 2012
AsiaOne
Record number of new private homes sold in Feb
Despite new cooling measures and uncertain economic conditions, the property market registered record sales in February with 3,138 new private homes sold.
The figure is propelled by the 725 executive condominium (EC) units sold. Without this, the figure drops to 2,413 homes. This is lower than the 2,772 non-EC private units sold in July 2009.
The EC sales figure is the highest monthly figure since EC sales resumed in October 2010.
Developers had launched a string of projects last month, making more homes available compared to January. January sales were robust as well, with 2,077 units sold that month.
However, despite the rosy sales figure, the number of unsold units also hit a record high, with 7,586 units left in the market due to the large number of projects, reported The Straits Times.
Most of the units sold were from the city fringe, with five times more homes sold here than in January. 75 per cent of the total sales came from the mass market segment.
The Straits Times reported that experts attributed the positive sales sentiment to low interest rates, market liquidity, and the lack of alternative investments.
Experts also predict that minus any unexpected events, March sales figures are expected to remain strong, with the mass market segment still leading the pack.
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By Mr Propwise
Sales of residential property by developers surged in February to exceed even those during the 2007 and 2009 booms. The interesting (and perhaps worrying) aspect is that the sales were largely driven by sales of Executive Condominiums (ECs) and mass market condos. In my opinion, this increases the risk of further government action to clamp down on the still buoyant investment demand.
Developers sold a total of 3,138 homes (including ECs) in February, an increase of 51% on a month-on-month basis and 156% on a year-on-year basis. Total private residential sales (excluding ECs) was 2,413 units, an increase of 29% on a month-on-month basis and 119% on a year-on-year basis. EC sales were the standout, selling 725 units, which was an increase of 254% on a month-on-month basis and 471% on a year-on-year basis! In fact, three of the top ten selling projects were ECs: The Rainforest, Trilliant and Twin Waterfalls.
Some might argue that this high growth is due to the Chinese New Year (CNY) effect, as CNY fell in February in 2011 versus January this year. But even if we combine the first two months of the year in 2012 and compare that with 2011, new home sales (excluding ECs) were still up 85%. Furthermore, most of the sales (81%) came from the Outside Central Region (OCR), which suggest that mass market sales are driving the market.
Increased risk of further government measures
Despite the implementation of the Additional Buyer Stamp Duty (ABSD) in December 2011, which I thought was harsh, new home sales have powered ahead. The worrying aspect is that the demand has been mainly driven by the mass market segment, while the luxury segment has remained subdued as international buyers have stayed away due both to the ABSD and concerns about the global economic environment.
The strength and bullishness of mass market demand could increase concern by the government that middle-income investors (and especially first and/or second time Singaporean home buyers) are still rushing like lemmings into the property market, despite the uncertainty in the markets and the government's own efforts to clamp down on excessive investment demand. This will then increase the risk that additional measures will be implemented to further cool the property market.
On a more philosophical note, I believe that the root cause of this buoyant investment demand is the low interest rate environment. When real interest rates (nominal interest rates minus inflation) are negative, savers are being penalised whereas borrowers get the benefit of cheap funds (or are even paid to borrow!).
To put this in more concrete terms, banks are paying close to 0% on deposits and so the real purchasing power of your savings is being constantly eroded by inflation. In this situation, anything that has positive yield looks attractive as an investment. Property looks doubly attractive because it is a real asset and is believed to be a good hedge against inflation.
But before you rush out to buy a property keep in mind that the low interest rate environment will not last forever and what seems like a good idea in the short term might turn out to be a bad idea in the longer term. For example, if we go back to the first half of 2008, inflation (as measured by the Consumer Price Index) was running at 7-8%, and we could have made very similar arguments as the above on why property looked like a good investment. But anyone who had bought then would have been caught by the Global Financial Crisis when property prices dropped by 25% (as measured by the Property Price Index).
In times of crisis, cash is king, so make sure you have an emergency fund to help you get through the tough times before you jump into a property!
If there is a cm 6 what will it be? 50% ltv forb2nd unit? Or no more than 4 units per singaporean?
devilplate
23-03-12, 11:03
If there is a cm 6 what will it be? 50% ltv forb2nd unit? Or no more than 4 units per singaporean?
5yrs MOP la
5yrs MOP la
How to MOP if you own many many PC?
devilplate
23-03-12, 11:13
How to MOP if you own many many PC?
effective date la...purchases subject to 5yrs MOP after today for eg.....den most bro/sis here no nid to headache tink of investing in pte ppty liao....bestest....px will crash as per wat the netizens always wanted :D
If there is a cm 6 what will it be? 50% ltv forb2nd unit? Or no more than 4 units per singaporean?
My take is that with CM5, the govt has largely contained foreign funds from inflating the property market. If CM6 were to come, it would be to tame the domestic demand ie; to ensure the bubble does not become uncontrollable. In that case the ltv would be one of the tools to use. I don't think further mop (SSD), limiting purchases etc will be used because it is still "private" property.
My take is that with CM5, the govt has largely contained foreign funds from inflating the property market. If CM6 were to come, it would be to tame the domestic demand ie; to ensure the bubble does not become uncontrollable. In that case the ltv would be one of the tools to use. I don't think further mop (SSD), limiting purchases etc will be used because it is still "private" property.
They will not limit, but tax you more. Win-Win for them. More income to milk from them, cool market at the same time :D
They been supplying land like crazy, definitely the developers wanna quickly sell them out before more cooling measures are set.
devilplate
23-03-12, 11:53
My take is that with CM5, the govt has largely contained foreign funds from inflating the property market. If CM6 were to come, it would be to tame the domestic demand ie; to ensure the bubble does not become uncontrollable. In that case the ltv would be one of the tools to use. I don't think further mop (SSD), limiting purchases etc will be used because it is still "private" property.
simply means netizens cannot complain and push blame to foreigners for pushing up the ppty px liao if there is any px surge after cm5!!!
locals/pr can only blame ourselves for sky high ppty px!
ooo well, den locals will push blame to PRs.......
wakakakakkakaka
cm6 : MOP 5yrs for pte ppty.....not fair? den also increase HDB MOP to 10yrs la.....still more 'private' rite?
wakakakakkaka
Pte got mop then won't be called private liao. Ha.
devilplate
24-03-12, 00:35
Pte got mop then won't be called private liao. Ha.
10% absd is almost equal to foreigner not eligible....
4yrs ssd almost like 4yrs mop
So pte ppty still consider private anot?
To me it is not anymore.....too many govt intervention and yet it is not subsidised at all.....
Private becoming less private and hdb becoming more private these days
10% absd is almost equal to foreigner not eligible....
4yrs ssd almost like 4yrs mop
So pte ppty still consider private anot?
To me it is not anymore.....too many govt intervention and yet it is not subsidised at all.....
Private becoming less private and hdb becoming more private these days
Ok lah. Just treat it as force saving lor. Remember JLRX? Property should nvr be sold!! So just collect rental and leave your property to appreciate.
Depends where is the property. Rental also get hit with desperate owner when too many units got TOP. Unless near mrt,etc, competition will be stiff.
Ok lah. Just treat it as force saving lor. Remember JLRX? Property should nvr be sold!! So just collect rental and leave your property to appreciate.
10% absd is almost equal to foreigner not eligible....
4yrs ssd almost like 4yrs mop
So pte ppty still consider private anot?
To me it is not anymore.....too many govt intervention and yet it is not subsidised at all.....
Private becoming less private and hdb becoming more private these days
2 thumbs up, fully agree...
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