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seletar

02-10-14, 14:11

http://sbr.com.sg/financial-services/news/chart-day-singapore-banks-rising-exposure-property-market-looming-doomsday#sthash.D0NjFfBb.dpuf
Published 03 June 2014

Chart of the Day: Singapore banks' rising exposure to property market is a looming doomsday

http://sbr.com.sg/sites/default/files/news/exposure.JPG

Household and mortgage loans are trekking north.

Banks are becoming more exposed to property market as buyers turn to them in their plight against the house measures.

According to DBS, the TDSR is one of the macro prudential measures employed by the MAS to curb excessive lending and mitigate the risk exposure of the banking system to the real estate sector.

Here's more from DBS:

Financial institutions are not allowed to extend additional loans to borrowers whose total monthly debt repayments exceed 60% of monthly income.

The aim is to limit consumer leverage and cool demand for loans, particularly large-ticket mortgage loans.

The property market is showing signs of moderation due to the series of cooling measures. This has led some to suggest that the MAS may unwind some of the earlier measures.

We suspect that will not happen soon, as the easing in property prices was the raison d’etre of the cooling measures. Absent a sharp fall in prices and / or rise in negative home equity, policymakers will likely allow the market to self-adjust over time.

The focus of monetary policy remains on managing overall leverage within the economy.

The household debt-to-GDP ratio rose to 75% in 2013 and appears to be continuing north. The mortgage loan-to-GDP ratio is at historical high of 45% while the LDR has continued to rise towards its historical peak almost a year after the introduction of the TDSR.

We suspect that these various measures against leverage will show little unwinding until interest rates begin to rise.

For most people, investment in property is a long-term commitment. Hence, it is important for potential home buyers to take into account the negative impact of interest rates on property prices, as well as to do the necessary “stress testing” to prepare for the higher interest rates that will eventually come.

This will help home owners determine whether their properties will remain affordable under higher rate scenarios.

seletar

02-10-14, 14:22

http://www.bloomberg.com/news/2014-06-04/singapore-joins-china-with-dangerous-debt-level-gmt-says.html

Singapore Joins China With Dangerous Debt Level, GMT Says

Bloomberg Jun 4, 2014

Singapore companies’ indebtedness has swelled to the most in Asia after China and India as the city-state’s economic growth slows, according to GMT Research Ltd.

Leverage among the Southeast Asian nation’s corporates is following counterparts in the two larger economies to a level considered a “danger threshold,” Gillem Tulloch, founder of the Hong Kong-based researcher, said in an interview yesterday. Debt rose to six times the amount of operating cash flow in 2013 for non-financial Singaporean companies, from 5.1 times in 2012, a report by GMT Research shows.

“It’s a bit surprising that Singaporean companies seem to have leveraged up significantly over the past few years,” said Tulloch, 43, a former analyst at CLSA Asia-Pacific Markets. “There’s been a slight loss of discipline, or it could be that the growth has not come in as expected.”

Singapore’s government said last month its export-led economy will experience “modest” expansion in 2014 amid a labor-market crunch. It’s likely that growth is headed for a slowdown, since it can’t be sustained without more stimulus or reckless bank lending, GMT Research said.

The leverage ratio in China rose to 7.5 times from 6.8 times last year, while the measure in India grew to 8.1 times from 7 times, the May 28 report showed.

‘Growth Scare’

Singaporean bonds have gained 2.9 percent this year in U.S. dollar terms, less than the 4.4 percent returns for the broader market in Asia, indexes compiled by HSBC Holdings Plc show. The country’s stocks have outperformed the region’s benchmark index, according to MSCI indexes.

Tulloch said equity investors should hold fewer Singaporean, Chinese and Indian shares than the benchmarks they track. He doesn’t have any recommendations for the bond markets.

Companies’ debt to cash flow ratios signal that investment for business expansion in Singapore may be waning, GMT Research said. Enterprises with high ratios of leverage and cash outflows include those in the consumer discretionary, energy and materials sectors, Tulloch said in his report.

“There is a high potential for a growth scare there,” he said. “Singaporean companies, from my experience, are quite well run. You would expect them to pare back capital expenditure in 2014 to restore their balance sheets.”

A corporate-sector bubble starts when free cash outflows exceed 50 percent of net profit for several years, Tulloch said.

Singapore’s companies suffered 37 cents of cash outflows for every $1 of net profit earned in 2013 as they spent 40 percent more in capital expenditure, according to the report. That compared with 12 cents of inflows the previous year. The 2013 outflows for China and India were 51 cents and 93 cents.

GMT Research tracks some 9,000 Asian companies or about 50 percent of all listed companies in the region ranked by descending sales. Tulloch formed GMT Research in December 2013 after leaving Forensic Asia Ltd., a research consultancy set up by former CLSA economist Jim Walker.

seletar

02-10-14, 14:32

http://www.btinvest.com.sg/dailyfree/unsold-homes-big-drag-developers-coffers-20140607/

Business Times
Published June 07, 2014

Unsold homes big drag on developers' coffers

Punishing fees seen incentivising some to reprice projects to move sales in near term

DEVELOPERS have collectively paid up to $55.1 million in extension fees for unsold units in their private condo projects since 2012. They could potentially fork out another $80.7 million to extend the sales period for another year if they do not sell their inventory by year-end, according to a study by OrangeTee Research.

"As the penalty amounts to millions of dollars per project, we believe that it will incentivise some developers to reprice some of these projects to move sales in the near term," said OrangeTee research head Christine Li.

A total of 24 condo projects, mostly high-end ones, are still not fully sold two years after receiving their temporary occupation permits (TOPs) between 2010 and 2012, the study showed. Under the government's Qualifying Certificate (QC) rules, developers have to pay extension charges to extend the sales period after two years of the project's TOP.

All developers with non-Singaporean shareholders or directors need to obtain QCs to buy private land for new projects because they are deemed "foreign developers" under the Residential Property Act (RPA). This means the QC rules apply to all listed developers. Privately owned Far East Organization and Hoi Hup are among the few developers exempted from the rules.

Given that the QCs allow developers up to five years to finish building a project and two more years to sell all the units, the heat is on developers to clear their stock by the deadline.

To extend the sales period, developers pay 8 per cent of the land purchase price for the first year of extension, 16 per cent for the second year and 24 per cent from the third year onwards. The charges are pro-rated based on unsold units over the total units in the project.

Such fees drove luxury residential player SC Global to delist from the Singapore Exchange last year after sales slowed significantly due to the government's property cooling measures.

Analysts warn that more extension charges will kick in. The charges paid up so far are just the tip of the iceberg as projects built from land acquired during the 2006-2007 en bloc fever have just crossed a seven-year mark, they say.

"More developers are caught between a rock and a hard place" as they have to decide whether to pay the extension charges or cut prices to move the units, said SLP International executive director Nicholas Mak.

If they pay for extension charges, there is also the question of whether they can recover these costs later on, he said. This is why some developers of luxury projects are resorting to selling the units in bulk to mega investors.

At the end of the first quarter of this year, there were 10,295 unsold units in the Core Central Region (CCR), 8,089 in the Rest of Central Region (RCR) and 12,433 in the Outside Central Region (OCR).

Based on URA caveats, there are 71 unsold units in Wheelock Properties' Scotts Square that TOP-ed in 2011 and 16 unsold units in Wing Tai's Helios Residences, which also TOP-ed in the same year.

"As unsold inventory builds up, there will likely be more bargains in the market if developers want to avoid paying penalties to extend the sales period, especially high-end developers who have already paid premium prices for their lands," Ms Li said.

The study excluded the fees that developers need to pay to extend the completion of projects beyond five years, as they can typically extend without paying the charges "based on technicalities".

Even in a more optimistic scenario where developers manage to sell 20 per cent of the remaining units for the rest of this year, further extension charges to be paid by developers by end-2014 will amount to around $68.3 million.

Some market watchers noted that the QC rules should mark a distinction between larger and smaller projects, given that it takes a longer time to move all the units in large projects in a difficult market as the current one.

Century21 chief executive officer Ku Swee Yong said that demand for high-end projects had been hit hardest by higher additional buyers' stamp duty (ABSD) since January 2013 and a borrowing cap under the total debt servicing ratio (TDSR) since June last year.

Even if a developer decides to set up an investment company to buy the units and rent them out, the company could be hit by a 15 per cent ABSD and is restricted by a loan-to-value limit of 20 per cent.

seletar

02-10-14, 14:40

http://www.businesstimes.com.sg/premium/top-stories/dark-condos-shine-light-rising-vacancy-20140610

Business Times
Published June 10, 2014

Dark condos shine light on rising vacancy

Suburban areas worst hit; softening rentals seen

http://www.businesstimes.com.sg/sites/businesstimes.com.sg/files/imagecache/image_300x200/DARK-CONDOS-100614.jpg
As dusk descends upon the Singapore skyline, the excess capacity building up in the private housing market is evident. Dark patches in some condominium developments completed six to 12 months ago, or even longer, point to significant vacancy - PHOTO: REUTERS

[SINGAPORE] As dusk descends upon the Singapore skyline, the excess capacity building up in the private housing market is evident. Dark patches in some condominium developments completed six to 12 months ago, or even longer, point to significant vacancy.

Analysts cite a host of factors, including strong investment demand for real estate after the global crisis, escalation in private home completions of late, and slower expatriate inflow. Vacancies are set to climb and rents fall in general. Suburban locations, where most of the supply is, will be the worst hit.

After the global crisis, investors sought refuge in trusty assets such as real estate. Fuelled by the low interest rate environment, some took to hoarding property at new launches and are hence not bothered whether they can find a tenant after taking possession of their units, say observers. Some high net worth foreign buyers treat their Singapore property as a holiday home and leave it unoccupied most of the time.

But there are others who leave units vacant because they are not able to find tenants. As Ms Lee notes: "Competition for tenants is increasingly intense, with both demand and supply factors at work. On the demand side, changes in labour policies have slowed down the flow of foreign professionals into Singapore while on the supply side, there is a higher-than-average number of private home completions."

JLL national director Ong Teck Hui highlights that "those who bought for rental returns would find themselves in a more competitive leasing market today, where units in mediocre locations would be more difficult to lease and therefore remain vacant for a longer duration, especially during this period of strong supply".

R'ST Research director Ong Kah Seng says that, due to low rents, some owners have left their units empty, especially the cash-rich set who did not take any housing loan for their purchase. "A vacant unit may deteriorate faster but leasing it out at a low rent may not be feasible since it will incur high maintenance costs. High-end properties have the finest finishes, so maintenance and repair costs may be hefty. Selected fit-outs and finishings such as tiles may be of limited collection and difficult to replace if it is damaged by the tenant."

Developers left with unsold units, especially in the slow high-end segment, also contribute to vacancies as these projects are completed. Other factors may also be at play in specific projects. But the overall trend of rising vacancies and softening rents is clear amid climbing private home completions since last year.

The 13,150 private homes that received TOP last year was 27.3 per cent above the previous year's 10,329 and 40 per cent above the past 10-year average of 9,395. The figure for Q1 this year was 4,114 and the full-year tally is expected to hit 17,138, based on estimates submitted by developers to the Urban Redevelopment Authority. Thereafter, completions are slated to climb further to 21,738 next year and 26,252 in 2016 before easing the following year.

URA figures show that the pool of vacant private homes has risen to 19,284 at end-Q1 2014 from 18,003 at end-Q4 2013 and 14,532 at end-Q1 2013. The islandwide vacancy rate rose to 6.6 per cent at end-Q1 this year from 6.2 per cent a quarter earlier and 5.2 per cent at end-Q1 2013.

Rising vacancies have been accompanied by softening rentals. For the first time since Q3 2009, URA's private home rental index contracted in Q4 last year. The index dipped 0.5 per cent quarter-on-quarter, followed by a further 0.7 per cent drop in Q1.

CBRE predicts a 5-8 per cent drop in rents generally this year. JLL predicts a 4-8 per cent decline; Century 21's Mr Ku reckons competition for tenants will drive rents down by 8-10 per cent, followed by a further drop of up to 25 per cent in 2015.

Against the backdrop of the large supply, says DTZ's Ms Lee, some landlords could become more flexible on their rents, particularly after the removal of the vacancy tax refund with effect from Jan 1, 2014. "Landlords now have to pay property tax on their vacant units and some may accept a lower rent and have the unit rented out instead of leaving it empty."

This could create downward pressure on rents.

JLL's Mr Ong predicts the vacancy rate could be around 7-9 per cent at end-2014.

Mr Ku reckons vacancy will head towards 7.5-8 per cent mid to late next year, adding that price drops are likely to be limited to 5-10 per cent per year - assuming the economy is fine.

Competition for tenants is likely to be more intense in suburban projects, as the bulk of completions last year as well as the potential supply pipeline are in Outside Central Region (OCR). URA's Q1 rental index for non-landed private homes in OCR was down 2.3 per cent from a year ago. This compares with a decline of 0.3 per cent for Core Central Region (CCR) and a rise of one per cent in Rest of Central Region (RCR).

Of the 67,507 homes under construction at end-Q1, about 59 per cent were in OCR, 22 per cent in RCR and 19 per cent in CCR. Four years earlier, of the slightly over 36,000 units under construction, the respective shares were 30, 36 and 34 per cent, notes JLL's Mr Ong. "The heavy buying in OCR in the past few years has resulted in units under construction in this submarket surging 270 per cent over the past four years. While it is true that a high proportion of purchases in OCR is for owner-occupation, the level of investment purchases in the past few years has also been substantial.

"Based on rental contracts registered last year, OCR's share of the leasing market was about 31 per cent. Hence, the disproportionate oncoming supply may be expected to impact on this submarket more significantly."

Ms Lee, too, expects a bigger impact on rents and vacancy rates in the suburbs, "although rental demand will still be supported by budget-conscious foreign professionals as the rental quantum for suburban condos is lower than city-fringe or prime condos".

seletar

02-10-14, 14:45

http://www.channelnewsasia.com/news/singapore/property-buyers-should-consider-future-i/663538.html

Property buyers should consider future interest rate hikes: Khaw

https://www.youtube.com/watch?feature=player_detailpage&v=ShGdgykCDiI

SINGAPORE : National Development Minister Khaw Boon Wan has urged those who might be looking to buy property to take into account future spikes in interest rates.

Speaking during a dialogue with young Singaporeans, he also cautioned buyers not to over-commit.

He explained that the current low interest rates for home loans will not last forever, and the eventual rate may be many percentage points higher than it is today.

He also offered advice for property buyers.

Mr Khaw said: "They assume two things. Property prices will keep going (up). Two, interest rates will keep on remaining low. Both are wrong and therefore one day, both will collapse on them. So, if you are over-committed, let's say you can only afford a 3-room flat, (but) you decide to buy five room flat. Yes, based on today's interest rates you can afford a five-room flat. But, when interest rates go up as it will, you will no longer be able to afford a five-room flat and what will happen, your bank will start calling you up to please top up or sell your flat and that's when trouble starts."

In addition, Mr Khaw said the high property prices will not last in the long run.

He added: "Only when you can get enough buyers who can afford, will prices stay up, if not they will come down. Today because of low interest rates, this bubble is being pushed up and sustained longer than it should have. So, it will collapse in a matter of time and therefore do not think that prices will keep on going up."

seletar

02-10-14, 14:52

http://sbr.com.sg/residential-property/news/chart-day-see-massive-spike-in-singapore%E2%80%99s-home-vacancy-rate#sthash.5cTD3PpO.dpuf
Published 12 Jun 2014

Chart of the Day: See the massive spike in Singapore’s home vacancy rate

http://sbr.com.sg/sites/default/files/news/GraphTHURS.PNG

Large oversupply looms over private developers.

Analysts fear that the government’s efforts to scale down residential supply may not be enough to avert a looming oversupply in 2015 to 2017.

A report by Barclays Research noted that the vacancy rate could hit 9.9% by 2016 assuming an annual demand of 15,500 units

According to Barclays Research, “We believe this is testament to the looming oversupply in 2015-2017 as the government reiterated the reduced future supply will be ‘added to the existing large pipeline supply of more than 90,000 private residential units (including ECs)’.”

Here’s more from Barclays:

Private housing (including ECs) on the Confirmed List for 2H14 is down 15% h/h and 34% y/y to 3,915 units. The bulk of the supply is now made up by the Reserve List, which has also been scaled down and which is unlikely to be triggered for sale should market conditions continue to deteriorate.

We maintain our negative stance on the Singapore residential sector as we see an oversupply of private housing properties and expect prices to fall 20% by 2015E in view of an expected interest rate rise, coinciding with peak supply, and think the vacancy rate could reach a record 10% by 2016E.

seletar

02-10-14, 14:59

http://www.businesstimes.com.sg/premium/top-stories/concern-over-indebtedness-singapore-asia-20140621
Business Times
Published June 21, 2014

Concern over indebtedness in Singapore, Asia

THE surge in household debt in Singapore over the past six years - measured as a ratio to gross domestic product (GDP) - has outpaced that of the United States during the run-up to the global financial crisis, a fresh HSBC report has shown.

This reflects overarching wariness that any tightening through regulations or a rise in interest rates would have more impact in this part of the world now than before, though analysts have indicated that the current addiction to debt in Asia is unlikely to spark a credit crisis in the region.

Singapore joins Thailand in registering a jump in household debt to GDP ratios between 2007 and 2013 that is bigger than that of the US for the period between 2001 and 2007, HSBC's note said. Economists measure household debt against GDP as one way to show the extent that economic growth can cover the amount of debt racked up.

"Household debt may not be as big a systemic financial risk as it was in the West, but it highlights a potential growth problem in Asia: without it, how resilient would consumption spending really be?" said HSBC economist Frederic Neumann in the report.

Other analysts have earlier flagged concerns over Asian debt. In February last year, S&P's analyst, Tan Kim Eng, noted in a report that loose monetary conditions may be "magnifying financial and economic risks".

"The conditions that supported robust economic growth in the region could turn less supportive in the future. In the current circumstances, a lack of regulatory vigilance could create possible financial instability," Mr Tan said.

But he also argued that debt-to-GDP ratios can overstate financial risk in some economies, particularly for financial centres such as Singapore and Hong Kong.

For example, companies may take loans from domestic banks to invest abroad, and these projects may not count towards the home economy's GDP.

OCBC, which has the second-largest construction loan book in Singapore, said earlier this year that more property developers are taking loans from the bank for projects in London and Australia.

In a comparison of Singapore and Hong Kong, Barclays analyst Sharnie Wong said in a March report that Singapore banks have shown greater discipline in pricing loans.

In Singapore, personal loans - excluding those for housing - are typically secured against collateral, and the size of unsecured lending is restricted based on the individual's income.

A person who earns more than $30,000 a year can be offered an unsecured loan of about four times his monthly salary. The bank may raise this ratio for a person who earns at least $120,000 a year.

And, Singapore is now reviewing rules for money-lending - usually for unsecured loans - and will look at, among other things, the cap on the total of such loans taken by each borrower.

By contrast, personal loans in Hong Kong are mostly unsecured, since lending rates can be as low as 2 per cent, and loan size can be up to 18 times of monthly income, Ms Wong said.

In Singapore, household debt-to-GDP ratio stood at about 75 per cent last year. This is higher than Hong Kong's 62 per cent, though for Hong Kong, that is its historic high.

Over here, the debt ratio had breached the 90 per cent mark in 2002 and 2003, and household debt has since eased after the government introduced a borrowing cap for property loans, known as the total debt servicing ratio, Ms Wong said.

Housing loans in Singapore make up about three-quarters of all consumer loans, which stood at $228 billion in April.

S&P's Mr Tan noted high domestic saving rates for some parts of Asia offer a buffer against rising debt. He also highlighted that Asia's total leverage - which includes debt from the public and private sectors - remains "well lower" than in much of Europe, given the relatively lower government borrowings.

There are now brewing concerns over China's government debt, though this is mainly focused on local government debt, Mark Austen, CEO of Asia Securities Industry and Financial Markets Association, a finance-trade body, told BT in an interview.

China's overall local-government debt stood at 17.9 trillion yuan (S$3.6 trillion) - or about a third of its GDP - for the first six months through to June last year, said media reports that cited China's National Audit Office figures.

Arcachon

02-10-14, 15:04

Property Bubbles, Bank Bubbles, all bubbles.........

Let see.

1. 2 Bedroom bought at SGD 535,000 in 2006. Now valuation at SGD 1,500,000 in 2010.
2. 3 Bedroom bought at SGD 1,305,800 in 2011.
3. 5 room HDB bought at SGD 250,000 in 1995. Valuation at SGD 640,000 in 2014
4. 3 room HDB bought at SGD 65,000 in 1995 now SGD 300,000

Price can drop how much ?????

Quick, go and sell and Bank all your money in the Bank......

OR

MTB it's party time, go out and buy.........

seletar

02-10-14, 15:06

http://www.stproperty.sg/articles-property/singapore-property-news/mortgagee-sales-touch-quarterly-high-in-q2/a/169687

Mortgagee sales touch quarterly high in Q2

Trend seen gaining momentum due to rising supply of homes, weaker rental market

The Business Times - June 24, 2014

[SINGAPORE] The number of properties up for auction by mortgagees (or lenders) as well as their share of the number of properties going under the hammer has hit a quarterly high in Q2.

Auctioneers say this reflects the difficulty that financially stretched borrowers face in securing buyers for their properties since the implementation of the total debt servicing ratio (TDSR) framework a year ago. Because of this, financial institutions have had to repossess more properties and put them up for auction.

The trend is expected to gain momentum as the rising supply of non-landed private homes will make it harder for mortgagors (or borrowers) to find buyers and thus dispose of their properties themselves - resulting in more properties ending up as mortgagee sales.

Furthermore, the reduced inflow of expats into Singapore is shrinking the pool of potential tenants, hitting rental incomes and hurting owners' ability to service their loans.

Figures from Colliers International show that this quarter, 42 mortgagee sale properties have been put up for auction - almost double the 22 in Q1 this year. In Q2 2013, the figure was just six properties.

The latest figure is the highest since Q3 2009, when 63 mortgagee sale properties landed on the auction block. The first-half tally of 64 was double the 32 for the whole of last year - and also a big jump from 24 in 2012 and 39 in 2011.

In H1 this year, the number of properties put up for auction by owners was 192, down from 226 in the same year-ago period.

As a result, while the owner sales' share of properties put up for auction has dropped from 93.4 per cent in full-year 2013 to 75 per cent in H1 2014, the mortgagee sales' share has risen from 6.6 per cent to 25 per cent. On a quarterly basis, the mortagee sale share has doubled from 16.7 per cent in Q1 this year to 33.9 per cent in Q2 - the highest level since the 35.5 per cent share in Q1 2008 during the global crisis.

Colliers' analysis took into account information as at June 19 from auction lists for the major houses for the month of June. While DTZ conducted its auction last Thursday, Colliers, Knight Frank and JLL will conduct theirs this week.

JLL's analysis shows that for January-May this year, 13 properties (both owner and mortgagee sales) were sold for a total of nearly $26.2 million at auction. Of this, the mortgagee sales accounted for nine properties which fetched $12.8 million.

For the whole of last year, 21 properties amounting to $99.6 million were sold at auction, of which 10 properties totalling $12.6 million involved mortgagee sales.

Typically, financial institutions provide some leeway to borrowers who are experiencing difficulty servicing their mortgages by giving them the first crack at finding a buyer as owner sales tend to fetch a higher price compared with a mortgagee sale which is often seen as distressed. However, the implementation of TDSR has made it difficult for potential buyers to obtain credit.

"More buyers have also chosen to stay on the sidelines with a view that prices will start to ease," noted JLL's head of auction and sales, Mok Sze Sze.

As a result, said Colliers' deputy managing director Grace Ng, banks have little choice but to respossess such properties - resulting in the increase in mortgagee sale properties surfacing at auctions.

She added that due to exuberance at private housing launches in the past few years, many buyers bought uncompleted properties "off plan" with the non-savvy ending up with units that have undesirable orientation or layout. Such owners now face difficulty finding buyers and tenants.

While the majority of mortgagee properties ending up on the auction block are residential, there are also signs of an increase in strata industrial units, notes Ms Mok.

Going by Colliers' analysis, nearly 63 per cent of the mortgagee sale properties that have been put up for auction in the first six months are residential properties, followed by a 17.2 per cent share each for industrial and retail properties.

Colliers' auction tomorrow will feature a mortgagee sale property at Turquoise condo in Sentosa Cove. The 2,777-sq-ft four-plus-one bedroom unit previously surfaced at an auction on April 30. It was withdrawn without bids at the opening price of $5 million.

Another mortgagee property to be featured at the same auction is a third-floor unit at the freehold Stevens Court. The 2,863-sq-ft unit has five bedrooms. JLL's auction on Thursday will feature mortgagee sale units at VisionCrest Residence, Residences@Killiney, The Floravale in Westwood Avenue and a shop unit at 116 Yio Chu Kang Road. At Knight Frank's auction today, a mortagee sale of a two-bedder at Dover Parkview is expected to go under the hammer.

Sharon Lee, head of auctions at the firm, advises those having problems servicing loans to be realistic. Given the buyer's market today, one has to be aware that potential buyers would be anticipating price corrections - instead of sticking to the last transacted price in the project some time ago, she said.

lajia

02-10-14, 15:15

Ah B is back big time...

seletar

02-10-14, 15:15

http://sbr.com.sg/residential-property/news/chart-day-graph-rubs-ugly-truth-about-home-supply-in-everyones-faces#sthash.j3RXdA82.dpuf
Published 25 Jun 2014

Chart of the Day: This graph rubs the ugly truth about home supply in everyone's faces

http://sbr.com.sg/sites/default/files/news/completion.JPG

We've all been warned.

Analysts have long been getting the jitters from looming housing oversupply, and now these nightmares of supply glut are coming true.

According to OCBC, including HDB, DBSS and EC completions, we anticipate that 50.0k, 49.7k and 73.6k homes will come into the physical supply in FY14, FY15 and FY16, respectively.

Here's more from OCBC:

Assuming a 6.0m population target by 2020 from the latest Population white paper, we forecast average population growth at ~86k individuals per annum from 2014-20.

Assuming a conservative 3 persons per household, this translates to an incremental demand of ~29k physical homes per year, which points to a fairly clear physical oversupply situation ahead.

We saw the URA residential price index fall 1.3% and 0.9% in 1Q14 and 4Q13, respectively, after nine quarters of sub-2% appreciation before that.

The mood of the market has been increasingly cautious after the latest TDSR requirements and we believe that significant headwinds, i.e., a physical oversupply situation over FY14-16 and an anticipated interest rate uptrend after mid-FY15, will likely keep the market on its back foot

Arcachon

02-10-14, 15:17

Welcome back AH B.......

seletar

02-10-14, 15:26

http://sbr.com.sg/residential-property/news/we%E2%80%99re-sale-high-end-ccr-property-prices-continue-steep-drop-in-q2#sthash.K64EBqbj.dpuf
Published 02 July 2014

We’re on sale: High-end CCR property prices continue steep drop in Q2

More property buyers are fleeing from expensive properties in the Core Central Region. Data released by the URA today revealed a steep price decline in the CCR for 2Q14, with more decreases expected in the latter half of the year.

According to Knight Frank, the decline is caused by increasingly price-sensitive homebuyers and the government’s property cooling measures.

“With the property cooling measures and the TDSR framework reining in buying momentum, lacklustre buying sentiment is likely to persist in the near term. With homebuyers becoming increasingly price-sensitive and discerning in their purchases, developers would need to review their pricing and marketing strategies in order to move units. The downward fall in prices could continue into the second half of 2014,” stated the report.

Here’s more from Knight Frank:

Property prices in all non-landed private residential market segments fell, with the largest decline seen in the high-end market in the Core Central Region (CCR). Prices fell by 1.5 per cent q-o-q, marking its fifth consecutive quarter of decline. On a y-o-y basis, prices have fallen 4.8 per cent.

Based on caveats lodged data as at 1st July 2014, the steeper price decline seen in the CCR for 2Q 2014 could be due to falling new sale and resale prices of high-end properties in Districts 1 and 2, which saw more than 10 per cent q-o-q decline in prices.

Private home prices in the CCR are expected to fall by another 1 to 2 per cent per quarter in the next half of the year, with an estimated 4 to 8 per cent y-o-y decline in 4Q 2014.

walkthetiger

02-10-14, 15:28

http://www.channelnewsasia.com/news/singapore/property-buyers-should-consider-future-i/663538.html

Property buyers should consider future interest rate hikes: Khaw

SINGAPORE : National Development Minister Khaw Boon Wan has urged those who might be looking to buy property to take into account future spikes in interest rates.

Speaking during a dialogue with young Singaporeans, he also cautioned buyers not to over-commit.

He explained that the current low interest rates for home loans will not last forever, and the eventual rate may be many percentage points higher than it is today.

He also offered advice for property buyers.

Mr Khaw said: "They assume two things. Property prices will keep going (up). Two, interest rates will keep on remaining low. Both are wrong and therefore one day, both will collapse on them. So, if you are over-committed, let's say you can only afford a 3-room flat, (but) you decide to buy five room flat. Yes, based on today's interest rates you can afford a five-room flat. But, when interest rates go up as it will, you will no longer be able to afford a five-room flat and what will happen, your bank will start calling you up to please top up or sell your flat and that's when trouble starts."

In addition, Mr Khaw said the high property prices will not last in the long run.

He added: "Only when you can get enough buyers who can afford, will prices stay up, if not they will come down. Today because of low interest rates, this bubble is being pushed up and sustained longer than it should have. So, it will collapse in a matter of time and therefore do not think that prices will keep on going up."

Wise advice

seletar

02-10-14, 15:31

Arcachon

02-10-14, 15:32

Already consider, also consider how fast your money is depreciating in the Bank.

Arcachon

02-10-14, 15:34

http://sbr.com.sg/economy/news/chart-day-take-look-worrying-drop-in-singapore%E2%80%99s-domestic-deposits#sthash.ggg0PEst.dpuf
Published 02 July 2014

Chart of the Day: Take a look at the worrying drop in Singapore’s domestic deposits

http://sbr.com.sg/sites/default/files/news/GRAPH_July%202.PNG

This is the first decline since 2003.

Banks are getting wary of Singapore’s shrinking deposit pool, and they might hike up everyone’s funding costs in the process.

According to CIMB, the year-on-year decline in domestic deposits revealed in Singapore’s May banking statistics has not been seen since the SARS epidemic in 1Q03.

“A worrying trend that appeared in May is that DBU deposits shrank (-0.8% mom, -0.2% YTD), led by an outflow of fixed deposits. We have to go back to as far as Mar 03 (SARS) to find a yoy decline in system deposits. As loan growth continues to outpace deposit growth, DBU LDR is up (May:111%, Apr:109%), so is S$ LDR (May:84%, Apr: 83%),” reported the CIMB.

Here’s more from the report:

A shrinking deposit pool is worrying as banks will have to compete aggressively for a shrinking pie, hiking up funding costs for all.

The concern is accentuated with the new LCR requirements, especially for the foreign banks who need to offer attractive rates to compete.

If higher rates merely poached time deposits from the local banks, it would not be a worry. However, recent CASA packages suggest that the local banks are equally wary of CASA slippage.

Before QE nobody know you can just change saving account to checking account, after QE every Central Bank know how to change the money from saving account to checking account.

http://www.financialsense.com/contributors/matthew-kerkhoff/qe-printing-money-inflation

On Money Demand & QE
BY CULLEN ROCHE · THURSDAY, NOVEMBER 21ST, 2013
One topic that seems to confuse a lot of people is the way that QE increases the broad money supply. This excellent post by Ramanan gets into the heart of the matter and I love the way Ramanan explains things here. In case you have no idea what I am talking about – QE adds to the broad money supply of bank deposits when banks buy bonds from the non-bank public and on-sell them to the Fed. There’s an appearance that Fed is determining the money supply here. But this is a lot less impactful than most people think and it’s because this idea of “money” is less important than some people think.

When QE occurs with a non-bank the non-bank receives deposits and the Fed takes a T-bonds onto its balance sheet (you can see all the accounting steps here). At its most basic level this is an asset swap where the composition of the private sector’s stock of assets changes. And that’s really the key here. If you’re like most people in the world and your spending is a function of income relative to desired saving then QE doesn’t really change the aggregate private sector’s spending habits (outside of wealth effects and things like that) because QE is a lot like taking a savings account and swapping it out for a checking account. Would you suddenly alter your spending habits if you had a CD that came due and you were suddenly more liquid? No, you’d consider the new liquid deposits within your broader saving and income stream. Basically, people obsess over this concept of “money” a bit too much and how it impacts QE. And that has ended up causing a lot of silly hyperinflation predictions and whatnot….

http://pragcap.com/on-money-demand-qe

seletar

02-10-14, 15:36

http://sbr.com.sg/economy/news/singapore-faces-credit-meltdown#sthash.qOe5ZXIu.dpuf
Published 02 July 2014

Singapore faces a credit meltdown

http://sbr.com.sg/sites/default/files/news/debtgdp.PNG

Debt levels higher than the US pre financial crisis.

Singapore and other Asian countries are facing an economic crisis of the same proportions as the US financial meltdown that put the world’s economies to its knees. Singapore and many Southeast Asian countries have already surpassed US debt-to-GDP ratio. There is no sign of that growth slowing down. This is eerily similar to the financial conditions that pre-dated the American collapse, and economists are deeply concerned.

According to Duncan Woolridge of UBS, “China, North Asia, Hong Kong, Singapore, Thailand, and Malaysia stand out based on levels of leverage alone as at risk. This trend appears unsustainable and a reversal on the horizon should be expected, though we do not claim to know the exact day that will unfold.”

Here’s more:

Liquidity risk matters as much as leverage. UBS expects the Fed to hike 25bps in mid-2015 and raise Fed Funds to 1.25% by end 2015.

Countries with current account deficits, high loan to deposit ratios, or completely open capital accounts should find it difficult to grow deposits fast enough to sustain the current pace of credit growth, in our view.

Aggressive reform is urgently needed, in our view, unless exports can bail out the region. Unit labor costs (ULCs) have been rising because of weak exports, which is mainly a function of weak DM economic growth.

Asian policies generally aim to prevent unemployment from rising and to sustain wage growth when exports slow. They have largely succeeded at this, but the result is rising ULCs and that means real effective exchange rates appreciate.

That's ok as long as DM demand recovers soon, exports return to strong growth, and ULCs stabilize. However, we still think that export growth on a volume basis will remain perhaps 40-50% below pre-crisis even assuming better exports to DM going forward.

This means no relief for ULCs and real exchange rates should appreciate, but of course they cannot appreciate ad nauseam without a loss of competitiveness and trade deficits.

Arcachon

02-10-14, 15:42

http://www.tradingeconomics.com/singapore/money-supply-m3

seletar

02-10-14, 15:44

http://business.asiaone.com/news/moodys-bad-loans-risk-local-banks#sthash.57sLRgEr.dpuf

Moody's: Bad loans risk up for local banks

http://business.asiaone.com/sites/default/files/styles/medium/public/2014/06/24/20140624_sgbanks_reuters.jpg

The Straits Times
Wednesday, Jul 09, 2014

Ratings agency Moody's Investors Service has retained its negative outlook on Singapore's banking system over the next 12 to 18 months, it said yesterday.

The agency expects that a surge in lending by Singapore banks in recent years will raise the risk of problem loans when interest rates rise.

"Because the banks have rapidly grown both their domestic and cross-border loans in recent years, we expect a moderate increase in problem loans, as interest rates rise... and as asset prices are likely to fall," said Eugene Tarzimanov, vice-president and senior credit officer at Moody's.

"As a result, the banks will face a modest increase in their credit costs over the next 12-18 months," he added.

But Mr Tarzimanov expects the problem loans of Singapore banks this year and next year to "increase only moderately", noting that such loans made up just 1 per cent of all loans here at the end of last year.

Banks' foreign loans are more likely to be at risk than domestic loans, he added.

seletar

02-10-14, 15:51

http://www.stproperty.sg/articles-property/singapore-property-news/more-buying-smaller-private-units/a/171779/page3/1

More buying smaller private units

The Straits Times - July 10, 2014

SOARING prices and home loan curbs are forcing increasing numbers of buyers to turn to ever smaller homes as they struggle to get on the property ladder.

The median size of private homes sold dropped to 947 sq ft in the period from July last year to June this year, according to STProperty. This is slightly smaller than a Housing Board (HDB) four-room flat, which is typically around 969 sq ft.

STProperty, which looked at all private home transactions, including new sales and resales, also found 40 per cent of units sold over the past 12 months have been no bigger than 800 sq ft, which is the typical size of a one- or two-bedroom condominium unit.

The 947 sq ft figure was 3.3 per cent smaller than the median size of 979 sq ft in the first half of last year, before a total debt servicing ratio (TDSR) framework was imposed. TDSR, which took effect in late June last year, restricts a borrower's monthly debt repayments to at most 60 per cent of his gross monthly income. This has driven many buyers to aim for smaller homes with cheaper total prices.

The effect of TDSR on home sizes was even more pronounced within the new sales market.

The median floor area of new homes bought from developers in the past 12 months was just 753 sq ft, according to caveats lodged with the Urban Redevelopment Authority. That was 12.5 per cent smaller than the median size of 861 sq ft in the first six months of last year before TDSR was imposed.

A run-up in property prices per sq ft (psf) since 2009 after the global financial crisis has also played a part in shrinking private home sizes, STProperty said yesterday.

Non-landed home prices jumped 56.2 per cent from the second quarter of 2009 to the third quarter of last year, which was the peak, according to URA figures.

Coincidentally, the median size of private homes sold has been steadily declining since 2009 when the figure was 1,227 sq ft, STProperty noted in its report.

"While the TDSR framework is working well to ease home prices, the shrinking home size is another area that the Government might closely monitor... There are certain social implications should small homes become a norm in Singapore," said STProperty analyst Jason Chen.

seletar

02-10-14, 15:54

http://sbr.com.sg/residential-property/in-focus/two-year-low-hdb-price-index-slides-61-in-june#sthash.D2aQIhLV.dpuf
Published 10 July 2014

Two-year low: HDB price index slides by 6.1% in June

Resale prices continue their 5-month slide.

The government’s property cooling measures are really working out, judging by the two-year low in HDB’s price index in June. According to the Singapore Real Estate Exchange (SRX), HDB prices have dropped by 6.1% prices have dropped from June 2013.

The SRX HDB Flash Report for June 2014 showed that prices have dropped by 6.8% compared to peak levels in Apr 2013. Resale volume remained flat and rental prices dropped by 1.1%, while rental volume also fell by 2%.

“Overall, HDB resale prices slipped 0.6% in June compared to May. The price drop is evident in 3,4,5-room flats which saw a decline of 0.6%, 0.8%, and 0,3% respectively. Executive flats on the other hand experienced a 1.3% increase in price. However, compared to its peak in Feb 2013, Executive flats showed a decline of 5.1%,” the report stated.

Here’s more from SRX:

According to HDB resale data compiled by SRX, 1,315 HDB flats were sold in June's resale market. June's volume remained relatively flat from May's 1,320 transacted units.

On a year-on-year basis, June's resale volume is also relatively flat compared with 1,325 units resold in the same month of last year. Comparing to the peak where 3,649 units were resold in May 2010, the volume is still down by 64.0%.

An estimated 1,590 HDB flats were rented in June 2014, a 2.0% decrease from May's 1,622 units. On a year-on-year basis, June's rental volume was 0.9% higher than the same month of last year in which 1,576 units were rented.

Overall HDB rental prices decreased by 1.1% in June compared to May, reaching a new low since Jan 2012. 4,5-room flats and executive flats softened by 1.7%, 1.3% and 1.1% respectively, while 3-room flats saw a slight 0.1% price increase.

On a year-on-year basis, overall rental prices in June 2014 are down 3.4% from the same period last year.

seletar

02-10-14, 15:57

http://sbr.com.sg/residential-property/news/striking-bargain-private-residential-resale-prices-hit-18-month-low-in-jun#sthash.69hYHb5z.dpuf
Published 14 July 2014

Striking a bargain: Private residential resale prices hit 18-month low in June

Prices slipped in all three regions.

Homeowners who are thinking of re-selling their property must brace themselves for thinner and thinner profits. Overall resale prices of non-landed private homes continued their steady decline in June, reaching an 18-month low as prices fell islandwide.

According to the Singapore Real Estate Exchange’s Private Residential Flash Report, private resale prices fell by 1.4% month on month in June, a record low since December 2012. But compared to the recent price peak in Jan 2014, June prices are 4.7% lower.

15 out of 24 of districts also saw negative median transaction over x-values. This means that majority of the non-landed private property buyers last month in these districts purchased their units below what other buyers who came before them paid for in similar units.

For districts with more than 10 resale transactions in the month of June, district 15 (Katong, Joo Chiat, Amber Road) and 10 (Bukit Timah, Holland Rd, Tanglin) had the lowest median TOX at -$50,000 and -$37,000 respectively.

“An estimated 452 resale transactions were registered in the month of June, a 7.9% increase month-on-month. On a year-on-year basis, resale volume posted a 23.8% drop compared to 593 units resold in the same month of last year. Compared to the peak when 2050 units were resold in April 2010, the volume was still down by 78.0%. Since beginning of the year, resale volume has gone up by 53.7%,” the SRX noted.

On a regional basis, prices fell in all 3 regions. Rest of Central Region (RCR) led the fall by a 3.2% decrease, followed by prices in Core Central Region (CCR) and Outside Central Region (OCR) which dropped 1.7% and 0.3% respectively.

seletar

02-10-14, 16:00

http://www.todayonline.com/business/new-private-home-sales-plunge-68-june

New private home sales plunge 68% in June

TODAY
Published: 1:14 PM, July 15, 2014

SINGAPORE — The private housing market returned to the doldrums in June after a burst of activity in the previous months, with developers scaling back new launches in the traditionally slow period.

Developers sold 482 new private homes last month, 68 per cent lower than the 1,488 units that were sold in May, latest data by the Urban Redevelopment Authority (URA) showed today (July 15).

The lacklustre sales performance came as developers launched only 418 new units, compared to 1,819 homes in the previous month.

Coco Palms at Pasir Ris Grove was the top selling project of the month with 55 out of the 100 units launched snapped up at a median price of S$1,014 per square foot (psf).

The Panorama at Ang Mo Kio, which was re-launched at a lower price in May, moved another 49 units at a median of S$1,287 psf, making it second best-selling project in June.

seletar

02-10-14, 16:05

http://www.stproperty.sg/articles-property/singapore-property-news/more-failing-to-repay-mortgages-on-time/a/172935

More failing to repay mortgages on time

Experts cite slightly higher jobless rate, property market correction

The Straits Times - July 19, 2014

MORE private home owners are not making their mortgage payments on time, figures from the Credit Bureau of Singapore show.

The number of borrowers with delinquent mortgages - accounts that have not been paid for more than 30 days - hit 4,186 in May, up 20 per cent from the 3,340 a year earlier, the Credit Bureau told The Straits Times.

Delinquent borrowers comprised 0.82 per cent of private home loans in May, up from 0.7 per cent in the same month last year.

But there was a much smaller increase in the number of mortgage defaults. Banks wrote off six mortgages in the first five months of the year, a touch up from the five bad loans over the same period last year.

The Credit Bureau does not decide on the status of a mortgage, it said, but banks typically consider accounts with payments that have been overdue for 90 days or more as a defaulted loan.

However, industry players noted that the decision to repossess a property varies among banks.

Although the percentage rise in the number of delinquent accounts was more than the increase in total private home loans, experts note that the figures are not yet alarming.

Mr Alvin Liew, senior economist at United Overseas Bank, said: "It's good to pay attention to the numbers, but it's too early to conclude that this is the start of a major problem."

Loan curbs, known as the Total Debt Servicing Ratio (TDSR), were introduced in June last year to stop home buyers from overstretching themselves.

