View Full Version : Mass-market homes 'face price pressure'
http://www.straitstimes.com/archive/friday/premium/money/story/mass-market-homes-face-price-pressure-20141205
Mass-market homes 'face price pressure'
OCBC report also says capital values of shoebox units could be tested
Published on Dec 5, 2014 1:00 AM
By Marissa Lee
THE demand for mass-market flats has fallen sharply this year and is putting increasing pressure on prices, says OCBC Investment Research.
It forecasts that prices could fall up to 15 per cent over the next two years while sales of new homes will stay muted next year.
The numbers from this year point to the gloom ahead.
There were only 6,800 private homes sold - excluding landed properties and executive condominium units - in the 10 months to Oct 31, half the level of the same period last year, says OCBC Investment Research analyst Eli Lee, adding that the pain is especially acute in the mass-market segment.
"Mass-market home sales routinely made up the bulk of the total market volume - 69 per cent of total sales over January 2012 to June 2013. As we entered the bear market in the second half of 2013, the dominance of the segment waned and constituted 51 per cent of total sales over July 2013 to date."
High-end sales "spiked" in October from September, thanks to the launch of Marina One Residences, which sold 335 units over the month at a median price of $2,228 per sq ft, notes Mr Lee.
He expects demand for shoebox apartments - units up to 506 sq ft - to be more at risk than larger homes due to the "untested rental market for the large supply of shoebox units that will be completed next year".
The prevailing rents for shoebox units may have been skewed upwards as the smaller completed supply means the market has not really been tested yet.
Mr Lee also notes that 84 per cent of the 12,000 shoebox units sold since 2009 are outside the city centre, so "their capital values could come under pressure if rental yields decline significantly below current expectations".
OCBC Investment Research also tips new home sales to stay soft at between 8,000 and 10,000 units next year.
While some in the industry hope that cooling measures like stamp duties will be reviewed, OCBC expects that will happen only "when residential price declines approach a meaningful threshold of 10 per cent".
Deputy Prime Minister Tharman Shanmugaratnam said in a speech in October that private property prices still have "some distance to go in achieving a meaningful correction after the sharp run-up in prices in recent years".
This could happen in the second half of next year or later, said the OCBC report.
It also prefers large developers with strong balance sheets, a diversified regional presence and portfolios with significant investment asset exposures.
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Didnt know 84% of MM supply is in OCR.
The MM OCR rental may drop to a small premium above a HDB master bedroom rental.
If that happens, MM OCR prices should drop to around a 3rm HDB flat price
http://www.straitstimes.com/archive/friday/premium/money/story/mass-market-homes-face-price-pressure-20141205
OCBC report also says capital values of shoebox units could be tested
Published on Dec 5, 2014 1:00 AM
By Marissa Lee
He expects demand for shoebox apartments - units up to 506 sq ft - to be more at risk than larger homes due to the
Mr Lee also notes that 84 per cent of the 12,000 shoebox units sold since 2009 are outside the city centre, so "their capital values could come under pressure if rental yields decline significantly below current expectations".
Didnt know 84% of MM supply is in OCR.
The MM OCR rental may drop to a small premium above a HDB master bedroom rental.
If that happens, MM OCR prices should drop to around a 3rm HDB flat price
Didnt know kOOL is actually teddybear in disguise too.
The fire sale of OCR MM should start in the summer of 2015 when Yellen hikes interest rates by 25bps, followed by another hike in end 2015.
Sibor should reach 1%. Poor rentability will make it a -ve carry trade
Recommend sell now for OCR MM before too late
Desperate homeowners launch fire sales of shoebox flats
The flat glut will only intensify.
Shoebox flats had seemed like the perfect investment property a number of years ago. These units, typically with a floor area less than 50 square meters, hooked penny-pinching investors because of their affordability and the cheap downpayment outlay that they required.
However, homeowners who bought shoebox flats as investment properties will soon find that these tiny homes will fail to deliver promised profits. According to CIMB, distressed sales of shoebox flats is likely in 2015 to 2016, as sellers struggle to eke out a profit in the soft market.