Mr Liew noted that as the figures are cumulative, there could be highly leveraged individuals who took out large loans before the TDSR was introduced.

However, given the stricter loan curbs, the situation is expected to improve, said Mr Liew.

Another possible reason behind the increase in overdue payments could be the slight rise in the overall jobless rate, which increased from 1.8 per cent in December last year to 2 per cent in March.

Mr Song Seng Wun, regional economist at CIMB, pointed out that it could be a reflection of the correction in the property market.

The number of private condominium homes completing this year is expected to hit 17,000, up from 13,150 last year.

As tenants have more options amid a softening market, owners who bought units expecting to finance them with rental income could find themselves burdened instead, Mr Song said.

Moreover, mortgages are almost fully drawn down upon the completion of a new property, bumping up the monthly payments, he noted.

This underlines the increasing number of properties that were put up for auction by banks.

Earlier reports showed that 42 mortgagee sale properties went to auction in the second quarter, the highest since the third quarter of 2009, when 63 homes were up for a fire sale.

Repayment schemes can be worked out with the bank, said Mr Joseph Wong, head of consumer credit risk at OCBC Bank, but borrowers at risk should inform the bank as soon as possible as a sign of commitment to the loan.

"Some options could include lower repayments to meet a temporary change in their financial position," added Ms Lui Su Kian, managing director and head of deposits and secured lending at DBS Bank.

seletar

02-10-14, 16:11

http://www.businesstimes.com.sg/premium/singapore/developers-pessimism-deepens-q2-20140723

Developers' pessimism deepens in Q2

Rising construction costs, inflation, interest rates seen roiling market

Business Times
Published July 23, 2014

DEVELOPERS are more pessimistic about the property market in the coming six months, citing rising cost of construction, inflation, and interest rates as factors that will likely have an adverse impact on market conditions.

The NUS-Redas Real Estate Sentiment Index Survey's Future Sentiment Index - which measures sentiments towards the market outlook over the next six months - fell to 3.4 in Q2 compared with 3.9 in Q1.

A score under five indicates deteriorating market conditions while scores above five indicate improving conditions.

Meanwhile, the Current Sentiment Index slipped marginally, from 3.7 in the last quarter to 3.6.

Taken on a year-on-year basis, the Composite Sentiment Index (which measures overall sentiment) was weaker at 3.5 in Q2 compared to 4.5 previously.

Looking ahead into the next six months, the key potential risks are rising inflation/interest rates as identified by 75.4 per cent of respondents and rising cost of construction (63.1 per cent).

Equally worrying is the excessive supply of new property launches and a slowdown in the global economy, which were identified by 53.8 per cent of respondents.

However, 31.7 per cent of developers surveyed said that they expect moderately more residential launches in the coming six months, while 29.3 per cent said that they expect residential launches to hold at the same level.

In terms of unit price change, 26.8 per cent of them anticipate that residential prices will hold in the next six months, up from 26.3 per cent in the previous quarter. Majority of developers still expect unit prices to be moderately less (63.4 per cent compared with 64.8 per cent previously).

Of the various property sectors, prime and suburban residential sectors were the worst performing segments according to the survey.

The prime residential sector showed a current net balance of -72 per cent and a future net balance of -69 per cent; while the suburban residential sector showed a current net balance of -63 per cent and a future net balance of -65 per cent in Q2.

The current and future net balance percentage is defined as the difference between the proportion of respondents who have selected positive options and the proportion who selected negative options.

teddybear

02-10-14, 16:12

If this condition persist till GE-2016 (or there about), we will know from GE voting results whether majority support lower property prices (which some minority group has been advocating and shouting very loudly) or they support higher property prices......................... :hopelessness:

http://sbr.com.sg/residential-property/in-focus/two-year-low-hdb-price-index-slides-61-in-june#sthash.D2aQIhLV.dpuf
Published 10 July 2014

Two-year low: HDB price index slides by 6.1% in June

Resale prices continue their 5-month slide.

The government’s property cooling measures are really working out, judging by the two-year low in HDB’s price index in June. According to the Singapore Real Estate Exchange (SRX), HDB prices have dropped by 6.1% prices have dropped from June 2013.

The SRX HDB Flash Report for June 2014 showed that prices have dropped by 6.8% compared to peak levels in Apr 2013. Resale volume remained flat and rental prices dropped by 1.1%, while rental volume also fell by 2%.

“Overall, HDB resale prices slipped 0.6% in June compared to May. The price drop is evident in 3,4,5-room flats which saw a decline of 0.6%, 0.8%, and 0,3% respectively. Executive flats on the other hand experienced a 1.3% increase in price. However, compared to its peak in Feb 2013, Executive flats showed a decline of 5.1%,” the report stated.

Here’s more from SRX:

According to HDB resale data compiled by SRX, 1,315 HDB flats were sold in June's resale market. June's volume remained relatively flat from May's 1,320 transacted units.

On a year-on-year basis, June's resale volume is also relatively flat compared with 1,325 units resold in the same month of last year. Comparing to the peak where 3,649 units were resold in May 2010, the volume is still down by 64.0%.

An estimated 1,590 HDB flats were rented in June 2014, a 2.0% decrease from May's 1,622 units. On a year-on-year basis, June's rental volume was 0.9% higher than the same month of last year in which 1,576 units were rented.

Overall HDB rental prices decreased by 1.1% in June compared to May, reaching a new low since Jan 2012. 4,5-room flats and executive flats softened by 1.7%, 1.3% and 1.1% respectively, while 3-room flats saw a slight 0.1% price increase.

On a year-on-year basis, overall rental prices in June 2014 are down 3.4% from the same period last year.

seletar

02-10-14, 16:22

Residential rents continue sinking and private homes vacancy rates continue hiking, now up to 7.1% in Q2 2014.

Developers still have 27,024 private home units unsold.

The overall pipeline supply of private homes + ECs = 102,400 units, huge oversupply on the way to hike the vacancy rate to record high plus interest rates hike coming next year.

http://business.asiaone.com/news/private-home-prices-singapore-continue-fall-q2-ura#sthash.4RexetHs.dpuf

Private home prices in Singapore continue to fall in Q2: URA

The Business Times
Friday, Jul 25, 2014

SINGAPORE - Urban Redevelopment Authority's official private home price index fell one per cent in the second quarter of this year compared with the first quarter.

Here is an excerpt from the press statement by the Urban Redevelopment Authority:

The Urban Redevelopment Authority (URA) released today the real estate statistics for 2nd Quarter 2014.

PRIVATE RESIDENTIAL PROPERTIES

Prices and Rentals

Prices of private residential properties decreased by 1.0 per cent in 2nd Quarter 2014, following the 1.3 per cent decline in the previous quarter. This was the third straight quarter of price decline.

Price decline was observed across all segments of the private residential property market. Prices of non-landed properties in the Core Central Region (CCR) declined by 1.5 per cent, following the 1.1 per cent decrease in the previous quarter. Prices in the Rest of Central Region (RCR) declined by 0.4 per cent, after decreasing by 3.3 per cent in the previous quarter. In Outside Central Region (OCR), prices declined by 0.9 per cent, significantly more than the 0.1 per cent decline in the previous quarter. Prices of landed properties declined by 1.7 per cent, significantly more than the decrease of 0.7 per cent in the previous quarter.

Rentals of private residential properties fell by 0.6 per cent in 2nd Quarter 2014, compared with the 0.7 per cent decline in 1st Quarter 2014.

Launches and Take-up

Developers launched 2,843 uncompleted private residential units (excluding Executive Condominiums, ECs) for sale in 2nd Quarter 2014, compared to1,964 units in 1st Quarter 2014.

Developers sold 2,665 private residential units (excluding ECs) in 2nd Quarter 2014, compared to the 1,744 units sold in 1st Quarter 2014.

No new EC units were launched for sale in 2nd Quarter 2014. Developers sold 154 EC units in 2nd Quarter 2014, compared to the 149 units sold in 1st Quarter 2014.

Resales and Sub-sales

There were 1,314 resale transactions in 2nd Quarter 2014, compared to 941 transactions in 1st Quarter 2014. Resale transactions accounted for 31.9 per cent of all sale transactions in 2nd Quarter 2014, compared to 33.5 per cent in 1st Quarter 2014.

There were 139 sub-sale transactions in 2nd Quarter 2014, compared to 128 transactions in 1st Quarter 2014. Sub-sales accounted for 3.4 per cent of all sale transactions in 2nd Quarter 2014, lower than the 4.6 per cent recorded in 1st Quarter 2014.

Supply in the Pipeline

As at the end of 2nd Quarter 2014, there was a total supply of 76,0143 uncompleted private residential units (excluding ECs) in the pipeline, compared to 80,261 units in 1st Quarter 2014.

Of this number, 27,024 units remained unsold as at 2nd Quarter 2014. After adding the supply of 12,812 EC units in the pipeline, there were 88,826 units in the pipeline.

In addition, another 13,592 units (including ECs) will soon be added to the pipeline supply. These units are from Government Land Sales (GLS) sites that have been awarded to developers, but for which planning approvals had not yet been obtained as at 2nd Quarter 2014; and Confirmed List sites from the 1H2014 and 2H2014 GLS Programmes that have not yet been awarded. If these units are included, there would be about 102,400 private housing and EC units in the overall pipeline supply.

Based on expected completion dates reported by developers, 9,242 units (including ECs) will be completed in the second half of 2014. Overall, 20,023 units will be completed in 2014. Another 24,893 units (including ECs) are expected to be completed in 2015. In comparison, about 14,400 units (including ECs) were completed in 2013.

Stock and Vacancy

The stock of completed private residential units (excluding ECs) increased by 4,715 units in 2nd Quarter 2014. The vacancy rate of completed private residential units (excluding ECs) increased from 6.6 per cent at the end of 1st Quarter 2014 to 7.1 per cent at the end of 2nd Quarter 2014.

seletar

02-10-14, 16:28

http://sbr.com.sg/residential-property/news/chart-day-chart-shows-how-bad-residential-oversupply-can-get#sthash.pJ7i855u.dpuf

Chart of the Day: This chart shows how bad residential oversupply can get

http://sbr.com.sg/sites/default/files/news/fig2.JPG

According to Phillip Capital, over the next 3 years, it would be an oversupply situation within the Singapore residential segment. Inclusive of both public and private sectors, they project the physical completion of 168,200 residential units from 2014 to 2016.

In contrast, they look into the underlying ‘real’ demand that stems from population growth.

Here's more from Phillip Capital:

We estimate that the increase in population will provide take-up of c. 71,400 residential units. Beside the local government intervention in the aforementioned portion, the oversupply situation will be a major factor in the gloomy outlook for residential.

stl67

02-10-14, 16:29

seletar

02-10-14, 16:41

http://www.stproperty.sg/articles-property/singapore-property-news/wary-buyers-shun-completed-homes/a/173906

Wary buyers shun completed homes

Fears of private housing glut, poor rental market hurting sales: Experts

The Straits Times - July 29, 2014
By: MELISSA TAN

http://business.asiaone.com/sites/default/files/styles/medium/public/2014/07/29/20140729_caperoyale_bt.jpg

THE threat of an oversupply of private homes and a poor rental market are deterring home-seekers from buying completed homes, especially in the city centre.

The upscale Districts 9, 10 and 11 account for the bulk of unsold units at completed developments across Singapore, according to data last week.

Consultants said that buyers were still wary of taking the plunge, particularly in the luxury segment, due to a flood of new units entering the market and the increased difficulty in finding tenants.

Private home vacancy rates have reached their highest point since 2006, according to Urban Redevelopment Authority (URA) figures.

Developers appear to be responding by cutting prices further to boost sales in order to avoid penalties for failing to sell all their units by a deadline, consultants added.

Fines are imposed if a builder fails to sell all the apartments in a project within two years of completion, under Qualifying Certificate (QC) rules.

There were 1,412 completed but unsold homes at the end of June - 1,259 condominium units and private apartments, and 153 landed houses - according to the URA last Friday.

The city centre accounted for the bulk of that - about 894 units, or 63.3 per cent - while the city fringe had about 414 unsold units, or 29.3 per cent of the total, said OrangeTee research head Christine Li.

Both areas far outstripped the suburbs, where there were only 104 unsold completed units, or 7.4 per cent of the total.

Ms Li pointed out that the prices of completed homes in the city centre slid 1.9 per cent in April through June from the previous three months, the largest quarterly drop since the second quarter of 2009.

"This could suggest that some developers have started to become skittish and have started to cut prices in order to move units to avoid QC fines."

Still, buyers will likely stay on the sidelines partly due to rising vacancy rates and a possible supply overhang in the near future, consultants said.

The islandwide vacancy rate for all private homes, including landed housing, climbed from 6.6 per cent in the first quarter of this year to 7.1 per cent in the second - the highest level since the 7.4 per cent recorded in the first quarter of 2006.

City centre homes were the worst hit in the second quarter of this year, with a vacancy rate of 8.5 per cent, said the URA.

R'ST Research director Ong Kah Seng said that owners of some city centre units may have left the apartments empty because they were unable to fetch rents high enough to be cost-effective, given the high maintenance costs.

For instance, tenants may speed up the normal process of wear and tear, or require the landlord to replace some parts of the house, he told The Straits Times. The cost of those repair or replacement work may not be worth the rent in some cases.

"When there are significant 'pitch-dark' condominiums in the prime districts, it will paint a negative picture of lifelessness in Singapore's central region," he added.

Consultants said that a bumper crop of completed homes could weaken the leasing market even further.

JLL Singapore research director Ong Teck Hui pointed out that there were 9,016 private homes completed in the first six months of this year, compared with 13,150 units throughout the whole of last year and 10,329 units over 2012.

Some developers have slashed prices to move remaining units in projects that are substantially sold.

At the freehold The Vermont at Cairnhill, developer Bukit Sembawang had 37 units unsold by the end of June but has managed to move more than 30 this month by cutting prices, according to real estate agents.

Prices per sq ft (psf) were reduced to just over $2,000 psf about two weeks ago, down from the previous average of around $2,400 psf, agents said, making a drop of up to 16 per cent.

Cape Royale in Sentosa had not moved any of its 302 apartments as at the end of June, making it the project with the highest number of completed but unsold units.

Developers IOI and Ho Bee decided to rent out units there instead of selling them.

CapitaLand's The Interlace in Alexandra was next with 180 units left, but that is just 17 per cent out of its 1,040 units in total.

http://news.asiaone.com/static/images/20140729_unsoldunits_stura.jpg

seletar

02-10-14, 16:49

http://www.stproperty.sg/articles-property/singapore-property-news/steady-increase-in-number-of-unsold-private-units/a/173940

'Steady increase' in number of unsold private units

The Straits Times - July 29, 2014

MANY private developments have been launched but remain unloved by buyers as home loan curbs continue to suppress demand.

The number of launched but unsold homes as at the end of June was higher than at the same time the previous year, according to official data last week.

There has been a "a steady increase in unsold units in launched private residential projects" since the middle of last year, when tough restrictions were imposed under a total debt servicing ratio (TDSR) framework, JLL Singapore research director Ong Teck Hui said.

TDSR forces home buyers to tighten their belts because it caps a borrower's monthly total debt repayments at 60 per cent of his gross monthly income.

Mr Ong noted that there were around 5,200 unsold units in launched private residential projects, as at the end of June last year. However, that jumped about 20 per cent to reach around 6,300 units, as at the end of last month, he said.

The Urban Redevelopment Authority does not give a breakdown of launched but unsold units by region.

However, the three projects with the highest number of such units were all in the suburbs, The Straits Times found.

The project with the biggest number of unsold private homes, as at June 30, was The Santorini in Tampines Street 86.

The 99-year leasehold project has launched all 597 units, but has moved only 113, leaving 484 units, or 81 per cent, unsold.

Sales were poor even though its developer, MCC Land, had engaged four real estate agencies to market the project when it was launched in March, a move deemed unusual at the time.

Consultants said prices are still holding buyers back, which is prompting developers like MCC Land to change how they market new launches.

In the past, developers would typically engage only one marketing agency, or two for projects with more than 800 units, but roping in more than two is now par for the course.

The launch of City Gate at Beach Road this month involved six agencies: ERA, PropNex, Knight Frank, Savills, Teakhwa Real Estate and SLP Scotia.

Consultants said that apart from enlisting more agents, developers could try to spend a longer period drumming up interest before the actual launch.

"Developers are likely to adjust the length of their marketing programme," said Mr Joseph Tan, executive director of residential at CBRE.

Developers have also lowered their selling prices below initial market expectations at recent launches, such as City Gate's.

The second-biggest number of launched but unsold units was found at Kingsford - Hillview Peak, in Bukit Batok. The 512-unit project by Chinese developer Kingsford Development has 352 unsold units, or 69 per cent of the total.

In third place was the 420-unit The Skywoods at Dairy Farm Heights by TA Corporation, with 319 launched but unsold units as at end-June.

seletar

02-10-14, 16:55

http://sbr.com.sg/residential-property/in-focus/private-home-supply-glut-hits-14-year-high-in-q2#sthash.u09qqlyT.dpuf
Published 29 July 2014

Private home supply glut hits 14-year high in Q2

http://sbr.com.sg/sites/default/files/news/trap_house_1.jpg

7 out of 10 new units remain unoccupied.

A staggering number of brand-new private homes remain cold and empty across the island, as private home supply hit record levels in Q2 while new take-ups remained painfully lacklustre.

Statistics released by the URA revealed that net new supply reached 4,715 completed units in 2Q 2014. According to Colliers, the last time the net new supply exceeded the 4000-mark was in 2Q 2000.

“Downside pressures from the increase in new home completions continued to weigh on rents of private homes in 2Q 2014. The all private residential property rental index eased by another 0.6% QoQ following the 0.7% fall in 1Q 2014. This exceeded the corresponding net new take-up of 2,731 units by 72.6%. Consequently, the occupancy rate slipped to 92.9% in 2Q 2014 from 93.4% in 1Q 2014,” noted Colliers.

Here’s more from Colliers:

Over the next six months, the air of caution is expected to linger, as long as the punitive cooling measures and stringent loan curbs remain in place.

Developers, though likely to continue to push out their projects, are expected to be more selective with their launches and re-launches.

Prospective buyers and investors are expected to adopt a tentative stance in anticipation of further price declines on the back of various downside risks. Primary home sales which stood at 4,409 units at half-time, could come in at between 7,000 and 9,000 units for the whole of 2014.

Plagued by tepid demand, the lacklustre high-end/luxury segments could witness larger average price declines ranging from 10% to 15% for the whole year. This is following a 5.0% slide in 1H 2014.

seletar

02-10-14, 16:58

http://sbr.com.sg/residential-property/in-focus/flat-glut-developers-grapple-unsold-flats-supply-goes-through-roof#sthash.W4cXOgEI.dpuf
Published 30 July 2014

Flat glut: Developers grapple with unsold flats as supply goes through the roof

Almost 175,000 units are expected in the next 3 years.

Both private condos and HDB flats are increasing at a staggering rate, with almost 175,000 new units expected to crowd the property market within the next 3 years. This in turn will only drag prices further.

According to PropertyGuru’s Outlook Report for H2 2014, a further 65,128 private condos are expected to be completed between this quarter and end 2016, while 108,000 HDB flats will come onstream from 2014 till 2017.

For private developers, the amount of vacant units up for sale is expected to be much larger than this as a result of spillovers from the year before.

“This cycle of remnant units will continue to have a domino effect on prices year- on-year in the long run, adding further pressure on developers to offer discounts and incentives to purchase their projects,” noted the report.

Meanwhile, the large supply of HDB flats market will influence the amount of resale flats in the market in the next 3-5 years.

“Current flat owners are more likely to set their sights on the resale HDB market rather than purchase another BTO. This is because second-time applicants must have a monthly household income of less than $12,000 to qualify for a BTO as well as the fact that they are not as favoured as compared to first-timers with families (70 to 95 percent of BTO flats are set aside for the latter). As such, the effect of higher BTO supply on resale demand is low – at least for the short term,” stated the report.

Arcachon

02-10-14, 17:30

Interest Rates of Banks and Finance Companies
PER CENT PER ANNUM

End of Period Banks Savings Deposits
2014 Jan 0.12
Feb 0.12
Mar 0.12
Apr 0.12
May 0.12
Jun 0.11
Jul 0.11
Aug 0.11
Sep 0.11

Note: Figures refer to average rates compiled from that quoted by 10 leading banks and finance companies.

https://secure.mas.gov.sg/msb/InterestRatesOfBanksAndFinanceCompanies.aspx

ingapore Inflation Continues to Slow in August

Singapore’s annual inflation rate eased to 0.9 percent in August of 2014 from 1.2 percent in July, mainly reflecting a sharper decline in private road transport cost and a more moderate increase in services fees.

In August of 2014, private road transport cost fell by 2.9 percent, following the 1.6 percent correction a month earlier, largely due to lower COE premiums in July. Petrol pump prices also rose at a slower pace of 0.7 percent, compared to 3.1 percent a month ago, on account of the recent weakness in global oil prices. Services inflation edged down to 2.1 percent in August from 2.5 percent in the preceding month, led by more modest increases in the costs of recreation & entertainment and holiday travel. Accommodation cost declined by 0.2 percent after coming in flat in July, given the soft housing rental market. Overall food inflation was slightly lower at 2.9 percent compared to 3.0 percent in July, as the increase in the prices of prepared meals eased. Non-cooked food prices, however, rose at a quicker pace of 3.4 percent compared to 2.8 percent in July, reflecting steeper price increases for seafood and vegetables.

MAS Core Inflation, which excludes the costs of accommodation and private road transport, eased slightly to 2.1 percent in August, from 2.2 percent a month ago, mainly due to the lower contribution from services costs. The government expects MAS core inflation to stay elevated between 2.0 percent to 3.0 percent in 2014.

On a month-on-month basis, the CPI accelerated 0.5 percent in August after a 0.3 percent decline in July mostly due to higher prices of food, largely for seafood, dairy products & eggs and fruits, and increasing costs of services, mainly tertiary tuition fees and household services.

Arcachon

02-10-14, 17:31

http://www.tradingeconomics.com/singapore/inflation-cpi

Actual Previous Highest Lowest Dates Unit Frequency
0.90 1.20 34.00 -3.10 1962 - 2014 Percent Monthly
2009=100
In Singapore, the most important categories in the consumer price index are housing (25 percent of total weight) and food (22 percent). The index also includes: transport (16 percent), education (7 percent), health (6 percent), communication (5 percent) and clothing and footwear (3 percent). Recreation, alcoholic beverages, tobacco and others account for the remaining 16 percent of total weight. This page provides - Singapore Inflation Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. Content for - Singapore Inflation Rate - was last refreshed on Thursday, October 2, 2014.

http://www.tradingeconomics.com/singapore/inflation-cpi

seletar

02-10-14, 21:03

http://www.todayonline.com/chinaindia/china/chinas-bad-dream

China’s bad dream

TODAY - Published: 4:03 AM, August 5, 2014

Since his first address as China’s President last year, Mr Xi Jinping has been espousing the so-called Chinese Dream of national rejuvenation and individual self-improvement.

But the imperative of addressing the unprecedented amount of debt that China has accumulated in recent years is testing Mr Xi’s resolve — and his government is blinking.

The Chinese government’s uncertain ability — or willingness — to rein in debt is apparent in its contradictory commitment to implement major structural reforms while maintaining 7.5 per cent annual gross domestic product (GDP) growth.

Given that China owes much of its recent growth to debt-financed investment — often in projects such as infrastructure and housing, meant to support the Chinese Dream — any effort to get credit growth under control is likely to cause a hard landing.

This prospect is already prompting the authorities to delay critical reforms.

To be sure, China’s debt-to-GDP ratio, reaching 250 per cent this month, remains significantly lower than that of most developed economies. The problem is that China’s stock of private credit would normally be associated with a per capita GDP of around US$25,000 (S$31,200), almost four times the country’s current level.

LESSONS FROM THE JAPANESE EXPERIENCE

There are strong parallels between China’s current predicament and the investment boom that Japan experienced in the 1980s. Like China today, Japan had a high personal savings rate, which enabled investors to rely heavily on traditional, domestically-financed bank loans.

Moreover, deep financial linkages among sectors amplified the potential fallout of financial risk. And Japan’s external position was strong, just as China’s is now.

Another similarity is the accumulation of debt within the corporate sector. Corporate leverage in China rose from 2.4 times equity in 2007 to 3.5 times last year — well above American and European levels.

Nearly half of this debt matures within one year, even though much of it is being used to finance multi-year infrastructure projects.

Making matters worse, much of the new credit has originated in the shadow-banking sector at high interest rates, causing borrowers’ repayment capacity to become overstretched. One in five listed corporations carries gross leverage of more than eight times equity and earns less than two times interest coverage, weakening considerably these companies’ resilience to growth shocks.

To be sure, China’s situation is more extreme than Japan’s. At its peak, Japanese investment stood at 33 per cent of GDP, compared with 47 per cent in China.

This is a substantial difference, especially considering that China’s per capita GDP amounts to only 19 per cent of Japan’s at its highest level, and that its debt has already reached 60 per cent of Japan’s. Moreover, the accumulation of debt in China — 71 percentage points of GDP over the past five years — has been far sharper than in Japan, where the debt level grew by only 16 percentage points over the five-year period before its bust.

That is all the more reason to believe that Japan’s experience can provide important insight into the risks that China faces.

After Japan’s bubble burst, annual GDP growth, which averaged 5.8 per cent in the four years preceding the bust, plummeted to 0.9 per cent for the next four years.

With bad debt left to fester on banks’ balance sheets, growth vanished and deflation set in. While private debt as a share of GDP stabilised, public debt increased by 50 per cent in the five years after the bust.

LACK OF AUTOMATIC STABILISERS

The collapse of China’s credit bubble is likely to cause annual GDP growth to drop to 1 to 2 per cent, on average, for the subsequent four years, assuming a 2 per cent annual decline in capital expenditure and a still-respectable consumption-growth rate of 3 to 5 per cent. Consolidated public-sector debt would rise to 100 per cent of GDP.

This is a relatively modest prediction. Without automatic stabilisers or a strong financial-stability framework underpinned by deposit insurance, coping with the downside risks of the potentially destabilising financial reforms that the government is pursuing will be difficult enough; a credit shock could prove disastrous.

China’s debt tipping point is to be found in its massive real-estate bubble. The investment bank UBS said new urban housing supply has far exceeded marginal underlying demand from urban population growth. Indeed, almost half of the formal increase is not an increase at all, but merely recognition of rural workers who have been living and working in cities for some time.

The impact of a sharp decline in real-estate prices would be far-reaching. After all, property collateral is the bedrock of the Chinese financial system, with estimates of banks’ direct and indirect exposure to real estate ranging from 66 to 89 per cent of GDP.

Complicating matters further is the government’s lack of options for stabilising property markets.

In fact, a key part of the problem is that China’s response to cyclical weakness always entails more housing construction.

China’s lack of automatic stabilisers places the tension between reform objectives and growth imperatives in sharp relief.

The only way for the government to shore up growth in the short run is to pursue more debt-driven stimulus, as it did earlier this year.

But this will also cause China’s debt burden to continue to grow, with bad debt increasingly crowding out good credit.

If China’s leaders continue to choose debt-fuelled growth over reform, they will only delay, and possibly prolong, the inevitable slowdown. That would turn Mr Xi’s Chinese Dream into a more elusive prospect. PROJECT SYNDICATE

seletar

02-10-14, 21:09

http://sbr.com.sg/residential-property/news/chart-day-take-look-rapidly-mounting-number-unsold-houses-in-singapore#sthash.ZcrNMBrA.dpuf
Published 06 Aug 2014

Chart of the Day: Take a look at the rapidly mounting number of unsold houses in Singapore

http://sbr.com.sg/sites/default/files/news/chart_AUGUST6_BARCLAYS.PNG

Luxury projects are the hardest hit by the country’s property cooling measures, but mass market homes are also suffering from a sales dearth. Unsold inventory is building up for the country’s residential property developers, and real estate firms are grappling with the rising number of empty houses.

According to Barclays, 1260 private condominiums homes were completed in 2013 and 2014 and are still unsold.

Of these unsold units, 64% were from the Core Central Region (CCR), and mostly from the high-end to luxury projects. But though luxury developments are faring worse, mass market unsold inventory also building up.

“However, with developer sales slowing since 3Q13, there was also increasing unsold inventory at the mass market suburban projects. Of the 6,120 units that were uncompleted, launched and unsold as of 2Q14, 49% are from the Outside Central Region (OCR), a proxy for mass market private homes,” stated the report.

seletar

02-10-14, 21:13

http://www.todayonline.com/world/asia/asias-next-crisis-could-be-flood-debt

Asia’s next crisis could be a flood of debt

TODAY - Published: 4:03 AM, August 7, 2014

Asia is still traumatised by the great financial crisis of 1997, when Thailand’s devaluation of the baht set off a regionwide collapse in markets. Could it happen here again?

The mere question will strike many as odd, given Asia’s rapid growth and progress in strengthening financial systems, improving transparency and amassing trillions of dollars of currency reserves. But Asia now faces three risks that could quickly undo those gains: Federal Reserve tapering, a Chinese crash and an explosion of household debt.

The danger of the Fed pulling too much liquidity out of markets has been well documented. So have China’s rising vulnerabilities. Debt, though, deserves far more scrutiny. As economists survey the scene, Thailand once again tops the worry list. Debt there has risen rapidly, underwriting standards appear loose and non-performing loans are rising.

Thailand has plenty of company in Asia, Oxford Economics warns in a new report. Financially-conservative Singapore has seen credit growth in the past six years exceed that of the United States in the run-up to its 2008 subprime meltdown.

Several nations now have private-debt ratios of between 150 per cent and 200 per cent of gross domestic product. They include the higher-income set — Australia, Hong Kong, South Korea and Taiwan — as well as China, Malaysia, Thailand and Vietnam. Even where debt levels are lower, in Indonesia and the Philippines, the trajectory is troublesome.

“Debt surges of this kind often end badly,” said Mr Adam Slater, an economist with Oxford.

ASIA NOT AS HEALTHY AS IT SEEMS

Even more worrisome than the absolute levels of debt is the pace of increase, said Dr Frederic Neumann, Hong Kong-based co-head of Asian economic research at HSBC. For all its rapid growth and buoyant markets, Asia is not as healthy as it appears on the surface and might take on even more debt to support growth. As leverage exceeds the peak before the 1997 crash, is a sharp correction on the way?

“The optimists argue that’s unlikely to occur in Asia, where people tend to be more prudent and save more of their monthly income,” Dr Neumann said. “Well, not necessarily.”

All this fresh debt leaves Asia highly exposed to financial shocks and economic shifts. Any destabilising event — Fed chairman Janet Yellen over-tightening, renewed turmoil in Europe, a Chinese credit crunch, surging oil prices, trouble in Japan’s bond market — could push Asia back to the brink.

And it is not as though export markets are booming to provide a cushion.

What should governments be doing to avoid disaster? “It’s all about productivity growth,” Dr Neumann said. “If it slows, profits come under pressure and there’s a tendency to leverage up to maintain returns on equity, so anything that boosts productivity growth, really. For example, state-owned enterprise reform, infrastructure, less labour market rigidity and trade liberalisation.”

Few of these upgrades are afoot. Certainly not in Thailand, where the generals who seized power on May 22 are too busy consolidating power to restructure the economy. Ambitious talk of change in Hong Kong, South Korea, Malaysia and elsewhere has not been met with noticeable action. And the real worry, of course, is China. Last Friday, the central bank warned that credit and money supply are increasing too rapidly, months after Premier Li Keqiang pledged to tackle China’s lending bubble.

Beijing’s unprecedented stimulus binge after Wall Street’s 2008 reckoning supported growth throughout Asia. Beijing’s epic largess could come back to haunt the region if growth slows sharply or giant debt defaults slam world markets. The same goes for the Fed’s quantitative easing programme. Ultra-low US rates pulled tidal waves of capital Asia’s way, helping to facilitate a surge in private-debt ratios. But now Fed policies and China’s growth engine risk shifting into reverse.

Thailand’s implosion was only the most spectacular example of Asia’s propensity for boom-and-bust cycles since the late 1990s. Others include Hong Kong’s property slump in the early 2000s, mini-crises in unsecured debt in South Korea and Taiwan in the mid-2000s and Vietnam’s real-estate blow-up that began in 2010. This track record is a warning against downplaying the damage unsustainably high debt could inflict.

Granted, Asia is still among the world’s least ugly economic regions, with Greece and Portugal back in the news and Argentina defaulting anew. Also, stricter loan-to-income ratios and robust “macroprudential” policies such as taxes and regulations that limit money flows could save Asia from revisiting the depths of 1997.

But, Oxford Economics’ Mr Slater warned, the risks from the debt build-up look sufficient to call into question the much-touted trend of the rise of the Asian consumer. That would be bad news for everyone.

seletar

02-10-14, 21:17

http://sbr.com.sg/residential-property/in-focus/still-going-under-hdb-resale-prices-hit-29-month-low-in-july#sthash.049byEt2.dpuf
Published 07 Aug 2014

Still going under: HDB resale prices hit 29-month low in July

Residential property prices continued their downward slide in July, as the overall HDB resale prices slipped 0.9% in July compared to June. The price drop was most evident in 3, 4, and 5-room flats which saw a decline of 1.0%, 1.8%, and 0.4% respectively.

According to the Singapore Real Estate Exchange, the SRX HDB Price Index shows that July prices marked a 29-month low since Feb 2012.

Compared to the peak in Apr 2013, prices have declined by 7.8%. Year-on-year, prices also dropped by 6.7% from July 2013. Since the beginning of this year, prices have declined 4.0%.

Meanwhile, resale volume picked up slightly month on month. . According to HDB resale data compiled by SRX, 1,341 HDB flats were sold in July's resale market, a 2% increase from June’s 1,315 transacted units.

But on a year-on-year basis, July's resale volume is 10.2% down compared with 1,494 units resold in the same month of last year. Comparing to the peak where 3,649 units were resold in May 2010, the volume is down by 63.2%.

seletar

02-10-14, 21:23

http://www.channelnewsasia.com/news/singapore/private-home-resale/1306498.html

Private home resale prices fall to 21-month low: SRX

Channel News Asia
POSTED: 11 Aug 2014 10:07

SINGAPORE: The resale prices for non-landed private homes continued its downward trend in July, falling 1.3 per cent month-on-month, according to flash estimates from the Singapore Real Estate Exchange (SRX) on Monday (Aug 11).

The decline represented a 21-month low since October 2012, SRX said, and the fall in prices were felt in all three regions. Prices for the Core Central Region fell the most with 4 per cent, while Rest of Central Region and Outside Central Region dropped 1.1 per cent and 0.6 per cent, respectively.

The median Transaction Over X-value (TOX) for the majority of districts - 18 out of 24 - was negative in July. For districts with more than 10 resale transactions, districts 9 (Orchard, Cairnhill, River Valley), 15 (Katong, Joo Chiat, Amber Road) and 23 (Bukit Panjang, Choa Chu Kang) saw the most negative median TOX at -S$130,000, -S$40,000 and -S$30,000, respectively.

This means that majority of the non-landed private property buyers last month in these districts purchased their units below what other buyers who came before them paid for in similar units, SRX said.

http://www.channelnewsasia.com/blob/1306530/1407724923000/srx-for-private-home-data.jpg

In terms of resale volume, there were an estimated 431 transactions in July, compared with 427 in June. The volume dropped 20.5 per cent from the same month last year, SRX said.

RENTAL VOLUME UP, PRICES DOWN

As for rental transactions, the number of full units rented out in July was 3,360 - representing a 5.3 per cent on-month hike. Year-on-year, rental volume improved by 9 per cent from the 3,082 contracts signed in July 2013, according to the data.

Rental prices went down, though, slipping 0.8 per cent from the previous month. It is a 38-month low since May 2011, SRX added.

The decline was greatest in the Rest of Central Region at 1.4 per cent, while Core Central Region dipped 1.1 per cent. Prices for Outside Central Region improved slightly by 0.3 per cent.

http://www.channelnewsasia.com/blob/1306532/1407724884000/srx-rental-for-resale-data.jpg

seletar

02-10-14, 21:29

http://sbr.com.sg/economy/in-focus/deteriorating-household-net-worth-could-push-singapore-credit-meltdown-ubs#sthash.od7uFfj1.dpuf
Published 12 Aug 2014

Deteriorating household net worth could push Singapore into a credit meltdown: UBS

The current environment is "unsustainably benign".

Singapore’s economy looks rosy on the outside, with household net worth estimated to be four times the GDP and assets far surpassing liabilities. But probe a little deeper and an inconvenient truth comes to the surface: the country could well be headed to a disastrous economic meltdown.

A report by UBS warns that Singapore’s healthy household balance sheets are a source of risk rather than resilience. The report notes that high household net worth did little to prevent the US economic crisis of 2008, and Singapore is already experiencing a decline in resident property prices and household residential property wealth.

“We do not believe household balance sheets are a source of resilience. Instead we see them as the source of weakness. Even before the higher interest rates have become a reality, the maturing credit cycle is depressing the elevated value of assets on household balance sheets,” noted UBS economist Edward Teather.

Rising rates will likely provoke a shakeout in the labour market –via corporate indebtedness – further weakening households’ demand for risky assets and depressing prices.This will cause household net worth to deteriorate, which in turn will crimp domestic demand, raise concerns of a vicious cycle and provoke a policy response.

Singapore is already experiencing a slowdown in domestic credit growth, and the economy could well be trapped in a ‘vicious’ feedback loop between credit, employment, property prices, household net worth and domestic demand.

The domestic economy is also exposed to pockets of risk--the Monetary Authority of Singapore estimates that 5-10% of borrowers have a monthly debt servicing burden greater than 60% and that the percentage of overly-indebted households could increase to 10-15% should mortgage rates rise by 300 basis points.

“We think the current environment is unsustainably benign. We are not saying Singapore’s housing market looks like that of the US in 2007, just that pockets of risk matter. The point we are making is that this will hurt household balance sheets – which have been bloated by high house prices and leverage. Moreover, that deterioration will in turn lead to a depressing effect on the credit cycle, employment and domestic spending. Household balance sheets are a source of economic risk, not resilience.” added Teather.

seletar

02-10-14, 21:32

http://sbr.com.sg/financial-services/news/disaster-in-making-4-out-5-young-singaporeans-have-no-savings#sthash.6OkRatgw.dpuf
Published 13 Aug 2014

Disaster in the making: 4 out of 5 young Singaporeans have no savings

Most Singaporeans aged 20-35 years old are just one missed payment away from a financial disaster. Figures released today by a Singapore based financial website point to a shocking lack of financial planning by younger people, as 4 out of 5 respondents have no savings at all.

According to a survey by EnjoyCompare.com, majority of people in the said age bracket could lose their homes within three months if they became unemployed because they have no savings to fall back on in an emergency.

Figures obtained by EnjoyCompare.com show that a quarter of young people have savings of less than $6000, while 36% have no savings at all. This compares with the average savings of $60,000 for people in their parents' age range.

Four-fifths of people surveyed said they had spent money they should have been putting aside for a mortgage deposit. Only a third of people plan to buy a home rather than rent.

Here’s more from EnjoyCompare.com:

"These are shocking figures," said EnjoyCompare.com ‘s Mark Hall, "The current generation are seemingly living for the day and spending their money rather than putting some aside for when it might be needed.

"This is endemic of what's rapidly becoming known as the 'renting generation', who would rather not save money for a mortgage, pension or even for emergencies.

"In fact, we've seen surveys that show people spending money they admit they ought to be saving. Where's the sense in that?" he added.

“It’s shocking but the average Singaporean graduate spends 40% of their salary on rent, while another 9% is spent on student loan repayments.

"There's so little money going into investment or savings that some people are finding themselves rapidly up to their necks when they hit troubled times," said Hall, "Some people are just one missed payment from disaster."

seletar

02-10-14, 21:39

http://www.stproperty.sg/articles-property/singapore-property-news/one-in-eight-ec-units-left-vacant-in-q2/a/176767

One in eight EC units left vacant in Q2

The Straits Times - August 18, 2014

ABOUT one in every eight executive condominium (EC) units was left vacant in the second quarter this year, markedly more than before, official figures show.

However, consultants said this was probably not because more people were buying EC units that they do not plan to live in.

Some people may have bought EC units ahead of their needs, but those buyers are likely only a minority, they said.

Instead, more EC units have been left vacant possibly because their owners have not moved in yet because they are under renovation or other factors, they said.

Consultants added that the growing pile of unsold as yet unbuilt EC units could raise vacancy rates further in future.

ECs are a public-private housing hybrid meant to cater to a "sandwiched class" of buyers not qualifying for public housing but unable to afford private property.

The proportion of vacant EC units shot up from 6 per cent in the first quarter to 12.2 per cent in the second, according to Urban Redevelopment Authority (URA) figures released last month.

The 12.2 per cent vacancy rate translates to an estimated 1,634 unoccupied units out of 13,448 completed EC homes in total as at the end of June - more than twice the estimated 726 vacant units in the first three months this year.

Consultants said that there could have been some people who bought EC homes even though they did not actually need them.

"There may be a minority of people who buy an EC (unit) not because they need a roof above their head but because they want to make use of housing grants," said SLP International research head Nicholas Mak.

He said such buyers may opt to live elsewhere as EC projects are on the outskirts. They may rent the unit out after the five-year minimum occupation period ends.

However, consultants said this type of buyer was rare, and the higher vacancy rate in the second quarter was most probably owing to a surge in the supply of newly completed EC projects in the second quarter. "For new EC completions, the owners are in no hurry to move into the newly completed flat," sad R'ST Research director Ong Kah Seng.

ECs completed since the middle of last year include Esparina Residences in Sengkang, Belysa in Pasir Ris and Punggol's Riverparc Residence.

Another major factor could be the weak Housing Board (HDB) flat resale market.

"It could be that some upgraders have not sold their HDB flat yet to move into their EC (flat)," said CBRE research head Desmond Sim. Upgraders are usually given six months to sell their HDB flat. Mr Sim said the growing number of ECs under construction that are still unsold would "put pressure" on vacancy rates.

As at the end of the second quarter, 739 units had not found any takers, which is equivalent to 6 per cent of the total number of uncompleted EC units.

The URA typically calculates the vacancy rate by looking at a smaller sample of EC units rather than every single unit islandwide. The vacancy figure includes both sold and unsold EC units that are already completed. There were no unsold completed EC units at the end of June.

seletar

02-10-14, 21:43

http://sbr.com.sg/commercial-property/news/chart-day-see-how-july%E2%80%99s-developer-sales-slid-down-53-last-year#sthash.9tigK1JT.dpuf
Published 18 Aug 2014

Chart of the Day: See how July’s developer sales slid down 53% from last year

http://sbr.com.sg/sites/default/files/news/Aug_18_Chart.PNG

Poor performance to go on beyond Hungry Ghost month.

July’s developer sales stayed flat as sales from previous months’ launches continued to slow significantly, and take-up at the four new launches was subdued at best.

In a report by Barclays, year-to-July sales was 4,893 units, down from 10,432 units in July last year.

Barclays says that the weak trend will continue beyond August, as the traditionally quiet Hungry Ghost Festival month kicked in from 27 July. The bank sees rising risk of unsold inventory, across both high- and low-end segments.

seletar

02-10-14, 21:52

http://www.stproperty.sg/articles-property/singapore-property-news/hdb-rents-to-stay-depressed-for-rest-of-2014/a/176933

HDB rents 'to stay depressed for rest of 2014'

Sluggish demand, rising supply will weigh on rates, analysts say

The Straits Times - August 19, 2014

LEAN times are here to stay for Housing Board landlords, with rentals likely to stay depressed for the rest of the year.

Sluggish demand, arising from foreign labour curbs that have shrunk the pool of tenants, combined with a rising supply of HDB flats, will weigh on rental rates, said property analysts.

Already, Singapore Real Estate Exchange data shows the HDB rental index has fallen 2.3 per cent since the start of the year, hitting a three-year low last month. The median rent was $2,300.

This is only the beginning of a continued slowdown, said property analysts.

ERA Realty key executive officer Eugene Lim expects a further 5 per cent to 6 per cent drop by the year end. R'ST Research director Ong Kah Seng predicts a full-year fall of 5 per cent to 7 per cent, and SLP International Property Consultants research head Nicholas Mak, one of 4 per cent to 6 per cent.

For the longer term, OrangeTee research head Christine Li sees a decline of about 10 per cent by the end of next year.

Property agents said the problem is simply a lack of demand due to a shortage of tenants.

"Landlords are realistic as the market is not doing very well," said ERA Realty agent Noel Lu.

Many have been adjusting their rentals downwards, said agents.

The worst-affected areas are those without easy access to amenities such as public transport.

However, demand in mature estates and those near MRT lines is continuing to hold up, said ERA agent Zola Tan.

Tenants for units in such areas can be found within a month, as opposed to two to three months for less popular areas, he added.

For instance, PropNex Realty agent Michelle Lai, who focuses on Woodlands, noted that demand is "still quite strong". But although tenants can be found, rents have been falling, she said. An executive apartment used to go for $2,700 or $2,800 a month; now, the rate is $2,500.

The one bright spot is that falling rents have boosted activity in the market so far this year.

There have been more rental deals in general, with 8,485 in the January to March period and 8,455 in the March to June period.

This is up from an average of 7,580 a quarter last year and 6,780 a quarter in 2012.

Woodlands, Jurong West and Tampines have seen the most rental transactions in the past month, based on an STProperty "heat map" using HDB data.

One reason for the flurry of activity is that low rents have attracted more tenants, said R'ST Research's Mr Ong.

Landlords have had to offer low rents to compete for tenants, whose numbers have been affected by foreign labour curbs. The surfeit of flats for rent also means tenants can pick and choose.

"Nowadays, tenants can be fussy," said a 32-year-old safety officer who wanted to be known only as Mr Chandran. He has been trying to rent out his four-room flat near Ang Mo Kio MRT station, but has received just one call in the past fortnight.

With more suburban condominiums due to be completed next year, competition will only rise, said Mr Ong.

He noted: "(Current upgraders) have to quickly secure a tenant for their flat in case there are more flats put up for subletting."

Falling rents in the private market are also putting pressure on HDB rents. Last month, non-landed private residential rents hit a 38-month low.

"Suburban condos both new and old are competing for tenants, with budgets of around $3,000," said ERA's Mr Lim.

seletar

02-10-14, 21:57

http://sbr.com.sg/residential-property/news/chart-day-take-look-country%E2%80%99s-surging-private-home-vacancy-rate#sthash.4oIZo1G7.dpuf
Published 25 Aug 2014

Chart of the Day: Take a look at the country’s surging private home vacancy rate

http://sbr.com.sg/sites/default/files/news/CHART_0822_SAVILLs.PNG

Newly-completed private homes remain cold and empty across the island, as developers struggle to move inventory while stingy customers continue shy away from domestic real estate investment.

According to a report by Savills, there were 297,998 available private homes across the island, an increase of 1.6% from the 293,283 units at the end of March.

“Despite the strong leasing demand in Q2/2014, the vacancy rate of private residential units climbed to 7.1% from 6.6% in the previous quarter. This reflected a total of 21,268 vacant private homes island-wide, a significant jump of 10.3% QoQ from 19,284 units in Q1/2014,” noted the report.

Here’s more from Savills:

The major projects completed in the reviewed quarter are mostly located in the suburban areas, such as The Lakefront Residences on Lakeside Drive (629 units), Foresque Residences on Petir Road (496 units), Waterfront Gold on Bedok Reservoir Road (361 units) and The Greenwich on Seletar Road (319 units).

The central areas saw the completion of Silversea on Marine Parade Road (383 units), Sophia Residences on Sophia Road (272 units) and Cyan on Keng Chin Road (278 units).

seletar

02-10-14, 22:01

http://sbr.com.sg/economy/news/singapore-threatened-unprecedented-500-increase-in-household-credit-report#sthash.EEK0vlpn.dpuf
Published 28 Aug 2014

Singapore threatened with unprecedented 500% increase in household credit: report

Record-low interest rates cannot last forever.

The entire South East Asian region is awash with capital, thanks to record-low interest rates and a loosening of credit underwriting standards. But economists now warn against the rapid fivefold increase in Singapore’s household debt, which has expanded at a staggering rate in just a decade.

According to a report by ICAEW, the fast increasing rate of household lending has already caused concern in other Southeast Asian countries such as Thailand and Malaysia. A key risk of a rising-consumption economy is a thirst for yield, where in speculators tempted by high returns bet on property prices rising, increasing the risk of a property bubble building up.

The skyrocketing amount of household debt has prompted the Singapore government to intervene by introducing several rounds of property cooling measures, which will slow consumer spending and provide a gentle drag on growth in the short term.

“In moderation, household debt is useful in allowing people to stay afloat between jobs, or to spread a large purchase across several months’ income. It also encourages the region to move from traditional export-driven growth typically seen in emerging economies towards a consumption-driven growth model, something already evident in Singapore’s move towards high value-added services,” noted the report.

But according to Mark Billington, Regional Director, ICAEW South East Asia, “It is important that economies with already high consumption rates take care to avoid artificially raising the standard of living. Allowing credit growth to offset weak wage growth in lower earnings groups may ultimately raise the number of non-performing loans. That, in turn, could result in increased risks of another financial crisis.”

ICAEW Economic Advisor and Cebr Director Charles Davis also noted that many banks got their fingers burnt by a sharp increase in non-performing business in the 1997 Asian Financial Crisis.

“Although reforms have been put in place – including the transformation of economic and financial legislation, bank consolidation and increased capital ratio requirements –post-crisis, many banks have ramped up their consumer lending. Given this, South East Asian economies need to maintain vigilance over lending standards so that they heed the lessons from the late 2000s financial crisis in the US and Europe,” he cautioned.

seletar

02-10-14, 22:13

http://www.reuters.com/article/2014/08/28/uk-singapore-property-idUSKBN0GS2M120140828

Lights off on Singapore's billionaire row as luxury house prices plunge

http://s3.reutersmedia.net/resources/r/?m=02&d=20140828&t=2&i=968446042&w=&fh=&fw=&ll=700&pl=378&r=LYNXMPEA7R11Q
A man sits by the pool in the largely vacant Cape Royale condominium estate in Sentosa Cove on Singapore's Sentosa island August 19, 2014

REUTERS
SINGAPORE Thu Aug 28, 2014 5:19pm EDT

(Reuters) - There's an eerie silence at night in Sentosa Cove, the man-made island resort billed as Singapore's answer to Monte Carlo and the only place in the country where foreigners can buy landed property.

Dozens of houses - complete with their own private yacht berths and multiple swimming pools - sit empty while few lights are on in the apartment blocks overlooking the marina, a few kilometres away from Sentosa's giant casino.

Prices in the gated community, where Australian mining tycoons Gina Rinehart and Nathan Tinkler bought properties, fell around 20 percent in the past year as lending restrictions and taxes on foreign buyers burst a bubble in the Southeast Asian financial hub's luxury real estate market.

Investors could see the value of their assets fall even further with developers and investors still struggling to sell even after the recent price falls. Real estate websites list hundreds of flats and bungalows for sale, yet just 12 apartments and one house have changed hands all year on Sentosa, according to data from the Urban Redevelopment Authority (URA).

"The way prices have fallen in Sentosa, it's as if there is a global financial crisis," said Alan Cheong, head of Singapore research at property firm Savills.

That could mean a tough 2015 for the city state's banks unless policy restrictions are eased soon. But that looks unlikely because government-imposed curbs are having the desired affect of keeping the broader market in check after private house prices rose more than 60 percent between 2009 and 2013.

New mortgage business at the country's lenders is up to 40 percent below 2013 levels, although the downturn is unlikely to show up in their balance sheets until next year as loans are typically agreed a year ahead of them starting to be drawn down.

Compounding the problem for property investors are cutbacks in housing allowances for expatriate workers - meaning rents have fallen - and a drop in the number of high-net-worth foreigners being granted permanent residency.

Estate agent Knight Frank's analysis of property prices in 32 cities around the world found Singapore's prime residential market, defined as the priciest 5 percent of properties, performed the worst in the first half of 2014, with prices falling 7.3 percent.

For the luxury sector, the government measures have led to a sharp drop in foreign buyers, who accounted for over half of Sentosa sales between 2010 and 2014.

That means the number of distressed investors is expected to rise.

"Some of the earlier buyers are likely to have bought at prices 20 to 30 percent above current prices," said Christine Li, head of research at property consultancy OrangeTee.

"The rental can't even cover the mortgage for these high-end investments - they want to offload but there are no takers."

DISTRESS SIGNALS

United Overseas Bank, Singapore's third-biggest lender, last month reported a doubling in its bad debt charges for the second quarter, saying a group of investors was struggling to service high-end property loans.

The number of residential properties being put up for sale at auction by banks after buyers defaulted on mortgages, known as mortgagee sales, quadrupled to 64 in the first half of this year from 16 in the second half of 2013, according to real estate agency Colliers.

"This is different from previous years, when owners' sales dominated auctions," said Joy Tan, head of auctions at DTZ.

"The tables have turned and we expect more mortgagee sales on the way."

In July, a four-bedroom apartment in Sentosa's Turquoise condo sold at auction for S$3.88 million ($3.11 million) in a mortgagee sale, or about S$1,400 per square foot. In 2012, a flat in the same block sold for S$2,450 per square foot and in 2007 for as much as S$2,800.

The only house that has sold on Sentosa all year - a six-bedroom pad on "Treasure Island" - went for S$17 million in February, having been bought for S$20.2 million in June 2012.

Some in the luxury property industry fear foreign buyers have gone for good.

City Developments Ltd, Southeast Asia's second-largest residential property developer, said in its latest results statement that foreign buyers have "shifted and are still shifting their investments to markets outside Singapore".

TIMES HAVE CHANGED

Sentosa Cove was developed in the early 2000s at a time when Singapore was actively courting the world's wealthy to its shores. It sprang up along with other luxury developments near Singapore's glitzy Orchard Road shopping district.

In 2004 the country's central bank launched the Financial Investor Scheme (FIS) that allowed foreigners with a global net worth of S$20 million ($15.99 million) to become permanent residents if they parked S$5 million (raised to S$10 million in 2010) in Singapore, S$2 million of which could be put into property.

That scheme, a favourite tool of Singapore private bankers to win clients, was quietly scrapped in 2012 as the government grappled with growing public discontent over immigration, rising inequality and a spike in property prices, adding to the drop in wealthy foreign property buyers.

While Singapore is trying to tone down its image as a place where residency is "for sale", Australia is embracing a similar scheme, luring away some of the high-net-worth buyers.

That, combined with the end of the "easy money" seen before the 2008 financial crisis, may mean the quiet on Sentosa Cove's streets is here to stay.

"Sentosa happens to be a development targeted at a time when the world was leveraging up but now that we have deleveraged, there is a much smaller pool of people who can afford it," Savills' Cheong said.

seletar

02-10-14, 22:18

http://sbr.com.sg/economy/in-focus/crisis-in-making-economists-raise-alarm-over-singapore%E2%80%99s-skyrocketing-household-deb#sthash.AP9gRQxl.dpuf
Published 29 Aug 2014

Crisis in the making: Economists raise the alarm over Singapore’s skyrocketing household debt

Consumer credit is now 75% of the GDP.

Singaporean households are clearly biting off more than they can chew when it comes to borrowing. The country’s ballooning household debt is becoming a steady source of concern for economists in the region, with most raising the alarm over the unsustainable and unprecedented rise in household credit.

For instance, a report by UBS warns that debt levels are now high relative to history while traditional measures of banking system liquidity are looking increasingly stretched.

“An often quoted MAS estimate is that about 5-10% of borrowers have a monthly debt servicing burden greater than 60% and that the percentage of over-leveraged households could increase to 10-15% should mortgage rates rise by 300bps. That might sound like a modest share of households, but consider that, according to Mortgage Bankers Association surveys, at the height of the US housing crisis in August 2008 only 9.2% of all US mortgages were estimated to be delinquent or in foreclosure and this rose to just 14.4% in September 2009,” noted UBS.

Meanwhile, ICAEW warns that there has been a fivefold increase in Singaporean household debt over the past decade, and that lending is going to consumers on a scale previously unseen in South East Asian nations.

“A number of factors make high consumer lending potentially destabilising for an economy. High leverage itself is dangerous in a system: when wage growth slows and households start to struggle with repayments, the businesses owed money struggle with wage bills. This is because they base decisions on future income streams being ever-larger,” stated the ICAEW’s Economic Insight South East Asia.

Fitch Ratings also notes that Singapore’s consumer credit grown at a fairly high pace, averaging 14%-15% annually since the 2008-2009 recession, aided by economic growth and a favourable interest rate environment.

“As a result, Singapore’s household debt has grown from about 66% of GDP at end-2010 to 75% of GDP at end-2013, compared with Hong Kong’s more moderate increase from about 59% to 65% over that period.

Rising household debt remains a focus for the MAS. Macro-prudential measures aimed at curbing excessive borrowing by households since 2009 appear to be gradually taking effect, with household lending growth slowing since late 2013,” Fitch warns.

seletar

02-10-14, 22:20

http://sbr.com.sg/economy/news/housing-and-bridging-loans-70-in-july-mas#sthash.hUZuP9sH.dpuf
Published 29 Aug 2014

Housing and bridging loans up 7.0% in July: MAS

Total bank lending rose 10.8% year-on-year.

Local banks released more housing and bridging loans in July this year, as total bank lending rose 10.8% year-on-year.

Data released today by the Monetary Authority of Singapore revealed that total loans of Domestic Banking Units reached $597.4 billion last month, compared to $539 billion in July last year.

Housing and bridging loans grew to $172.6 billion, up 7% from $161.2 billion in July last year.

Lending to non-bank customers rose across the board year-on-year, except for manufacturing loans and car loans.

seletar

02-10-14, 22:22

http://sbr.com.sg/residential-property/news/total-private-home-transactions-plunge-57-january-july-report#sthash.6FhJRW5x.dpuf
Published 02 Sep 2014

Total private home transactions plunge 57% from January to July: report

HDB resale applications also fell by 15%.

Residential property prices are steadily heading south, thanks to the government’s different cooling measures. Due to the increasing completions of new homes, private and public housing prices have started retracing from their highs.

According to CIMB, The price drop was accompanied by a 57% yoy drop in total private home transactions, including ECs, to 5,365 units from Jan to July of this year as buyers hold back on their buying decisions or evaluate their affordability status.

Within the public housing market, meanwhile, HDB resale applications for the first two quarters of 2014 have also dropped by 15% yoy.

“The URA property price index has declined 3.2% since the high in 3Q13 and is 18% above the previous peak in 1Q08. The high end market segment in the Core Central Region (CCR) continued to see the highest slippage of 2.5% from end 2013 while those in the city fringe areas (Rest of Central Region, RCR) experienced a smaller 2.4% dip. Prices in the suburban localities (Outside Central Region, OCR) only saw a marginal 1% retracement. HDB resale prices have retraced 5.3% from the high in 2Q13,” noted the report.

seletar

02-10-14, 22:27

http://business.asiaone.com/news/suburban-shoebox-units-bottom-falling-out-sector#sthash.QiOLIcjU.dpuf

Suburban shoebox units: Bottom falling out of sector?

http://business.asiaone.com/sites/default/files/styles/medium/public/2014/09/02/20140209_hdb_st.jpg
The URA projected in September 2012 that there were about 2,400 completed shoebox units as at 2011, with the figure rising to 11,000 by the end of next year.

The Straits Times
Thursday, Sep 04, 2014

Shoebox apartments outside the city centre could lose their cachet once the flood of new homes hits the market next year.

Experts note that tenants are enjoying greater choice, and that will only get better as the pool of available real estate deepens.

That trend spells bad news for suburban shoebox homes, which have a limited appeal given their location and relatively cramped living space.

Of the 53,900 new condo units expected to come on the market in the next 30 months, the experts point out, most will be small or shoebox apartments - with a floor area of up to 506 sq ft.

Landlords of such flats in less accessible locations will likely find it "challenging" to let out their units.

Since 2009, when shoebox units became popular, the bulk of transactions in this category has been outside the city centre, noted Ms Lee Lay Keng, regional head of research at DTZ.

Of the 12,097 shoebox units sold since 2009, about 47 per cent were in city fringe areas and around 37 per cent in the suburbs.

"Owners of such units for investment would not be as successful at getting the kind of rentals they want going forward.

"There will be pressure on vacancies, as they will be facing competition from the broader market too," said CBRE research head Desmond Sim

There are no official figures on the number of shoebox units on the market, but the Urban Redevelopment Authority (URA) in September 2012 projected that there were about 2,400 completed units as at 2011, with the figure rising to 11,000 by the end of next year..

These small homes featured heavily at newly launched projects from 2009 to 2012, including the 293-unit Alexis in Alexandra Road, the 138-home Parc Imperial in Pasir Panjang Road and the 72-unit Suites@Guillemard in Lim Ah Woo Road.

seletar

02-10-14, 22:31

http://sbr.com.sg/residential-property/in-focus/yet-another-pullback-hdb-resale-prices-hit-31-month-low-in-august#sthash.VKjiwqZT.dpuf
Published 04 September 2014

Yet another pullback: HDB resale prices hit 31-month low in August

HDB resale prices dropped for the seventh consecutive month in August, posting a 1.1% month-on-month decline.

According to the Singapore Real Estate Exchange, 3 and 4 -room flats drove the overall index down with declines of 2.0% and 0.9%, respectively, while 5 - Room and Executive prices increased 0.8% and 1.5%, respectively.

Year-on-year, prices have dropped 7.1% from August 2013 marking a new 31-month low since January 2012. Prices have declined 8.6% since the peak in April 2013, August 2014 prices.

According to HDB resale data compiled by SRX Property, 1,327 HDB resale flats were sold in August, a 1.1% decrease from 1,342 transacted units in July.

Year-on-year, resale volume dropped 3.3% down compared with 1,372 units resold in August 2013. Compared to its peak of 3,649 units in May 2010, resale volume is down 63.6% compared.

Arcachon

02-10-14, 22:39

Yes Singapore having a down pour.

https://fbcdn-sphotos-d-a.akamaihd.net/hphotos-ak-xap1/v/t1.0-9/10177939_842506809115494_6717084346904795465_n.jpg?oh=631459fdafd2a0eac6d34116abb16ee9&oe=54B84D07&__gda__=1421811675_3c85cff23bc698931d8c7d04e37d9c9c

https://fbcdn-sphotos-b-a.akamaihd.net/hphotos-ak-xap1/v/t1.0-9/10704065_842506822448826_1978590855266762522_n.jpg?oh=597f50e7cd24862cce474daca7d586b7&oe=54B098BC&__gda__=1420869984_72031c07998769b647366fbb58717b76

seletar

02-10-14, 22:42

http://www.stproperty.sg/articles-property/singapore-property-news/return-to-seller/a/179571

Return to seller

Exec condos form 30% of units given up in first 7 months of this year

The Straits Times - September 6, 2014

BUYERS of executive condominiums (ECs) are backing out of their purchases more than buyers of private properties, new data analysis shows.

Only a handful of ECs are on the market, compared with scores of private condos.

But units from just eight EC projects made up about 30 per cent of the 277 units returned to developers in the first seven months of the year.

The figures are based on an analysis of monthly data from property portal Square Foot Research.

ECs are a hybrid of public and private housing, sold with Housing Board restrictions.

At Skypark Residences, an EC in Sembawang, for instance, 22 units were returned - the highest number among the projects.

Forestville in Woodlands was next with 18. In Punggol, 14 units were given up at Ecopolitan while Waterwoods had 12 units returned. The Sea Horizon EC project in Pasir Ris had 10 units returned.

Consultants suggested that one reason could be that prices of ECs have risen to record levels, and that a lower mortgage servicing ratio (MSR) introduced last year limited the monthly housing payments at 30 per cent of the buyer's gross monthly income.

"The substantial (number of) units returned could be due to impulse buying, and buyers finding that they cannot secure a sufficient loan under the new MSR cap, or that the prices worked out to be in excess of their affordability," said Mr Ong Kah Seng, director of R'ST Research.

Weak market sentiment could also mean buyers expect property prices to correct further, and some might have decided to give up their units for other opportunities, said Mr Ong.

Another possibility is that some buyers did not meet the eligibility criteria set by HDB. For instance, EC buyers cannot have a combined gross monthly income of more than $12,000, and must have lived in their HDB flat for at least five years, if they are not first-time buyers.

But some returns could simply be because of cancelled marriage plans, since buyers must form a family unit to buy an EC unit, said Mr Nicholas Mak, research head at SLP International.

The penalty for returning a unit to developers who bought EC land after Dec 9 is 5 per cent of the property's price, after the sales agreement has been exercised. For all other EC projects, the penalty is 20 per cent of the unit's price tag. If the sales agreement has not been exercised, the penalty is typically about 1.25 per cent of the purchase price.

seletar

02-10-14, 22:45

http://sbr.com.sg/residential-property/news/non-landed-private-residential-rental-prices-down-66-in-augustsrx#sthash.4fn7qvyC.dpuf
Published 08 September 2014

Non-landed private residential rental prices down 6.6% in August: SRX

Rental prices of private condominiums continued to fall in August, posting a 6.6% year-on-year decline and a 0.6% month-on-month slide.

According to the Singapore Real Estate Exchange, this marks the 7th consecutive decline in prices. Non-landed Private Residential units in CCR and OCR saw rent decreases of 2.0% and 1.1% respectively, while units in RCR posted an increase in rent of 0.4%.

seletar

02-10-14, 22:48

http://www.todayonline.com/business/home-prices-fall-20-2016-restructuring-curbs

Home prices ‘to fall 20% by 2016 on restructuring, curbs’

TODAY
Published: 4:02 AM, September 10, 2014

SINGAPORE — Home prices in Singapore will decline at a steeper pace, falling by 20 per cent between this year and 2016, as economic restructuring as well as property and loan curbs continue to weigh on the housing market, Bank of America Merrill Lynch (BAML) said in its research report released yesterday.

“Overly tight population policies will imply the dominance of ageing-resident demographics over the influx of younger non-resident workforce. Delays in relaxing property measures would imply a greater negative impact from rising mortgage rates,” said BAML economist Chua Hak Bin.

Under the ongoing economic restructuring that the Government has said is a long-term undertaking, it will slow the flow of foreign workers into Singapore while rolling out incentives for companies to raise productivity.

“Restructuring and stricter foreign worker and immigration policies are lowering potential growth and impacting the property market,” Dr Chua said.

“Foreign labour growth is fast slowing, while permanent resident growth has turned negative … We believe total job creation is likely to slow to about 100,000 this year versus 136,000 in 2013,” he added.

Private home prices fell for a third straight quarter in the three months ended June as cooling measures such as the Additional Buyer’s Stamp Duty and loan restrictions such as the Total Debt Servicing Ratio (TDSR) framework curbed demand. From the beginning of the year, prices had fallen by 2.3 per cent by the end of the second quarter, the Urban Redevelopment Authority’s index showed in July.

On the public housing front, Housing and Development Board (HDB) resale prices shed 3 per cent by the end of the second quarter from the beginning of the year, hit by a reduction in the Mortgage Servicing Ratio cap and the maximum loan term, as well as a three-year wait for new permanent residents before they can enter the market.

Mr Ku Swee Yong, chief executive of property agency Century 21, said more downward pressure will be exerted on private residential prices from current vacancies and new supply. He noted that more than 21,000 private homes remained unoccupied in the second quarter, translating to a vacancy rate of 7.1 per cent, while another 29,000 new units will come on the market in the next two years.

Meanwhile, the decline in HDB resale prices will directly affect the mass market private housing segment, as the pool of upgraders becomes smaller.

Dr Chua said the fate of the property market largely depends on how the Government tweaks its policies, particularly on restructuring, immigration and foreign workers, as well as the timing of the relaxation of property measures.

“Singapore’s transition to a productivity-driven growth model is still ongoing and has produced mixed results so far … Labour productivity has not improved and not compensated for weaker foreign labour growth,” he added.

“We do not see the Government reversing course, but a pause may be in order. Scheduled foreign labour tightening is not over. Levies will be further raised and dependency ratio ceilings tightened next year. The intensity of such tightening will probably reach a crescendo in 2015, unless the Government chooses to further tighten in the Budget, to be announced in February.

“We think a pause in the restructuring is likely and in order, as companies, particularly small and medium enterprises, are having trouble adjusting to the speed of the tightening,” he said.

Dr Chua expects the Government to begin unwinding property measures only from the second half of next year, when the benchmark United States federal funds rate is forecast to begin to rise, with Singapore mortgage rates moving in tandem. He said the structural measures, such as the TDSR and loan tenure curbs, are not likely to be changed. However, cyclical measures such as loan-to-value limits and stamp duties can be calibrated based on market conditions.

“Residential property prices would have probably declined by more than 10 per cent by the middle of 2015 and highly leveraged households would have de-geared sufficiently,” he said.

seletar

02-10-14, 22:58

http://www.businesstimes.com.sg/premium/top-stories/more-owners-luxury-condos-selling-loss-20140915
Business Times
Published September 15, 2014

More owners of luxury condos selling at a loss

Yields also under pressure; low rentals leave more people struggling to pay mortgages

[SINGAPORE] A larger percentage of high-end luxury condo homes on the resale market are selling at a loss and a smaller percentage at a profit, as the tide of the once-rosy property market recedes and reveals those who have been "swimming naked" - that is, those without adequate holding power for their extravagant purchases.

According to data compiled by STProperty.sg from URA Realis, 7 per cent of transacted units in the prime districts 9, 10 and 11 sold at a loss in the first eight months of this year, up from 5.5 per cent over the same year-ago period.

Fewer people are profiting from their resales too: only 62.2 per cent enjoyed any capital gains - a steep drop from 83.5 per cent a year ago. And 4.5 per cent sold without making a profit or a loss (versus 0.4 per cent a year ago).

Yields are also under pressure. The low-rental environment is leaving more owners struggling to repay their mortgages. Assuming a S$1.6 million loan (equivalent to an 80 per cent loan limit for a S$2 million property) is taken out at an annual 1.5 per cent interest rate over a 30-year tenure, this would amount to a monthly mortgage of S$5,500. Rentals would therefore have to be in excess of this to cover mortgage payments.

"In some cases, the monthly rental cannot cover the mortgage. Take a S$5 million Sentosa Cove condo: it would take a monthly rent of S$13,800 to cover your loan," said Christine Li, head of research and consultancy at OrangeTee.

"That said, it's quite common that rents cannot cover monthly instalments, especially for bigger units. But those who don't have holding power would have to let go of their units. Others may be forced to do mortgagee sales," she added.

But not all the sellers who were willing to stomach losses were over-leveraged. Some could simply want to exit the market because they don't see the cooling measures ending anytime soon (meaning, they expect that price recovery is still far off), or just as a way of rebalancing their overall portfolio.

"A large proportion of purchases in the prime districts are by foreigners; perhaps they are just pulling out of Singapore. But the fall in demand for private homes makes it harder for sellers to find buyers. So if they really need to sell, they will have to lower their prices significantly," said Lee Lay Keng, DTZ's Southeast Asia regional head of research.

Meanwhile, loan curbs and price cutting by developers at new condo launches also continue to sap strength from the resale market.

Condo homes in the prime districts 9 (Orchard Road, River Valley), 10 (Bukit Timah, Holland, Balmoral) and 11 (Novena, Newton, Thomson) have traditionally been purchased as investment homes for capital gains and rental yields.

Buyers bank on demand from expatriate lessees, most of whom enjoy staying near the city. But with corporate housing budgets having shrunk post-financial crisis, these foreign workers are moving instead to the city fringes and suburbs, with some even renting HDB flats.

Losses made in resale transactions from January to August 2014 range from S$9,300 for a unit at The Hillier in Bukit Timah, to S$2.06 million for a unit at St Regis Residences in Tanglin. The latter was purchased at S$6.8 million in 2007, and sold for S$4.7 million in April this year.

Four units at The Promont (at Cairnhill), St Thomas Suites (near River Valley), Tanglin View and Waterscape At Cavenagh also resold at considerable losses of S$800,000 to S$1.2 million each (see table).

Notably, there were also four units at Robinson Suites on Shenton Way which resold at losses of about S$300,000.

Many of the loss-making resale transactions from the first eight months of this year were from sellers who bought their units in 2007, in the run-up to the previous peak in property prices and just when the financial crisis was starting.

Prices of these prime-location condos have recovered since, but dipped back down slightly from 2012 due to cooling measures. As at Q2 2014, prices were roughly on a par with the previous peak in 2008.

This means that not only would buyers who picked up condo units fresh at launch in 2007 not enjoy much capital gains, they may also suffer a loss if they sell now.

seletar

02-10-14, 23:03

http://sbr.com.sg/residential-property/in-focus/ghost-month-new-private-home-sales-plunge-429-year-year-in-august#sthash.6F67bwMr.dpuf
Published 16 Sep 2014

Ghost month: New private home sales plunge 42.9% year-on-year in August

The Hungry Ghost did not bring good tidings to the country’s residential property developers. Data released by the Urban Redevelopment Authority revealed that new sales volume plunged 42.9% year-on-year to 432 units, from 756 units sold in the same month last year.

On a month-on-month basis, new sales volume fell by 15.1%, from 509 units in July 2014.

There were a total of 351 new private landed and non-landed units launched last month, representing a 64.1% plunge compared to August 2013 where 979 new units were launched.

According to Knight Frank, the lacklustre sales performance was due to the lack of new project launches in August which is traditionally a quiet period as developers seek to avoid the Hungry Ghost Month Festival, often perceived as an inauspicious period to buy a home.

Here’s more from Knight Frank:

In light of the existing Total Debt Servicing Ratio (TDSR) ruling and property cooling measures, prospective buyers are maintaining a wait-and-see approach in anticipation of further price changes. Buying sentiment for new launches is likely to remain fairly muted in light of the current cooling measures.

It is anticipated that total developers’ sales for the whole of 2014 could range between 8,000 to 9,000 units, falling short of the 10,000-unit mark.

Arcachon

02-10-14, 23:06

https://fbcdn-sphotos-h-a.akamaihd.net/hphotos-ak-xap1/v/t1.0-9/227424_842506585782183_1446145615527788517_n.jpg?oh=b04e40404c55d2c3f1e51d213881cef5&oe=54CD4B13&__gda__=1418151406_02ff668d2dc610a91d4a2ebb5cbacc33

https://fbcdn-sphotos-b-a.akamaihd.net/hphotos-ak-xpf1/v/t1.0-9/10610702_842506612448847_3486912951013901335_n.jpg?oh=0a34c9023b3c9d0c606e06d4ca454f0a&oe=5487545C&__gda__=1420908342_91a01f7a262fc46b6824cec64557b648

https://fbcdn-sphotos-h-a.akamaihd.net/hphotos-ak-xpf1/v/t1.0-9/10256476_842506855782156_559470208005223126_n.jpg?oh=69880257bfee741dd7ebb5db5944c168&oe=54B3BF0D&__gda__=1422731212_b45d6c7e76dd40c75f3c65f2bf21a874

seletar

02-10-14, 23:07

http://sbr.com.sg/economy/news/asean-meltdown-singapore%E2%80%99s-largest-publicly-traded-companies-risk-default#sthash.ITtX6R7C.dpuf
Published 16 Sep 2014

ASEAN meltdown: Singapore’s largest publicly traded companies at risk of default

Southeast Asia is suffering from critical debt levels and weak profitability.

Debt-to-earnings ratios rose last year at the fastest pace since 2011, as average return on capital at the biggest firms by market value fell for the first time since 2008, according to data compiled by Bloomberg. In the past four years, their debt rose 89 percent to the equivalent of $501 billion.

A report by Bloomberg reveals that average economic growth in Indonesia,Malaysia, Singapore, Philippines,Thailand and Vietnam fell to just under 5 percent last year from 8.5 percent in 2010, forcing companies to rely more on borrowing than earnings to finance their investments. Outbound acquisition activity from the Asean region has tripled in the past five years as companies sought growth abroad.

“More and more debt is financing less and less growth,” Singapore-based Xavier Jean, a director of corporate ratings for Standard & Poor’s, said in a Sept. 11 interview. “The only way for these companies to keep growing seems to be leveraging up.”

S&P released a study last week that said the escalating debt levels among Asean’s blue-chip companies will increase vulnerability when interest rates start to rise. Internal cash flows and cash balances funded only about half of the $300 billion the region’s largest companies spent on expansion and acquisitions between 2008 and the first quarter of 2014, S&P said. About $150 billion of debt was issued to bridge the gap.

Here’s more from Bloomberg:

Bigger, listed companies typically take on more debt at a faster pace than their private sector counterparts, S&P’s Jean said. That’s partly due to the cheaper cost of funding they’ve enjoyed over the last five years.

U.S. dollar borrowing costs have averaged 4.92 percent since September 2009, JPMorgan Chase & Co. indexes dating back to 2005 show. They averaged 6.70 percent the four years before that and climbed as high as 11.13 percent during the global financial crisis. Costs have risen 14 basis points this month, to 4.75 percent on Sept. 12. “As rates rise, these debt payments are going to become more expensive,” Jean said. “We’re calling attention especially because we’re seeing a lot of U.S. dollar bond transactions at very tight prices.”

Kelonguni

02-10-14, 23:09

Revenge of the red fonts. Fast and furious.

seletar

02-10-14, 23:10

http://sbr.com.sg/financial-services/news/industry-shocker-uob%E2%80%99s-non-performing-housing-loans-spiked-342-in-q2#sthash.0Y7kfMnZ.dpuf
Published 16 Sep 2014

Industry shocker: UOB’s non-performing housing loans spiked 34.2% in Q2

http://sbr.com.sg/sites/default/files/news/uob-marina-bay-financial-centre-lowres_8.jpg

Residential NPLs are now at a 10-year high.

UOB took the banking sector by surprise when it revealed that its non-performing housing loans jumped 34.2% in the second quarter, taking NPLs to their highest level since 4Q04.

According to Maybank Kim Eng, the sharp spike in UOB’s housing NPLs is surprising given the perception that it is one of the more conservative home lenders in Singapore and only a slight year-to-date correction in Singapore’s home prices.

“We understand its NPLs were isolated to a group of borrowers who had invested in Turquoise, a high-end condominium project in Sentosa. According to URA data, two units at Turquoise changed hands in 2Q14 at 45% discounts to their launch prices. It stoked fears that it is a matter of time before default cases become widespread, undermining Singapore banks’ profitability that has been propped up by low charge-off rates,” noted the report.

Arcachon

02-10-14, 23:11

The Red Red Red Red Font will be getting bigger soon.

4. We can’t put all false predictors in jail.

“I find it profoundly unethical to talk without doing, without exposure to harm, without having one’s skin in the game, without having something at risk.”

We all like to listen to the so-called experts making predictions about the property market – the media love it; the audience love it. These ‘experts’ and their predictions are fragile because they are exposed to prediction errors. Honestly, who can tell what is going to happen in the future?

Below are the media predictions and the reality of the property market in the 2000s and 1990s, extracted from No B.S. Guide to Property Investment.

But they don’t have to pay a price for their mistakes. In fact, in our history no one has ever been convicted by law because their projection figures or forecast trends are far from reality. No one has ever paid a price for a prediction error.

We can’t stop people from asking for predictions. We can’t stop experts from making false predictions. But we can at least request the predictors to eat their own cooking and have their skin in the game.

“Never ask anyone for their opinion, forecast, or recommendation. Just ask them what they have – or don’t have – in their portfolio.”

seletar

02-10-14, 23:25

http://www.stproperty.sg/articles-property/singapore-property-news/bleak-private-home-sales-evoke-memories-of-2008/a/181008/page1/1

Bleak private home sales evoke memories of 2008

Number of units unsold at 15.1% last month, worse than in August 2008

The Straits Times - September 18, 2014

http://www.stproperty.sg/articles-property/upload/article/181008__1411007972.jpg
The sales gallery for the upscale Skyline @ Orchard Boulevard was deserted on Tuesday. By some indicators, the market is in worse shape than in the run-up to the 2008 global financial crisis. -- PHOTO: LIM YAOHUI FOR THE STRAITS TIMES

THE upscale Skyline @ Orchard Boulevard sums up the state of the private home market.

In the first eight months of the year, the 40-unit condominium has sold just one unit, leaving 34 units unsold.

The single sale in January was made at $3,362 per sq ft (psf) - far below the starting price of $3,900 psf at its June 2010 launch.

When The Straits Times visited on Tuesday, its sales gallery was completely deserted. This underscores the fact that, by some indicators, the market is in worse shape than it was in the run-up to the 2008 global financial crisis which hit in October that year.

The number of units launched but unsold rose to 15.1 per cent on Aug 31, worse than the 11.8 per cent in August 2008.

http://www.stproperty.sg/articles-property/upload/article/181008__1411008009.png

Vacancy rates at completed private residential projects are also higher, at 7.1 per cent at the end of the second quarter versus 6.1 per cent in 2008 at the same time.

Property consultants expect vacancy rates to rise, given a deluge of completed projects in the pipeline and the limited number of expats looking to rent.

"Most expats are also no longer on expatriate packages... While on local packages, they are more budget conscious and may even combine with others to lease a unit. The demand dynamics for rentals have changed," said CBRE research head Desmond Sim.

Some new completed projects may even see occupancy rates of just 60 per cent, versus the usual more than 90 per cent, said SLP International research head Nicholas Mak.

The low point of the year has been last month's private home sales figures, released on Monday, with just 432 units moved.

Buyer sentiment is bleak.

In central Singapore, projects such as Ardmore 3, Devonshire 8, Ferra at Leonie Hill, One Balmoral and TwentyOne Angullia Park had each sold fewer than 10 units as at Aug 31 - despite being on the market for more than a year.

Even in the suburbs, projects such as E Maison in Braddell Road and Singa Hills in Bedok had sold fewer than a quarter of their units at the end of last month.

Still, monthly sales for the past six months are generally above the corresponding months in 2008, and better than the worst of the global financial crisis, when monthly sales were just 105 in January 2009.

But underlying demand back then may still have been better than now, said Century 21 chief executive Ku Swee Yong.

In 2008, demand came from people flush with cash from collective sales in 2007, who needed a new home; but that element is gone today.

The market recovered fast as more foreigners started taking up permanent residency here, looking to Singapore as a safe haven. But cooling measures hit foreign buyers, Mr Ku said.

The total value of sales today is also likely lower given the greater popularity of one-bedroom units, he added.

"Moving into a time of high vacancies and uncertain yields, investors are expecting and will wait for lower prices."

seletar

02-10-14, 23:28

http://sbr.com.sg/economy/news/singapore%E2%80%99s-total-trade-hit-47-contraction-in-august#sthash.JeJdlrBs.dpuf
Published: 17 Sep 14

Singapore’s total trade hit with 4.7% contraction in August

http://sbr.com.sg/sites/default/files/news/graph_downtrend_10.jpg

This follows a 2.5% decline in July.

Data released today by the International Enterprise Singapore revealed that the country’s total trade fell by 4.7% year-on-year in August. On a seasonally adjusted basis, the level of total trade reached $80.5 billion in August, lower than July’s record of S$80.6 billion.

On a year-on-year basis, total exports declined by 1.2% in August, following the 1.6% contraction in July. Total imports also decreased by 8.6% last month following the 3.5% decline in July.

seletar

02-10-14, 23:39

http://theindependent.sg/blog/2014/09/17/3-indications-that-show-just-how-bad-the-singapore-residential-property-market-is/

3 indications that show just how bad the Singapore residential property market is

September 17th, 2014 | by The Independent

In Jan 2014, I wrote about why this year could be turbulent for property market stakeholders. In the recent weeks, there were some reports on how quiet the high-end property market in Singapore is. A casual observer may think that this is just limited to the high-end sector; in reality, the market malaise is probably more wide spread than what many people realise.

For those who are wondering just how bad the market is, here are 3 indicators to shed some light on the health of the Singapore residential property sector.

Indicator 1: The Property Price Index is on a downward trend

If you have been following the property market news, you would have read that the URA private property price index (PPPI) has been on a downward trend. But exactly how much has it dropped by and for how long?

Based on Figure 1, it can be seen that prices in the private property market, as a whole, have been dropping for 9 months (i.e. 3 quarters) and the total drop has been about 3%. While some may feel that a drop of 3% is not much, URA PPPI is only one indicator. To have a more complete picture, we should look at how much transaction volume has dropped by.

Figure 1: URA PPPI chart (2013Q1 to 2014Q2)

Duration __URA PPPI__ % Change
2013Q1 ___ 213.2 _____ -
2013Q2 ___ 215.4 _____ 1.0%
2013Q3 ___ 216.3 _____ 0.4%
2013Q4 ___ 214.3 _____ -0.9%
2014Q1 ___ 211.6 _____ -1.3%
2014Q2 ___ 209.4 _____ -1.0%

Source: URA, Ascendant Assets Pte Ltd

Indicator 2: Significant drop in transaction volume

To give readers a sense of the transaction volume, a chart comparing the monthly changes between 2013 and 2014 is shown in Figure 2. Graphically, it can be seen that in some months, transaction volume in 2014 is less than half what it was for the same month a year ago.

Figure 2: Transaction volume comparison
https://ca_images.s3.amazonaws.com/2014/9/6/4130c8c4-54a1-4ed8-9f4a-c3bfa70465c0-Screen%20Shot%202014-09-06%20at%2011.10.47%20AM.png

Collectively, there were a total of 19,531 private property transactions from Jan 2013 to Aug 2013. In comparison, there were only 8,532 for the same period in 2014, which works out to be a drop of more then 56%

Indication 3: Number of unsold units is increasing

Some readers may argue that low transaction volume may not be representative of a lacklustre market, as there may not be that many units on sale to begin with. However, when we look at the number of unsold units in the market, it is observed to be increasing.

Based on URA’s data, it can be seen that the number of private residential units (including EC) under construction that were launched and remain unsold is on an upward trend (see Figure 3). As at 2014Q2, there were more than 6,300 units still left unsold. With more new developments coming on line in the next few quarters, this figure looks set to increase.

Figure 3:Private Residential and Executive Condominium Units Under Construction with Pre-requisites for Sale and are Launched but Unsold
https://ca_images.s3.amazonaws.com/2014/9/6/f7087943-4bc7-4489-8bdc-70cf31f06cd6-Screen%20Shot%202014-09-06%20at%2011.11.18%20AM.png

Conclusion

In conclusion, we are still in early days and the lacklustre market is expected to last for some time. Hence you may want to maintain a healthy dose of scepticism whenever you hear anyone who tries to present the property market in a promising light.

seletar

02-10-14, 23:43

http://www.businesstimes.com.sg/premium/top-stories/fed-flags-october-end-bond-buying-20140919
Business Times
Published September 19, 2014

Fed flags October end to bond buying

More hawkish tone prompts traders to switch out of Treasury bonds into dollars

http://www.businesstimes.com.sg/sites/businesstimes.com.sg/files/imagecache/image_300x200/BT_20140919_RCFED19_1276049.jpg

FOR the Federal Reserve, this was the point of no return: an extraordinary half-decade of stimulus and rate cuts has almost certainly come to an end.

In her latest policy statement and press conference, Janet Yellen, the chairwoman of the central bank, said the Fed's monetary stimulus will end with the purchase of a final US$15 billion of bonds in October, adding that most Fed members now expect to hike rates some time in 2015.

While the Fed once again promised that rates would remain at extraordinarily low levels for a "considerable time", two of the ten voting board members - Dallas Fed president Richard Fisher and Philadelphia Fed president Charles Plosser - dissented on the rate decision largely because they didn't want to make that promise.