“The trigger for the distressed sales of suburban small-formats may come from rising vacancy rates. Smaller units are typically bought for investments, but investors will find themselves hitting a soft market caused by the cutback in foreign labour and ballooning property supply,” noted CIMB.
CIMB further warned that banks may see some non-performing loans from these mortgages. “But as LTVs for investment properties are lower, the ticket size of each loan is smaller and the smaller price quantum of these products is more likely to find a secondary buyer, we do not expect mortgage NPLs to balloon. The developers that are aggressive on the small-format trend tend to be the small developers, but most have sold off their stock,” CIMB stated.
- See more at: http://m.sbr.com.sg/residential-property/news/desperate-homeowners-launch-fire-sales-shoebox-flats#sthash.ym7WEw8f.dpuf
you sound exactly like Teddybear :)
Rental of OCR HDB has faced difficulty in securing tenants 6 months ago. It will face more competition when hdb upgraders start to release more flats for rental when their condos are ready. IMO, hdb prices will continue to drop in the next two quarters.
Didnt know 84% of MM supply is in OCR.
The MM OCR rental may drop to a small premium above a HDB master bedroom rental.
If that happens, MM OCR prices should drop to around a 3rm HDB flat price
Rental of new MM at aljunied mrt stn is about $2000. How much can a new OCR MM get?
The fire sale of OCR MM should start in the summer of 2015 when Yellen hikes interest rates by 25bps, followed by another hike in end 2015.
Sibor should reach 1%. Poor rentability will make it a -ve carry trade
Recommend sell now for OCR MM before too late
Desperate homeowners launch fire sales of shoebox flats
The flat glut will only intensify.
Shoebox flats had seemed like the perfect investment property a number of years ago. These units, typically with a floor area less than 50 square meters, hooked penny-pinching investors because of their affordability and the cheap downpayment outlay that they required.
However, homeowners who bought shoebox flats as investment properties will soon find that these tiny homes will fail to deliver promised profits. According to CIMB, distressed sales of shoebox flats is likely in 2015 to 2016, as sellers struggle to eke out a profit in the soft market.
“The trigger for the distressed sales of suburban small-formats may come from rising vacancy rates. Smaller units are typically bought for investments, but investors will find themselves hitting a soft market caused by the cutback in foreign labour and ballooning property supply,” noted CIMB.
CIMB further warned that banks may see some non-performing loans from these mortgages. “But as LTVs for investment properties are lower, the ticket size of each loan is smaller and the smaller price quantum of these products is more likely to find a secondary buyer, we do not expect mortgage NPLs to balloon. The developers that are aggressive on the small-format trend tend to be the small developers, but most have sold off their stock,” CIMB stated.
- See more at: http://m.sbr.com.sg/residential-property/news/desperate-homeowners-launch-fire-sales-shoebox-flats#sthash.ym7WEw8f.dpuf
Rental of new MM at aljunied mrt stn is about $2000. How much can a new OCR MM get?
Paid $750k for a OCR MM can rent out at $2000 only now???
Only collect $1500 after deducted maintenance fee, pty tax, agent comm, etc .... So sad:blue:
HDB $350k is renting at about $1500 liao
Well, game is over for the MM especially those in OCR.
Paid $750k for a OCR MM can rent out at $2000 only now???
Only collect $1500 after deducted maintenance fee, pty tax, agent comm, etc .... So sad:blue:
HDB $350k is renting at about $1500 liao
Well, game is over for the MM especially those in OCR.
This is the map of Singapore, do you know how tiny RCR and CCR is relative to OCR?
http://singaporepropertyvalue.files.wordpress.com/2013/03/regions1.jpg
If OCR is all the same then you might as well call every elderly man with the same family name as PAPA or Daddy
That is the exclusivity of being small.
This is the map of Singapore, do you know how tiny RCR and CCR is relative to OCR?
http://singaporepropertyvalue.files.wordpress.com/2013/03/regions1.jpg
If OCR is all the same then you might as well call every elderly man with the same family name as PAPA or Daddy
That is the exclusivity of being small.
Do you mean overbuilt? What about traffic jammed? Pollution? Different focus? LOL
Didnt know 84% of MM supply is in OCR.
The MM OCR rental may drop to a small premium above a HDB master bedroom rental.