Even though the "tapering" of bond purchases was effectively a nine-month, slow-motion change in policy, the realisation that the Fed's mighty ship had now completed its volte-face caused fixed-income traders to buy dollars and sell Treasury bonds in the wake of the statement. Rising rates drag down the value of Treasury bonds but they increase the relative value of the US dollar, particularly when other nations - including those in the eurozone, Japan and China - are printing money to pump into their economies. The same day Ms Yellen described the end of the Fed's stimulus era, China reportedly started pumping billions of yuan into its commercial banks while October would be the first month of a bond buying programme by the European Central Bank.

In its statement, the Fed concluded that the US economy’s expansion has continued since its last meeting in July. In what was likely a nod to the surprisingly weak August jobs report, however, Ms Yellen reiterated concerns about “underutilization” of labour, one of the chairwoman’s main reservations about the outlook for growth.

One indication that the Fed is now more hawkish – or leaning toward rate hikes – was the change in the Fed board members’ own rate projections. The central bank now predicts the rate it charges commercial banks when it lends them money will move from zero currently to 3.75 percent by the end of 2017.

seletar

02-10-14, 23:49

http://www.todayonline.com/business/property/tidal-wave-property-supply-hits-spore

Tidal wave of property supply hits S’pore

TODAY
Published: September 19, 2014

Investors should sell their residential investments in Singapore. The property market, which has been gradually declining, does not need any new action to tip it over. Just the sheer number of new homes being supplied both in Singapore and Iskandar will drive prices lower.

New private home sales in Singapore have plunged in the past three months to about 40 per cent of the monthly average of the past five years or so.

Since January 2010, the average number of homes sold by developers each month has exceeded 1,300 units. The total number of new homes sold in June, July and August were 531, 560 and 490, respectively, including executive condominiums (EC). Excluding the hybrid housing type, the respective numbers were 482, 509, and 432, respectively, Urban Redevelopment Authority (URA) and Century 21 (IPA) data showed.

Given seasonal factors, such as the Hungry Ghost Month and the quadrennial football World Cup, the three months of dismal private home sales will not be sufficient to render the residential sector a bear market. However, the downward trend can be confirmed by several other indicators.

The Housing and Development Board (HDB)’s resale price index, which has a direct impact on mass market private properties, has fallen 5.4 per cent over the past four quarters.

During the same period, the URA’s private residential price index slipped 3.4 per cent. The weakness is also reflected in the rental market, where median private non-landed rentals eased 1.1 per cent in the past four quarters to S$3.79 psf per month. Meanwhile, private residential occupancy rates fell to 92.9 per cent in the second quarter of this year from 93.9 per cent in the third quarter of last year. In absolute terms, the number of vacant units increased to 21,268 in the second quarter of this year from 17,459 in the third quarter of last year.

Taken together, it is evident that we experienced a slow decline over the past year. Will this gradual weakening lead to a soft landing? Or are we about to fall off the edge of a cliff? As a practising real estate agent, I find it tougher to hold up high rents for landlords. With the rising vacancy rates amid a stream of newly-completed properties, the competition for tenants is intense, especially with the Government tightening foreign employment.

Although some landlords have yet to tune themselves to this new reality, others have reacted quickly ahead of next year’s record high supply, which will further pressure rents.

Supply of HDB, EC UNITS and Private Residences

In the past 10 years, Singapore has added about 8,000 new private residential units per year. But next year, we can expect about 22,000 units to be completed and 24,000 the year after and at least 16,000 in 2017. The pressure on rents will be overwhelming. Lifting the property curbs will not help fill vacant apartments and improve rents.

The expected supply of new HDB flats and ECs is large as well. More than 25,000 units will be completed every year over the next three years. There are also many second-time new HDB buyers and those who are upgrading to ECs who are required by law to sell their current HDB flats when they collect the keys to their new flats or ECs. Unless a few of the cooling measures are lifted and the foreigner employment policies are relaxed, the HDB Resale Price Index and the URA Residential Price Index are set to decline at a faster pace with the onslaught of new, completed home completions, even after taking into account the need for infrastructure to keep pace with population growth.

Supply in Iskandar

We must also not forget the promise of lower-cost properties across the Causeway in Iskandar.

The numerous Iskandar residential projects launched in Singapore since 2010, in locations such as Puteri Harbour, Danga Bay, Tebrau, Medini, etc, are now being completed.

They are ready to compete for tenants from Singapore seeking to reduce their housing costs and who do not mind making the commute between the countries. I estimate that over the next four years, about 10,000 new homes will be added per year in Iskandar and some of these will find tenants from Singapore with their attractive rents.

In the past six months, there has been an increase in the number of mortgagee home sales, with several headline-grabbing ones involving luxury condominiums in Sentosa Cove and the prime District 9. During the luxury property boom from 2006 to 2008, about 60 per cent of top-end apartments were purchased by foreigners. Some have held on to their investments, but they are now feeling stifled as a result of the multiple rounds of cooling measures, weak property demand and the restricted ability to refinance under the current regime.

For those who are willing to take a long-term view, say, 15 years and beyond, landed homes and high-quality freehold properties in Districts 9 and 10 would remain safe bets as these sub-segments are limited in terms of current stock and future supply.

As for now and the immediate future, as I forecast in a commentary in this column last year (“The price war has begun”, Nov 8, 2013), sellers are lowering prices and this will continue to take its toll on investors.

I recommend that investors sell their residential investments before they are engulfed by the tidal wave of new supply.

seletar

02-10-14, 23:53

http://www.stproperty.sg/articles-property/singapore-property-news/a-property-launch-in-all-but-name/a/181515

A property launch in all but name

Times are hard, but cautious developers may be going overboard

The Straits Times - September 20, 2014
By: MELISSA TAN

YOU know times are hard in the property market when developers cannot even call a launch a launch.

Before sales of private homes slowed down so badly, developers would, with much fanfare, open a project for preview one weekend and launch it for sale the next.

These days, however, projects seem to spend a prolonged period moseying through an untold number of preliminary stages before they finally muster up the courage to take that big, scary step of making the sale official.

Their main goal throughout seems to be to keep the sale under the radar just in case it turns out to be a flop.

When they do finally launch it, they make only a smaller portion of the total number of units available for sale, so that they can proclaim high take-up rates.

Some may also proclaim that they have secured "commitments" from buyers to pick up units, which may or may not translate to actual sales.

Even if the project's showflat is already completed, many developers are happy to let dust collect.

Like spiders spinning a web, they now quietly complete their showflat first and then wait and wait. The hunt begins only once they believe enough interest from prospective buyers has been drummed up.

It starts off with a tentative and somewhat tense song and dance often known as the "VVIP preview", since clearly only one "V" no longer cuts it in these uncertain times.

This preview can stretch up to several weeks, and though it may make it sound rather exclusive, those not in the Tatler set do not have to fear being shut out.

As I have found over the months I spent visiting showflats as part of my job, "VVIP" pretty much applies to anyone who picked up an agent's call and looks capable of opening a bank account.

Having become extremely flexible in this regard, developers are balancing that out by being extra cautious in others.

This is completely understandable, given the moribund state of the property market - which is not within their control - and their need to keep the public perception of the project positive.

In their eagerness to do that, however, some developers could go somewhat overboard.

I can think of at least one new project where the developer insisted that marketing had not started yet, even though real estate agents had begun to distribute fliers for the condo and send out promotional e-mail.

At another project that had already begun sales, the developer took pains to steer clear of the taboo word. Rather than call it a "launch", it insisted on saying that units were "released" for sale to the public, which to me sounds no different.

Of course, private developers are free to call their project sales anything they want. The Urban Redevelopment Authority does not stipulate precise definitions for the word "launch" in its data dictionary available online.

But I cannot see how smokescreen tactics like that would truly help sales, which depend far more on the project's location, design and, of course, pricing.

After all, what's in a name? A launch by any other name would sell just as sweet - or poorly - as it would otherwise.

seletar

03-10-14, 00:04

http://www.stproperty.sg/articles-property/singapore-property-news/rise-in-unsold-housing-units-on-city-fringe/a/181487/page1/1

Rise in unsold housing units on city fringe

Developers forced to offer big discounts to spur sales

The Straits Times - September 22, 2014

http://www.stproperty.sg/articles-property/upload/article/181487__1411354204.jpg
There were about 300 units left unsold in total at the 360-unit Concourse Skyline (right) in Beach Road and the 1,040-unit The Interlace in Depot Road as at June 30. -- ST PHOTO: MARK CHEONG

THE property market's woes have spread from the luxury sector to more modestly priced homes on the city fringe as new loan curbs keep buyers in check.

Unsold units are piling up in areas such as Bukit Merah, Kallang and Marine Parade, with developers forced to dangle big discounts to move homes.

Homes in the area - dubbed the "rest of the central region" (RCR) in industry jargon - are right in the price range that leaves many buyers struggling to raise a mortgage, in the light of new rules that restrict lending.

"Developers of suburban condos have not needed to slash prices as most HDB upgraders find launch prices of about $1,000 per sq ft (psf) affordable. But developers of RCR non-landed homes have had to cut prices to fit the total debt servicing ratio (TDSR) limits of buyers," said R'ST Research director Ong Kah Seng.

Wealthy buyers of properties in the central city area generally do not require a loan and so are not affected by the TDSR, he added.

The city fringe area had 414 completed but unsold units islandwide as at June 30. This was 29 per cent of the national total and up from the 20 per cent or 250 such units at the end of last year.

The central city area accounted for 63 per cent of such units as at June 30, down from 70 per cent at the end of last year.

Colliers International research director Chia Siew Chuin believes the build-up in completed but unsold units on the city fringe could be due to the recent completion of large-scale projects.

"It is also more challenging to find buyers for projects in the (area) where homes are generally pricier than mass market condominium developments, especially in the light of the current weak market sentiment," said Ms Chia.

There were about 300 units left unsold in total at the 1,040-unit The Interlace in Depot Road and the 360-unit Concourse Skyline in Beach Road as at June 30. The Interlace obtained its temporary occupation permit (TOP) in the third quarter of last year, while Concourse Skyline received it in the first quarter of this year.

As at the end of last month, just six units had been sold at the 41-unit Riverside Melodies in St Michael's Road, which received its TOP in the second quarter.

Project launches on the city fringe have had a mixed reception as well. About a week ago, the 500-unit Highline Residences in Tiong Bahru sold about 80 per cent of the first 160 units released.

But the picture at older launches is less rosy. The 56-unit Cosmo Loft in Balestier, launched in May last year, had sold just five units as at Aug 31.

The 128-unit Fulcrum in Fort Road, which started selling units in April 2012, has moved just 17 units with its last sale in May last year. #1 Suites in Geylang, on the market for over a year, had sold just 38 of 112 units as at the end of last month.

"The pool of buyers who can afford RCR properties has definitely shrunk. Unit sizing and price quantum are even more critical areas to consider today to achieve sustainable sales," said Knight Frank Singapore research head Alice Tan.

teddybear

03-10-14, 08:43

Don't any how say lah, OCR private property prices still holding up VERY WELL and is UP >140% vs 2009 lows................................................................................ :star:

http://theindependent.sg/blog/2014/09/17/3-indications-that-show-just-how-bad-the-singapore-residential-property-market-is/

3 indications that show just how bad the Singapore residential property market is

September 17th, 2014 | by The Independent

In Jan 2014, I wrote about why this year could be turbulent for property market stakeholders. In the recent weeks, there were some reports on how quiet the high-end property market in Singapore is. A casual observer may think that this is just limited to the high-end sector; in reality, the market malaise is probably more wide spread than what many people realise.

For those who are wondering just how bad the market is, here are 3 indicators to shed some light on the health of the Singapore residential property sector.

Indicator 1: The Property Price Index is on a downward trend

If you have been following the property market news, you would have read that the URA private property price index (PPPI) has been on a downward trend. But exactly how much has it dropped by and for how long?

Based on Figure 1, it can be seen that prices in the private property market, as a whole, have been dropping for 9 months (i.e. 3 quarters) and the total drop has been about 3%. While some may feel that a drop of 3% is not much, URA PPPI is only one indicator. To have a more complete picture, we should look at how much transaction volume has dropped by.

Figure 1: URA PPPI chart (2013Q1 to 2014Q2)

Duration __URA PPPI__ % Change
2013Q1 ___ 213.2 _____ -
2013Q2 ___ 215.4 _____ 1.0%
2013Q3 ___ 216.3 _____ 0.4%
2013Q4 ___ 214.3 _____ -0.9%
2014Q1 ___ 211.6 _____ -1.3%
2014Q2 ___ 209.4 _____ -1.0%

Source: URA, Ascendant Assets Pte Ltd

Indicator 2: Significant drop in transaction volume

To give readers a sense of the transaction volume, a chart comparing the monthly changes between 2013 and 2014 is shown in Figure 2. Graphically, it can be seen that in some months, transaction volume in 2014 is less than half what it was for the same month a year ago.

Figure 2: Transaction volume comparison
https://ca_images.s3.amazonaws.com/2014/9/6/4130c8c4-54a1-4ed8-9f4a-c3bfa70465c0-Screen%20Shot%202014-09-06%20at%2011.10.47%20AM.png

Collectively, there were a total of 19,531 private property transactions from Jan 2013 to Aug 2013. In comparison, there were only 8,532 for the same period in 2014, which works out to be a drop of more then 56%

Indication 3: Number of unsold units is increasing

Some readers may argue that low transaction volume may not be representative of a lacklustre market, as there may not be that many units on sale to begin with. However, when we look at the number of unsold units in the market, it is observed to be increasing.

Based on URA’s data, it can be seen that the number of private residential units (including EC) under construction that were launched and remain unsold is on an upward trend (see Figure 3). As at 2014Q2, there were more than 6,300 units still left unsold. With more new developments coming on line in the next few quarters, this figure looks set to increase.

Figure 3:Private Residential and Executive Condominium Units Under Construction with Pre-requisites for Sale and are Launched but Unsold
https://ca_images.s3.amazonaws.com/2014/9/6/f7087943-4bc7-4489-8bdc-70cf31f06cd6-Screen%20Shot%202014-09-06%20at%2011.11.18%20AM.png

Conclusion

In conclusion, we are still in early days and the lacklustre market is expected to last for some time. Hence you may want to maintain a healthy dose of scepticism whenever you hear anyone who tries to present the property market in a promising light.

Kelonguni

03-10-14, 09:50

Fed chief Bernanke having trouble refinancing his own home loan
Published on Oct 3, 2014 8:38 AM 0 0 0 0PRINT EMAIL
NEW YORK (Reuters) - Former U.S. Federal Reserve Chairman Ben Bernanke is having a "hard time" refinancing his home loan due to the tight credit conditions in the mortgage market.

"I recently tried to refinance my mortgage and I was unsuccessful in doing so," Bernanke said, speaking at a conference in Chicago, according to Bloomberg report on Thursday.

The Mortgage Bankers Association's said on Wednesday its seasonally adjusted index of refinancing applications fell 0.3 per cent, while the gauge of loan requests for home purchases, a leading indicator of home sales, were unchanged.

Bernanke also said the market for first-time home buyers was"not what it should be," Bloomberg reported. "The housing area is one area where regulation has not yet got it right," Bernanke said, according to the report.

teddybear

03-10-14, 11:47

Wah, didn't know Fed Chief also so highly leveraged to take advantage of the low interest rate situation to make a bundle!!!!!!!!

Fed chief Bernanke having trouble refinancing his own home loan
Published on Oct 3, 2014 8:38 AM 0 0 0 0PRINT EMAIL
NEW YORK (Reuters) - Former U.S. Federal Reserve Chairman Ben Bernanke is having a "hard time" refinancing his home loan due to the tight credit conditions in the mortgage market.

"I recently tried to refinance my mortgage and I was unsuccessful in doing so," Bernanke said, speaking at a conference in Chicago, according to Bloomberg report on Thursday.

The Mortgage Bankers Association's said on Wednesday its seasonally adjusted index of refinancing applications fell 0.3 per cent, while the gauge of loan requests for home purchases, a leading indicator of home sales, were unchanged.

Bernanke also said the market for first-time home buyers was"not what it should be," Bloomberg reported. "The housing area is one area where regulation has not yet got it right," Bernanke said, according to the report.

jwong71

03-10-14, 12:28

mr seletar:

I thought you were vested..??

Allthepies

03-10-14, 12:44

It must be a good sign when you see all the negative news coming out. This can usually mean only 1 thing : ) Those unvested good luck : )

seletar

03-10-14, 12:50

If there is a 50% cap on the use of CPF funds to finance housing, residential property prices could drop substantially ...

http://www.todayonline.com/singapore/cap-use-cpf-monies-housing

Cap use of CPF monies for housing

http://www.todayonline.com/sites/default/files/styles/photo_gallery_image/public/20218801.JPG?itok=634pCSLN
Linking CPF monies to housing makes Singaporeans’ retirement funds vulnerable to the cyclical patterns of the property market. Photo: Bloomberg

TODAY
Published: 4:03 AM, September 24, 2014

At a recent seminar, Associate Professor Lum Sau Kim from the National University of Singapore (NUS) noted that the use of Central Provident Fund (CPF) monies for housing payment had constrained retirement adequacy.

“If so much of CPF funds are dedicated to housing, then we have poorly diversified household portfolios ... the nest egg that we have will be vulnerable to housing sector shocks and greater risks,” she said.

This raised an important question on whether the use of CPF savings for housing has been too liberal and whether it is time to impose limits to enhance Singaporeans’ retirement adequacy.

There are pros and cons to linking CPF to housing. The benefit is clear, for without the provision to use CPF to fund property loans, far fewer Singaporeans would be able to buy a home. Currently, home ownership rate stands at about 90 per cent, among the highest in the world.

However, on the flipside, linking CPF monies to housing makes Singaporeans’ retirement funds vulnerable to the cyclical patterns of the property market. For instance, when the property market contracts and valuations plunge, CPF members who are retiring and intending to unlock some or all of their housing assets to fund their retirement could be heavily hit.

Even if property prices surge, they may not be able to afford another home after selling the current one — unless they move in with family or friends. So while they might be sitting on an S$800,000 property, they may well have much less in the bank for their daily needs.

The Government is clearly keen to address Singaporeans’ concerns on retirement adequacy. The recent revision to the Lease Buyback Scheme — where Housing and Development Board (HDB) flat owners sell back part of the remaining lease to the Government — is a case in point.

But I believe the crux of the problem is the way Singaporeans use their CPF monies to buy property.

Many Singaporeans are currently pledging most, if not all, of their Ordinary Account contributions to housing, an illiquid asset. This might not be the most prudent approach to retirement planning. Even if there is a lack of viable investment vehicles in Singapore for retirement planning, a retirement portfolio needs to be well-diversified and not one that places most, if not all, eggs into one basket. There should also be a cash savings component in the portfolio that caters for a rainy day such as a medical emergency.

HOW A CAP WORKS

In a 2012 paper, NUS economic professors Chia Ngee Choon and Albert Tsui suggested that while it may be an uphill task to delink housing financing from CPF completely, more measures can be implemented to ensure that younger Singaporeans buy only homes they can afford. This is a viewpoint that has garnered support among retirement-planning professionals in the private sector.

The professors’ housing consumption sensitivity analysis indicated that there is a strong trade-off between housing consumption and retirement adequacy. For example, a median male earner (monthly salary of S$2,500) who enters the workforce today and goes on to buy a four-room HDB flat will have a net Income Replacement Ratio (IRR) of 70 per cent. But if he buys a five-room flat instead, his net IRR dips to 58 per cent, a staggering 12-percentage-point differential.

IRR is defined as the percentage of working income an individual needs to maintain the same standard of living in retirement he had enjoyed while still active in the workforce. The lower the IRR, the worse off the retiree will be in his golden years.

To expand upon the professors’ prudent approach, a cap could be imposed on the amount of Ordinary Account funds that is made available for housing purchases. For example, a 50-per-cent cap on the use of CPF funds to finance housing will ensure more savings will be set aside for retirement.

Let’s use the same median male earner with a monthly salary of S$2,500 to illustrate this. Let’s say he wants to buy a new four-room HDB flat and needs to take a 30-year-old loan of S$300,000 at an interest rate of 1.5 per cent. If the 50 per cent cap is applied, his household will have to come up with an additional S$6,155 per annum in cash payments for the flat. This transfers into almost S$513 per month, or about 25 per cent of his take-home pay of S$2,000. This percentage would not be considered onerous and would drop as his income grows along with career progression. The upside for him is that he would get S$15,000 more in retirement income every year when he retires at 62.

The policy rationale allowing Singaporeans to draw heavily on their CPF funds to pay for housing in the past is understandable as the priority was to make Singaporeans homeowners and to give them a stake in the nation’s future. But with greater life expectancy and an ageing population, the need to help Singaporeans enjoy retirement adequacy suggests it is perhaps time to rethink this policy.

If young Singaporeans, confident of their future earning power, want to buy a bigger first home, they should by all means seize that opportunity. But the caveat is that they should plan their finances carefully and not depend primarily on their CPF accounts.

A cap on the use of CPF for housing could provide the balance necessary to fund property ownership, but not at the expense of retirement funds.

seletar

03-10-14, 12:51

https://sg.news.yahoo.com/spore-among-least-affordable-cities-young-graduates-074126705--sector.html

Singapore among least affordable cities for young graduates

Property Guru – 24 Sep 2014

Singapore is one of the least affordable cities in the world for young professionals, according to Knight Franks Cost of Living Index.

The city-state was ranked 16th on the list of 20 global cities monitored by Knight Frank, and published in its inaugural Global Cities 2015 report.

The report stated that young graduates based in Singapore have one of the lowest levels of disposable income, with around 10 percent of their net salaries left at the end of every month.

Frankfurt was rated as most affordable on the list, with young professionals in the German city having 60 percent of their income remaining after expenses.

In 20th place, Hong Kong emerged as the least affordable city, with a 4.61 percent income deficit recorded for a Hong Kong graduate. All Asian cities fell below the top 10 among the global cities tracked.

Knight Franks research looked at young graduates in the districts surrounding the city limits, using variables including graduate starting salary, cost of rented accommodation and utility bills, as well as the cost of a pint of beer, a coffee and groceries.

seletar

03-10-14, 12:54

More and more supply on the way ...

http://www.channelnewsasia.com/news/singapore/staggered-downpayments/1378144.html

Channel News Asia
POSTED: 24 Sep 2014 10:59

September 2014 BTO Exercise Launched

A total of 4,630 new flats, spread across six projects in the non-mature towns of Bukit Batok, Hougang and Jurong West, and the mature town of Kallang Whampoa, were launched in the September 2014 BTO exercise.

http://www.channelnewsasia.com/blob/1378136/1411526347000/sept-bto-2014-data.png

At Bukit Batok, 1,793 two- to five-room units are on offer. Jurong West has about 907 two- to four-room flats available. Two projects at Buangkok will have almost 1,192 units comprising two- to five-room and Three-Generation flats.

According to real estate agency HSR, the 738-unit project at Kallang Whampoa will be the most popular as it is the only project located in a mature estate.

"It is also near to a lot of amenities and the MRT station. It will definitely create a lot of interest which I also believe is why the price, as indicated on HDB's website, is higher than the rest," said HSR's head of Singapore projects, Mr Alan Tan.

"Jurong West will be the other one which will also attract high interest ... due to the redevelopment of the area," he added.

Eligible first-timer singles have the option of applying for a two-room flat in Buangkok Square, West Terra @ Bukit Batok, Yung Ho Spring I or Yung Ho Spring II. For large families, Three-Generation flats are available at Buangkok Edgeview, Buangkok Square, St George’s Towers, West Terra @ Bukit Batok, Yung Ho Spring I or Yung Ho Spring II, HDB added.

Half of the studio apartments at St George’s Towers in Kallang Whampoa will be set aside for seniors living in the same town or within 2 kilometres of their current flat or property, or those applying for a studio apartment to live near or with their parents or married child.

Applications start on Wednesday and will close on Sep 30.

Another 4,290 flats in Sembawang, Sengkang, Tampines and Yishun will be launched in the next BTO exercise in November. Another 3,000 flats will be offered in a concurrent Sale of Balance Flats exercise, HDB added.

seletar

03-10-14, 13:00

http://www.cnbc.com/id/102027065

China property hard sell intensifies in bid to lift sagging sector

Reuters
23 Sep 2014 | 7:29 PM ET

Chinese banks, property developers and regional governments are intensifying efforts to drag the housing market from its worst slump in two years by allowing people to buy more than one home, slashing prices and launching unorthodox promotions.

The property sector, which accounts for about 15 percent of China's economy and directly affects some 40 industries from furniture to steel, is of increasing concern to companies and policy makers as it drags on growth.

The most powerful support measure may be yet to come.

Chinese media said on Tuesday that one of China's top four state banks planned to discount mortgage rates by 30 percent and relax lending rules for those buying a second home.

Whether the flurry of measures can stoke growth in a sector that is crucial to the world's second largest economy remains to be seen.

Even in central Beijing, one of the few cities left in China where home purchase restrictions are still in place due to record-high prices, the sector is feeling the pinch.

Lu Yanzeng, a property agent, said he had not sold a single home in two months. Business this year "is very so-so, it's not as good as last year," he said. "Sales of second-hand homes are slow, but new home sales are brisk."

China's property market, where prices surged to all-time highs for five consecutive years, is experiencing its sharpest slowdown in around two years.

Average new home prices fell for a fourth consecutive month in August by 1.1 percent, meaning the market is now close to wiping out gains seen over the last year. Compared to a year ago, sales as measured by floor space were down 12.4 percent.

While the slowdown in a heated market has benefited millions of Chinese, for whom soaring house prices have made home ownership a distant dream, slackening activity has also raised concerns about the health of China's economy.

It is straining already softening domestic demand and pushing overall fixed-asset investment to lows not seen in nearly 14 years on a cumulative basis between January to August.

Falling home prices are also fueling credit risks.

State news agency Xinhua said on Sunday that 32 small property developers in the city of Handan in north China have defaulted on loans that were borrowed illegally from an underground market.

That prompted the local government to arrest several executives to stem local investor panic.

No bank or official has so far confirmed media reports that mortgage rates would be lowered, partly out of fear of being criticized for reflating China's property bubble.

But those in the market were hopeful such a move was imminent, especially since regional governments have already tried to prop up the market by abolishing housing investment limits in 40 of 46 cities.

"The unwinding of property controls by local governments should lift sales, but the effect so far isn't obvious," said a senior executive at a mid-sized listed developer in Beijing, who declined to be named.

"Relaxing the rules on home loans would be more effective and practical."

Losing weight, free chickens

In the meantime, developers are resorting to off-beat marketing ploys to boost business.

China's largest residential developer China Vanke has partnered Taobao, China's version of eBay, to give shoppers who have spent at least 1 yuan on Taobao in the past year a discount of 50,000 yuan ($8,148) when they buy a home featured in a promotion.

And discounts go up to 2 million yuan for those who have bought 2 million yuan worth of goods on Taobao, owned by Alibaba Group Holding.

The promotion, which includes a free taxi ride for those who visit the showroom, has drawn an "especially good response", Taobao said in a statement this month when Vanke expanded the promotion to cover more housing projects.

The month-long initiative now covers apartments and villas in 40 Vanke projects spread across 14 cities, including the eastern city of Hangzhou, one of the areas worst hit by an oversupply of homes and falling property prices.

With China Poly Real Estate, one of China's largest developers, buyers can get discounts proportionate to the amount of weight they lose in a few weeks, the Beijing Evening News newspaper said last week.

"Many property developers face big pressure to meet their sales targets this year," said Zhang Xu, an analyst at property consultant HomeLink, in Beijing. "Some of them are exploring new ways to boost sales."

Developers started cutting prices in February, but modest reductions failed to turn the market around as buyers held out for bigger discounts.

And as inventories of unsold homes climbed during the traditional peak season for property launches in September and October, analysts said developers, especially those strapped for cash, could offer deeper discounts in the coming months.

As of the end of August, half of the 24 listed developers monitored by HomeLink were more than 50 percent short of meeting their 2014 sales targets, data from HomeLink showed.

For an unnamed developer in Guangxi, a region in southwest China, giving live chickens away for free has proved an effective way of drawing attention to a property launch.

"They're yours if you can catch them", Chinese media reports quoted the promotional material as saying.

Pictures online showed smiling retirees grabbing chickens by their claws, with 1,000 live poultry snapped up in 15 minutes.

The reports did not say how many homes were sold.

seletar

03-10-14, 13:02

http://sbr.com.sg/residential-property/news/panic-selling-alert-number-singaporeans-keen-dispose-their-houses-surged-1#sthash.vifR669P.dpuf
Published 25 Sep 2014

Panic selling alert: Number of Singaporeans keen to dispose their houses surged 15% in H2

More jittery homeowners are looking to sell their homes in the second half of 2014, but more buyers are holding back thanks to affordability and financing concerns.

According to the iProperty Asia Property Market Sentiment Report H2 2014, the number of Singaproeans who want to sell their homes jumped to 16% in H2, compared to just 1% in the same period last year.

Meanwhile, the number of residents looking to buy property fell to 10%, from 22% in the second half of 2013.

The number of respondents who expect new and resale private condominium prices to decline jumped from 34% to 53%.

“The H2 2014 report shows that both property sellers and buyers are nervous a year after the start of the Total Debt Servicing Ratio (TDSR). In the H2 2013 APMSR report, just after the TDSR was announced, 59 per cent of owners were confident their property would retain its value; now only 38 per cent think so, a decline of 21 per cent. Another 25 per cent are unsure if the value will be retained,” said Sean Tan, iProperty.com Singapore General Manager.

seletar

03-10-14, 13:07

http://www.stproperty.sg/articles-property/singapore-property-news/downtown-home-prices-take-a-big-hit/a/182424

Downtown home prices take a big hit

More sold at loss, bigger drop in prices than in old prime districts

The Straits Times - September 29, 2014

http://www.stproperty.sg/articles-property/upload/article/182424__1411960226.jpg
For 11 out of 34 units sold in District 1, rentals would have been unable to cover the assumed mortgages, said SLP International's Mr Mak. -- ST PHOTO: DESMOND WEE

AS THE luxury residential segment flounders, properties in the Downtown area have taken an especially big hit.

More loss-making transactions have occurred in this area so far this year, compared with last year. Fewer profit-making transactions have taken place.

Resale prices in the area have also fallen faster than those in the traditional prime districts, reflecting its status as a less established high-end residential area.

According to data compiled by ST Property, there were seven loss-making transactions in the Downtown area in the first eight months of this year.

They ranged from a $60,000 loss from the resale of a 1,130 sq ft unit at Marina Bay Residences last month to a $343,200 loss from the subsale of a 506 sq ft unit at Robinson Suites in April.

In comparison, there were just two such transactions in the same period last year - a $30,740 loss from the resale of a 667 sq ft unit at The Sail in January and a $82,400 loss from the resale of a 1,184 sq ft unit, also at The Sail in the same month.

The number of profitable transactions slid from 37 in the first eight months of last year to 27 in the same period this year.

The average annualised profit margin from profitable transactions fell as well, from 9.4 per cent a year in the first eight months of last year to 4.83 per cent a year in the same period this year, said SLP International executive director Nicholas Mak.

He added that there was a higher risk of suffering a loss on an investment in a one-bedroom unit this year as five out of seven loss- making deals over the two time periods involved investments in one-bedders (60 sq m, or about 646 sq ft, or smaller).

Mr Mak noted that in the first eight months of this year, for 11 out of 34 units sold in District 1, rentals would have been unable to cover the assumed mortgages, assuming median market rents. This compares with five out of 39 sales over the same period last year.

Owners putting up high-end residential units for resale may also be feeling the strain of competing with developers with ample unsold stock, said R'ST Research director Ong Kah Seng.

Developers may be offering attractive discounts, or even renting out units instead of selling them. "This impacts owners who are investors, so their best choice would be to sell the unit away at a loss," he said.

Resale prices in the Downtown area have fallen by about 8 per cent over the past year, whereas resale prices in Districts 9 to 11 fell about 5 per cent over the same period, Mr Ong noted.

Prices are steadier in Districts 9 to 11 as they are more established as exclusive areas, said Mr Ong. "Owners (in these areas) are more willing to hold on to the properties even as prices decline 'on paper' - they take pride in their property's established location."

He noted that units in traditional prime districts are also usually larger, a reflection of the fact that their owners are typically wealthier. All 330 units in Ardmore Park, for example, are 2,885 sq ft.

In comparison, condominiums in the Central Business District usually comprise a mix of small, average and large units.

"When the overall high-end residential segment plunges, those newer high-end residential localities without an entrenched positioning might see prices falling faster," said Mr Ong.

seletar

03-10-14, 13:10

http://sbr.com.sg/shipping-marine/in-focus/dark-days-dawn-offshore-and-marine-firms-rig-building-activities-grind-halt#sthash.DczfK6Bm.dpuf
Published 29 Sep 2014

Dark days dawn for offshore and marine firms as rig-building activities grind to a halt

Sliding oil prices are to blame.

Singapore’s once-busy shipbuilders have been left high and dry by sliding oil prices. Investors are already lamenting a dearth of new orders, as a heavy newbuilding backlog is expected to flood the market over the next two years.

According to CIMB, the dearth of new orders will be especially pronounced for SGX-listed companies like Ezra and Vard, which are geared towards deepwater activities. Sembcorp Marine, Keppel Marine and Nam Cheong would also be affected since they are leveraged to the capital investment cycle.

“We believe that deepwater and ultra-deepwater activities would be the most affected, since they are most sensitive to oil prices. Brent, the global oil benchmark, has dropped some 15% since June, slipping below US$100/bd to a two-year low of c.US$97," noted CIMB.

We are currently witnessing an environment of softer demand growth in both Europe and China, combined with ongoing surge in US production. According to Douglas Westwood, investment levels and oil majors' strategies could be radically altered if the Brent drops below US$85/bbl. That is, we are going to see pressure on the supply chain to cut costs, delays in projects sanctioning and major modifications in projects,” the report added.

seletar

03-10-14, 13:13

http://sbr.com.sg/economy/news/chart-day-take-look-how-singapore%E2%80%99s-loan-growth-nearing-peak-1997-asian-financial-crisi#sthash.ze7Sdjkh.dpuf
Published 30 Sep 2014

Chart of the Day: Take a look at how Singapore’s loan growth is nearing the peak of the 1997 Asian financial crisis

http://sbr.com.sg/sites/default/files/news/Sept30Chart.PNG

Deposit growth languishes near to zero.

The gap between loan and deposit growth figures will remain wide. Both figures will be announced today and loan growth should remain around 10% level while deposit growth is likely to languish near to zero. This is more or less unchanged from 10.8% and -0.01% respectively in July.

According to DBS, with the gap between loan and deposit growth expected to remain wide, total loan value will continue to stay above deposit value (see Chart). This implies that the loan to deposit ratio will continue to stay above parity and could possibly approach the historical peak of 1.17 recorded during the Asian financial crisis in the coming months.

DBS adds that the Monetary Authority of Singapore introduced the Total Debt Servicing Ratio (TDSR) in June last year in a bid to contain the rapid increase in household leverage. And this coincides with the loan to deposit ratio hitting parity in the same month. So, as long as the loan to deposit ratio remains elevated and global interest rates remain low, it is unlikely that the authority will unwind on the property market cooling measures introduced in recent years.

seletar

03-10-14, 13:17

http://sbr.com.sg/building-engineering/news/singapore-bank-lending-inched-101-in-august-back-higher-construction-loans#sthash.PoqH6lRM.dpuf
Published 30 Sep 2014

Singapore bank lending inched up 1.2% in August on back of higher construction loans

Total loans and advances reached $604.6b last month.

Singapore’s total bank lending inched up 1.2% month-on-month in August, as the total amount of loans and advances climbed to $604.6b compared to $597.4b in July.

Data released today by the Monetary Authority of Singapore showed that loans to businesses rose in almost all categories except for loans to business services and financial institutions, among others.

Building and constructions loans climbed to $99.4b in August compared to $96.9b in July, while manufacturing loans remained flat at over $32b.

Housing and bridging loans to consumers also rose to $173.5b, up from $172.6b in July.

On a year-on-year basis, August lending is up 11.8% from $540.8b in August 2013.

seletar

03-10-14, 13:21

http://sbr.com.sg/residential-property/news/stingy-expats-hardest-hit-singapores-property-cooling-measures#sthash.fZc1ABKU.dpuf
Published 30 Sep 2014

Stingy expats hardest hit by Singapore's property cooling measures

Indonesian purchases plunged to a record low in Q2.

Foreigners are more vulnerable to the country's stringent property cooling measures compared to Singaporeans, a study by DTZ Research revealed.

The report revealed that the number of non-Singaporean private home purchases plunged in the first half of the year, as expats are adversely affected by the hike in ABSD rates.

In the second quarter, the the share of private home purchases by foreigners fell to 8%, the lowest since Q213 when additional ABSD and TDSR measures were rolled out.

The top four groups of non-Singaporean buyers are made up of Mainland Chinese, Malaysians, Indonesians, and Indians.

Between H2 2013 and H1 2014, the proportion of private home purchases below $1.0m by the top four groups of non-Singaporean buyers rose by a stronger 12.0 percentage-points, compared to the 8.0 percentage-point increase for Singaporean buyers.

In addition, the proportion of private home purchases above $2.0m by the top four groups of non-Singaporean buyers decreased 8.0 percentage-points to 13% in H1 2014.

“In H1, 46% of their private home purchases were below $1.0m while this proportion was much lower at 38% for Singaporean buyers. Although the trend towards units at a lower quantum was evident across most nationalities between H2 2013 and H1 2014, it was strongest for Malaysian and Indonesian buyers.

Indian buyers, on the other hand, resisted the overall trend as the proportion of their purchases below $1.0m was similar across the two periods,” noted the report.

This suggests that the impact of the ABSD and TDSR framework is stronger for the non-Singaporean buyer groups, clipping their purchasing power, as a larger proportion of their purchases have shifted towards units with a smaller price quantum.

The report showed that Indonesian buyers are the most price-sensitive of the lot. The share of Indonesian purchases fell to a historical low in the first half, as the bulk of purchases by Indonesians have been by those with foreign residential status.

seletar

03-10-14, 13:25

http://sbr.com.sg/residential-property/news/hdb-resale-prices-down-16-in-q3#sthash.YSr94Tar.dpuf
Published 01 Oct 2014

HDB resale prices down 1.6% in Q3

Around 4,290 flats will be available in November.

Resale prices of HDB flats slipped 1.6% quarter-on-quarter in Q3, according to flash estimates released today by the Housing and Development Board.

RESALE prices of public housing fell 1.6 per cent in the third quarter, compared to Q2, according to flash estimates released by the Housing and Development Board (HDB) on Wednesday.

HDB’s Resale Price Index fell to 192.5 in Q3, down from 195.6 in Q2. The HDB will release more detailed data for the full third quarter on Oct 24.

Housing officials also noted that about 4,290 build-to-order flats will be offered in November. These flats are located in Sembawang, Sengkang, Tampines and Yishun. About 3,000 flats will be also offered in a concurrent Sale of Balance Flats exercise.

seletar

03-10-14, 13:28

http://www.stproperty.sg/articles-property/singapore-property-news/prices-of-private-homes-slip-for-4th-straight-quarter/a/182744

Prices of private homes slip for 4th straight quarter

The Business Times - October 1, 2014

PRICES of private residential properties slipped for the fourth straight quarter, flash estimates from the Urban Redevelopment Authority (URA) showed.

The overall Private Residential Property Price index, covering both landed and non-landed homes, fell 0.6 per cent in the third quarter, after slipping one per cent in the preceding quarter.

Prices of landed properties fell 1.7 per cent, after falling by the same magnitude in the previous quarter.

Prices of non-landed condos also fell across all segments. The Core Central Region saw prices slipping 0.9 per cent, after a 1.5 per cent decline in the second quarter, while the Rest of Central Region saw prices dipping 0.1 per cent, compared to the 0.4 per cent decline in the previous quarter.

Prices in the Outside Central Region dipped 0.2 per cent, compared to a 0.9 per cent fall in the previous quarter.

The URA said that the flash estimates are compiled based on transaction prices given in caveats lodged during the first 10 weeks of the quarter, supplemented by survey data on new units sold by developers in the quarter.

The data will be updated four weeks later when the URA releases the full real estate statistics for the third quarter, which captures more data on the caveats lodged and the take-up of new projects.

seletar

03-10-14, 13:32

http://business.asiaone.com/news/iskandar-housing-glut-may-hit-rents#sthash.RELLdUmP.dpuf

Iskandar 'housing glut' may hit rents

http://business.asiaone.com/sites/default/files/styles/medium/public/2014/10/01/20141001_GuangzhouR%26F_ST.jpg

The Business Times
Wednesday, Oct 01, 2014

A looming housing glut in Iskandar Malaysia may weigh down rental yields in the economic zone, with homes being left empty.

The warning this time came from Malaysia's national organisation of developers, the Real Estate & Housing Developers Association (Rehda).

F.D. Iskandar, president of Rehda, noted that some 30,000 homes could be completed by 2016 or early 2017 in Iskandar.

If these are mainly sold to buyers outside Malaysia and Singapore, "then you will see that these units will be empty and once they are put up for rent and there are so many units available, that will put pressure on rental yields", he said.

Malaysia's federal government is "actually looking seriously" at this issue, Mr Iskandar added. But land administration in Malaysia lies within the state government's authority.

In the past 12 to 18 months, the deluge of homes launched or in the pipeline by Chinese developers, including Country Gardens and Guangzhou R&F Properties, has stoked concerns over a looming housing glut in the Iskandar region, which encompasses an area of more than 2,000 sq km in Johor.

"Obviously, we have seen developers from China launching a few thousand units at one go," Mr Iskandar said, adding that Malaysian or Singaporean developers would typically have 400 to 600 units in one project.

Most of the buyers of these Chinese projects come from mainland China, he observed. "Upon completion, they will not use this as their main home, there will be some concerns about these residential units being empty."

Mr Iskandar noted that many Singaporean buyers prefer to buy from Singapore developers or reputable Malaysian developers.

There has also been much interest from Singaporean investors in industrial as well as commercial properties.

Meanwhile, other hot property spots in Malaysia such as Penang and Greater Kuala Lumpur are likely to be shielded from the supply glut in Iskandar as strong population growth in these areas is still supporting fundamental demand for housing, according to Mr Iskandar.

Kuala Lumpur's population is six million, and could grow to 10 million by 2020 through demographic growth, urbanisation and intra-state migration.

Mr Iskandar estimated that this would translate to some 170,000 homes being built each year, based on the assumption of four people per household. Investment yields from residential properties in Penang and Kuala Lumpur are likely to hold up in the region of 5 to 8 per cent, while commercial properties could reap higher yields, he projected.

The retail segment has also emerged as a strong component, with Kuala Lumpur being ranked by global news network CNN as the fourth-best city in the world for shopping, after New York, London and Tokyo.

With the upcoming high-speed rail between Singapore and Malaysia expected to cut travelling time from 51/2 hours to just 90 minutes, both Kuala Lumpur and Singapore will benefit from greater inter-city travel and cross-border investments, Mr Iskandar said.

seletar

03-10-14, 16:30

http://sbr.com.sg/residential-property/news/looming-hdb-flat-glut-further-drag-resale-prices-in-2014#sthash.mSIZLmTx.dpuf
Published: 01 Oct 14

Looming HDB flat glut to further drag resale prices in 2014

Resale prices hit a 2-year low in Q3.

Resale prices of HDB flats continued to decline in the third quarter, as HDB’s flash estimates showed a 1.6% decline to 192.5 points.

This figure marks the fifth consecutive quarter of declines and also marks a 2-year low for HDB resale prices.

According to PropNex, a looming flood of new HDB homes is going to drag resale prices further this year, even as buyer sentiment continues to be subdued thanks to the government’s property cooling measures.

“Home buyers are now more restrained if their MSR is over 30 per cent or TDSR is near 60 per cent. In summary, home-buying sentiment is more subdued. Loan curbs and softer prices will ultimately mean that HDB upgraders have less to spend on their next property,” said PropNex CEO Mohamad Ismail.

PropNex expects HDB resale prices to soften 6 to 7 per cent for full-year 2014, with volumes hitting around 17,000 units — likely to be the lowest in the last decade.

seletar

03-10-14, 17:02

http://www.stproperty.sg/articles-property/singapore-property-news/sliding-flat-values-in-tale-of-two-markets/a/182919

Sliding flat values in tale of two markets

The Straits Times - October 2, 2014

SINKING property prices seem to be the order of the day, so another quarter of tumbling prices came as no surprise.

More notable is an emerging trend that private home prices appear more resilient now than those of HDB resale flats. Since the third quarter of 2013, prices of HDB resale flats have fallen more than those of private homes.

Cooling measures sent private home prices down by 3.8 per cent in the past year, flash estimates indicated yesterday. Housing Board flat values tumbled a steeper 6 per cent in the same period.

Over the year, experts predict that private homes prices will ease 5 to 6 per cent while HDB resale prices slide by 5 to 8 per cent.

This reverses the usual pattern.

Rises or falls in private home prices mostly outpace changes in the HDB market, especially during a global or economic crisis, said Ms Chia Siew Chuin, director of research and advisory at Colliers International.

She cited the 1997 Asian financial crisis when private property prices dived 44.9 per cent as HDB resale prices shed 20.4 per cent. "HDB flats are a basic housing provision... the public segment tends to be insulated from external shocks during those times."

A shortage of new flats had also forced buyers to look to resale flats, propping up prices, said Mr Ong Teck Hui, JLL national director of research and consultancy.

But the rug seems to have been pulled from under the feet of the HDB market, as demand shifted from resale flats to new flats.

The market is now flush with new HDB flats after the Government ramped up its building programme to meet first-time buyer demand. About 25,000 new flats were launched last year, with 22,000 more due this year.

A mortgage servicing ratio limiting monthly housing payments at 30 per cent of the buyer's gross monthly income hit many. And newly minted permanent residents can buy an HDB flat only after three years.

Private home buyers have been hurt by tough mortgage lending guidelines and higher stamp duties but one key difference is that high land prices paid by developers act as a limit on discounting.

"They're floating on thin margins," as Mr Alan Cheong, research head at Savills Singapore, noted.

Also, private property owners would have gained from the 60 per cent surge in private home prices during the most recent market upswing. They are unlikely to lower their selling expectations.

Still, the private home market could be hit by an external shock, much like the Asian financial crisis, or internal issues, like rising vacancies owing to an oversupply of new homes.

The market will soon abound with completed condo units - many of which have been bought for investments - in the face of a shrinking pool of foreign tenants.

"If loan servicing is affected by reduced rental income, there could be selling pressure resulting in price declines," said Mr Ong.

Arcachon

03-10-14, 17:04

Logo_post_bPrint Back to story
Chinese Tap Singapore Wealthy in Record Bond Sales: Asean Credit
By Tanya Angerer - Oct 2, 2014
Singapore’s bond market is getting a boost from Chinese borrowers tapping the island’s millionaires for record amounts at rates almost 30 percent cheaper than home.

Private investors in Singapore took almost all of the S$380 million ($299 million) of local dollar-denominated notes sold by mainland Chinese companies excluding banks last month, according to people familiar with the matter. Offerings in the currency by all Chinese borrowers rose to S$1.7 billion this year, almost double such sales for the whole of 2013, according to data compiled by Bloomberg.

China’s issuers are increasingly targeting Singapore’s surging millionaire base to raise funds amid record borrowing costs at home. Debut issues from offshore companies rose to 10 in 2014 compared with none five years ago, supporting a market that makes up just 20 percent of bond sales in the Asean region compared with about 32 percent each for Thailand and Malaysia.

“The future growth of Singapore’s bond market is dependent on making itself relevant to offshore issuers and investors, over and above the domestic market,” Clifford Lee, Singapore-based head of fixed income at DBS Group Holdings Ltd., the island’s top bond arranger, said in an interview. “It’s natural for Chinese issuers to sell Singapore dollar bonds as they continue to grow, as there’s the appeal of further diversification in an open and transparent capital market.”

Slowing China

Yields on yuan-denominated bonds are averaging at a record high of 5.87 percent this year, according to a Bank of America Merrill Lynch index, as China faces its slowest growth since 1990, plummeting deposits and rising soured debt amid a property slump. The average coupon on Singapore-dollar bonds in the same period is 4.16 percent, Bloomberg-compiled data show.

Far East Horizon Ltd., a financial unit of China’s state-owned Sinochem Group, sold S$200 million of 4.25 percent five-year notes on Sept. 24, with private banks and individual investors buying 87 percent of the securities, according to a person familiar with the offering.

Zhengzhou-based China Coal Solution Singapore Pte. Ltd.’s debut sale of a S$180 million note the previous week was 91 percent bought by private banks, a separate person said.

“Part of the appeal is the strength of the Singapore dollar, which is why people invest their money here,” Adeline Tan, a Singapore-based analyst at UOB Asset Management Ltd., said in an interview. “That’s the main reason why Singapore is successful as a private banking hub and investment center.”

Millionaire Hub

Singapore’s dollar was at $1.2722 at 3 p.m. yesterday local time, stronger than its five-year average of $1.2823. The currency’s three-month implied volatility was at 4.56 percent at the end of September, the lowest among Southeast Asia’s biggest economies, data compiled by Bloomberg show.

The island has 151,000 millionaires, or 2.8 percent of its population, according to a survey by London-based Spear’s magazine and consultancy WealthInsight. It ranks eighth globally behind cities including Monaco, London and New York.

Asia’s second-smallest country after the Maldives will be home to almost 5,000 people with $30 million or more in assets excluding their principal residence by 2023, a 55 percent gain from 2013 and trailing only London globally, according to a March report from Knight Frank LLP.

Of the 10 offshore corporate borrowers that issued debut Singapore dollar notes this year, China Coal Solution and Ping An Insurance Group Co. of China Ltd. were from the world’s second-largest economy. First-time sellers from other nations included Australian child-care provider G8 Education Ltd. and Korea-based motorcycle seller Kolao Holdings.

Flexible, Friendly

“The market is flexible on size and on tenors at the shorter end of the curve,” said Danny Tan, a Singapore-based fund manager at Eastspring Investments Ltd., which controls about $115 billion. “Singapore is a friendly market for issuers and investors compared to other Asian countries.”

Ties between Singapore and China go beyond bond markets. The island’s Prime Minister Lee Hsien Loong mentioned a third possible venture between the governments on “mega” industrial park projects, the Business Times reported Sept. 19 citing Lee.

China became Singapore’s largest trading partner last year, with bilateral trade growing to $92 billion last year from just $4.2 billion in 1990, Lee said in a speech last month. More than 5,200 Chinese companies have a presence on the island, which was China’s largest foreign investor in 2013, he said.

“As of today, Singapore has the deepest and most efficient local currency bond market in Asia, offering most flexibility in sizes and tenors,” said DBS’s Lee. “If the markets stay open and the pricing works, we’ll definitely see more Chinese issuance.”

To contact the reporter on this story: Tanya Angerer in Singapore at [email protected]

To contact the editors responsible for this story: James Holloway at [email protected]; Katrina Nicholas at [email protected] Chris Bourke, Ken McCallum

®2014 BLOOMBERG L.P. ALL RIGHTS RESERVED.

seletar

03-10-14, 17:07

http://sbr.com.sg/economy/news/money-no-enough-nearly-half-singaporean-households-are-subsisting-paycheck-paycheck#sthash.R51L3YOM.dpuf
Published: 02 Oct 14

Money no enough: Nearly half of Singaporean households are subsisting from paycheck to paycheck

Savings rates are way too low across the island.

Here’s an uncomfortable truth about Singaporean households: a report by CLSA revealed that almost half of households across the islands are saving less than 10% of their monthly incomes, leaving them unable to cope with unexpected financial expenses.

The report revealed that 30% of Singaporean households save less than 10% of their incomes, while an alarming 14% have no savings at all.

Majority of elederly respondents are not saving money during their retirement, as most are focused on enjoying their money during this period. However, a high proportion of residents in their 30s and 40s are also unable to save.

Unsurprisingly, 73% of low-income households are saving less than 10% of their monthly income. However, an unexpected 37% of the top-income bracket is essentially spending everything they earn.

“In our view, as a result of the low savings rate, the high proportion of total wealth in non-liquid assets (eg property, CPF, insurance) and high optimism about future earnings potential, 47% of households do not have enough funds readily available to cope with unexpected financial expense,” stated CLSA.

seletar

03-10-14, 17:13

seletar

03-10-14, 17:21

http://sbr.com.sg/financial-services/in-focus/over-7-out-10-singaporeans-brace-cash-strapped-retirement-back-insuffici#sthash.0k0AQU1G.dpuf
Published: 03 Oct 14

Over 7 out of 10 Singaporeans brace for cash-strapped retirement on back of insufficient CPF funds

Seniors are counting on dole-outs from younger family members.

Will you be ready to support senior family members when they’re sixty-four? An alarming number of Singaporeans think that they do not have enough funds to rely on, a survey by CLSA revealed.

According to CLSA, 78% of respondents are not topping up their CPF income in order to bolster retirement funds, and 71% think they will not have enough funds to retire on.

In spite of this, 69% do not have other retirement-savings vehicles to rely on and 44% would not be willing to sell their property if they fall short of their retirement income.

“Perhaps our respondents are hoping that younger family members will provide financial support in future, or that the government will loosen the eligibility criteria for the lease buyback scheme (either by the income limit or by the size of HDB property). Overall, although Singaporean households are more leveraged than they have been historically, and the disparity in income and wealth continues to grow, we feel comfortable that majority of the population can weather a material downturn,” noted CLSA.

pmet

03-10-14, 18:24

http://sbr.com.sg/residential-property/news/chart-day-private-home-prices-nosedive-4th-straight-quarter#sthash.O4xBBOqF.dpuf
Published: 03 Oct 14

Chart of the Day: Private home prices on a nosedive for the 4th straight quarter

http://sbr.com.sg/sites/default/files/news/Oct3Chart.PNG

As high-end home prices fall for sixth consecutive quarter.

Private home prices in Singapore fell for the fourth straight quarter as the government steps since 2009-2013 to cool the real estate market, especially the TDSR, continued to take effect.

According to the Urban Redevelopment Authority’s flash estimates, the private residential property price index fell 1.3 points to 208.1 in 3Q14, down 0.6% q/q and -3.8% y/y. This is the fourth straight decline, albeit a slight slowdown, after 1% q/q decline in 2Q14, 1.3% q/q decline in 1Q14 and -0.9% q/q in 4Q13.

According to Barclays, in the Core Central Region (CCR), which usually represents high-end homes, prices fell 0.9% after declining 1.5% in the 2Q14. This is the sixth consecutive quarter of price declines in this segment, bringing the total decline of CCR prices to 5.8% since the peak in 1Q13.

The price decline of suburban homes – proxied by the Outside Central Region (OCR) – decelerated for the fourth consecutive quarter, by -0.2%, compared with the 0.9% decrease in the previous quarter. This brings cumulative price decline for OCR homes to just 2.1%. In the Rest of Central Region (RCR), mid-end home prices fell 0.1%, compared with the 0.4% decrease in the previous quarter, which brings cumulative decline for RCR homes to 4.3% from the peak. Prices of landed private residential properties fell another 1.7% for the fourth consecutive quarter, identical to the decline in 2Q14. This brings the cumulative decline for landed homes to 5.0% since the peak in 3Q13.

Not yet :cheers1:

Wait for 2015 for interest rates to rise. From 0.25% to:

0.5% will cause another 5% drop
0.75% will cause another 2% drop
1% will cause another 3% drop

See... total drop only 10% if interest rises to 1% next year. But that's on top of the govt's measure which is already biting. So assuming 8% from the CMs, plus another 10% will be 18% drop next year :scared-4:

If interest rates increases another 1% in 2016 we will only see an exponential plunge. Perhaps another 30% drop in 2016.

Wah! Property really bearish now...

Also, just to add that govt is unlikely to lift any of the CM till the first interest rate increase, lest that they shoot themselves in their own foot. If they lift CM now, more ppl will chiong to buy and when interest rate start to increase they GG during election liao.

Arcachon

03-10-14, 22:51

AEC 2015

teddybear

03-10-14, 22:53

It will be interesting to see what happen to next election results if interest rate rises and they didn't relax the cooling measures..................... :butterfly:

Not yet :cheers1:

Wait for 2015 for interest rates to rise. From 0.25% to:

0.5% will cause another 5% drop
0.75% will cause another 2% drop
1% will cause another 3% drop

See... total drop only 10% if interest rises to 1% next year. But that's on top of the govt's measure which is already biting. So assuming 8% from the CMs, plus another 10% will be 18% drop next year :scared-4:

If interest rates increases another 1% in 2016 we will only see an exponential plunge. Perhaps another 30% drop in 2016.

Wah! Property really bearish now...

Also, just to add that govt is unlikely to lift any of the CM till the first interest rate increase, lest that they shoot themselves in their own foot. If they lift CM now, more ppl will chiong to buy and when interest rate start to increase they GG during election liao.

Kelonguni

03-10-14, 23:27

I think there will be some very serious disappointments for those expecting Govt to bend over and backwards just due to private property prices.

1. The majority of votes are still in the hands of HDB dwellers, and a huge chunk are the pioneers.

2. Private property owners have such a huge stake in the stability of SG that very few will actually vote against the incumbent. It doesn't matter where prices are headed, their votes are generally secure.

My two cents only.

teddybear

04-10-14, 01:14

HDB resale flats prices are dropping faster than private properties!
Is this a concern?
If not, they should not adjust any properties' policies before next GE................................
Let's wait and see.........................

I think there will be some very serious disappointments for those expecting Govt to bend over and backwards just due to private property prices.

1. The majority of votes are still in the hands of HDB dwellers, and a huge chunk are the pioneers.

2. Private property owners have such a huge stake in the stability of SG that very few will actually vote against the incumbent. It doesn't matter where prices are headed, their votes are generally secure.

My two cents only.

Arcachon

04-10-14, 03:14

HDB resale flats prices are dropping faster than private properties!
Is this a concern?
If not, they should not adjust any properties' policies before next GE................................
Let's wait and see.........................

Any Data, sample, resale transaction to show "HDB resale flats prices are dropping faster than private properties"

http://services2.hdb.gov.sg/webapp/BB33RTIS/BB33PReslTrans.jsp

https://www.ura.gov.sg/realEstateIIWeb/transaction/search.action

SOUTHBANK NORTH BRIDGE ROAD Apartment 07 RCR 99 yrs lease commencing from 2006 1 980,000 592 Strata 11 to 15 1,655 May-14
SOUTHBANK NORTH BRIDGE ROAD Apartment 07 RCR 99 yrs lease commencing from 2006 1 1,060,000 614 Strata 26 to 30 1,728 Apr-12

123 Paya Lebar Way 13 to 15 118.00 Improved 1980 $560,000.00 Aug 2014
123 Paya Lebar Way 01 to 03 118.00 Improved 1980 $535,000.00 Apr 2014

3 Pine Cl 07 to 09 110.00 Improved 2000 $840,000.00 Aug 2014
1 Pine Cl 07 to 09 110.00 Improved 2000 $875,000.00 Jul 2014
11 Pine Cl 10 to 12 110.00 Improved 2000 $820,000.00 Jul 2014
3 Pine Cl 10 to 12 110.00 Improved 2000 $850,000.00 Feb 2014
1 Pine Cl 16 to 18 110.00 Improved 2000 $840,000.00 Jan 2014

Arcachon

04-10-14, 03:23

Facts

Kelonguni

04-10-14, 08:05

HDB resale flats prices are dropping faster than private properties!
Is this a concern?
If not, they should not adjust any properties' policies before next GE................................
Let's wait and see.........................

Presumed dropping prices (of HDB) affect mainly the few groups most strongly.

1. People intending to sell and live in other countries - very small group, might not vote anyway.

2. Pioneer generation - most cannot sell the flat anyway (no place to stay) so might opt for renting rooms, lease buyback. Majority and huge group likely neutral to price changes.

3. Baby boomer generation - other than those similar in context to Group 2, most already possibly cashed out more than once and might be cash-loaded but generally planning for retirement and unlikely to buy sell so actively.

3. Upgrading Gen X and Gen Y group - the private TDSR prices most of them out. This is the possible group to work on for any tweaks in regulations. Moderately sized group. Check Punggol / Sengkang / Hougang for a large presence of them.

Pros and cons to any tweaks. My two cents.

DC33_2008

04-10-14, 08:42

Please see my response to your earlier post. Just my observation.
Presumed dropping prices (of HDB) affect mainly the few groups most strongly.

1. People intending to sell and live in other countries - very small group, might not vote anyway.

2. Pioneer generation - most cannot sell the flat anyway (no place to stay) so might opt for renting rooms, lease buyback. Majority and huge group likely neutral to price changes. [With faster devalue of hdb resale flat, pioneers will get less with the lease buy back scheme. Can you imagine for those who own flats and want to it 5 years later? You probably know the answer.]

3. Baby boomer generation - other than those similar in context to Group 2, most already possibly cashed out more than once and might be cash-loaded but generally planning for retirement and unlikely to buy sell so actively. [May not be true. This is the most active group who will be playing in the market not just for themselves but growing and preserving their wealth for next their children and grandchildren...]

4. Upgrading Gen X and Gen Y group - the private TDSR prices most of them out. This is the possible group to work on for any tweaks in regulations. Moderately sized group. Check Punggol / Sengkang / Hougang for a large presence of them. [This is the most frustrated group who cannot upgrade unless they have great FM support. How to upgrade when their flats are devaluing? Competition in career advancement from within and outside Singapore. Cannot afford to retire early and got to work beyond 65. Have higher expenses in all areas: children education, food, car, etc. No pioneer assistance scheme for them. This is the most vulnerable group in election.]

Pros and cons to any tweaks. My two cents.

Kelonguni

04-10-14, 09:01

Please see my response to your earlier post. Just my observation.

True too. Group 4 is the group Govt will target on when GE2015 or 2016 draws near. EC is the only route for most, which might explain why Minister Khaw couldn't scrap it.

Point to note: 2006 to 2011 was a period of huge price growth. What was the impact on GE2011?

DC33_2008

04-10-14, 10:49

That was due to undersupply when Mah heading mnd and increase in population. LHL proof WP wrong in last night lecture on stopping the FOREIGN TAP that will dampen our GDP. It will continue to be opened moderately for certain group of people especially with the current situation in hk. More MNCs will setup hq in Spore fto ensure business continuity and stable currency. .
True too. Group 4 is the group Govt will target on when GE2015 or 2016 draws near. EC is the only route for most, which might explain why Minister Khaw couldn't scrap it.

Point to note: 2006 to 2011 was a period of huge price growth. What was the impact on GE2011?

teddybear

04-10-14, 14:10

FACTs?
I obtained these information from the News as follow regarding "HDB resale flats prices are dropping faster than private properties":

Published: Saturday September 27, 2014 MYT 12:00:00 AM

Widening price gap for Singapore home upgraders

IT is becoming harder than ever for housing board upgraders to make the leap to private property, despite softening prices.

The price gap between an HDB flat and a private condo has widened, hampering those who rely on resale proceeds to fund their new home - not least in the light of tougher home loan curbs.

A 2011 Goldman Sachs study found that the price gap in the first quarter of that year was S$490 per sq ft, a record then. That means a 1,000 sq ft condominium unit would have cost S$490,000 more than a resale HDB flat with the same floor area.

A five-room HDB flat is slightly larger than 1,000 sq ft.

New figures from the Singapore Real Estate Exchange suggest the gap has only widened since.

Their calculations put the gap in median resale prices at S$383 per sq ft in the first quarter of 2011 but that had shot up to to S$524 per sq ft by the second quarter of this year.

The gap is even wider for new private units, having risen from S$556 per sq ft to S$753 per sq ft.

These calculations were based on prices of HDB five-room flats and condominiums outside the central region, to reflect the typical upgrade.

“It does mean that private housing for HDB upgraders is becoming more unaffordable,” said SLP International Property Consultants research head Nicholas Mak.

But the growing gap is unsurprising, given the different trends in private and public property, said experts.

The Urban Redevelopment Authority’s resale price index shows that values of non-landed private property outside the central region have risen by 17.3% overall since the first quarter of 2011.

The HDB’s resale price index rose only about 12% over the same period.

Several rounds of government cooling measures have begun to bite, and both markets are now on a decline. But public housing prices have been falling faster - contributing to the widening gap.

HDB prices started falling after the second quarter of last year, and have dropped 5.3% since then. The private property index started falling from the third quarter, and has lost 3% since.

R’ST Research director Ong Kah Seng does not see this as cause for alarm: “I think it is not a major concern now because in the years of 2010 to the first half of 2013, there were ample HDB upgraders ... many HDB upgraders have already fulfilled their dreams of upgrading.”

Executive condominiums, which are bought as public housing but become fully private after 10 years, could also bridge the gap, as they are cheaper than private units, said Chris International director Chris Koh.

Jedric Goh, 34, is willing to be even more flexible as he tests market interest for his five-room flat in Serangoon.

In this market, going private would be “quite tough”, so he is not limiting his options that way.

“I’m looking at location instead of the type of property,” said Mr Goh, who works in the finance industry.

Any Data, sample, resale transaction to show "HDB resale flats prices are dropping faster than private properties"

http://services2.hdb.gov.sg/webapp/BB33RTIS/BB33PReslTrans.jsp

https://www.ura.gov.sg/realEstateIIWeb/transaction/search.action

SOUTHBANK NORTH BRIDGE ROAD Apartment 07 RCR 99 yrs lease commencing from 2006 1 980,000 592 Strata 11 to 15 1,655 May-14
SOUTHBANK NORTH BRIDGE ROAD Apartment 07 RCR 99 yrs lease commencing from 2006 1 1,060,000 614 Strata 26 to 30 1,728 Apr-12

123 Paya Lebar Way 13 to 15 118.00 Improved 1980 $560,000.00 Aug 2014
123 Paya Lebar Way 01 to 03 118.00 Improved 1980 $535,000.00 Apr 2014

3 Pine Cl 07 to 09 110.00 Improved 2000 $840,000.00 Aug 2014
1 Pine Cl 07 to 09 110.00 Improved 2000 $875,000.00 Jul 2014
11 Pine Cl 10 to 12 110.00 Improved 2000 $820,000.00 Jul 2014
3 Pine Cl 10 to 12 110.00 Improved 2000 $850,000.00 Feb 2014
1 Pine Cl 16 to 18 110.00 Improved 2000 $840,000.00 Jan 2014

HDB resale flats prices are dropping faster than private properties!
Is this a concern?
If not, they should not adjust any properties' policies before next GE................................
Let's wait and see.........................

Arcachon

04-10-14, 14:29

News, I decide what I want you to know.

http://www.thestar.com.my/Business/Business-News/2014/09/27/Widening-price-gap-for-Singapore-home-upgraders/

http://www.straitstimes.com/news/singapore/housing/story/widening-price-gap-home-upgraders-20140924

DREAM A LITTLE LONGER

It does mean that private housing for HDB upgraders is becoming more unaffordable.

- SLP International Property Consultants research head Nicholas Mak, on buyers having to fork out more

DREAM FULFILLED

Many HDB upgraders have already fulfilled their dreams of upgrading.

- R'ST Research director Ong Kah Seng, who does not see the growing price gap between HDB and condo units as cause for alarm

- See more at: http://www.straitstimes.com/news/singapore/housing/story/widening-price-gap-home-upgraders-20140924#sthash.OqGhLmV4.dpuf

http://www.thepropertyeffect.com/widening-price-gap-for-home-upgraders-24-september-2014/

It is becoming harder than ever for Housing Board upgraders to make the leap to private property, despite softening prices.

https://www.google.fr/search?q=Widening+price+gap+for+Singapore+home+upgraders&oq=Widening+price+gap+for+Singapore+home+upgraders&aqs=chrome..69i57&sourceid=chrome&es_sm=93&ie=UTF-8

Arcachon

04-10-14, 14:34

4. We can’t put all false predictors in jail.
“I find it profoundly unethical to talk without doing, without exposure to harm, without having one’s skin in the game, without having something at risk.”
We all like to listen to the so-called experts making predictions about the property market – the media love it; the audience love it. These ‘experts’ and their predictions are fragile because they are exposed to prediction errors. Honestly, who can tell what is going to happen in the future?
Below are the media predictions and the reality of the property market in the 2000s and 1990s, extracted from No B.S. Guide to Property Investment.

But they don’t have to pay a price for their mistakes. In fact, in our history no one has ever been convicted by law because their projection figures or forecast trends are far from reality. No one has ever paid a price for a prediction error.
We can’t stop people from asking for predictions. We can’t stop experts from making false predictions. But we can at least request the predictors to eat their own cooking and have their skin in the game.

“Never ask anyone for their opinion, forecast, or recommendation. Just ask them what they have – or don’t have – in their portfolio.”

http://propertysoul.com/

Arcachon

04-10-14, 14:38

http://www.geeksaresexy.net/wp-content/uploads/2011/03/half-full.jpg

Arcachon

04-10-14, 15:43

puffer_fish

04-10-14, 15:54

It pretty normal, what goes up must come down and vice versa.

The ruling party has stated clearly what their plans are, so just to ride on their coattails

Ringo33

04-10-14, 16:41

Government is likely to let the property market continue its downward trend for the next 3 to 4 quarter as election is drawing near, and I am expect 2015 will be the election year.
In PM speech yesterday, its important that government is acknowledging severity of foreign workers controls and I expect going forward things is likely to get better.
Having said that, I think it will be premature for government to lift any cooling measures yet, which I think is logically.

DC33_2008

04-10-14, 18:45

The question is not just what goes up must come down but the important question is the trend rising or falling in the mid to long term that investors are looking at.
It pretty normal, what goes up must come down and vice versa.

The ruling party has stated clearly what their plans are, so just to ride on their coattails

teddybear

04-10-14, 19:48

Not just that, given that property Cooling Measures have no effect on OCR private properties, whether they introduce further measure targeted to cool OCR properties or not will tell us whether they really want property prices to go down or not....................... :hopelessness:

Government is likely to let the property market continue its downward trend for the next 3 to 4 quarter as election is drawing near, and I am expect 2015 will be the election year.
In PM speech yesterday, its important that government is acknowledging severity of foreign workers controls and I expect going forward things is likely to get better.
Having said that, I think it will be premature for government to lift any cooling measures yet, which I think is logically.

Ringo33

04-10-14, 19:55

Not just that, given that property Cooling Measures have no effect on OCR private properties, whether they introduce further measure targeted to cool OCR properties or not will tell us whether they really want property prices to go down or not....................... :hopelessness:

OCR property prices is supported by government decentralizing effort which is expected. So there is no reason why government would want to introduce cooling measures to intentionally crash just because someone living in the wrong side of CCR is sour about it.

teddybear

04-10-14, 20:46

So you saying it is govt policy to support JGateway at $1700+ psf? :topsy_turvy:

OCR property prices is supported by government decentralizing effort which is expected. So there is no reason why government would want to introduce cooling measures to intentionally crash just because someone living in the wrong side of CCR is sour about it.

Ringo33

04-10-14, 21:10

So you saying it is govt policy to support JGateway at $1700+ psf? :topsy_turvy:

JLD is just one of the many exciting projects that government is doing to decentralize commercial activities.
I am sure you must have noticed there are now fewer international school kids in central region.

teddybear

04-10-14, 21:16

Govt will be very HAPPY to LEASE you 99-years leasehold properties and make you pay TOP $$$ of >S$1700+ psf to be their PREFERRED TENANT for 99 years !!!!!!!!!!!!!! :tongue4:

JLD is just one of the many exciting projects that government is doing to decentralize commercial activities.
I am sure you must have noticed there are now fewer international school kids in central region.

Ringo33

04-10-14, 21:45

Govt will be very HAPPY to LEASE you 99-years leasehold properties and make you pay TOP $$$ of >S$1700+ psf to be their PREFERRED TENANT for 99 years !!!!!!!!!!!!!! :tongue4:

We all know that the very old FH property you own doesnt belongs to you forever, you are just a caretaker. Eventually it will be too old and be sold for rebuilding.

DC33_2008

04-10-14, 21:52

DC33_2008

04-10-14, 21:53

Bro, it is the FH land and not just the building.
We all know that the very old FH property you own doesnt belongs to you forever, you are just a caretaker. Eventually it will be too old and be sold for rebuilding.

Arcachon

04-10-14, 22:03

https://www.youtube.com/watch?v=kfeFlJxuMhU&list=UUKQVSNdzGBJSXaUmS4TOWww

Ringo33

04-10-14, 22:09

Bro, it is the FH land and not just the building.

If 99LH = $1000psf
Does 999LH = $10,000psf?
or FH = $100,000psf?

Ringo33

04-10-14, 22:10

Looking at what happen to HDB resale market now. OCR are supported partially by hdb upgraders. Watch closely at those OCR projects completing at punggol. HDB has to give more time for hdb upgraders to sell their flats. All these are not very promising sign.

Its expect that Punggol and Sengkang will be affected the most due to too much new supply in the pipe line. For matured district, the impact will be very marginal

DC33_2008

04-10-14, 22:21

I only know FH will outlast LH.
If 99LH = $1000psf
Does 999LH = $10,000psf?
or FH = $100,000psf?

DC33_2008

04-10-14, 22:24

Hope you are right. But if this effect is duplicated in all the other OCRs, it will be real bad news for them.
Its expect that Punggol and Sengkang will be affected the most due to too much new supply in the pipe line. For matured district, the impact will be very marginal

teddybear

04-10-14, 22:59

Ringo and many others would choose and want you to believe their 99 years leasehold properties have no difference to Freehold properties, and hence they are getting the best of both worlds - Pay 15-20% less than FH properties and getting higher rental yields than FH properties!!! It seems that even the whole machinery also want people to believe this is so because the valuation of a 99 years leasehold properties is only 15-20% from that of FH properties and they will only want to sell you 99 years leasehold properties (they won't sell you FH anymore!)

But as we know, once the properties is >30 years old, there will be very few buyers, if any. Those owners will soon be left carrying the babies! I know of many people who have been flipping 99 years leasehold properties and selling to others to carry the babies once those properties hit 10 years old or more and telling people that these 99 years leasehold properties they are selling are value for money because they have higher rental yields than more expensive FH properties!

And only idiot will say that owning FH properties you don't own them forever!!! Please wake up lah, only your 99 years leasehold properties you DON'T EVEN OWN THEM because you are just TENANT for 99 years to these 99 years leasehold properties!!!!!!!!!!!!!!!!!! :miserable:

Bro, it is the FH land and not just the building.

We all know that the very old FH property you own doesnt belongs to you forever, you are just a caretaker. Eventually it will be too old and be sold for rebuilding.

Ringo33

04-10-14, 23:08

Hope you are right. But if this effect is duplicated in all the other OCRs, it will be real bad news for them.

Study the masterplan 2014 and GLS, you will know why not all OCR are the same.

DC33_2008

04-10-14, 23:12

Not the same but similar.
Study the masterplan 2014 and GLS, you will know why not all OCR are the same.

Ringo33

04-10-14, 23:12

Ringo and many others would choose and want you to believe their 99 years leasehold properties have no difference to Freehold properties, and hence they are getting the best of both worlds - Pay 15-20% less than FH properties and getting higher rental yields than FH properties!!! It seems that even the whole machinery also want people to believe this is so because the valuation of a 99 years leasehold properties is only 15-20% from that of FH properties and they will only want to sell you 99 years leasehold properties (they won't sell you FH anymore!)

But as we know, once the properties is >30 years old, there will be very few buyers, if any. Those owners will soon be left carrying the babies! I know of many people who have been flipping 99 years leasehold properties and selling to others to carry the babies once those properties hit 10 years old or more and telling people that these 99 years leasehold properties they are selling are value for money because they have higher rental yields than more expensive FH properties!

And only idiot will say that owning FH properties you don't own them forever!!! Please wake up lah, only your 99 years leasehold properties you DON'T EVEN OWN THEM because you are just TENANT for 99 years to these 99 years leasehold properties!!!!!!!!!!!!!!!!!! :miserable:

How can you own a FH property FOREVER when the building are not build to last forever, nor will it make sense to preserve it for ever.
The only chance you could do that is if you are Peter lim who own the entire apartment block for himself. Then again, he is peter lim, and you are just Teddybear who live in the wrong side of CCR.

teddybear

04-10-14, 23:29

I think you are really stupid!!!!!!!!!!!!! one word: STUPID!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

FH property means : FH land and property.

You never see properties >100 years old Europe?

Many properties can last >100 years old, even >200 years old!
But too bad, your 99 years Leasehold properties you MUST return to Govt after 99 years lease is UP even thought it can can still be lived in because you are just tenant for 99 years only!!!!!!!!! So simple you don't understand?????????????

How can you own a FH property FOREVER when the building are not build to last forever, nor will it make sense to preserve it for ever.
The only chance you could do that is if you are Peter lim who own the entire apartment block for himself. Then again, he is peter lim, and you are just Teddybear who live in the wrong side of CCR.

Ringo33

05-10-14, 05:01

I think you are really stupid!!!!!!!!!!!!! one word: STUPID!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

FH property means : FH land and property.

You never see properties >100 years old Europe?

Many properties can last >100 years old, even >200 years old!
But too bad, your 99 years Leasehold properties you MUST return to Govt after 99 years lease is UP even thought it can can still be lived in because you are just tenant for 99 years only!!!!!!!!! So simple you don't understand?????????????

For someone who is living in the wrong side of CCR, its pretty obvious that you would like to paint a picture that FH property = Forever. If your argument would to hold any water than the premium for FH property vs LH on the same location should easily be 100x more than what LH property is worth.

In reality is that FH property in the same location is only worth around 20% more than LH, hence it only goes to show that the FH property is never meant to be holding forever.

If you think otherwise, please show us some numbers instead of big talk and no fact. or ALL FART NO SHIT (EDB)

teddybear

05-10-14, 14:25

I already said you are really very stupid and you don't admit it?!!!!!!!!!!!!

Show you the number? How when the number now is manipulated so that you all stupid idiot will buy 99 years leasehold?!

Ok, Challenge you to do A TEST: Tell the govt that you want to buy the land from them at 10x the price at "FREEHOLD" condition, not "99 years LEASEHOLD", and see whether they are willing to sell to you or not?!!!!!!!!!!!!!!!!!!!!

For someone who is living in the wrong side of CCR, its pretty obvious that you would like to paint a picture that FH property = Forever. If your argument would to hold any water than the premium for FH property vs LH on the same location should easily be 100x more than what LH property is worth.

In reality is that FH property in the same location is only worth around 20% more than LH, hence it only goes to show that the FH property is never meant to be holding forever.

If you think otherwise, please show us some numbers instead of big talk and no fact. or ALL FART NO SHIT (EDB)

I think you are really stupid!!!!!!!!!!!!! one word: STUPID!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

FH property means : FH land and property.

You never see properties >100 years old Europe?

Many properties can last >100 years old, even >200 years old!
But too bad, your 99 years Leasehold properties you MUST return to Govt after 99 years lease is UP even thought it can can still be lived in because you are just tenant for 99 years only!!!!!!!!! So simple you don't understand?????????????

Ringo33

05-10-14, 16:37

I already said you are really very stupid and you don't admit it?!!!!!!!!!!!!

Show you the number? How when the number now is manipulated so that you all stupid idiot will buy 99 years leasehold?!

Ok, Challenge you to do A TEST: Tell the govt that you want to buy the land from them at 10x the price at "FREEHOLD" condition, not "99 years LEASEHOLD", and see whether they are willing to sell to you or not?!!!!!!!!!!!!!!!!!!!!

Like I said before FH property doesnt make you the owner forever because we all know that old condo and apartment or even landed property will eventually be torn down for rebuilding, by then the FH condo which you "hope" to hold forever will be sold to developer for en bloc and resold in the market as new launch.
And this is a FACTS so please dont be so gullible to believe that the FH property you own will be yours forever, unless of course if you are Peter Lim who own and kept his entire block and land for himself.

If what you said holds any water, then FH apartment in the same location will not just command a mere 20% premium over LH99, it should be

LH99 = $1000psf
LH999 = $10,000psf because its lease is 10 times longer?
FH = >$100,000psf because its FOREVER??

AssetRichMoneyPoor

05-10-14, 16:52

Ringo33

05-10-14, 17:29

Bro you are wrong. Singapore is too young a nation for most to grasp the difference between leasehold and freehold. However the day beckons and you will again realized that's just your opinion and a misjudged one.

You should see more of the world than coop up in your 24/7 hole.

Singapore is turning 50 years old next year, which are the oldest FH or 999 condo projects in Singapore? Pandan Valley, TOP 1978, approaching 40 years in 2018.
Current transaction

Price : $1000-$1100psf
Rent : $1.9-2.9psf

How come so cheap? Because its old and its costly to maintain and very soon it will be going for En Bloc. Forever? dream on.

AssetRichMoneyPoor

05-10-14, 18:10

You are just further validating my point. SG is a young nation.
You really should go out see the world more.

teddybear

05-10-14, 18:25

En bloc? What if it can't be enbloc and the property obviously can be lived in after 99 years? (since they are made of concrete, not wood!)
Oh No, you MUST return to the govt for FREE !!!!!!!!!!!!!!!! Pity all those owners getting ZERO Dollar for owning a 99 years Leasehold properties for 99 years !!!!!!!!!!!!!!!!!!!!!

Singapore is turning 50 years old next year, which are the oldest FH or 999 condo projects in Singapore? Pandan Valley, TOP 1978, approaching 40 years in 2018.
Current transaction

Price : $1000-$1100psf
Rent : $1.9-2.9psf

How come so cheap? Because its old and its costly to maintain and very soon it will be going for En Bloc. Forever? dream on.

DC33_2008

05-10-14, 18:29

Ringo33

05-10-14, 18:43

You are just further validating my point. SG is a young nation.
You really should go out see the world more.

I have already stated my point very clearly using Pandan Valley as an example, so I am not sure what you are talking about Singapore being a young nation or seeing the world.

The only thing which I am not seeing till now is a good explanation on how to keep a condo FOREVER.

BTW, have you decided to retire your old forum account?

invigorated

05-10-14, 18:57

I have already stated my point very clearly using Pandan Valley as an example, so I am not sure what you are talking about Singapore being a young nation or seeing the world.

The only thing which I am not seeing till now is a good explanation on how to keep a condo FOREVER.

BTW, have you decided to retire your old forum account?

Just thinking aloud, what would be the value of a leasehold condo at 90 years old compared with a fh property, if it isn't en bloc?

What kind of value will a sub 10 years condo have vis a vis a freehold one? I echo the thoughts of some forumers here that Singapore is still a young nation and with such a surge in properties, won't be surprised to see many condos without en bloc potential at end of lease.

el loco

05-10-14, 19:47

Freehold land is also subjected to Nation building.Once they wanna build a new highway or mrt. Say bye bye to yr freehold land.

heehee

05-10-14, 20:00

You talk as though our govt are bandits and they take without paying market rate???
Please don't make such irresponsible comments!

Freehold land is also subjected to Nation building.Once they wanna build a new highway or mrt. Say bye bye to yr freehold land.

Arcachon

05-10-14, 20:11

UOL is top bidder for Eng Cheong Tower

7 Jan 05

Its offer for maiden collective sale of 99-year site crosses reserve price

By KALPANA RASHIWALA

UNITED Overseas Land has emerged as the top bidder for Eng Cheong Tower, with an offer above the reserve price, sources told BT.

A deal has yet to be inked but assuming the property fetches $46 million, the price works out to about $233 per square foot of potential gross floor area. That includes development charges (DC) and a premium to top up the site's lease to 99 years.

There are 65 years remaining on the leasehold site along North Bridge Road, and it could cost an estimated $8.5 million to top it back up to 99 years.

http://www.skyscrapercity.com/showthread.php?t=358211

Eng Cheong a good collective sale model

11 Jan 05

In principle approval from SLA to top up leases can help push en bloc sales and thus save the city of many eyesores, writes KALPANA RASHIWALA

THE recent sale of Eng Cheong Tower, the first collective sale of a 99-year leasehold property, has not only set a precedent for more en bloc sales of such properties but can also be used as an urban redevelopment strategy, say market watchers.

What facilitated the $47.5 million sale to United Overseas Land and Low Keng Huat was an unprecedented decision by the Singapore Land Authority to grant in-principle approval to top up the lease of the site from the remaining 65 years to the original 99 years. In the past, SLA had processed requests for lease upgrading only on formal application, which requires more detailed submissions and takes a longer time.

'Developers would not take the risk of buying Eng Cheong Tower, which has 65 years unexpired in its lease, for redevelopment and sale,' said Foo Suan Peng, executive director of Knight Frank who was involved in brokering the deal.

'If left alone, such buildings on sites with leases diminishing with each passing year, will depreciate in value, leaving their owners with little incentive for upgrading the properties. They may deteriorate into urban blight,' he added.

One solution could be for the government to step in and acquire such sites. 'But then again, compensation is always a thorny issue and land acquisition by the state seldom leaves property owners happy,' he noted.

By securing SLA's in-principle nod for a lease top-up, a developer can enter more confidently into a deal to buy such a site, although the land premium for the lease upgrade will still be finalised by SLA only later.

'The precedent set by Eng Cheong Tower can be used as a template for a national urban planning policy to prevent urban deterioration as the lease nears expiry and, at the same time, help rejuvenate the city,' said Mr Foo.

Such a strategy allows the market to decide when and how redevelopment should take place, with the state playing a supporting role, in terms of processing applications for upgrading the lease and redeveloping the site. Other examples of ageing leasehold properties are Golden Mile Tower and Golden Mile Complex along Beach Road, near Eng Cheong Tower, and Pearl Bank apartments in Chinatown.

More choice sites facing similar circumstance that could potentially become collective sale candidates include Grangeford, Mount Elizabeth Medical Centre and Orchard Bel-Air in the prime districts 9,10 and 11, and Mandarin Gardens and Bayshore Park along the east coast.

Like Eng Cheong Tower, all these properties were built on 99-year leasehold sites sold by the government starting from the late 1960s.

He explained: 'In all practical terms, the useful life of a building is between 40 and 60 years and its usefulness would decrease as the years go by.

'Hence, there's a need to redevelop the building and it makes sense to top up the lease. Otherwise there would be too many old, dilapidated buildings on the island.'

Home owner K H Teo, 57, feels lease top-ups could help his children. He owns a 99-year leasehold condo in Bukit Batok, which is about 10 years old.

He said: 'In this case, I'm sure the property value will go up in the future.

'This is good because it'll affect the younger generation like my children who could benefit from a lease top-up to the estate.'

2005 Land Cost RCR ------ Assuming an all-in land cost of about $240 psf per plot ratio, market watchers estimate that the breakeven cost for a new condo/SoHo project on the site could come in below $500 psf for the UOL and Low Keng Huat tie-up.

Arcachon

05-10-14, 20:21

LOCATION ALLOWABLE DEVELOPMENT SITE AREA MAXIMUM PERMISSIBLE GROSS FLOOR AREA (GFA) SUCCESSFUL TENDERER TENDERED PRICE
($PSM of GFA)
Parcel A at Fernvale Road Residential 16,603.9 m2 49,812 m2 CEL Development Pte. Ltd. and Unique Residence Pte. Ltd. $234,933,000 ($4,716.39)
Parcel B at Fernvale Road 17,413.9 m2 52,242 m2 $252,122,000 ($4,826.04)

http://www.ura.gov.sg/uol/media-room/news/2014/aug/pr14-46.aspx

SINGAPORE: Two plots of land for residential development at Fernvale Road have attracted lukewarm response from developers at the close of tender on Thursday (Aug 7).