If that happens, MM OCR prices should drop to around a 3rm HDB flat price
If that really happens, assuming you are referring to OCR HDB of around 300K, there should be huge demand for buying two MMs side by side for 600K to match the size of a normal size 3BR.
Realistic prediction bo?
That also has an implication on the whole market. I think CCR FH 3BR will see some selling below 1 million if that day comes. Personally, I would really like to see that happen, because RCR will be probably 800k for the same size.
Time to wake up.
2MMs 500 sqft for $600k?
Where got so cheap?
OCR MMs any how price also >$1500 psf! 2xMMs 500 sqft at least S$1.5M!!!!!!!!!!!!!!!!!!!!!
JGateway is >$1700 psf! :pig:
If that really happens, assuming you are referring to OCR HDB of around 300K, there should be huge demand for buying two MMs side by side for 600K to match the size of a normal size 3BR.
Realistic prediction bo?
That also has an implication on the whole market. I think CCR FH 3BR will see some selling below 1 million if that day comes. Personally, I would really like to see that happen, because RCR will be probably 800k for the same size.
Time to wake up.
Stop going around calling people :asshole: leh. Very rude you know. Moderator, please take note of this :asshole:, before she start farting again.
Ringo,
Don't be such a liar and to show no integrity and no moral character here and trying to put words into other people's mouth!
When did I say I doesn't like dark skin? Please show evidence to back up your false allegation! :asshole:
http://forums.condosingapore.com/showthread.php/13282-Significant-Property-News-amp-Discussions/page83?p=497151#post497151
Tenants looking for OCR MM (< 500sf but with facilities) for rental will be comparing with HDB 3 room (7-800sf with no facilities) in the same vicinity, hence 3 room HDB rental prices should provide an indication on where the OCR rental will be.
TOWN 3-RM Median Rental
ANG MO KIO $2,000
BEDOK $2,000
BISHAN $2,100
BUKIT BATOK $1,900
BUKIT MERAH $2,200
BUKIT PANJANG $1,800
CENTRAL $2,400
CLEMENTI $2,200
GEYLANG $2,100
HOUGANG $1,900
JURONG EAST $2,000
JURONG WEST $1,900
KALLANG/ WHAMPOA $2,100
MARINE PARADE $2,200
QUEENSTOWN $2,200
SERANGOON $2,000
TAMPINES $2,100
TOA PAYOH $2,100
WOODLANDS $1,650
YISHUN $1,800
Yes, I also heard that PAP has instructed HDB to start installing swimming pool, gyms, Jacuzzi, tennis court, round the clock security for HDB flats and they will also lift the restriction for HDB to rent out for foreigners, including setting up dormitory and whore houses.
Agreed. What outsiders do not realize is that even at these rental prices, many OCR MMs are still very viable, as in the projected rent still more than covers mortgage after down payment. Even if interests hike to 3.5%, the same situation persists. The power of low quantum. For the high quantum OCR MMs, let's hope the proximity to the nodes provide tenant pool guarantee and thus price support.
The bigger question is, if one is not gaining so much, why risk investing? One will have to figure it for himself or herself on this.
Tenants looking for OCR MM (< 500sf but with facilities) for rental will be comparing with HDB 3 room (7-800sf with no facilities) in the same vicinity, hence 3 room HDB rental prices should provide an indication on where the OCR rental will be.
TOWN 3-RM Median Rental
ANG MO KIO $2,000
BEDOK $2,000
BISHAN $2,100
BUKIT BATOK $1,900
BUKIT MERAH $2,200
BUKIT PANJANG $1,800
CENTRAL $2,400
CLEMENTI $2,200
GEYLANG $2,100
HOUGANG $1,900
JURONG EAST $2,000
JURONG WEST $1,900
KALLANG/ WHAMPOA $2,100
MARINE PARADE $2,200
QUEENSTOWN $2,200
SERANGOON $2,000
TAMPINES $2,100
TOA PAYOH $2,100
WOODLANDS $1,650
YISHUN $1,800
It is not about financial viability. It is really about finding tenants given the falling expats. You can go to ICA and observe who are the people getting EPs these days. Most of them are earning at least $12000/mth with housing subsidy. Do you think they will go for MM in OCR?