The Urban Redevelopment Authority (URA) said Land Parcel A has attracted four bids. The top bid for Parcel A came from CEL Development and Unique Residence at S$234.9 million. It is a joint venture led by Chip Eng Leong Development. The 99-year leasehold site measures about 16,604 square metres.

Meanwhile, Land Parcel B has received three offers, with the top bid also coming from CEL Development and Unique Residence at S$252.1 million. This plot has a site area of about 17,414 square metres.

The top bids for both land parcels work out to a weighted average land price of S$443.38 per square feet per plot ratio (psf ppr) and the break-even cost is estimated to range from S$850 to S$890 psf. The two adjacent plots were put up for sale on June 26 under the batch tender closing system, which is aimed at ensuring more prudent bids from developers.

SLP International Property Consultants Executive Director for Research and Consultancy Nicholas Mak said in a statement: "Altogether, the two sites at Fernvale Road can potentially add a large number of housing units, around 1,100 to 1,200 units, to the supply. This will create a large influx of residential supply in the neighbourhood. Hence, the developments on Parcels A and B may take a longer time to sell all their units."

URA said it will announce its decision on the tender award at a later date.

- CNA/by

https://www.squarefoot.com.sg/trends-and-analysis/land-sales

Ringo33

05-10-14, 21:10

En bloc? What if it can't be enbloc and the property obviously can be lived in after 99 years? (since they are made of concrete, not wood!)
Oh No, you MUST return to the govt for FREE !!!!!!!!!!!!!!!! Pity all those owners getting ZERO Dollar for owning a 99 years Leasehold properties for 99 years !!!!!!!!!!!!!!!!!!!!!

There is no such thing as cant en bloc because developers are always hungry for land for development. The only question is if the price is inline with developer expectation and if lease can be top up. But that has got nothing to do with the fallacy of FH condo can be kept FOREVER because buildings are not built to last forever and if the development becomes too old, price and rent will decline and cost of maintenance will rise. It will be like having an old cow that is no longer producing milk.

Ringo33

05-10-14, 21:20

Bro 33. It is the price of FH land that escalate faster than the construction cost of the building in a land scarce country like Singapore. Why do you think FEO built the condo, The Shore (at east coast), on their FH land but sell as leasehold condo. NG family will have the land generation after generation. Got it?

In Singapore the value of land greatly depends on the location and what the government allow you to build above it, and the premium for FH property over LH99 s around 20%. Its not 2 times or 100 times.

The cost of construction doesnt track property prices, it depends on labor and material cost such as granite, steel cement, which is determined by external factors.

FEO is like any developers, their job is to buy land and rebuild. Building LH property on FH land is different from an individual owning a FH apartment and hoping to keep it forever. So please dont confuse the 2. And unless if you are like Peter Lim who own the entire block for his own use, there is no chance of any individual FH apartment owners to keep it forever.

Ringo33

05-10-14, 21:32

Just thinking aloud, what would be the value of a leasehold condo at 90 years old compared with a fh property, if it isn't en bloc?

What kind of value will a sub 10 years condo have vis a vis a freehold one? I echo the thoughts of some forumers here that Singapore is still a young nation and with such a surge in properties, won't be surprised to see many condos without en bloc potential at end of lease.

The value of FH will always be higher than LH (about 20%) if you are comparing apple to apple, but that is beside the point. Our discussion here is about teddybear suggesting that keeping your FH condo FOREVER which we know is impossible unless you own the entire development plus the land like Peter Lim.

Developers are always on the look out for land for development, the only reason why it cant go en bloc is usually price. Then again, this has got nothing to do keeping FH condo FOREVER.

seletar

05-10-14, 21:40

Please kindly do not argue about FH/LH in this thread, you can start another thread to argue about it if you want to. Thanks.

I will start posting some earlier articles relating to this downcycle for reference.

seletar

05-10-14, 21:54

The Govt was well aware of the impending oversupply and with this change they will not lose any tax revenue from vacant properties. Investors with vacant properties now face double whammy of servicing their mortgage, maintenance fees and property tax without rental income.

No more tax refunds on vacant properties

The Business Times
Monday, Feb 25, 2013

THE government will do away with the current concession that provides tax refunds on vacant properties in order to achieve "consistency and equity" in tax treatment.

This, said Finance Minister Tharman Shanmugaratnam on Monday in his annual Budget speech, is a "fair" move given the new measures to have a more progressive property tax schedule on residential properties.

"Property tax is a tax on property ownership and should be levied irrespective of whether the property is vacant or occupied," said Mr Tharman.

These changes will take effect from January 1, 2014.

seletar

05-10-14, 22:04

http://sbr.com.sg/residential-property/news/singapore-must-brace-itself-200000-new-homes#sthash.QHuCIl5l.dpuf
Published: 21 Jan 13

Singapore must brace itself for 200,000 new homes

In a blog post, Minister for National Development Khaw Boon Wan said that some 200,000 new housing units will be constructed. 80,000 of which are private properties, 10,000 are ECs and about 110,000 are public housing. "This is equivalent to the building of four new Ang Mo Kio towns by 2016, and we are still building more," he wrote.

http://sbr.com.sg/sites/default/files/news/infograph_mnd.jpg

seletar

05-10-14, 22:16

Singapore property tax is a tax on property wealth, not usage.

http://www.todayonline.com/business/mof-rejects-property-tax-feedback
Published 04 Sep 2013

MOF rejects property tax feedback

SINGAPORE — The Ministry of Finance (MOF) has dismissed all eight suggestions it received in relation to proposed property tax changes announced during the Budget Speech in February, saying the feedback was “inconsistent with the policy objectives of the proposed legislative changes”.

The tax changes announced included the removal of property tax refunds for unoccupied residential and non-residential properties “to ensure consistency in the tax treatment of all vacant properties and to align with the policy intent of property tax, which is to tax property wealth rather than use”.

The MOF received six suggestions, which included recommendations to allow vacancy refunds for unoccupied properties owned by Singaporeans residing abroad due to work or for charitable causes, as well as to reduce business costs of commercial and industrial property owners whose premises are vacant.

The feedback was rejected as it was “not in line with the policy intent of property tax, which is to tax property wealth rather than use”, said the MOF.

The remaining two suggestions were for the proposed change to clarify the definitions of residential versus non-residential properties, to enable the introduction of the progressive property tax structure on all residential dwellings.

The public consultation on the draft Property Tax (Amendment) Bill 2013 was sought between July 25 and Aug 14.

prunes

05-10-14, 22:16

2015 supplies are mostly appearing in 2014 as TOP tends to be about 1 year ahead of schedule. Those in 2016 are likely to appear in 2015. Beyond 2015 the supplies are likely to stagnant or dwindle as evident by lower supply of GLS and BTOs. In early 2015, the US economy should have picked up sufficient momentum to boost Singapore's economy, employment and inflow of foreign labour.

SMEs 'modestly upbeat for next 6 months'
PUBLISHED OCTOBER 04, 2014
http://www.businesstimes.com.sg/premium/top-stories/smes-modestly-upbeat-next-6-months-20141004

teddybear

05-10-14, 22:21

Think you are right, so we should see OCR private properties prices crashing by end of 2015.................

2015 supplies are mostly appearing in 2014 as TOP tends to be about 1 year ahead of schedule. Those in 2016 are likely to appear in 2015. Beyond 2015 the supplies are likely to stagnant or dwindle as evident by lower supply of GLS and BTOs. In early 2015, the US economy should have picked up sufficient momentum to boost Singapore's economy, employment and inflow of foreign labour.

SMEs 'modestly upbeat for next 6 months'
PUBLISHED OCTOBER 04, 2014
http://www.businesstimes.com.sg/premium/top-stories/smes-modestly-upbeat-next-6-months-20141004

prunes

05-10-14, 22:30

Think you are right, so we should see OCR private properties prices crashing by end of 2015.................

A mild correction in early part of 2015 can be expected for a few oversupplied OCR areas. There are no major retrenchments so I don't expect any crash.

CCR is clearly over-priced so significant correction can still be expected. Due to the big quantum, the holding power of weaker investors will be severely tested.

seletar

05-10-14, 22:30

Not only no more tax exemptions for vacant homes, the Govt also increase property tax in 2014 and 2015 for non-owner-occupied homes, especially the high value homes. The Govt getting more tax revenue from property investors.

http://www.iras.gov.sg/irashome/page04.aspx?id=12186

New Property Tax Computations for Non-Owner-Occupied (include Let-Out/ Vacant) Residential Buildings

The Government announced the introduction of progressive tax rates for all residential properties from 1 Jan 2014 and 1 Jan 2015. See revised rates below.

A) Progressive Tax Rates for Residential Properties (Exclude residential land)
Progressive Tax Rates
Annual Value($) Effective 1 Jan 2014
First 30,000 10%
Next 15,000 11%
Next 15,000 13%
Next 15,000 15%
Next 15,000 17%
AV in excess of $90,000 19%

Annual Value($) Effective 1 Jan 2015 First 30,000 10%
Next 15,000 12%
Next 15,000 14%
Next 15,000 16%
Next 15,000 18%
AV in excess of $90,000 20%

1 Illustrations of Property Tax Computations for Non-Owner-Occupied
(include Let-Out/ Vacant) Residential Buildings

Example 1: Annual Value: $95,000

Property Tax based on Year 2013 property tax rate:
$95,000 @ 10% = $9,500
Property tax payable before 2014 = $9,500 [A]

Property Tax based on new residential rates with effect from 1 January
2014:

First $30,000 @ 10% = $3,000
Next $15,000 @ 11% = $1,650
Next $15,000 @ 13% = $1,950
Next $15,000 @ 15% = $2,250
Next $15,000 @ 17% = $2,550
Remaining $5,000 @ 19% = $950__
Property tax payable from 2014 = $12,350 [B]

Tax increase = $2,850 [B-A]

2 Illustrations of Property Tax Computations for Non-Owner-Occupied
(include Let-Out/ Vacant) Residential Buildings

Example 2: Annual Value: $95,000

Property Tax based on residential tax rates with effect from 1 January
2014:

First $30,000 @ 10% = $3,000
Next $15,000 @ 11% = $1,650
Next $15,000 @ 13% = $1,950
Next $15,000 @ 15% = $2,250
Next $15,000 @ 17% = $2,550
Remaining $5,000 @ 19% = $950__
Property tax payable from 2014 = $12,350 [A]

Property Tax based on residential tax rates with effect from 1 January
2015:

First $30,000 @ 10% = $3,000
Next $15,000 @ 12% = $1,800
Next $15,000 @ 14% = $2,100
Next $15,000 @ 16% = $2,400
Next $15,000 @ 18% = $2,700
Remaining $5,000 @ 20% = $1,000__
Property tax payable from 2015 = $13,000 [B]

Tax increase = $650 [B-A]

teddybear

05-10-14, 22:50

On the contrary, I am expecting something >30% crash for OCR private property prices, given that OCR private has gone up by >140% since 2009 lows.

On the other hand, CCR only gone up by about 30% since 2009 lows (as of current price after crashing about 30+%), and comparing >140% increase vs 30% increase, I would say OCR is the one much more seriously over-priced and hence will crash much more when it comes!

Let's wait and see, end 2015 to end 2017 will be interesting times, where we see OCR crashing like no tomorrow (unless govt relax the cooling measures!). Let's watch the show that is starting to unfold.................. :topsy_turvy:

A mild correction in early part of 2015 can be expected for a few oversupplied OCR areas. There are no major retrenchments so I don't expect any crash.

CCR is clearly over-priced so significant correction can still be expected. Due to the big quantum, the holding power of weaker investors will be severely tested.

seletar

05-10-14, 23:26

http://www.businesstimes.com.sg/premium/top-stories/property-market-set-2016-supply-avalanche-20130812

Business Times
Published August 12, 2013

Property market set for 2016 supply avalanche

SSD scheme may work against govt's intention, say market players

[SINGAPORE] With previously locked-up homes getting ready to hit the market, it is timely to relook the sellers stamp duty (SSD), to prevent a head-on collision with the record number of private homes that are expected to make it to the market in 2016, say market observers.

According to data provided by Orange Tee, a total of 33,555 units are expected to make it to the market in 2016, compared with the 15,503 units that are available this year.

Of this, 27,181 units will originate from newly launched projects while the remaining 6,374 units will be from the stash of previously locked-up units, assuming that owners choose to hold onto their properties and not incur any SSD.

This follows enhancements to the SSD scheme in 2011, which saw the holding period raised from three to four years, and rates increased steeply up to 16 per cent.

seletar

05-10-14, 23:48

Singapore's domestic private debt-to-GDP ratio has now risen to very high 162% in Q3 2014 ($604.6 billion), this private debt does not include those that borrow from CPF to pay for their HDB flats.

http://sbr.com.sg/economy/news/chart-day-heres-proof-singapores-loan-growth-outstripped-nominal-gdp-8-times#sthash.o5Cx8f5C.dpuf
Published 14 Aug 2013

Chart of the Day: Here's proof that Singapore's loan growth outstripped nominal GDP 8 times

According to Nomura, Singapore's nominal GDP growth fell to 1.3% y-o-y in Q1 2013, yet loan growth picked up to a sizzling 19.2% (it eased to 18.8% in Q2; nominal GDP data for Q2 are not yet available).

So loans growth outpaced nominal GDP by 18.0 percentage points in Q1, and likely by a similar margin in Q2.

Singapore's credit-GDP growth gap is the largest in Asia.

Here's more from Nomura:

Since quarterly data began in 1981, loans growth has outpaced nominal GDP by more than 18pp on eight occasions: Q2, Q3 and Q4 in 2008, Q2, Q3 and Q4 2012, Q1 2012 and Q1 2013.

All are since the global financial crisis. One reason for this is that Singapore's main monetary policy target is the exchange rate, and so its short-term interest rates closely mimic the near-rock bottom rates in the US.

The upshot is that Singapore's domestic private credit-to-GDP ratio has risen sharply, from 101% in Q4 2008 to 149% in Q1 2013. It is not only the level, but the speed of the debt build-up that is a concern.

Unless the debt build-up is brought under control, Singapore will be very exposed when the US Fed eventually does raise rates.

http://sbr.com.sg/sites/default/files/news/fsr.JPG

seletar

05-10-14, 23:57

Housing debt slavery : How it can occur....

My friend who is an economist was terrified when he bought a private condo. He and his wife were thrifty penny pinchers who paid down the housing loan as fast as possible. Why was he so fearful? Being an economist he knew a lot of economic history and knew that many things can go wrong when one has a large debt. Somehow these few years, people don't think too much about borrowing half a million or a million to buy a home - sometimes they do it because others are doing it. Sometimes they think they are okay as long as they stay employed.

15 years ago a friend of mind show me the terrible situation got in with his housing loan. He computed that he paid a total of $200K in installments but the outstanding loan decreased by only $60K. How is this possible? During the Asian crisis interest rates went up to 6-8% depending on which bank you got your loan. 8% on a 800K loan is a whopping $64K a year roughly $5K a month on interest alone. Not to mention the depreciation of the property during that time. Interest rates today are artificially low. They may be low now but if you look at a window of 2 decades chances are you will hit a duration of extremely high rates.

Another situation that can arise is negative equity. When the price of the home falls very quickly, the market price of the home can fall below the outstanding loan you have with the bank. When this happens, the banks can ask you to pay down part of your loan immediately so that you get back to positive equity. This clause I believe is found in all housing loan agreements today. It didn't happen in Singapore but home buyers in Hong Kong got hit by this during the Asian Crisis and were at the mercy of the banks that had the right to foreclose on the property.

During boom times, there is always this tempting strategy of buying a home then taking loan with a long tenure then servicing the loan with rental income. I've seen a number of people who get into trouble with this strategy - they can afford one condo but buy two thinking the 2nd property can pay for itself via rental income. To get into real trouble buy 3 condos. when you can only afford one. If your timing is perfect perhaps you can get away with it but many people do this during the boom time when property prices are high. When rental yields fall, they end up slaving away to hold on to the property.

seletar

06-10-14, 00:17

'Beware oversupply of shoebox apartments'

Experts warn investors that thousands of them are set to flood market

The Straits Times

PROPERTY analysts have issued a blunt warning to investors keen to buy so-called shoebox apartments in hopes of capital gains and good rental returns.

The strong interest in these units - mainly 500 sq ft or smaller - is playing a central role in fuelling the robust demand in the overall private property market.

Analysts at major research firms cautioned that investors should look before they leap even though the price tags look tempting, given the units' small size.

They said investors should understand that thousands of these tiny homes are set to flood the market in the next year or so, which could mean headaches in getting a tenant - or a good resale price.

The analysts said most buyers for such units tended to be investors rather than owner occupiers, many of whom lived in HDB flats that were larger than the shoebox units they were buying.

A report by BNP Paribas Group noted a spike in private units purchased by HDB dwellers since 2008, many of which were shoebox-size, 'which we believe is not for owner occupation'.

A research report by Nomura Group pointed out that the number of completed shoebox units could triple next year. Most units scheduled for completion are mass and mid-market projects and more than half of such units were purchased by HDB dwellers, it said.

http://3.bp.blogspot.com/-Y8uUy5uIEAw/T5Fg2Y9we4I/AAAAAAAAAxc/StNX-17Qph8/s320/ShoeBoxNos.jpg

The BNP report also stated that tighter immigration rules may mean investors would face even more difficulty finding enough tenants for the units.

'Facing an uncertain demand ahead, we believe the physical market could start to feel the first pains of oversupply as early as next year via softening rents and buyer sentiments,' it said.

The researchers also warned that rising interest rates could dampen home demand. 'Coupled with other risks such as an earlier-than-expected climb in interest rates, this could indeed have a significant impact on the financial well-being of HDB households, which typically have less holding power,' said Nomura.

Likewise, the BNP report warned that a rise in mortgage rates could hurt home affordability, 'unless household income rises faster or home prices fall faster'.

Shoebox unit prices did the worst in the 08/09 crash, performing well below the property price index
http://www.ires.nus.edu.sg/webapp/images/srpi/SRPI_20120628.png

seletar

06-10-14, 00:49

http://www.channelnewsasia.com/news/singapore/new-home-loan-rules-a/729458.html
Channel News Asia
POSTED: 30 Jun 2013 8:29 PM

New home loan rules a "structural measure": Khaw

SINGAPORE: National Development Minister Khaw Boon Wan said the recent tightening of property loan rules granted by financial institutions is a structural measure to ensure a more stable property market, and is expected to be "quite permanent".

The new rules, which kicked in on Saturday, are also meant to ensure that monthly loan repayments by property buyers do not exceed 60 per cent of their income.

On Friday, Singapore's central bank introduced a Total Debt Servicing Ratio (TDSR) framework and tighter Loan-to-Value (LTV) limits on housing loans. It said the move will strengthen credit underwriting practices among banks and encourage financial prudence among borrowers.

Mr Khaw said: "Our observation is I think those people buying for home ownership is not an issue, but we do have buyers who are stretching themselves, buying second property, third property for investments, and those are the people we worry about, because when interest rates go up, and when they find themselves (being unable to) afford the increased mortgage, what would they do? They may be forced to liquidate, and who knows, if that time combines with a time where there's a bit of a glut in the property market, they may suffer financially. So I think the new rules are a good reminder."

Mr Khaw also noted that the current low interest rate is not sustainable.

He said: "If you assume that today's mortgage rate is 1.5 per cent, and let's say you buy a property, let's say your monthly mortgage is S$1,500. But it won't stay 1.5 per cent forever… Interest rates will adjust and let's say if it goes up to 3.5 per cent or 4 per cent or even higher, as not too long ago, then your monthly mortgage will suddenly increase in a very big way. And will you still be able to afford it? So I think all these prudential rules are very important, it's for the interests of the buyers.”

seletar

06-10-14, 00:54

http://www.stasiareport.com/breaking-news/money/story/one-10-borrowers-overstretched-warns-mas-20130724#sthash.Cy2pn9mp.dpuf
The Straits Times
Published 24 July 2013

One in 10 borrowers overstretched, warns MAS

Hike in rates and fall in property prices may pose risks to financial stability

HOUSEHOLDS here are borrowing more amid low interest rates and combined with soaring home prices, the mix poses "significant risks" to Singapore's financial stability, the Monetary Authority of Singapore (MAS) has warned.

The central bank said 5 per cent to 10 per cent of borrowers here have likely taken on too much debt to buy a home. In other words, their total monthly debt repayments exceed 60 per cent of their income, said MAS managing director Ravi Menon yesterday.

This proportion of "at risk" borrowers could hit 10 per cent to 15 per cent if mortgage rates rise by 3 percentage points, he added.

While Singapore households as a whole have more cash and deposits than debt, individual households may not be in such good financial shape, Mr Menon said at the release of the MAS annual report. Households with lower income, less savings or longer loan periods may find it a strain to repay debts if interest rates rise.

"The combination of low interest rates, growing leverage, and surging property prices poses significant risks to financial stability," Mr Menon said.

"When interest rates rise and if property prices fall, any risks built up will materialize."

He added: "So when interest rates rise, long before any bank gets into trouble - and they won't - some households will."

Bank housing loans here have risen 18 per cent a year in the last three years, and home loans as a share of gross domestic product (GDP) have jumped from 35 per cent to 46 percent in the period.

This has led Singapore's debt as a share of GDP to rise from 200 per cent to 270 percent over the last three years, while resident debt to GDP has risen from 125 per cent to 155 per cent, Mr Menon said.

Economists have sounded similar alarms. Standard Chartered noted this month that Singapore households are among the most indebted in Asia relative to what they earn, while Moody's Investors Service recently downgraded its outlook for Singapore's banking system due to mounting debt.

The MAS last month unveiled a new framework for home buyers' loans, to ensure that a borrower's repayments on all debts does not exceed 60 per cent of his gross monthly income. The move came as MAS wants banks to practice lending. It had noted some "worrying practices" during bank inspections.

One couple with a total monthly income of $6000 were granted a new home loan of $400,000 on top of their existing debt, as they had a savings deposit of $90,000. But their total monthly loan repayments came to more than 90 per cent of their income.

Some car buyers also borrowed almost the full car price, which is not prudent as cars are depreciating assets, Mr Menon said.

seletar

06-10-14, 01:15

http://www.todayonline.com/singapore/hdb-cuts-loan-tenure#inside

HDB cuts loan tenure as interest rate hikes loom

Move among initiatives to boost financial prudence, improve affordability of public housing

TODAY
Published 28 Aug 2013

SINGAPORE — To encourage financial prudence and mitigate an impending rise in interest rates, the Housing and Development Board (HDB) announced yesterday that it would cut, with immediate effect, the maximum loan tenure from 30 years to 25 years for its housing loans, and reduce the mortgage servicing ratio (MSR) limit from 35 per cent to 30 per cent of the borrower’s gross monthly salary.

And with effect from today, financial institutions will shorten the maximum tenure of their new housing loans and re-financing facilities from 35 years to 30 years.

The measures were announced yesterday by the HDB as part of a raft of housing initiatives — including details of the enhanced Special CPF Housing Grant that was announced during the National Day Rally and a pilot launch of multi-generation flats — that sought to achieve various outcomes such as improving affordability and encouraging extended families to live together or in close proximity.

Permanent resident (PR) households will now also have to wait three years after obtaining their PR status before they can buy a resale flat — a move that National Development Minister Khaw Boon Wan described as a “judgment call” to allow PRs to sink roots here and save up before buying a flat. Previously, PR households could buy resale HDB flats as soon as they acquired PR status.

The objective of the revised mortgage loan terms was to “ensure financial prudence in purchase of public housing and discourage over-consumption”, the HDB and the Ministry of National Development said in a joint press release. This comes after the Monetary Authority of Singapore introduced a Total Debt Servicing Ratio (TDSR) framework about two months ago to cap total debt obligations at not more than 60 per cent of an individual’s gross monthly income.

It was only in January that the authorities announced that the MSR limits for housing loans from banks and the HDB would be capped at 30 per cent and 35 per cent of a flat buyer’s gross monthly income, respectively. With yesterday’s announcement, the MSR limit for HDB loans will be the same as for bank loans.

Speaking to reporters at Toa Payoh HDB Hub, Mr Khaw reiterated that the changes were meant to align HDB loan policy with that of the banks.

Referring to the current “unrealistic and artificial” interest rates, he said: “People think they can buy a bigger flat or a condo, when we all know that over the lifetime of the mortgage, interest rates won’t stay that low and then what? Then there will be trouble.”

Analysts whom TODAY spoke to reiterated that the latest measures were primarily targeted at “preparing the ground” for the looming interest rate hikes.

Arcachon

06-10-14, 02:54

]Housing debt slavery : How it can occur....

My friend who is an economist was terrified when he bought a private condo. He and his wife were thrifty penny pinchers who paid down the housing loan as fast as possible. (Normal, everyone was told by their parent, teacher, friends to do so) Why was he so fearful? Being an economist he knew a lot of economic history and knew that many things can go wrong when one has a large debt. Somehow these few years, people don't think too much about borrowing half a million or a million to buy a home - sometimes they do it because others are doing it. Sometimes they think they are okay as long as they stay employed.

15 years ago a friend of mind show me the terrible situation got in with his housing loan. He computed that he paid a total of $200K in installments but the outstanding loan decreased by only $60K. How is this possible? During the Asian crisis interest rates went up to 6-8% depending on which bank you got your loan. 8% on a 800K loan is a whopping $64K a year roughly $5K a month on interest alone. Not to mention the depreciation of the property during that time. Interest rates today are artificially low. They may be low now but if you look at a window of 2 decades chances are you will hit a duration of extremely high rates.(Normal, everyone was told by their parent, teacher, friends)

Another situation that can arise is negative equity. When the price of the home falls very quickly, the market price of the home can fall below the outstanding loan you have with the bank. When this happens, the banks can ask you to pay down part of your loan immediately so that you get back to positive equity. This clause I believe is found in all housing loan agreements today. It didn't happen in Singapore but home buyers in Hong Kong got hit by this during the Asian Crisis and were at the mercy of the banks that had the right to foreclose on the property.(Normal, everyone was told by their parent, teacher, friends)

During boom times, there is always this tempting strategy of buying a home then taking loan with a long tenure then servicing the loan with rental income. I've seen a number of people who get into trouble with this strategy - they can afford one condo but buy two thinking the 2nd property can pay for itself via rental income. To get into real trouble buy 3 condos. when you can only afford one. If your timing is perfect perhaps you can get away with it but many people do this during the boom time when property prices are high. When rental yields fall, they end up slaving away to hold on to the property.(Normal, everyone was told by their parent, teacher, friends)

Question : Did your friend watch this video, if not it is good to watch the video ROI very high. Ask him whether is there any truth in the video.

https://www.youtube.com/watch?v=iJFIv_5BJL0

walkthetiger

06-10-14, 09:55

(Normal, everyone was told by their parent, teacher, friends)

Question : Did your friend watch this video, if not it is good to watch the video ROI very high. Ask him whether is there any truth in the video.

https://www.youtube.com/watch?v=iJFIv_5BJL0

Both have some truths in it...

"During boom times, there is always this tempting strategy of buying a home then taking loan with a long tenure then servicing the loan with rental income. I've seen a number of people who get into trouble with this strategy - they can afford one condo but buy two thinking the 2nd property can pay for itself via rental income. To get into real trouble buy 3 condos. when you can only afford one. If your timing is perfect perhaps you can get away with it but many people do this during the boom time when property prices are high. When rental yields fall, they end up slaving away to hold on to the property. "

But, it is the understanding of timing that helps to win more, or avoid a lose.

Ringo33

06-10-14, 09:58

A mild correction in early part of 2015 can be expected for a few oversupplied OCR areas. There are no major retrenchments so I don't expect any crash.

CCR is clearly over-priced so significant correction can still be expected. Due to the big quantum, the holding power of weaker investors will be severely tested.

Thats correct, any correction in the OCR will likely to be mild as demand for OCR apartments will be supported by hdb upgraders, down graders, newlywed who are unable to qualify for public housing, as well as new demand created by government decentralizing effort.

The luxury property in CCR region are likely to take the biggest hit as such luxury apartment equipped with expensive fixtures will suffer high depreciation and that lack of big budget tenants will mean lousy or negative yield eventually for such property. For those non luxury CCR property with big quantum, it will be cheaper to actually rent them instead of buying and the poor yield will likely continue as more international schools move to outskirt of Singapore.

DC33_2008

06-10-14, 10:41

Ringo33

06-10-14, 11:41

CCR is always first to be hit and it will send the ripple to the OCR soon. Good to watch for the period 2015-2017. A good barometer to measure is the price of resale flats with those in CCR as compared to those OCR. In addition, flats in CCR still somewhat able to hold for rental but not for OCR. A lot of them are looking for tenants even now. So imagine, when those with hdb flats owners who want to sell or rent their hdb flats to support the financing of their OCR PCs will be a challenge. They are worried now especially the rising interest rate.

Most CCR property has already been lagging behind OCR in terms of yield and price appreciation since 2008/9, which is around 5 years ago, and till now it doesnt looks like the price trend for CCR is going to change its course anytime soon, in fact we are now starting to see many resale CCR apartment selling at loss, something which we havent really see in the OCR yet.

In terms of rental yield, its a known fact that OCR property will promise better rental return so I am surprise that when you say CCR is able to hold for rental and not OCR? Could you elaborate? https://www.squarefoot.com.sg/market-watch/rental-yield. A rise in interest rate will hit property with the largest quantum first, worst hit will be the landed property and CCR segment due to both having lousy yield and larger loan

Arcachon

06-10-14, 14:11

How would you advise someone who have the following in 2011.

1. 5 room HDB with CPF can fully pay but chose to pay for another 10 years.
2. 2 Bedroom brought for SGD 535,000 pay 20% (SGD 108,000) value for SGD 1,500,000 in 2010.
3. Age 47.
4. Annual income SGD 44k.
5. No other loan.

seletar

06-10-14, 14:13

http://www.ft.com/cms/s/2/af96c30a-095d-11e3-8b32-00144feabdc0.html#ixzz2dEVQTwZd
Financial Times
August 20, 2013 1:21 pm

Asia’s debt conundrum reawakens ghosts of 1990s crisis

http://im.ft-static.com/content/images/5a32da7a-09c1-11e3-ad07-00144feabdc0.img

When China unleashed the largest stimulus package in its history in response to the 2008 crisis and slowing export markets in the west, it came at a price. Today China is grappling with a bill that some economists say has driven total debt to gross domestic product past 200 per cent.

While China offers the most extreme example of using debt to fund growth, it is a pattern that has been repeated across Asia. Without exports, central banks turned on the taps, leading to a jump in household and corporate borrowing.

Now, as the US Federal Reserve considers a reversal of its ultra-loose monetary policy, the region faces a new challenge: coping with life after debt. And as investors gauge the impact of that transition, the ghosts of the 1997-98 Asian financial crisis have been reawakened.

“All this QE [quantitative easing] money has lead to a massive credit inflation bubble in Asia,” said Kevin Lai, chief regional economist at Daiwa Securities. “The crime has been committed, we just have to deal with the aftermath. During that process there will be a lot of damage . . . It’s like a margin call. Households will need to sell their assets. There will be a lot of wealth destruction.”

Echoes of the Asian financial crisis are easy enough to hear. Credit growth since 2008 has been rapid, leading to a run-up in house prices, high growth rates and corporate mega-deals. In April, Thailand recorded both its biggest ever domestic takeover and its largest equity listing, according to Dealogic data.

But as the tide of cheap money from overseas rolls back from emerging economies across the region, analysts warn that Asia could be at the start of a series of currency and credit crises, not unlike the experience of the 1990s.

Most of the focus has so far been on India and Indonesia, the two countries in Asia with the biggest current account deficits, making them the most reliant on foreign capital to make ends meet. Both have seen their currencies and their equity markets plunge in the past week.

But the risks of contagion across the region are beginning to rise, say economists, made worse by the slowdown in China, Asia’s biggest growth engine.

In Thailand, which slipped into technical recession in the second quarter, household debt to GDP has risen from 55 per cent in 2009 to almost 80 per cent today. Total debt to GDP now stands at 180 per cent, according to data compiled by HSBC.

Oil-rich Malaysia has seen a similar increase in debt levels, helping to power consumption and housing booms. But poor trade figures have raised the prospect of it slipping into deficit this year, after a decade of running surpluses.

And last week Indonesia reported a sharp widening of its current account deficit, its worst since 1996, thanks mainly to a fall in the value of its commodity exports.

“We’re going into a period of stagnation in growth over the next couple of years,” said Fred Neumann, chief Asia economist at HSBC. “It was a sweet spot and that’s now coming to an end. Asian economies had an easy ride because they bought themselves growth through leverage. They should have used that time to carry out structural reforms. Instead they’ve used the cheap money and enjoyed the high growth rates. That opportunity has now gone.”

The falling growth rates across Asia also serve as evidence of a deterioration in productivity. Credit intensity – a measure of how much debt is needed to create a single unit of economic growth – has risen sharply almost everywhere. In Hong Kong, it has almost tripled since 2007, while in Singapore it has jumped more than fourfold.

“A lot of this new credit is going into housing and property across the region. That area is not the most productive, it doesn’t bring new value into the system,” says Jimmy Koh, head of economic-treasury research at United Overseas Bank in Singapore.

For policy makers, the rise in credit and fall in growth leaves little room to move. Indonesia chose to raise rates in an attempt to prevent a run on the currency, while India has introduced measures to support the rupee. So far, neither tack has produced the desired results.

“The choice is either you protect your currency or you protect domestic growth. You can only do one or the other. There is no easy way out,” Mr Lai said.

seletar

06-10-14, 14:21

http://www.channelnewsasia.com/news/business/singapore/s-pore-hong-kong-to-be/807728.html

S'pore, Hong Kong to be hardest hit if credit tightening occurs: DBS

Channel News Asia
POSTED: 09 Sep 2013 11:46 PM

SINGAPORE: Banks with large property loan portfolios will face higher risks when interest rates start to rise -- this as highly-leveraged households begin to have difficulty paying their mortgages.

Economists said this could lead to credit tightening by banks, and a hard landing for the property sector.

If that happens, DBS Bank said Singapore and Hong Kong will be hardest hit within Asia.

To spur growth, central banks in the developed world have kept global interest rates low for the last five years. However, that produced unintended consequences for Asia, where growth is chugging along just fine.

The access to cheap money has helped fuel a property up-cycle for the past four years. At the same time, it has also caused household debt to hit record levels.

In Singapore and Hong Kong, household debt has outpaced average household income growth.

According to a recent Goldman Sachs report, for the period from 2005 to 2012, household debt in Singapore grew by 63 per cent, outpacing the average household income growth of 57 per cent.

Irvin Seah, a senior economist with DBS Bank, said: "Among Asian economies, Singapore and Hong Kong will be the most vulnerable to an interest rates hike because of the rapid increase in leverage ratios over the last few years (in) a low interest rate environment.

In Singapore for example, the number of property loan holders has risen to almost 480,000 this year. That is up 66 per cent from five years ago, according to Credit Bureau Singapore.

The number of property loan holders with more than one property loan has jumped 78 per cent over the same period to 48,782.

Singapore's central bank warned in July that about one in ten of borrowers could have over-leveraged on their property purchases, and the proportion of borrowers at risk could reach 10-15 per cent if mortgage rates were to rise by 3 percentage points.

Mortgage rates in Singapore currently hover at 1.5 per cent.

According to Goldman Sachs, if mortgage rates in Singapore were to rise to around 3.5 per cent from 1.5 per cent, a household looking to upgrade from a HDB flat to a private home will see mortgage payments increase by 25 per cent, and the household's savings rate could drop to just 8 per cent of household monthly income, from 15 per cent previously.

Other economies in Asia where rising household debt is also a concern are Malaysia and Thailand.

Rajiv Biswas, Asia-Pacific chief economist at IHS, said: "We have seen rising levels of leverage in Malaysia and Thailand, and I think both the central banks in those two countries are concerned about rising household debt levels.

seletar

06-10-14, 14:33

Deposit growth is almost zero, but bank loans grew 11.8% from Sep 2013 to Sep 2014. Singapore's banks' loan-to-deposit ratio has now risen to 113% in Q3 2014.

http://sbr.com.sg/economy/news/fears-escalate-rising-household-debt-property-bubble-hit-singapore#sthash.FnET5ZRX.dpuf
Published 12 Sep 2013

Fears escalate as rising household debt, property bubble hit Singapore

The pace of debt increase is alarming.

According to Barclays, it is increasingly concerned about rising household leverage and the “bubbly” property market in Singapore

Here's more from Barclays:

Apart from its tendency to import a crisis, we think Singapore has some domestic vulnerabilities of its own.

Our main concern is rising household debt, a bubbly property market and the related exposure of the banking sector.

Households have taken advantage of very low interest rates in the past few years and borrowed extensively to purchase property in Singapore.

Moreover, 30% of outstanding loans are for investment purposes, rather than owner occupation. Residential property prices have risen by more than 60% from the trough in Q2 2009 and are at historical highs, notwithstanding nine rounds of cooling measures implemented by the government and the MAS.

As a result, household leverage, and household and banks’ exposures to the property market are higher today than during previous property price peaks.

The pace of the increase is also concerning. Household debt stood at 75% of GDP as at Q2 2013, up from a recent trough of 63% in Q1 2010. While household debt has risen 41% over this period, household income has increased by only 25% and wages by even less, just 15%.

Bank loans for building and construction, and mortgages also total 79% of GDP, up from 62% over the same period, and banks’ loan-to-deposit ratio has risen from 71% to 100%.

seletar

06-10-14, 14:38

http://www.cnbc.com/id/101027950

Household debt: Singapore’s ‘Achilles heel’?

CNBC - Published: Thursday, 12 Sep 2013 | 2:25 AM ET

Singapore stepped up efforts to contain a rapid increase in household debt by tightening rules around unsecured credit late Wednesday – a move viewed by economists as a preemptive strike ahead of a rise in borrowing costs in the country.

"The central bank is being pre-emptive. Taken together with the previous measures announced, including the Total Debt Servicing Ratio (TDSR) framework for property loans, they will likely be effective," Michael Wan, economist at Credit Suisse told CNBC on Thursday, referring to a measure which caps monthly mortgage payments to 60 percent of a borrower's monthly income.

Among the new rules on unsecured credit, the Monetary Authority of Singapore, the country's central bank, requires banks to review a borrower's total debt and credit limit before granting a new credit card.

In addition, financial institutions will not be allowed to grant further unsecured credit to individuals who have outstanding debt of more than 60 days with the institution

While expectations are for short-term interest rates to begin rising in 2015, a hawkish Federal Reserve chairman could mean that an increase in borrowing costs comes sooner, said economists. When interest rates rise, households will have to pay a higher monthly mortgage payment as a portion of their income.

The benchmark Singapore interbank overnight rate (SIBOR), used to price housing loans, tracks rates in the U.S.

"Rapid acceleration in household debt and bank lending are vulnerabilities for Singapore's economy, which could be destabilizing in the event of potential capital outflows and higher interest rates," Joey Chew, economist at Barclays wrote in a report titled "Openness and household debt – the Achilles' heel" on Wednesday.

The country has among the highest level of household borrowing relative to gross domestic product (GDP) in Asia at 75 percent, rising from around 63 percent in 2010, according to the bank, as record low interest rates in the recent years encouraged borrowing.

"While household debt has risen 41 percent over this period, household income has increased by only 25 percent and wages by even less, just 15 percent," she said.

Chew added that the nation's extensive trade, investment and financial links with the region, also pose a threat to the stability of its economy.

"Regardless of fundamentals, Singapore will never be completely immune to a contagion event. One of the economy's main strengths, its extreme openness, is also its Achilles heel," she said.

"Any shock originating from an ASEAN-4 economy (Indonesia, Malaysia, Philippines, and Thailand) would quickly affect Singapore," she added.

Singapore's exports to the four countries, for example, make up almost 30 percent of total exports.

seletar

06-10-14, 14:51

http://sbr.com.sg/economy/news/42-singaporeans-know-people-having-trouble-meeting-mortgage-payments#sthash.nnuJaxEv.dpuf
Published 17 Oct 2013

42% of Singaporeans know people having trouble meeting mortgage payments

More will join if interest rates rose.

"Although the household balance sheet looks healthy on headlines, our sentiment indicators highlight that 42% of the respondents to our survey know of people who are having trouble meeting mortgage repayments or people with mortgage repayments who are living on an extremely tight budget," reports Credit Suisse, citing data from its most recent housing survey.

"46% would become overstretched if monthly instalments rise by up to 30%. We estimate that a 200 bp increase in interest rate implies a 25% increase in mortgage repayments," it added.

seletar

06-10-14, 15:32

http://www.channelnewsasia.com/news/singapore/total-of-204-461-homes-to/861670.html

Over 200,000 homes to be ready by 2016: Khaw

Channel News Asia
POSTED: 25 Oct 2013 19:33

SINGAPORE: Good progress has been made in the ramp-up of the Housing Development Board’s (HDB) home building programme, said National Development Minister Khaw Boon Wan.

Writing on his Facebook page, Mr Khaw said 204,461 public and private residential units will be ready for occupation in the next three years.

The projected increase in units will come from executive condominiums (ECs) and private units.

The number of ECs projected to be completed by 2016 has gone up from 2,200 previously, to 4,955.

As for the private residential units, the projection has gone up from 18,400 units previously, to 26,355.

Mr Khaw said for this year, more than 21,000 homes have already been built.

Another 9,220 units will be ready by year-end.

http://www.channelnewsasia.com/blob/861672/1382700412000/mnd-new-homes-by-2016-data.jpg

seletar

06-10-14, 15:41

A forecast of 12% home vacancy rate in 2016.

http://sbr.com.sg/residential-property/news/chart-day-home-vacancies-predicted-hit-historical-highs-in-2014-2016#sthash.dfbsR4uj.dpuf
Published 18 Nov 2013

Chart of the Day: Home vacancies predicted to hit historical highs in 2014-2016

http://sbr.com.sg/sites/default/files/news/fig7.JPG

According to Macquarie Research, 2014 will see the completion of 19,302 units (+6.6% in inventory), which would result in a vacancy rate of 9.3%.

Historically, property price declines have coincided with vacancies of 8% and above.

Arcachon

06-10-14, 15:53

If they can do it so can we........

Singapore warms to land of the setting yen

Sunday, Oct 05, 2014
Fiona Chan
Melissa Tan
The Straits Times
Sushi lovers must be saying "arigatou" to Abenomics.

The deflation-busting economic policies of Japan's Prime Minister Shinzo Abe, which include generous monetary easing, have been pushing the yen down since 2012.

Now, as investors switch their focus to the rising US dollar, the yen has hit new multi-year lows. The Japanese currency touched a six-year low against the greenback this week, and is at its lowest to the Singapore dollar since the Asian financial crisis in 1997.

Traveller interest in Japan has surged and investors are eyeing more property in the land of the rising sun even as currency watchers predict further yen weakness over the coming months.

Dynasty Travel marketing director Alicia Seah said the number of Japan-bound tourists has risen "now that Singaporeans' spending power in Japan is stronger".

The agency has handled nearly 5,000 bookings for Japan in the first nine months this year, a sharp jump from the 3,000 travellers for the whole of last year.

Apart from the weak yen, more direct flights from Singapore to Japanese regions such as Okinawa also contributed to rising tourist interest, she added. "We expect Japan to be among the top destinations for Singaporeans this year."

At Chan Brothers Travel, the number of bookings to Japan in August and September has gone up 25 per cent from a year ago, said Ms Jane Chang, head of marketing and communications.

Serviced apartment group The Ascott has also seen more foreign visitors to Japan due to the weak yen and recent relaxation of visa requirements, said Mr Tan Lai Seng, the group's regional general manager for Japan and Korea.

He added that the group's Japan properties are more than 80 per cent occupied, and tourism is expected to be further boosted by the 2020 Olympics in Tokyo.

The weaker yen - coupled with low interest rates, high rental yields and a strong outlook for the property market over the next few years - is also drawing property investors, consultants say.

Mr Alex Bellingham, the Singapore-based director of property investment firm IP Global, said Japanese property is "more attractive than it has been for many years", especially ahead of the Olympics.

Economists say the yen's fall against the Singapore and US currencies is not a surprise, given Japan's monetary policy divergence with the other two nations.

"Singapore has an appreciating Singdollar policy, while Japan still favours anti-deflationary monetary and exchange rate policies," said DBS senior currency economist Philip Wee.

He expects the yen to fall further, reaching 90 yen to S$1 by the end of next year, from 85.9 yen to S$1 now.

"Markets anticipate further yen depreciation," said Oanda senior currency trader Stephen Innes. This should lead to a further fall in the Japanese unit against the Singdollar over the short term.

Credit Suisse Japan economist Takashi Shiono said the looming end of the US Federal Reserve's easy money policies has been the main factor behind the weakening of the yen against the US dollar.

But expectations of more easing from the Bank of Japan (BOJ), if Japanese economic data worsens in the coming months, will put further pressure on the yen.

"The BOJ remains entrenched in its monetary easing cycle with the potential for further initiatives still on the cards," agreed OCBC strategist Emmanuel Ng.

Companies with operations in Japan are expecting further yen fluctuations, but most have systems in place to manage the risks.

Among them is Singapore-listed Parkway Life Reit, which owns more than 40 properties in Japan.

"While we expect the yen to remain volatile in the near term, the adverse impact from its depreciation is mitigated to a large extent by (our) risk management strategies," said Mr Yong Yean Chau, chief executive of the Reit's manager Parkway Trust Management.

The Reit funded its Japanese acquisitions with yen-denominated loans, ensuring a stable net asset value, and it has also hedged its net yen cash flow for the next few years to protect its distribution income for unitholders, he added.

Other firms with Japan dealings include City Developments, which said on Monday that it tied up with a US investment firm to buy a historical site in Tokyo for 30.5 billion yen (S$355.5 million).

It was a timely purchase; a year ago the price would have translated into about S$390 million.

[email protected]

This article was first published on Oct 3, 2014.
Get a copy of The Straits Times or go to straitstimes.com for more stories.

teddybear

06-10-14, 16:02

More waves will come for OCR private properties!

I heard of many instances of HDB upgraders decoupling ownership of their HDB flats, i.e. HDB flats supposed to be owned jointly by husband and wife, yet HDB is facilitating them to decouple by allowing 1 party to remove their name from ownership while the other party still can fully own the HDB flat (without needing to sell). Well, people may ask: Why decouple? Simple, they are decoupling to buy OCR private property!!!!!!!!!!!!!!!!!!!! Well the reality will sink in in late 2015-2017, shits will hit the fence for OCR private properties and it will crash much worse than CCR when they have no tenants to help pay for their instalments because of govt's tightening of foreigners coming here to work! (unless MAS/MND relax the property cooling measures)! Those people still don't know OCR private condos like those in Punggol can't even find tenant after 6 months of advertisement?

CCR is always first to be hit and it will send the ripple to the OCR soon. Good to watch for the period 2015-2017. A good barometer to measure is the price of resale flats with those in CCR as compared to those OCR. In addition, flats in CCR still somewhat able to hold for rental but not for OCR. A lot of them are looking for tenants even now. So imagine, when those with hdb flats owners who want to sell or rent their hdb flats to support the financing of their OCR PCs will be a challenge. They are worried now especially the rising interest rate.

Arcachon

06-10-14, 16:02

Rank Country Foreign exchange reserves
(Millions of US$) Figures as of
1 People's Republic of China[1] 4,009,553 Mar 2014[1]
2 Japan 1,278,011 Aug 2014[2]
3 Saudi Arabia 738,817 Jun 2014[3]
4 Switzerland 545,948 Aug 2014[4]
5 Russia 465,228 Sep 2014[5]
6 Republic of China (Taiwan) 428,795 Jul 2014[6]
7 Brazil 379,157 Aug 2014[7]
8 Republic of Korea 366,546 Jun 2014[8]
- Hong Kong 325,035 Jul 2014[9]
9 India 319,390 Aug 2014[10]
10 Singapore 273,293 Aug 2014[11]
11 Germany 206,275 Aug 2014[12]

http://en.wikipedia.org/wiki/List_of_countries_by_foreign-exchange_reserves

Arcachon

06-10-14, 16:04

USD 1,278,011 million, just make Yen to Dollar down you make million.

Arcachon

06-10-14, 16:07

More waves will come for OCR private properties!

I heard of many instances of HDB upgraders decoupling ownership of their HDB flats, i.e. HDB flats supposed to be owned jointly by husband and wife, yet HDB is facilitating them to decouple by allowing 1 party to remove their name from ownership while the other party still can fully own the HDB flat (without needing to sell). Well, people may ask: Why decouple? Simple, they are decoupling to buy OCR private property!!!!!!!!!!!!!!!!!!!! Well the reality will sink in in late 2015-2017, shits will hit the fence for OCR private properties and it will crash much worse than CCR when they have no tenants to help pay for their instalments because of govt's tightening of foreigners coming here to work! (unless MAS/MND relax the property cooling measures)! Those people still don't know OCR private condos like those in Punggol can't even find tenant after 6 months of advertisement?

If I got HDB and there is Condo nearby for sale what should I do?

1. Buy condo rent out HDB.
2. See people buy and KPKB.
3. Wait for Condo price to fall (Durian is falling)
4. Put money in the Bank to earn interest.

Yuki

06-10-14, 16:36

More waves will come for OCR private properties!

I heard of many instances of HDB upgraders decoupling ownership of their HDB flats, i.e. HDB flats supposed to be owned jointly by husband and wife, yet HDB is facilitating them to decouple by allowing 1 party to remove their name from ownership while the other party still can fully own the HDB flat (without needing to sell). Well, people may ask: Why decouple? Simple, they are decoupling to buy OCR private property!!!!!!!!!!!!!!!!!!!! Well the reality will sink in in late 2015-2017, shits will hit the fence for OCR private properties and it will crash much worse than CCR when they have no tenants to help pay for their instalments because of govt's tightening of foreigners coming here to work! (unless MAS/MND relax the property cooling measures)! Those people still don't know OCR private condos like those in Punggol can't even find tenant after 6 months of advertisement?

I Think this applies for any couple with no holding power. I know quite a people who buy just as a vacation property with no intention to rent out.

N they stay in ocr places like punggol etc. I m unsure where u get your data from but it would be more useful if u can back up your claim with statistics.

Arcachon

06-10-14, 17:05

I Think this applies for any couple with no holding power. I know quite a people who buy just as a vacation property with no intention to rent out.

N they stay in ocr places like punggol etc. I m unsure where u get your data from but it would be more useful if u can back up your claim with statistics.

Agree, Facts and figures and possible link to the data, instead of general view or worst hearsay, Thank you.

teddybear

06-10-14, 17:15

I don't have full statistics, but I have anecdotal facts from my agents, and based on listening to the ground and gut feeling, I have been able to gauge the market well, and most importantly, make money out of such bets.............

And let's be realistic: If a person can only afford OCR private property as an investment property, you think he can afford to keep it vacant for long? If the person is going to keep it vacant, then that is not called "investment property" and it is not "investment" at all! That is called "burning money" for nothing...........

All too often, you hear people saying that they keep their additional Singapore's property as "vacation property" (in Singapore when they are already living in Singapore?!!!!!!), but the fact is because when they can't find tenant to rent out, their investment property become "vacation property" loh! It is not like the rich Indonesians where they left their property empty here because they don't live here permanently, and they come to Singapore once a month or so for business dealing and they want a familiar place to return to and these people can well afford to leave 10 properties empty (not just 1)................. :)

I Think this applies for any couple with no holding power. I know quite a people who buy just as a vacation property with no intention to rent out.

N they stay in ocr places like punggol etc. I m unsure where u get your data from but it would be more useful if u can back up your claim with statistics.

Arcachon

06-10-14, 17:53

I do go Singapore for vacation for the last 8 years in France and 2 years in US, though I am a Singaporean.

Some people collect fine art, wine, stone others collect property.

Some save money in the Bank, under the bed, in a biscuit can, other buy property, insurance as a form of force saving. Not everyone is cut out to be an investor.

teddybear

06-10-14, 18:05

Your Singapore property is your vacation home! (because you don't live in Singapore most of the time!). However, it is different from somebody who is already living in Singapore and yet say they left their another house vacant as "vacation home"?! :highly_amused:

I do go Singapore for vacation for the last 8 years in France and 2 years in US, though I am a Singaporean.

Some people collect fine art, wine, stone others collect property.

Some save money in the Bank, under the bed, in a biscuit can, other buy property, insurance as a form of force saving. Not everyone is cut out to be an investor.

Arcachon

06-10-14, 18:33

When a person only know know to save instead of invest, property is a force saving plan and when they use it occasionally they call it vacation home.

In China, they have vacation city (ghost town) because they don't know where to park their money.

Now Jack Ma show them the way, we should see lot of Jack Ma from China soon.

It is just a game of money, those who care to put in more time(life) or less in knowing it, others spend time on football, internet game, vacation.........

Relax and enjoy, everybody time on Earth is limited.

Ringo33

06-10-14, 19:34

I don't have full statistics, but I have anecdotal facts from my agents, and based on listening to the ground and gut feeling, I have been able to gauge the market well, and most importantly, make money out of such bets.............

And let's be realistic: If a person can only afford OCR private property as an investment property, you think he can afford to keep it vacant for long? If the person is going to keep it vacant, then that is not called "investment property" and it is not "investment" at all! That is called "burning money" for nothing...........

All too often, you hear people saying that they keep their additional Singapore's property as "vacation property" (in Singapore when they are already living in Singapore?!!!!!!), but the fact is because when they can't find tenant to rent out, their investment property become "vacation property" loh! It is not like the rich Indonesians where they left their property empty here because they don't live here permanently, and they come to Singapore once a month or so for business dealing and they want a familiar place to return to and these people can well afford to leave 10 properties empty (not just 1)................. :)

Obviously your gut feeling and understanding of the ground has been very inaccurate, thats why you have missed the opportunity to invest in OCR and MM apartment since 4 to 5 years ago. And you have wasted too much precious time hoping for a recovery in the wrong side of CCR.

The only way to judge if landlord are desperate is the study the rental trend. If rent doesnt fall by double digit, that means landlord are cash rich enough to hold and wait for tenant. The one who are actually more desperate are those mildly rich people who invest in really expensive CCR property with high maintenance cost, they are the one who will get cold feet first.

Plus it is important to remember that people who invest in OCR property are not poor people, there are many seasoned investors who put their money in OCR as it has been the best performing sector for the past 5 to 6 years.

DC33_2008

06-10-14, 20:19

My uncle has a good size 5-room near Khoo Teck Puat hospital does not have any viewing at all for the last 6 months.
More waves will come for OCR private properties!

I heard of many instances of HDB upgraders decoupling ownership of their HDB flats, i.e. HDB flats supposed to be owned jointly by husband and wife, yet HDB is facilitating them to decouple by allowing 1 party to remove their name from ownership while the other party still can fully own the HDB flat (without needing to sell). Well, people may ask: Why decouple? Simple, they are decoupling to buy OCR private property!!!!!!!!!!!!!!!!!!!! Well the reality will sink in in late 2015-2017, shits will hit the fence for OCR private properties and it will crash much worse than CCR when they have no tenants to help pay for their instalments because of govt's tightening of foreigners coming here to work! (unless MAS/MND relax the property cooling measures)! Those people still don't know OCR private condos like those in Punggol can't even find tenant after 6 months of advertisement?

DC33_2008

06-10-14, 20:20

Do not forget that there is GST now.
If they can do it so can we........

Singapore warms to land of the setting yen

Sunday, Oct 05, 2014
Fiona Chan
Melissa Tan
The Straits Times
Sushi lovers must be saying "arigatou" to Abenomics.

The deflation-busting economic policies of Japan's Prime Minister Shinzo Abe, which include generous monetary easing, have been pushing the yen down since 2012.

Now, as investors switch their focus to the rising US dollar, the yen has hit new multi-year lows. The Japanese currency touched a six-year low against the greenback this week, and is at its lowest to the Singapore dollar since the Asian financial crisis in 1997.

Traveller interest in Japan has surged and investors are eyeing more property in the land of the rising sun even as currency watchers predict further yen weakness over the coming months.

Dynasty Travel marketing director Alicia Seah said the number of Japan-bound tourists has risen "now that Singaporeans' spending power in Japan is stronger".

The agency has handled nearly 5,000 bookings for Japan in the first nine months this year, a sharp jump from the 3,000 travellers for the whole of last year.

Apart from the weak yen, more direct flights from Singapore to Japanese regions such as Okinawa also contributed to rising tourist interest, she added. "We expect Japan to be among the top destinations for Singaporeans this year."

At Chan Brothers Travel, the number of bookings to Japan in August and September has gone up 25 per cent from a year ago, said Ms Jane Chang, head of marketing and communications.

Serviced apartment group The Ascott has also seen more foreign visitors to Japan due to the weak yen and recent relaxation of visa requirements, said Mr Tan Lai Seng, the group's regional general manager for Japan and Korea.

He added that the group's Japan properties are more than 80 per cent occupied, and tourism is expected to be further boosted by the 2020 Olympics in Tokyo.

The weaker yen - coupled with low interest rates, high rental yields and a strong outlook for the property market over the next few years - is also drawing property investors, consultants say.

Mr Alex Bellingham, the Singapore-based director of property investment firm IP Global, said Japanese property is "more attractive than it has been for many years", especially ahead of the Olympics.

Economists say the yen's fall against the Singapore and US currencies is not a surprise, given Japan's monetary policy divergence with the other two nations.

"Singapore has an appreciating Singdollar policy, while Japan still favours anti-deflationary monetary and exchange rate policies," said DBS senior currency economist Philip Wee.

He expects the yen to fall further, reaching 90 yen to S$1 by the end of next year, from 85.9 yen to S$1 now.

"Markets anticipate further yen depreciation," said Oanda senior currency trader Stephen Innes. This should lead to a further fall in the Japanese unit against the Singdollar over the short term.

Credit Suisse Japan economist Takashi Shiono said the looming end of the US Federal Reserve's easy money policies has been the main factor behind the weakening of the yen against the US dollar.

But expectations of more easing from the Bank of Japan (BOJ), if Japanese economic data worsens in the coming months, will put further pressure on the yen.

"The BOJ remains entrenched in its monetary easing cycle with the potential for further initiatives still on the cards," agreed OCBC strategist Emmanuel Ng.

Companies with operations in Japan are expecting further yen fluctuations, but most have systems in place to manage the risks.

Among them is Singapore-listed Parkway Life Reit, which owns more than 40 properties in Japan.

"While we expect the yen to remain volatile in the near term, the adverse impact from its depreciation is mitigated to a large extent by (our) risk management strategies," said Mr Yong Yean Chau, chief executive of the Reit's manager Parkway Trust Management.

The Reit funded its Japanese acquisitions with yen-denominated loans, ensuring a stable net asset value, and it has also hedged its net yen cash flow for the next few years to protect its distribution income for unitholders, he added.

Other firms with Japan dealings include City Developments, which said on Monday that it tied up with a US investment firm to buy a historical site in Tokyo for 30.5 billion yen (S$355.5 million).

It was a timely purchase; a year ago the price would have translated into about S$390 million.

[email protected]

This article was first published on Oct 3, 2014.
Get a copy of The Straits Times or go to straitstimes.com for more stories.

Yuki

06-10-14, 20:26

I don't have full statistics, but I have anecdotal facts from my agents, and based on listening to the ground and gut feeling, I have been able to gauge the market well, and most importantly, make money out of such bets.............

And let's be realistic: If a person can only afford OCR private property as an investment property, you think he can afford to keep it vacant for long? If the person is going to keep it vacant, then that is not called "investment property" and it is not "investment" at all! That is called "burning money" for nothing...........

All too often, you hear people saying that they keep their additional Singapore's property as "vacation property" (in Singapore when they are already living in Singapore?!!!!!!), but the fact is because when they can't find tenant to rent out, their investment property become "vacation property" loh! It is not like the rich Indonesians where they left their property empty here because they don't live here permanently, and they come to Singapore once a month or so for business dealing and they want a familiar place to return to and these people can well afford to leave 10 properties empty (not just 1)................. :)

I'm not a seasoned investor like you and I do see where is your come from. But there are reasons why people buy ocr properties rather than rcr or even CCR. Then what about those people who buy CCR just for staying? Is it considered investment if they are staying in it?

DC33_2008

06-10-14, 20:27

Hope some analysts will develop a chart to show vacancy rate based on district in 2016.
A forecast of 12% home vacancy rate in 2016.

http://sbr.com.sg/residential-property/news/chart-day-home-vacancies-predicted-hit-historical-highs-in-2014-2016#sthash.dfbsR4uj.dpuf
Published 18 Nov 2013

Chart of the Day: Home vacancies predicted to hit historical highs in 2014-2016

http://sbr.com.sg/sites/default/files/news/fig7.JPG

According to Macquarie Research, 2014 will see the completion of 19,302 units (+6.6% in inventory), which would result in a vacancy rate of 9.3%.

Historically, property price declines have coincided with vacancies of 8% and above.

DC33_2008

06-10-14, 20:31

Yuki

06-10-14, 20:49

The question is not about buying properties in whether OCR/CCR/RCR. It is about the relative pricing of your purchased price. It can be in any region. Lots of people go with the herd mentality but miss out on the big picture. We all know property is a big ticket item which we need to buy after doing the homework.

I agree. But I take issue with teddybear assumption that they buy in ocr coz they are not rich n later have to claim that it's a vacation property in order to save face coz they can't find tenant.

But the fact is that since they are buying for self stay that's why they are looking at ocr properties which are bigger n more livable.

N that they are affluent enough not to worry about using rent to pay for the monthly installments.

It's the rich people who can burn money for nothing...N can afford at looking at capital appreciation only n not depend on rental to cover their monthly installments.

safetyfirst

06-10-14, 22:01

I agree. But I take issue with teddybear assumption that they buy in ocr coz they are not rich n later have to claim that it's a vacation property in order to save face coz they can't find tenant.

But the fact is that since they are buying for self stay that's why they are looking at ocr properties which are bigger n more livable.

N that they are affluent enough not to worry about using rent to pay for the monthly installments.

It's the rich people who can burn money for nothing...N can afford at looking at capital appreciation only n not depend on rental to cover their monthly installments.

My take on this: Some buyers buy ccr properties for own stay because they really like the environment. As long as they can fulfill the tdsr and better still, have another property to help cover part of the installments, I guess that is still ok. The issue on whether ccr properties can have capital appreciation or not in future is as good as anyone's guess in today's climate. It may be a case of let nature takes its course for now.

Yuki

06-10-14, 22:15

It would be good if there is a more detailed statistics.

On the first glance, it looks like home vacancy is a result of unable to rent out.

However, is it possible that rich people buy as a vacation property and prefer to leave it empty than rent out? i.e. matter of choice rather than circumstances?

A forecast of 12% home vacancy rate in 2016.

http://sbr.com.sg/residential-property/news/chart-day-home-vacancies-predicted-hit-historical-highs-in-2014-2016#sthash.dfbsR4uj.dpuf
Published 18 Nov 2013

Chart of the Day: Home vacancies predicted to hit historical highs in 2014-2016

http://sbr.com.sg/sites/default/files/news/fig7.JPG

According to Macquarie Research, 2014 will see the completion of 19,302 units (+6.6% in inventory), which would result in a vacancy rate of 9.3%.

Historically, property price declines have coincided with vacancies of 8% and above.

invigorated

06-10-14, 22:40

heehee

07-10-14, 09:37

Ringo33

07-10-14, 09:58

Property by itself, if freehold, is an investment regardless of own-stay or tenanted because you really own it with no expiry date of your ownership.

Buying leasehold is like buying futures and options, with expiry date. The 99year owner is hoping to sell to another much earlier before the expiry date, being acutely aware of the factor in time decay in value as expiry date gets nearer.

That is not true, if its a strata titled property, your expiry date will be the day when the development goes en bloc and you alone cannot decide if you choose to hold or sell.
Plus, there is no reason to believe why any investor will want to continue holding on to an old and run down development that it very expensive to maintain and difficult for findtenant.
LH or FH its all about location, if you property is located in good location, there is no need to worry about LH or FH and thats the reason why FH command only 20% premium over LH instead of 1000%. And its important to remember that to government LH land is more important than FH land, and thats the reason why government is giving so much attention on developing LH area rather than FH area in say D15 or D10.

AssetRichMoneyPoor

07-10-14, 13:02

seletar

07-10-14, 13:23

http://sbr.com.sg/economy/news/goodbye-singapore-almost-half-local-firms-considering-outsourcing-rein-in-ballooning-bu#sthash.8yIxg0kp.dpuf
Published: 03 Oct 14

Goodbye, Singapore: Almost half of local firms considering outsourcing to rein in ballooning business costs

Downsizing is also another option.

Domestic firms are considering an extreme weapon against Singapore’s persistently high business costs. According to a study by the Singapore Business Federation, majority of enterprises are focusing on cost reduction measures to combat ballooning business costs.

The report revealed that 43% of firms are considering outsourcing, while 41% are thinking of freezing their headcount and moderating wages.

The most popular cost reduction measure is reducing overheads, which is favored by 63% of firms, followed by procuring cheaper supplies at 62%.

In addition, some 22% of polled enterprises--of which 50% are mid to large-sized companies--are looking to relocate facilities to lower cost countries. Another 21%--of which 20% are large enterprises--are considering downsizing as an option.

Ringo33

07-10-14, 13:41

you are really self-degrading individual. Your warped logic stand contested and in fear of being judged, you claim others having multiple accounts.

really never seen someone so thick-skinned like you. can only gives you blessing cos you need loads of it.

Please stop wasting your time trying to operate multiple forum account to troll around in this forum, because sooner or later you are going to reveal your truth self and
you are going to get busted. I mean, you only have one childish brain, how do you expect to pretend to be a matured adult?

seletar

07-10-14, 13:45

http://www.stproperty.sg/articles-property/singapore-property-news/resale-volumes-of-private-condos-plunge/a/183467/page2/1

Resale volumes of private condos plunge

The Business Times - October 7, 2014

http://www.stproperty.sg/articles-property/upload/article/183467__1412652729.jpg
Total resales of private condos stood at 1,314 units in the second quarter, accounting for 31.9 per cent of all private non-landed residential transactions - PHOTO: SPH

[SINGAPORE] In yet another sign of a stalemate between buyers and sellers, resale volumes of private condominiums have fallen to levels last seen during the Global Financial Crisis, with the bloodbath of declines seen splattered islandwide.

While sellers with strong holding power seemed unwilling to let go of their units at much-lower prices, District 18 in the east and District 27 in the north appear to have held up well in resale volumes for the second quarter.

District 18, which comprises Tampines and Pasir Ris, saw resale volumes inch up 5.6 per cent in the second quarter this year to 57 transactions compared to the year-ago period before the total debt servicing ratio (TDSR) kicked in on June 29, 2013.

Resale volumes of private condos in District 27, which covers Yishun and Sembawang, were flat at 18 transactions in the second quarter, compared to the same quarter last year.

Their resilience came against a plunge in resale volumes islandwide.

Total resales of private condos stood at 1,314 units in the second quarter, accounting for 31.9 per cent of all private non-landed residential transactions. This is moderately higher than the 29.9 per cent in the same quarter last year but lower than the 40.9 per cent in the fourth quarter of 2012.

http://www.stproperty.sg/articles-property/upload/article/183467__1412652764.png

District 7 comprising Middle Road and Golden Mile and District 19 covering Serangoon Garden, Hougang and Punggol saw the biggest falls in resale volumes across districts. Transactions in District 7 fell to two units in the second quarter from 12 in the second quarter last year while that in District 19 plummeted to 57 units from 164.

The comparisons of resale volumes before and after TDSR are based only on caveats lodged, which typically represent some 80 per cent of the market. This illustration excludes new sales as they are driven mainly by new launches that may not have taken place in certain districts. The heterogeneity of property units also prevent direct comparisons on price movements over time without controlling for quality differences through constructing an index, a weighted scheme or tracking repeat sales.

Nicholas Mak, executive director of SLP International, noted that much of the resales caveats were for family-size units. "The marketing activities of new projects in that district could have attracted buyers, who may have later decided to buy resale properties as they were cheaper in per square foot (psf) terms."

New launches in District 18 included City Developments' Coco Palms in Pasir Ris, which has moved over 560 units at a median price of S$1,020 psf since its launch in May. MCC Land managed to sell more than 100 units at The Santorini in Tampines since its launch in April at a median S$1,113 psf, according to URA's developer sales data. In comparison, median prices of resale units in District 18 stood at S$897 psf in the second quarter.

The lack of new launches in certain districts could also have the converse effect on the resale market - as seen in Districts 19 and 12 (Balestier, Toa Payoh, Serangoon), Mr Mak added.

R'ST Research director Ong Kah Seng noted that buying interest for homes in Pasir Ris is supported by well-tested leasing demand, especially from the Changi Business Park. The decentralisation of the banks' non-core back-office operations to the business park and increased foreign professionals in the technology sector have also expanded the potential tenant pool in the eastern part of Singapore, he noted.

At the other end of Singapore, District 22 (Jurong) also registered a marginal 4.3 per cent year-on-year drop in resale transactions of private condos in the second quarter, possibly finding some support from renewed interest in the area given URA's masterplan to transform Jurong Lake District, consultants observed.

All transactions (new sales, resales and subsales) involving private condos have slumped 40.7 per cent year-on-year in the second quarter to 4,118 - similar to the levels last seen during the 2008-2009 Global Financial Crisis.

Based on the URA property price index for non-landed homes, prices of private condos transacted in the second quarter have fallen to levels last seen in the fourth quarter of 2012. Prices in the Core Central Region (CCR) fell by a larger magnitude to a level similar to that in the fourth quarter of 2010.

http://www.stproperty.sg/articles-property/upload/article/183467__1412652781.png

OrangeTee head of research and consultancy Christine Li noted that the drop in foreign purchases due to the additional buyer's stamp duty (ABSD) has hurt the CCR market segment, as foreign buyers make up a significant portion of this segment.

"Secondly, the implementation of loan restrictions such as loan-to-value limits and the TDSR framework have hurt properties with high quantums," she added. "As such, CCR properties have not held up as well as RCR (Rest of Central Region) and OCR (Outside Central Region). This trend is likely to persist until current cooling measures are tweaked."

But given the exuberant run-up in property prices since the second half of 2009, sellers who sold their units recently are unlikely to have suffered a loss, though they could be making less profits than if they had sold their units last year, consultants noted.

A random sampling by SLP International on resale transactions in the second quarter showed that most of the sellers did not incur losses in the resale market because a majority of them bought their units more than three years ago when the prices were cheaper and they did not have to pay the seller's stamp duty for properties that they have held for more than four years.

seletar

07-10-14, 13:54

http://sbr.com.sg/economy/in-focus/uncovering-singapore%E2%80%99s-overleveraged-and-vulnerable-borrowers#sthash.gxgqqo9n.dpuf
Published: 07 Oct 14

Uncovering Singapore’s overleveraged and vulnerable borrowers

http://sbr.com.sg/sites/default/files/news/risk_woodpieces_0.jpg

A new report reveals the growing number of potential defaulters.

The Monetary Authority of Singapore considers a household overleveraged if they have a monthly debt-servicing burden greater than 60%, and the MAS’ most recent Financial Stability Review revealed that 5-10% of Singaporean borrowers are overleveraged.

Though this seems like a relatively small number, analysts now argue that the MAS’ parameters might be understating the true gearing of most Singaporean households.

According to CLSA, other international regulatory authorities and financial institutions are unwilling to lend to borrowers who have a TDSR above 40% or 50%.

If this parameter is applied, it would appear that 29% of Singaporean borrowers have a TDSR greater than 40%.

CLSA notes that Singaporean households with a TDSR above 60% are either relatively poor or relatively wealthy, with larger proportions of 25-29 and 40-44 year olds. 64% of overleveraged households are made up of five or more people.

Most households in this category also have breadwinners who work in the financial services and manufacturing industries, which are the two sectors that have seen the greatest job redundancies in past economic downturns.

Meanwhile, it will appears that borrowers with TDSR above 40% tend to be average to above average income earners. There is an outsized proportion of 30-34 year olds, and most of these households are made up of 3-4 individuals.

“Given the abnormally low interest-rate environment and our expectation that rates will begin to rise in 2H15, we test our borrowers to see what would happen if rates were to swiftly rise by 300bps. We conclude that at least 15% of borrowers would be overleveraged in this scenario.”

seletar

07-10-14, 14:11

http://www.stproperty.sg/articles-property/singapore-property-news/city-non-city-condo-price-gap-narrows/a/183482/page2/1

City, non-city condo price gap narrows

Successive rounds of cooling measures have brought down median prices between homes in the city central and city fringes, suburbs

The Business Times - October 7, 2014

THE price gaps for resale private condos in the city area versus those in the city fringe and suburbs have been narrowing since the market started softening in late 2011, a HSR report released yesterday said.

The gap in median prices between the Core Central Region (CCR) and Rest of Central Region (RCR) reached a high of S$610 psf in Q4 2011, but this gap has fallen to S$461 psf in the second quarter this year.

Similarly, between median prices in the city and the Outside Central Region (OCR), the price gap has fallen from a high of S$870 psf to S$712 psf over the same period.

http://www.stproperty.sg/articles-property/upload/article/183482__1412661167.png

This came as no surprise to property consultants.

"The narrowing price gap is basically due to the impact of successive rounds of cooling measures which had a stronger impact on high-end homes, compared to other regions," said SLP International executive director Nicholas Mak.

DTZ's South-east Asia regional head of research, Lee Lay Keng, added: "It's quite obvious that the price drop for CCR was just after the additional buyer's stamp duty (ABSD) was introduced in Q4 2011. "Prices in OCR and RCR continued to go up even after ABSD took effect. The new launches did quite well, and Singaporeans and PRs continued buying in these regions, which could explain why prices in these areas held up better - that is, until the TDSR (total debt servicing ratio) kicked in from July 2013."

The TDSR framework caps borrowers' total monthly debt at 60 per cent of their gross monthly income to encourage financial prudence.

Ku Swee Yong, chief executive of Century 21 Singapore and the KEO of International Property Advisor, said some HDB upgraders could afford to pay more for OCR condos in 2012 and 2013 because they were using profit from reselling their public flats. "HDB resale prices went up 100 per cent between 2007 and 2013," he said.

Meanwhile, the "punitive" ABSD policy impacted foreigners the hardest, at first requiring them to pay 10 per cent stamp duties on any residential property they buy, and now 15 per cent.

"It is artificial. In a normal market without these policy measures coming into play, we wouldn't have this shrinking price gap," he said.

HSR's research found that since 2007, foreign buyers have made up an average of 47 per cent of yearly transactions in the city area, compared to 34 per cent in the city fringe and 31 per cent in the suburbs. The city area houses the largest proportion of freehold investment grade properties.

"At the peak of the gap in Q4 2011, non-Singaporeans represented 61 per cent of the total secondary transactions for non-landed properties in CCR, compared to 35 per cent in Q1 2014," it said.

Its regression analysis also found a high correlation between the percentage of foreign buyers and the price gaps between CCR versus RCR/OCR. "In other words, the higher the percentage of non-Singaporean buyers, the higher the gap is," it said.

Bernard Tong, HSR's head of operations, said it is likely that foreigners are more willing to pay more, and are less sensitive to prices, when buying homes in premium city locations for accessibility and proximity to the business district.

HSR expects the gap to keep shrinking by another S$50-S$100 psf as property prices continue to fall. But other analysts say that the price gap cannot keep narrowing.

Mr Mak said: "Chances are it will continue to narrow for the next six to 12 months, but there will be a natural resistance against narrowing any further, especially between prices in CCR and OCR.

"It's like magnets of like poles; prices in the city fringe and suburbs cannot get too close to city condo prices. It will come to a point where it doesn't make sense, where the owners of CCR homes won't want to lower prices anymore. Meanwhile, TDSR will be crucial in preventing OCR prices from rising too much, because buyers of OCR condos tend more to be owner occupiers and are not that cash rich."

Asked if the fact that prices of city condos falling faster than other regions will drive buyers to city fringe and suburban condos instead, DTZ's Ms Lee replied that it can cut both ways.

"If it will already cost me this amount to buy an OCR/RCR condo, why not spend a bit more to buy a CCR condo if I can afford it? It really depends on the buyer's profile and intentions. Not everyone buys for investment."

AssetRichMoneyPoor

07-10-14, 14:19

Please stop wasting your time trying to operate multiple forum account to troll around in this forum, because sooner or later you are going to reveal your truth self and
you are going to get busted. I mean, you only have one childish brain, how do you expect to pretend to be a matured adult?

no one is wasting time except troll33. one one is claiming to be a mature adult except troll33. no one, repeat no one.

Arcachon

07-10-14, 14:23

What happen when the Durian don't drop.

Over 1200 applications for Lake Life

The 546-unit Lake Life executive condominium (EC) in Jurong Lake District attracted more than 1,200 e-applications over the long weekend, with one-third of applicants being first-time buyers.

Developed by an Evia Real Estate-led consortium, the 99-year leasehold project comprises two- to five-bedroom units ranging from 743 sq ft to 1,711 sq ft.

Listing details on PropertyGuru show that the indicative price for a two-bedder starts from around $650,000. (Cheaper than 5 room resale HDB in mature estate)

Strong demand was expected as it is only the second EC to enter the market in 2014 and the first to be launched in Jurong in 17 years – the last one was Summerdale in 1997. Furthermore, second-timers do not need to pay the HDB resale levy as the site tender was won before 2013.

Lake Life is also the first EC to beat the 15 months government regulation to launch e-applications.

Applicants said they were attracted to the location, which is close to several shopping malls in Jurong East such as JEM and Westgate, as well as the development’s active living concept.

The developer recently announced a partnership with True Fitness to integrate mental and physical wellness programmes in the design of Lake Life. Other facilities that will promote active living include sheltered bicycle parking bays, pet zones and urban vegetable farms.

“We had a lot of conversations with home buyers who were looking to upgrade to condominiums. We asked them what they were looking for and listened to the kind of lifestyle they aspired towards. And we implemented these in Lake Life,” said Vincent Ong, Managing Partner of Evia.

E-applications close on 12 October while bookings open on 8 November. Lake Life is expected to obtain TOP in December 2017.

Past EC projects by Evia-led consortiums include Watercolours and Heron Bay, launched in 2011 and 2012 respectively.

Image: The launch of Lake Life EC drew big crowds over the long weekend.

Romesh Navaratnarajah, Singapore Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email [email protected]

seletar

07-10-14, 14:39

Hold your horses if eyeing property

Melissa Tan
Straits Times – Published 23 Feb 2014

With property prices finally losing steam, home buyers may be wondering whether it is the right time to take the plunge.

Both the private and public housing markets have begun to slow down, as sales volumes tumble and prices turn downwards.

Analysts expect the property market to sink further owing to a triple whammy of weak demand, an expected rise interest rates and looming oversupply.

Even DBS Group Holdings chief executive Piyush Gupta warned recently that high-end home prices could tumble as much as 15 percent this year while lower-end home prices could suffer a 10 percent drop.

In the light of such forecasts, buyers who can afford to wait for prices to slide further may opt to hold their horses in hopes of snagging a better bargain.

Low demand, high supply

The market’s long-term fundamentals are strong, in part owing to healthy employment levels, said CIMB economist Song Seng Wun.

However, property prices are expected to be dragged down this year by both weaker demand and large upcoming supply.

On the demand side of the equation, the pool of potential buyers has shrunk after several rounds of cooling measures have left buyers clutching their wallets more tightly.

These curbs include higher additional buyer’s stamp duty (ABSD) and tough restrictions on home loans under a total debt servicing ratio (TDSR) framework in June last year.

As a result, developers now face stiffer competition for home sales, noted Mr Mohamed Ismail, who heads real estate agency PropNex.

On the supply side, a possible glut of homes looms on the horizon, which could make it harder to resell homes or find tenants.

Since 1996 there has been no three-year period where housing supply was higher than it will be in the upcoming three years.” Said Mr Hartmut Issel, UBS Wealth Management’s head of research for Asia-Pacific.

From 2014 to 2016, more than 97,000 new Housing Board flats could be completed, plus around 65,400 private homes and 10,400 executive condominium (EC) units.

Mr Issel estimates that the total amount of new housing stock that will come onstream over the next three years is equivalent to about 14 percent of the existing housing stock.

Investing in another home

Investors face a more complicated guessing game, especially if they are buying a second or subsequent home and therefore incur hefty ABSD.

“It is still too early to enter the Singapore residential market, from an investment point of view,” said Mr Issel, who thinks that the market weakness could stretch out over the next two to three years.

OCBC Investment Research analyst Eli Lee said that buyers “should carefully weigh the risks of a weaker rental market with higher vacancy rates and softer rentals ahead”.

“It could take a longer time to resell their properties ahead if the need arises” since resale transactions can dry up in a bear market, he added.

Kelonguni

07-10-14, 14:39

If durian don't drop, nobody will go pick and get pricked.

What happen when the Durian don't drop.

Over 1200 applications for Lake Life

The 546-unit Lake Life executive condominium (EC) in Jurong Lake District attracted more than 1,200 e-applications over the long weekend, with one-third of applicants being first-time buyers.

Developed by an Evia Real Estate-led consortium, the 99-year leasehold project comprises two- to five-bedroom units ranging from 743 sq ft to 1,711 sq ft.

Listing details on PropertyGuru show that the indicative price for a two-bedder starts from around $650,000. (Cheaper than 5 room resale HDB in mature estate)

Strong demand was expected as it is only the second EC to enter the market in 2014 and the first to be launched in Jurong in 17 years – the last one was Summerdale in 1997. Furthermore, second-timers do not need to pay the HDB resale levy as the site tender was won before 2013.

Lake Life is also the first EC to beat the 15 months government regulation to launch e-applications.

Applicants said they were attracted to the location, which is close to several shopping malls in Jurong East such as JEM and Westgate, as well as the development’s active living concept.

The developer recently announced a partnership with True Fitness to integrate mental and physical wellness programmes in the design of Lake Life. Other facilities that will promote active living include sheltered bicycle parking bays, pet zones and urban vegetable farms.

“We had a lot of conversations with home buyers who were looking to upgrade to condominiums. We asked them what they were looking for and listened to the kind of lifestyle they aspired towards. And we implemented these in Lake Life,” said Vincent Ong, Managing Partner of Evia.

E-applications close on 12 October while bookings open on 8 November. Lake Life is expected to obtain TOP in December 2017.

Past EC projects by Evia-led consortiums include Watercolours and Heron Bay, launched in 2011 and 2012 respectively.

Image: The launch of Lake Life EC drew big crowds over the long weekend.

Romesh Navaratnarajah, Singapore Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email [email protected]

relax88

07-10-14, 14:49

But those who pick up the durian will get to taste the sweet flesh.

Those who dont dare pick just stand one side and smell the fragrance.

Unless you know anyone that is willing to share the profit they get from their investment. ...till date, I have not met any friends that are willing to even give me 1000 cash when they sell their hdb, condo or landed:strawberry:

seletar

07-10-14, 14:57

According to Mr Khaw, 18000 flat owners are required to sell their flats within 6 months of collecting their new keys over these 3 years, and this 18000 excludes those HDB upgraders to private properties. "This will no doubt have an impact on the resale HDB market, starting from this year" said Mr Khaw.

http://www.channelnewsasia.com/news/singapore/hdb-resale-market-may-be/967592.html

HDB resale market may be impacted by flat owners moving to new flats: Khaw

Channel News Asia
POSTED: 25 Jan 2014 13:13

SINGAPORE: National Development Minister Khaw Boon Wan said the HDB resale market has "finally turned the corner" as suggested by HDB's fourth quarter resale housing data.

Mr Khaw made the remark in his blog on Saturday morning.

Resale HDB flat prices fell for the first time in eight years last year, according to the last quarter's resale data that the Housing and Development Board (HDB) released on Friday.

Writing in his blog, Mr Khaw also noted the balance between sellers and buyers is also becoming more neutral.

While softening HDB resale flat prices will spell good news for home buyers, Mr Khaw cautioned that the market has not reached a steady state yet.

Over the next three years, 80,000 new HDB flats will be completed, with 30,000 of them being completed in this year alone.

Mr Khaw said that while most buyers will be collecting the keys to their first flats, some flat owners will still need to dispose of their existing units within six months after collecting their new keys.

Mr Khaw stressed this is not a small number and said it will have an impact on the HDB resale market starting this year.

HDB resale transactions hit a record low last year - with only 18,100 units changing hands.

Of these 18,100 resale transactions, 2,800 units came from households in the process of moving to their new flats.

Mr Khaw expects this number to double to about 6,000 units each year for the next three years.

This does not include the number of HDB upgraders moving into private property and selling their HDB flats.

Mr Khaw said: "This will no doubt have an impact on the resale HDB market, starting from this year. We will be monitoring closely. I am sure flat hunters and sellers will too."

Arcachon

07-10-14, 14:59

Anyone in the forum still think money is back by Gold ?

Cash is slave, Property is King......

The gold standard is a monetary system where a country's currency or paper money has a value directly linked to gold. With the gold standard, countries agreed to convert paper money into a fixed amount of gold. A country that uses the gold standard sets a fixed price for gold and buys and sells gold at that price. That fixed price is used to determine the value of the currency. For example, if the U.S. sets the price of gold at $500 an ounce, the value of the dollar would be 1/500th of an ounce of gold.

The gold standard is not currently used by any government. Britain stopped using the gold standard in 1931 and the United States abandoned the system in 1971. The gold standard was completely replaced by fiat money. The term fiat money is used to describe currency that is used because of a government's order, or fiat, that the currency must be accepted as a means of payment. So for the U.S., the dollar is fiat money and for Nigeria it is the naira.

Today, the price of gold is determined by the demand for the metal, and although it is no longer used as a standard, it still serves an important use. Gold is a major financial asset for countries and central banks. It is also used by the banks as a way to hedge against loans made to their government.

http://www.investopedia.com/ask/answers/09/gold-standard.asp

seletar

07-10-14, 15:06

http://business.asiaone.com/news/how-attract-tenants-tough-market#sthash.v36lhe6S.dpuf

How to attract tenants in a tough market

Cut the rent to cut your losses

Straits Times - Published on Mar 09, 2014
By Cheryl Ong

Renting out a flat has long been seen as a good way to bring in some extra income, but the chill winds blowing through the property market are forcing a painful rethink.

Landlords, including prospective ones, are getting the jitters as new units flood the market amid tighter manpower policies that are slowing the growth of arrivals.

The raw figures underscore the point: Private home rents fell 0.5 per cent in the three months to Dec 31, from a 0.2 per cent gain in the preceding quarter.

This was the first quarterly decline since 2009, according to Urban Redevelopment Authority (URA) data.

Mr Ku Swee Yong, chief executive of property firm Century 21, expects the market to stay weak for the next four years, with rents dipping 25 per cent over the next two years.

A potential oversupply looms in the background, with a total of 17,540 private homes expected to reach completion this year, while a further 21,299 will be ready for occupation next year.

This will peak in 2016 with a remarkable 27,321 completions, and another 11,963 expected to be built in 2017.

Experts say this flood of new homes means landlords should expect the weak rental market to persist in the face of strong leasing competition.

The Sunday Times looks at what landlords should watch out for in this increasingly challenging environment.

It's a tenants' market

There's an army of eager landlords out there, so tenants have more bargaining power now, say agents.

"It's quite common to have tenants asking for more nowadays," says Ms Shirley Ong, vice-president of property firm Centaline Singapore.

"It definitely takes more time to find tenants because in this market, the tenants are spoilt for choice."

Mr Steven Tan, managing director of property firm OrangeTee, says it used to take one month to rent out a unit, but two to three months is the norm now.

"The outlying areas have a greater softening compared with the other two areas because many new launches have reached completion," says PropNex chief executive Mohamed Ismail.

However, the main considerations tenants have when searching for a home remain unchanged.

Mr Tan notes that they are most sensitive to asking prices, and the location, age and condition of the property also feature high on their list.

Some tenants factor in the facilities available at condominiums.

If you have a new unit

Many homeowners make the mistake of having unrealistic expectations without a good understanding of the market.

"Rental rates have been falling since January," says realtor Jason Ho. "Depending on the situation, we'll advise landlords to cut losses and explain (to them) the increasing supply of units."

Experts say online property portals make it easy for landlords to check what others are asking for.

Calling an agent for an indication is another option.

It is also common to find many units within a newly completed development up for rent at the same time, so tenants become especially price-sensitive.

Mr Ismail says: "By keeping your price, you're losing out because potential tenants will likely see all the units there.

"The owner who is asking for more could actually be helping the others with cheaper units clinch the deal, since they are in the same location."

Experts tell landlords that adjusting their expectations will help cut any losses.

Take an owner who eventually rents out his unit for $4,000 after two months. That translates to a loss of $8,000 - or about $300 a month - if the tenant signs a two-year lease.

It would have been more prudent to have asked for $3,700 earlier, says Mr Ismail.

Because tenants have more choices, they demand more from landlords, says property agent Mex Zhang.

"They might ask for better furnishings in addition to lower rent. They are becoming more picky."

So owners should ensure they provide basic and proper furnishings and appliances, like beds, TV sets, curtains and sofas.

Time for facelift

Mr Tan suggests that owners can attract tenants by replacing old furniture and faulty appliances, spring-cleaning and giving the house a fresh coat of paint.

"Spend a little money. If it's a family, the kitchen is very important to the wife. If your cooker hob has been used for the past two years, replace it with a new one. If the TV is outdated, get a new one," adds Mr Ismail.

"A tenant is not buying for capital appreciation; he is renting for comfort."

Mr Ku suggests that owners should even consider renovating the bathrooms: "Sometimes, if your property is more than 15 years old, tearing out the sink and bathtub and toilet bowls could be a viable option.

"These things are a bit more personal to users who are particular about hygiene."

Arcachon

07-10-14, 15:18

relax88

07-10-14, 15:24

I finally know why the government keep building houses.

Cos if you look at the population figures released recently. It kept going up and even the government admit, they will not stop population increas...10,000,000.00 population?

Kelonguni

07-10-14, 16:28

If durian drop, can pick.

But if never drop and tree keeps growing taller, don't climb the tree and pluck the fruit. It will not taste as nice as you imagine. Got good chance to fall or get struck by lightning.

seletar

07-10-14, 17:12

http://www.stproperty.sg/articles-property/singapore-property-news/private-housing-rental-market-seen-being-squeezed-by-3-factors/a/162310

Private housing rental market seen being squeezed by 3 factors

They are record home completions, tighter inflow of expats, stricter property tax regime

The Business Times - April 26, 2014

THE private rental housing market is set to come under pressure on the back of record private home completions, a tighter inflow of expat tenants into Singapore and a stricter property tax regime.

"What we have seen so far are relatively modest drops, until we feel the full effects of the new supply completions," said JLL national director Ong Teck Hui.

Based on estimates provided by developers to the Urban Redevelopment Authority (URA), private housing completions are projected to hit 17,138 units this year, including the 4,114 units completed in Q1. This will be higher than the 13,150 units completed last year and 10,329 units in 2012. The pace of completions is projected to accelerate further - to 21,738 units in 2015 and 26,252 units in 2016.

"Due to the step-up in Government Land Sales in the past few years in response to the heated residential segment, the number of units under construction has snowballed to 67,507 in Q1, double that of four years ago.

"The growth in new completions will not be matched by demand from tenants as hiring of foreign executives has been curbed with hardly any growth in employment pass figures," said Mr Ong. He estimates a 4-7 per cent decline in private residential rents this year.

Lee Lay Keng, regional head (SEA) research at DTZ, predicts an up to 5 per cent rental decline this year, with a bigger fall next year.

"The rental drop may be higher in the suburbs, where the bulk of supply completions will be. Moreover, rental units there will also face competition from rental HDB flats. However, high-end properties will not be spared either as higher property tax rates affect this segment more," she said. "From Jan 1, 2014, landlords can no longer claim vacancy refunds on property tax. So if you do not want to pay property taxes on an empty unit, and with heightened competition for tenants, you may be more flexible on rental levels if you're an investor."

Most other property consultants predict a 5-10 per cent full-year price decline. Colliers International director Chia Siew Chuin said high-end homes will take a bigger price hit, to the tune of 10-15 per cent, given the odds stacked up against them - including weaker foreign buying, an anaemic leasing market and supply-side pressure from developers feeling the heat to meet regulatory deadlines to complete developing their projects and selling all the units.

The latest 1.3 per cent Q1 drop in URA's private home price index was steeper than the 0.9 per cent decline in the previous quarter.

Giving a breakdown of non-landed private home prices by region, URA said the sub-index for Core Central Region (CCR) slipped 1.1 per cent in Q1 - half the 2.1 per cent drop in the previous quarter.

Prices in Rest of Central Region (RCR) - which includes places such as Bukit Merah, Bishan and Geylang - eased 3.3 per cent in Q1, against a 0.4 per cent gain previously. In Outside Central Region (OCR) - home of mass-market condos - prices dipped 0.1 per cent in Q1 following a one per cent decline.

For both RCR and CCR, first-quarter prices of uncompleted units fell at a faster clip compared with completed properties. However, uncompleted homes in OCR rose 1.4 per cent, while completed unit prices fell 3.5 per cent.

relax88

07-10-14, 17:16

Fortune favour the bold.

Wonder what would ng teng fong be if he just waited for durian to drop.:sentimental:

seletar

07-10-14, 17:25

http://www.stproperty.sg/articles-property/singapore-property-news/private-home-resale-prices-fall-again-index/a/162560

Private home resale prices fall again: Index

Softness in market reflects broader weakening in housing sector in Q1

The Straits Times - April 29, 2014
By: MELISSA TAN

WEAK rental demand and tight loan curbs hammered private home resales again last month, deepening the gloom that has settled over the overall property market since the start of the year.

The price slide picked up speed from January to last month, according to Singapore Residential Price Index flash estimates out yesterday, with experts tipping worse to come.

Consultants expect prices to tumble 7 per cent to 11 per cent by the end of the year.

The central region bore the brunt of the slump, but the entire island took a hit, with overall prices down 1.1 per cent from levels in February, which in turn recorded a 0.9 per cent fall from January and a 0.4 per cent slip from last December.

This was due to a double whammy of lower demand from investors and upgraders, and the increased supply of homes, consultants said.

"Buyers of resale properties are more savvy and actively do their homework... They see for themselves the weakened property leasing conditions," said R'ST Research director Ong Kah Seng.

Nearly 17,000 non-landed private homes lay vacant in the first quarter, or about 7.6 per cent of the available stock, according to Urban Redevelopment Authority (URA) figures.

This was a jump from the 7.1 per cent vacancy rate in the fourth quarter of last year.

Private homes in the central region were the worst hit, owing to a large supply of unsold new property combined with lower housing allowances for expatriates amid an uncertain global economic climate.

Resale prices there fell 1.3 per cent last month after dipping 0.2 per cent in February from January's level.

In the suburbs, resale prices slipped 1 per cent last month on the heels of a 1.5 per cent drop the month before.

They were likely dragged down because Housing Board upgraders would rather hold out for better bargains on new homes, as developers dangle discounts.

These figures excluded small shoebox units of up to 506 sq ft. The resale prices of these compact private homes lost 0.4 per cent from February to last month, after falling 0.7 per cent from January to February.

The shoebox segment has a bigger impact on the resale price index after the National University of Singapore, which compiles the measure, revised its structure in February.

The softness in the private home resale market last month reflected a broader weakening in the housing sector in the first quarter, as strict curbs on home loans imposed in June last year continued to bite.

Private home prices fell across the island - the first time in nearly five years that all segments had taken a hit in the same quarter, the URA said last Friday.

HDB resale flat prices also slipped for a third straight quarter, shrinking the pool of HDB upgraders.

Arcachon

07-10-14, 17:41

Q: Are you a spender or saver?

The bulk of my savings I put into property investments. Every year, I try to purchase one property, big or small.

When I've a big chunk of money, it goes into my mortgage, so naturally most of my money goes into property.

http://business.asiaone.com/personal-finance/investor-profiles/high-flier-cherishes-her-childhood-dream/page/0/1

seletar

07-10-14, 18:02

http://business.asiaone.com/news/degree-holders-most-vulnerable-retrenchment#sthash.NrMY4kN2.dpuf

Degree holders 'most vulnerable' to retrenchment

The Straits Times
Wednesday, May 28, 2014

In the last two years, degree holders here have found themselves the most vulnerable to losing their jobs, among all qualification groups.

Since 2011, their share of residents made redundant was also disproportionately higher than their share of all resident workers.

Experts suggested three reasons for this - jobs lost in restructuring tending to be held by graduates, greater demand for non-academic skills, and substitution by skilled foreign labour.

"As graduates become more available, it brings about more friction in the job-matching process," said SIM University economist Randolph Tan. "Many graduates think that getting a degree is a pinnacle of achievement, but what they don't realise is that the workplace demands much more of them."

Studies by the Ministry of Manpower (MOM) on retrenchment - the latest of which was released last month - reveal that among Singapore residents, degree holders made up 39 per cent of workers who were laid off last year, but only 34 per cent of employees.

This was a slight improvement from 2012, in which they comprised 45 per cent of laid off workers and only 32 per cent of employees. In 2011, the figures were 33 per cent and 31 per cent respectively.

In the last two years, the gap became the widest among all the five qualification levels analysed by MOM, for the first time since 2008.

IT project manager Sylvia Tan, 51, lost her job of 29 years when her business unit was cut earlier this year due to restructuring. "If I had been able to pick up new skills like cloud computing and analytics, maybe they would have retained me," the computer science graduate said. "But they probably prefer to pay a younger person with less experience and newer skills."

She found a similar role at a new company within a month, but only because she took a pay cut of 43 per cent.

One of the reasons that graduates are being laid off could be that Singapore is losing its competitive edge in industries with a lot of professionals, managers, executives and technicians - roles which are typically filled by degree holders.

"There are a lot of corporate people who are graduates now," said human resource expert Paul Heng. "When the white-collar jobs are made redundant, graduates are naturally affected."

Another likely cause could be that the workplace now requires new skills which having a degree may not guarantee, such as networking and multilingual abilities, said recruitment firm Robert Walters Singapore's managing director Toby Fowlston.

It may be less clear for graduates where skills upgrading can occur, as there is no next qualification level to hit, added UniSIM's Associate Professor Tan.

"People who are highly trained may need more time for retraining, as they may need to 'unlearn' more things," he said.

A final reason for graduates' straggling could be substitution by mid- to high-skilled foreigners. The tightening of immigration practices for these groups in recent years could have been why the situation eased slightly last year.

"If this is one of the causes, the 'hire Singaporeans first' measures should help in the years to come," said DBS economist Irvin Seah.

Concerns have been raised about an oversupply of fresh graduates. In March, Manpower Minister Tan Chuan-Jin cautioned against a graduate glut which is being seen in South Korea and Taiwan, resulting in "over-educated and underemployed" people.

But some experts say degree holders should be able to keep up with the times.

Mr Mark Hall, vice-president and country manager of recruitment company Kelly Services, said: "Tertiary institutions have also been adding multi-disciplinary programmes, such as pairing engineering with business studies or life sciences to make people more employable."

Only 62 per cent find a new job within one year

The average degree holder struggled to find a new job within a year of being let go.

Only 62 per cent of them were in a new position within 12 months of losing their job last year, according to Manpower Ministry statistics released last month.

This is compared to the next lowest rate of 65 per cent for workers with polytechnic diplomas and professional qualifications, and the highest of 71 per cent for those with secondary qualifications.

Degree holders have had the lowest rate since 2011.

seletar

07-10-14, 18:17

http://sbr.com.sg/economy/in-focus/faster-speed-light-singaporeans-personal-bills-spiked-much-25#sthash.Mtr5OchE.dpuf
Published 30 May 2014

Faster than speed of light: Singaporeans' personal bills spiked as much as 25%

http://sbr.com.sg/sites/default/files/news/cart.jpg

Singaporeans will have to work double time and overtime just to survive the demanding lifestyle of residing in the world's most expensive city. Prices of everything has shot up, from the small luxury of eating out at omakase restaurants down to the most mundane needs such as phone bills and groceries--and Singaporeans are starting to cringe at the lash of price hikes.

CIMB recently conducted its Cost of Living survey, they focused on what accounts for the largest wallet share of Singapore residents: basic necessities.

Here's more from CIMB:

Our survey finds that an overwhelming majority (70%) now spend a higher proportion of their disposal income on groceries, utilities and children’s education than two years ago.

About 43% reckon that the dollar amount they spend on groceries and utilities has increased by 25-50% while 42% estimate that their bills have gone up by 1-25%.

Similarly, most (54%) estimate that the cost of eating out has jumped by 25-50% over the past two years.

One respondent, who has lived in Hong Kong and Singapore, told us that between the two cities, eating out in Singapore is certainly more expensive these days.

In other words, half of our households believe that their experience with food inflation is higher than Singapore’s reported core inflation of 1.7-2.5% for 2012-13. To be sure, the typical household might not be measuring the same basket of goods as the CPI.

Kelonguni

07-10-14, 18:23

Fortune favour the bold.

Wonder what would ng teng fong be if he just waited for durian to drop.:sentimental:

Do consider that his timings matter other than just locality. He is not foolhardy bold.

SG and HK have both progressed so much since the times of land hoarding, and prices have surpassed record highs to propel us to amongst the costliest excluding HDBs. From third world to first already... How much more do you expect prices to run away at this stage?

Yuki

07-10-14, 19:44

Arcachon

07-10-14, 19:48

relax88

07-10-14, 21:16

Do consider that his timings matter other than just locality. He is not foolhardy bold.

SG and HK have both progressed so much since the times of land hoarding, and prices have surpassed record highs to propel us to amongst the costliest excluding HDBs. From third world to first already... How much more do you expect prices to run away at this stage?

So we have a mutual agreement that some will prosper with properties but not all.
So it up to an individual to buy and sell at right time.

Ever since 2004, after my friend bought paterson at 1000plus psf. I learn to keep my mouth shut about properties not able to go higher or lower, cos you and I cannot forseen the future.

So cannot一竹杠打翻正船人。

No one till date, dares to put their balls on the line about prices wont go up more or less.:anonymous:

teddybear

07-10-14, 22:11

I can place all my money to bet that if a person buy 99-years leasehold property, their property value at the end of 99-years lease will drop to ZERO !!!!!!!!!!!!!!!!!!!!!!!!!!!!!! :frog:

So we have a mutual agreement that some will prosper with properties but not all.
So it up to an individual to buy and sell at right time.

Ever since 2004, after my friend bought paterson at 1000plus psf. I learn to keep my mouth shut about properties not able to go higher or lower, cos you and I cannot forseen the future.

So cannot一竹杠打翻正船人。

No one till date, dares to put their balls on the line about prices wont go up more or less.:anonymous:

mosaic

07-10-14, 22:15

I think it's self fulling prophecy... More people talk about downturn, the more it dampens people intention to buy. 3 years ago same thing nothing much has changed but people still buy like no tomorrow
tomorrow.

I think its funny that Mr Khaw purposely build so much n then keep telling people don't buy.

Honestly it's very easy to send the property prices down
Just over build n over supply.

lol.sibei jialat nowonder people can misunderstand the government so much. He IS telling you he s building so much so you should not have contributed to the rising property prices back than unless you bo pian or carrot head.

Actually they don t even have to go through so much trouble to actually build properties if they really intended to bring prices down. Just throw in an 80% capital gains tax or 20% TDSR than you will see what it down. Lol

Arcachon

07-10-14, 22:22

teddybear

07-10-14, 22:33

At the end of 99 years lease still didn't go to zero? Who so good and is doing charity to those 99-year leasehold owners when the land owner can take back for FREE? If it is the govt than we will have to take them to task because that is a leak in the country's revenue to benefit a very very small number of people! If they do this, they will have to do the same for all 99-year leasehold property owners sitting on govt's land!!!!!!!! :doh:

You lose, Southbank former Building Eng Tong Tower 99 years did not go to zero and many other example.

I can place all my money to bet that if a person buy 99-years leasehold property, their property value at the end of 99-years lease will drop to ZERO !!!!!!!!!!!!!!!!!!!!!!!!!!!!!! :frog:

gsmsimmax3

07-10-14, 22:53

You lose, Southbank former Building Eng Tong Tower 99 years did not go to zero and many other example.

Eng Cheong Tower did not go to zero at end of 99 year because the lease was top up to another 99 lease when there remain another 65 years left.
A sum of $8.5 mio was paid to government in 2005 to rest it to another 99 years.

Had it run to end 99 years, I also think it would be zero.

Arcachon

07-10-14, 23:09

Eng Cheong Tower did not go to zero at end of 99 year because the lease was top up to another 99 lease when there remain another 65 years left.
A sum of $8.5 mio was paid to government in 2005 to rest it to another 99 years.

Had it run to end 99 years, I also think it would be zero.

Location is very important, 99 years also can become Freehold.

Yuki

08-10-14, 00:55

lol.sibei jialat nowonder people can misunderstand the government so much. He IS telling you he s building so much so you should not have contributed to the rising property prices back than unless you bo pian or carrot head.

Actually they don t even have to go through so much trouble to actually build properties if they really intended to bring prices down. Just throw in an 80% capital gains tax or 20% TDSR than you will see what it down. Lol

Everyone blames everyone for the rising property prices.
- blame government
- blame the flippers flip and flip
- blame the wealthy buy and buy
- blame the bo-pian people who have yet to have a roof over their heads. :distant:

newbie11

08-10-14, 08:06

If g didn't under supply , would u be sitting on the gains now

Warren49

08-10-14, 10:52

Location is very important, 99 years also can become Freehold.

Yes for condos, location is more impt than lease status. After 40-50 years, all buildings will be run-down and eventually go for en-bloc. Location will determine the en-bloc value more than the lease status in 40-50 years time.

For landed, it's a different game though, hence the sig price differential betw 99 LH landed & freehold landed.

teddybear

08-10-14, 12:56

Benefits of "Location" only go to the Freehold land owners, owners of 99-years leasehold property owners better hope that their properties get enbloc latest at 30 years of age, thereafter either they can't enbloc and even if they do the "enbloc" value mostly goes to the "Freehold" land owners (and biggest "freehold" land owners is the govt!).

Yes for condos, location is more impt than lease status. After 40-50 years, all buildings will be run-down and eventually go for en-bloc. Location will determine the en-bloc value more than the lease status in 40-50 years time.

For landed, it's a different game though, hence the sig price differential betw 99 LH landed & freehold landed.

Ringo33

08-10-14, 13:35

Arcachon

08-10-14, 13:45

Arcachon

08-10-14, 17:26

WHAT is a fair price for a slice of land in a condominium complex, used for 13 carpark spaces, an electrical substation, trees and drains, has come up for debate in a land acquisition dispute.

Residents of the high-end Thomson 800 condo opposite MacRitchie Reservoir argue that the 600.9 sq m sliver of land acquired by the Government is worth at least $5.8 million. But the Collector of Land Revenue is prepared to pay only about $615,000.

This would work out to about $925.28 per sq m, or $86 per sq ft, for the affected freehold land - a land price unheard of here, residents argue.

The 10m-wide plot was acquired by the Government in 2011, as part of the construction of the North South Expressway Stage 1 from Admiralty Road to Toa Payoh Rise and redevelopment.

At issue in the case before the Appeals Board (Land Acquisition) is what makes for a reasonable sum to be paid and what makes for fair market value.

"We accept the space is lost but the issue is whether a different value can be given to a particular area, which is for a particular use when it was bought as part of a whole (in) the first place," said Thomson 800 resident Steven Sobak, 67, treasurer of the condo's management committee.

The 600.9 sq m plot below the road level adjoining Marymount Road forms 2.1 per cent of the 28,573 sq m of freehold land making up Thomson 800.

Completed in 1999, it is Hong Kong tycoon Li Ka Shing's maiden residential project in Singapore. There are a total of 390 units in a four-storey apartment block and three 20-storey blocks. Facilities include swimming pools, tennis courts and a clubhouse.

The Collector of Land Revenue awarded some $556,000, with an ex gratia payment of $58,380 as compensation in July 2012.

The Appeals Board, comprising Commissioner of Appeals Foo Tuat Yien, a senior district judge; Singapore Institute of Architects president Rita Soh, a Nominated Member of Parliament; and Associate Professor Sing Tien Foo from the department of real estate of the National University of Singapore, held hearings over three days in July.

Valuers from opposing sides had agreed that the market value, based on the residential zoning and plot ratio, was about $11 million but differed on the amount to be discounted and the adjustment factor to be applied to the market value.

Valuers for the authorities argued that the affected land is part of a road and green buffer zone, which meant its use was very limited and incapable of further residential or other redevelopment. This had to be factored to determine the market value.

The sum payable was worked out with the rent paid for a playing field in Upper Thomson Road as a benchmark.

But lawyers from Infinitus Law Corporation, representing Thomson 800 residents, questioned this. They suggested alternative ways with reference to Singapore Land Authority rates for "remnant land", or small plots of land left over after development.

Closing submissions were made last month by both parties to the Board and the outcome is pending.

Patrickstar

08-10-14, 17:33

Perhaps you can name us a condo with lease top up?

Eng Cheong Tower did not go to zero at end of 99 year because the lease was top up to another 99 lease when there remain another 65 years left.
A sum of $8.5 mio was paid to government in 2005 to rest it to another 99 years.

Had it run to end 99 years, I also think it would be zero.

Arcachon

08-10-14, 17:53

http://www.skyscrapercity.com/showthread.php?t=507753

THIRTY years or so ago, they were residential buildings that helped pioneer the start of modern architecture here. And they stood tall and proud during Singapore's formative years.

Architects lament five iconic buildings that are succumbing to en bloc fever and may soon go under the wrecking ball
By Tay Suan Chiang

THIRTY years or so ago, they were residential buildings that helped pioneer the start of modern architecture here. And they stood tall and proud during Singapore's formative years.

Mention their names, and they are bound to evoke a flood of memories for many Singaporeans: Pearl Bank Apartments in Outram Road, Golden Mile Complex in Beach Road, Futura in Leonie Hill Road, Beverly Mai in Tomlinson Road and The Habitat in Ardmore Park.

Beverly Mai and Futura were Singapore's first condominiums, Pearl Bank has its unusual horse-shoe shape, The Habitat is a distinctive child of the 1980s and rundown Golden Mile Complex was the first here to mix homes and businesses.

Yet, the physical presence of these iconic five is set to be just a memory, too. The en bloc frenzy has them in its sights.

While for owners this is a windfall, history buffs and architects told LifeStyle the razing of the iconic residences will be a loss for Singapore's architectural heritage.

The famous five are also written about in a book called Singapore 1:1 City, published two years ago by the Urban Redevelopment Authority and featuring a selection of significant architecture over the last 40 years.

It may seem strange to think old condos are part of the Republic's heritage, just like grand colonial buildings, monuments and conserved shophouses.

Yet Mr Tai Lee Siang, president of the Singapore Institute of Architects (SIA), says these residential projects have left a strong impression on the collective memory of Singapore.

'They also have a unique architecture form and were designed by local architects,' he says. Beverly Mai was designed by Singapore architect Timothy Seow in 1974 and was the first to introduce the condo principle of high-rise living and shared facilities to Singaporeans.

Dr Goh Chong Chia, managing director of TSP Architects & Planners, who worked with Mr Seow on the project, says Beverly Mai marked a change in housing type. 'It was a pioneer of luxury housing,' notes Dr Goh, an SIA past president.

Futura, also designed by Mr Seow in 1976, certainly lived up to its name. Mr Tai points out that its unique form lies in the space-pod look of the living spaces.

'Clearly inspired by the space age explorations, the design is bold and futuristic in outlook,' he says.

He adds that although its location at Leonie Hill created less impact in the public memory due to its status as a high-end private development off Orchard Road, 'there is no denying that the building is a quiet tour de force in Singapore architecture landscape'.

Architect Mink Tan of Mink Tan Architects agrees that these five buildings should be kept because of their historical significance to local architecture.

He is passionate about retaining Golden Mile Complex, which, of the five, is the only one whose en bloc sale is uncertain.

'The complex marks our first mixed-use development,' he says, and he hopes that instead of tearing it down, it can be refurbished to its original condition.

Dr Kevin Tan, president of the Singapore Heritage Society, says the five are 'all important and aesthetically and architecturally important buildings. Their demise or impending demise is to be much lamented'.

The SIA, meanwhile, is working to identify modern buildings that are less than 30 years old that may be worthy of recognition and future conservation - even though it is too late for the five featured here.

'To realise the development of potential of these buildings that may be demolished due to en bloc sale, SIA would like to make suggestions to the relevant authority on how to integrate the new potential with the old landmarks,' says Mr Tai.

However, home-owners at these landmark buildings have a different take. Ms Wong Chin Chin, a Pearl Bank Apartments resident for 11 years, says most owners in her block have agreed to sell at prices of about $1,300 psf, but adds it is more than just the money. Factors pushing them to sell include high maintenance fees, leaky pipes and lifts that break down.

'No doubt the building is unique and historical, but living and dealing with the inconvenience is a chore,' she says.

FUTURA
14 Leonie Hill Road

The deal: The condo, with 69 units and three penthouses, was sold en bloc last year for $287.3 million to City Sunshine Holdings, a subsidiary of City Developments. However, the deal is still in the works as minority owners have gone to court, claiming that the sale was not made in good faith.

History: It was completed in 1976.

Why it's so special: Futura was the second condominium to be built in Singapore. Its main architect is Mr Timothy Seow, who also designed Singapore's first condo, Beverly Mai, two years earlier. This, too, has gone en bloc.

The Futura was the first residential project to incorporate lifts that open directly into the apartments, giving residents much privacy. It was a novelty to most Singaporeans living in flats with a shared lift opening onto a shared corridor.

The 25-storey block has a distinctive curved facade, a move away from the usual linear configurations.

Its name reflects its architecture, considered advanced at the time: three radial wings linked by a central service core. As a result, the living rooms are in an elliptical shape, resembling space-pods, while the rooms are geometric shaped.

'Slum' becomes landmark

GOLDEN MILE COMPLEX
5001 Beach Road

The deal: The en bloc is not yet a done deal. Some owners at the strata-titled mixed development are lobbying for one. But there are many units and it may be difficult to get the mandatory minimum of 80 per cent of individual owners to agree.

History: The 16-storey building, with 411 shops, 226 offices and 68 residential units, was designed by Gan Eng Oon, William Lim and Tay Kheng Soon of then Design Partnership - now known as DP Architects - and was completed in 1973.

Why it's so special: It pioneered the idea of a mixed-use development. And its unique sloping form is unforgettable.

Today the complex is a hot spot for Thai clubs and eateries, as well as travellers going to Malaysia by bus.

It was even mentioned in Parliament once, when it was described as a national disgrace and a vertical slum because residents had put up zinc sheets and patched boards over their balconies to create an extra room.

The complex may look run down, but it is appreciated by architecture gurus.

Dutch architect Rem Koolhaas said at a press conference when he visited Singapore in 2005: 'These buildings (Golden Mile Complex and People's Park Complex) were not intended to be landmarks, but became landmarks.'

Pritzker Prize-winning Japanese architect Fumihiko Maki said it is a prime example of an urban building where people can live, work, shop and play - all in a single development.

Professor William Lim, a veteran architect here, says the demolition of the complex 'will be a definite loss for Singapore'.

Welcome to my horse shoe

PEARL BANK APARTMENTS
1 Pearl's Hill

The deal: LifeStyle understands from residents and industry experts that more than the mandatory 80 per cent of residents have agreed to sell. The apartments, near Outram Park MRT, could fetch more than $500 million.

History: The building was designed by local architect Tan Cheng Siong of Archurban Architects Planners, and completed in 1976.

Why it's so special: The 280-unit, 38-storey Pearl Bank Apartments has a distinctive horse-shoe shape for a reason. The block's horse-shoe opening faces west, shading the building from the afternoon sun.

Being located on a hill, it was the tallest residential building in Singapore at the time. And it had the highest density of apartments for a private residential development.

There are eight penthouses and 272 split-level units that are either two-, three- or four-bedroom apartments, with eight units to a floor.

Much thought went into the layout. Living rooms and bedrooms are at the front, giving great city views. Utilities and service areas are situated at the rear, overlooking a courtyard.

Prefab boxes

THE HABITAT 1 & 2
2 & 3 Ardmore Park

The deal: Property developer Wheelock Properties bought Habitat 1 for $180 million last year, and Habitat 2 for $103.88 million in 2005. The site of Habitat 2 and its neighbouring Ardmore View, which was also sold en bloc, is making way for Ardmore II condo. Habitat 1, which is still standing, will become Ardmore III condo.

History: The condo was completed in 1984, and was designed by local firm

RDC Architects in association with internationally renowned American firm Moshe Safdie & Associates.

Why it's so special: The two blocks can be considered a local version of Montreal's Habitat '67, a housing project done by Moshe Safdie for the 1967 World Exposition. The Canadian project, today a heritage landmark, pioneered the design and implementation of three-dimensional prefabricated housing. Each unit, resembling a box, was constructed elsewhere and connected together on site. There are 158 units.

Singapore's version is similar but on a smaller scale - there are just 61 units in both blocks.

It makes use of the same concept as in Montreal - vertically stacked precast boxes with hanging roof terraces, giving the condo a three-dimensional facade.

Both towers have single-storey units and maisonettes that overlook a garden with a pool and squash courts.

Airy bungalow

BEVERLY MAI
31 Tomlinson Road

The deal: The 28-storey tower was sold en bloc in April last year for $238 million to Hotel Properties Ltd (HPL).

History: It was built in 1974.

Why it's so special: It helped kick off Singaporeans' famous obsession with attaining the 5Cs: car, credit card, cash, country club and, of course, condos.

Yes, this is Singapore's first condo.

It was built by architect Timothy Seow, who also designed several other old favourites in LifeStyle's feature.

Mr Seow, founder of Timothy Seow & Partners, now known as CPG Consultants, pioneered the 'bungalow-in-the-air' concept with Beverly Mai. The 48 maisonettes, two deluxe apartments and two-storey luxury penthouses are all linked by a central service core, giving residents privacy.

As the first condo, it had other firsts - the first to incorporate shared facilities such as a swimming pool, to have maisonettes and to have apartment units with no party walls.

It also has big balconies, inspiring residents to build gardens in the sky.
__________________

Arcachon

08-10-14, 18:07

Completed in 1974, Beverly Mai is commonly known as Singapore’s first condominium.[1] Built at the cost of S$4 million, the 28-storey tower at Tomlinson Road had a site area of 7,230 sq m and was designed by Timothy Seow & Partners (now known as ids studio).[2] It is one of the earliest high-rise luxury apartments in Singapore and was developed along Seow’s pioneering concept of “bungalows in the-air”. The condominium is the first private residential project to incorporate maisonettes in apartment blocks and apartment units without party walls. It is also among the first to introduce the practice of shared facilities such as the swimming pool and other recreational amenities – features commonly found in condominiums today.[3]

The urban landscape of Singapore in the 1960s was dominated by slab block public housing for the masses and landed dwellings for the affluent. Seow saw a demand for upmarket apartments, which would provide the space and privacy of a bungalow in land scarce Singapore without the prohibitive prices of landed property. He tested his “bungalows in the-air” concept on Maxima Apartments (now known as The Belmont), the precursor of Beverly Mai. The tower block, developed on his parents’ property, had only one unit on each floor that was served by two lifts and a common swimming pool. Henry Kwee, the founder of Pontiac Land, was impressed with Seow’s concept and appointed him as the architect of Beverly Mai.[4]

Several of Seow’s early condominium projects such as Beverly Mai and Futura were inspired by English architect Denys Lasdun’s Keeling House maisonettes at Bethnal Green, East London, England. Beverly Mai had 48 maisonettes – four units on each floor – two deluxe apartments and two penthouses that were joined by a central service core and served by two lifts – a private lift for residents and a back lift for visitors. To maximise privacy, each unit was designed with split levels to segregate the private bedroom spaces on the second floor from the living and dining rooms below. Each unit also had a large balcony that functioned as a garden in the sky. Another key architectural feature of Beverly Mai was its “floating” entrance lobby, which separated the driveway for vehicles and pedestrians. The project also introduced shared recreational facilities such as a swimming pool, barbecue pits and terraces.[5]

The condominium, which cost between S$141,000 and $162,000 an apartment in 1970, was sold through a collective sale to Hotel Properties Ltd for S$238 million in 2006.[6] The threat of collective sales and the demolition of Beverly Mai and other early modern architecture built by local architects in post-war Singapore prompted the call to preserve Singapore’s built heritage.[7]

References
1. Au Yong, J. (2006, September 24). Is S’pore’s first condo worth preserving? The Straits Times, p. 8. Retrieved from NewspaperSG.
2. Wong, Y. C. (2005). Singapore 1:1 city: A gallery of architecture & urban design (pp. 110–113). Singapore: Urban Redevelopment Authority. Call no.: RSING 720.95957 WON; ids studio. (2013). Beverly Mai. Retrieved July 29, 2014, from ids studio website: http://www.intl-ds.com/projects/high-rise-residential/beverly-mai/; Naidu, D. (2007, December/January). An interview with Timothy Seow. The Singapore Architect, 236, 42–49. Call no.: RSING 720.5 SA
3. Wong, 2005, pp. 110–113.
4. Naidu, 2007, 42–49; Ong, C. (1998, July 11). Back where he belongs. The Business Times, p. 20. Retrieved from NewspaperSG; Lee, E. (2008). Singapore: The unexpected nation (p. 333). Singapore: Institute of Southeast Asian Studies. Call no.: RSING 959.57 LEE-[HIS].
5. Wong, 2005, pp. 110–113; Naidu, 2007, 42–49; The Business Times, 11 Jul 1998, p. 20; Campbell, W. (1970, June 19). Highrise goes high class. The Straits Times, p. 7. Retrieved from NewspaperSG.
6. The Straits Times, 19 Jun 1970, p. 8; Kalpana, R. (2006, April 27). HPL bags Beverly Mai for $238m. The Business Times, p. 32. Retrieved from NewspaperSG.
7. The Straits Times, 24 Sep 2006, p. 8.

The information in this article is valid as at August 2014 and correct as far as we are able to ascertain from our sources. It is not intended to be an exhaustive or complete history of the subject. Please contact the Library for further reading materials on the topic.

http://eresources.nlb.gov.sg/history/events/b6e48846-62e6-498a-b47c-f4b8b7ab465d

seletar

09-10-14, 11:26

http://sbr.com.sg/shipping-marine/in-focus/local-shipbuilders%E2%80%99-profits-sink-massive-jackup-rig-glut-looms#sthash.s6TdgnnG.dpuf
Published 08 Oct 2014

Local shipbuilders’ profits to sink as massive jackup rig glut looms

http://sbr.com.sg/sites/default/files/news/shipyard_15.jpg

New orders will plunge in 2015.

The worst is yet to come for domestic offshore and marine firms, as new orders jackup rigs are expected to dip significantly in 2015 on the back of massive oversupply.

According to Nomura, there will be a 71% y-y jump in scheduled jackup rig deliveries to 65 in 2015, and only 8% of these new-build units are contracted to-date.

This will be the second-highest annual deliveries on record, only surpassed by the 76 units in 1982.

“With the DCRs and utilization rates already facing downward pressure YTD from a total of 78 deliveries in 2013 and 2014, we believe the worst for jackup rigs has yet to come, unlike our outlook for floaters. We expect global jackup rig orders to weaken y-y in 2015F, due to the risk of near-term oversupply. This risk is expected to afflict KEP worst, as it is traditionally the runaway leader for global jackup rig orders. SMM will also be affected by the jackup rig orders slowdown globally, but this can be mitigated by drillship orders exposure,” noted Nomura.

Here’s more from Nomura:

We expect more downside to jackup rigs’ (>300ft WD) average DCR in 2015F, despite having dropped 13% as of August 2014 to USD158,000 from the peak of USD182,000 in October 2013.

Note that the premium jackup rigs (>300ft WD) have dominated new orders since 2004. With current new-build jackup rig prices at record highs, and the drop in average DCR by August 2014, this has worsened the investment metrics of newbuild jackup rigs, and will diminish the incentive to place orders in 2015F.

We estimate the payback period for new-build jackup rig orders to be 7.9 years, which is worse than the 7.2 years in 4Q10. Yet, global jackup rig owners are about to receive a total number of 113 jackup rig deliveries in 2015-16F, while it took twice as long for the world to see a total of 108 newbuild deliveries in the four years to 2014.

seletar

09-10-14, 11:31

http://www.straitstimes.com/news/business/property/story/singapore-drops-out-top-20-cities-property-investment-report-20141008#sthash.Ffytf9sB.dpuf

Singapore drops out of top 20 cities for property investment: Report

Straits Times
Published on Oct 8, 2014 11:46 AM

SINGAPORE - Singapore has fallen out of a ranking of the top 20 cities for property investment, says a report released on Tuesday.

Singapore, along with Toronto, Moscow and Seoul, were knocked out by Beijing, Shanghai, Miami and Stockholm.

http://www.straitstimes.com/sites/straitstimes.com/files/20141008/investment-ranking-2014.png

seletar

09-10-14, 11:44

http://www.stproperty.sg/articles-property/singapore-property-news/abysmal-sales-deal-body-blow-to-agencies/a/183679/page1/1

Abysmal sales deal body blow to agencies

More than 60 exit property business in 2013; over half of the remainder expected to sink into the red

The Business Times - October 9, 2014

http://www.stproperty.sg/articles-property/upload/article/183679__1412822837.jpg
With private residential sales falling off a cliff following several rounds of cooling measures, even some of Singapore's largest real estate agencies are reeling from profit slumps of as much as 20 to 50 per cent this year. - PHOTO: SPH

WITH private residential sales falling off a cliff following several rounds of cooling measures, even some of Singapore's largest real estate agencies are reeling from profit slumps of as much as 20 to 50 per cent this year.

Several key executive officers of real estate agencies also project that over half of the 1,425 registered agencies here could find themselves in the red. A significant number of their agents have turned inactive, or not clocking in any sales in the past one year.

To get through the dry spell, many agencies have turned to marketing overseas homes and commercial properties. Others are consolidating their resources through mergers, acquisitions and alliances.

"Generally today, the volume of transactions has dropped by 30-40 per cent. The margin of the business doesn't provide such a big buffer of 30-40 per cent," said PropNex chief executive Mohammed Ismail.

"I would not be surprised that many small and mid-size agencies and even the larger agencies, if they are not nimble enough, will face challenges and many will end up in losses," he said.

While residential sales clocked by PropNex has dipped by a marginal 3 per cent this year, the total value of transactions has declined along with the fall in property prices. This is why profits have fallen "to the tune of 20 per cent", Mr Ismail added.

ERA Realty chief executive Jack Chua conceded that a 20-50 per cent slump in profits is taking place among the large agencies.

Last year, ERA Realty Network - the agency business of ERA - saw a 43.5 per cent decline in its net profit to S$10.4 million on the back of a 12 per cent drop in sales, according to its filings with ACRA. PropNex's total profits from its broking business, excluding consultancy and property management, slipped 10.1 per cent to S$5.93 million in 2013.

They are the two largest real estate agencies here with more than 5,600 agents each, followed by Huttons, OrangeTee, DTZ and HSR International Realtors in terms of sales force.

HSR had swung into a net loss of S$5.4 million in 2013 from a net profit of S$3.5 million in 2012, based on ACRA filings, as revenues and margins took a hit.

http://www.stproperty.sg/articles-property/upload/article/183679__1412822893.jpg

This year, the situation could be worse. Developers' sales, which now account for two-thirds of all private non-landed transactions, have fallen to 4,409 units in the first half: the full-year tally will in all probability fall sharply short of the 14,948 units for the whole of 2013 and 22,197 units for 2012.

With total private home sales fallen to levels last seen during the Global Financial Crisis, agencies that rely mainly on broking residential sales are seen as most affected, while international property consultancies have found some buffer from consultancy, property management and valuation services.

A near-doubling of revenue to S$16.4 million at Savills (Singapore) - involved in office, hotel and industrial services, investment sales, international residential and project management - helped mitigate a 66.3 per cent slump in revenue to S$2.9 million at Savills Residential last year, based on ACRA filings. Savills group profit still fell 30.7 per cent to S$14.1 million in 2013.

According to the Council of Estate Agencies (CEA), some 67 agencies closed shop last year, leaving 1,425 licensed estate agencies as at Jan 1, 2014. The number of salespersons registered with CEA, however, increased to 31,783 as of January from 31,040 the year before.

About one-third of the registered salespersons are holding another job. "Out of these salespersons, about one-third are not active in doing estate agency work," said a CEA spokeswoman. It is not known if the proportion of inactive agents have increased given that such data was not compiled previously.

Raymond Chow, key executive officer of boutique agency Ray International, told BT that his firm is "making at least a 20 per cent loss".

Only half of his 43 agents are active now and its number of registered agents could drop to 30 next year as some are giving up and not renewing their licenses.

"TDSR (total debt servicing ratio) is the one that kills," said Mr Chow. "It is a pity to see some good performers dropping out of projects, dropping out of the industry and becoming taxi-drivers or getting a job."

Though the commission from selling overseas properties is lower than from local projects, Ray International is marketing homes in Australia, Philippines, and recently India (to Indian nationals).

The biggest agencies that dominate new condominium launches here have also turned the spotlight on overseas markets.

PropNex is marketing properties in the Philippines, Malaysia, Australia, Thailand, London, Tokyo and Indonesia, while ERA has intensified marketing efforts for projects in Iskandar, Kuala Lumpur and Australia.

"Moving forward, we will also be concentrating on overseas projects that are spearheaded by Singapore-based developers," said ERA's Mr Chua. Having brokered more than S$233 million worth of commercial and industrial property deals in Singapore this year, ERA has set up a dedicated team for this market segment.

Meanwhile, some smaller agencies have found support through global franchises and alliances.

International Property Advisor (IPA) and UPG International are among 24 agencies here that have joined the "Century 21 Singapore" franchise, a subsidiary of US-listed Realogy Holdings.

Both agencies noted that this has strengthened their pitch for overseas projects, given Century 21's network of over 7,000 offices and 102,000 salespersons - known for their golden blazers.

Helmed by key executive officer (KEO) Ujeen Tan, former co-founder of Huttons, UPG's 28 sales agents now market projects in Singapore, Malaysia, the UK, Australia, and Japan.

IPA is also actively promoting properties in Australia, Japan and Indonesia to clients, including high net worth individuals and private banks, said key executive officer Ku Swee Yong, also the CEO of Century 21 Singapore since last October.

Other agencies have banded together in marketing alliances. Project Alliance Group (PAG) was formed in July by SLP International, OrangeTee, HSR and Dennis Wee Realty; Real Alliance was formed in August comprising RE/MAX, C&H Group and More Property.

While one might expect the one or two-person agencies to close shop, industry players note that it is the bigger firms that are hit harder, given their fixed overheads such as office rentals and salaries for full-time staff.

At the same time, agents are not loyal to their firms, Mr Chow said. "When the market is bad, they start to look elsewhere for jobs to do."