Agreed. What outsiders do not realize is that even at these rental prices, many OCR MMs are still very viable, as in the projected rent still more than covers mortgage after down payment. Even if interests hike to 3.5%, the same situation persists. The power of low quantum. For the high quantum OCR MMs, let's hope the proximity to the nodes provide tenant pool guarantee and thus price support.
The bigger question is, if one is not gaining so much, why risk investing? One will have to figure it for himself or herself on this.
It is not about financial viability. It is really about finding tenants given the falling expats. You can go to ICA and observe who are the people getting EPs these days. Most of them are earning at least $12000/mth with housing subsidy. Do you think they will go for MM in OCR?
Stop talking cock lah nothing of what you said can be back up by facts.
ICA and observe? From the look of the face you can tell their salary? LOL!!
how much time you spend on ICA a week to make that kind of statement?
It is not about financial viability. It is really about finding tenants given the falling expats. You can go to ICA and observe who are the people getting EPs these days. Most of them are earning at least $12000/mth with housing subsidy. Do you think they will go for MM in OCR?
Honestly the tenants I have are rather price sensitive, even though I managed to raise their rents twice. Even 3% increase they will object like crazy.
If earn $12,000 means they must rent 6K apartment? I would think it makes more sense to buy a car and live a little further or even get a smaller unit if they do not have children.
Nonetheless at 2K rent and below, I believe locals are also potential tenants, and have seen quite a few who are renting for various reasons, though I have yet to rent to any.
May be good to do a survey of how many of our tenants own a car based on District, marital status (with or w/o kids, etc.). Have been renting out my apartments across all regions in Singapore since 1996 to mainly Caucasians and minority of Asians, and only 2 Asians tenants drove. That was when owning cars do not need COE. My French banker tenant who has been living in Singapore for the last 10 years told me that people in Singapore are so crazy to own a car. He can buy a nice car back home with the COE. He prefers to walk to his workplace. But I must say he is single. Maybe family will prefer to own a car?
Honestly the tenants I have are rather price sensitive, even though I managed to raise their rents twice. Even 3% increase they will object like crazy.
If earn $12,000 means they must rent 6K apartment? I would think it makes more sense to buy a car and live a little further or even get a smaller unit if they do not have children.
Nonetheless at 2K rent and below, I believe locals are also potential tenants, and have seen quite a few who are renting for various reasons, though I have yet to rent to any.
May be good to do a survey of how many of our tenants own a car based on District, marital status (with or w/o kids, etc.). Have been renting out my apartments across all regions in Singapore since 1996 to mainly Caucasians and minority of Asians, and only 2 Asians tenants drove. That was when owning cars do not need COE. My French banker tenant who has been living in Singapore for the last 10 years told me that people in Singapore are so crazy to own a car. He can buy a nice car back home with the COE. He prefers to walk to his workplace. But I must say he is single. Maybe family will prefer to own a car?
Fully agree with you on car ownership and tenant profile.
I think your strategy makes sense for tenants of the financial centres. High rent that accompanies high price of ownership.
But there is also growing decentralisation of work opportunities in the suburbs. So it makes sense to benchmark with heartland HDBs in terms of pricing of OCR condos or MMs.
I think it still works. Highly viable in my opinion and experience.
All these talk about CCR better than OCR is simply rubbish because within CCR or OCR there will are good and bad location, where good location will always command good rental take up rate during good or bad times.
The problematic area which I think, is the Punggol Sengkang, Woodlands and even Pasir Ris area as there are really too much new supply that have accumulated over the part 3 to 4 years.
Within CCR, any place there is far from MRT, amenities and school are just as bad.
A study on those jobs at the decentralized suburban area and their salary will be useful to determine the take-up rate of MM and larger units. Know of some Koreans who are working in the BCA who will be moving to JLD on 22 Dec. They are holding Senior executive/ manager and drawing no more than $7000. How to afford to rent MM at $3000-3500 per month?
Fully agree with you on car ownership and tenant profile.
I think your strategy makes sense for tenants of the financial centres. High rent that accompanies high price of ownership.
But there is also growing decentralisation of work opportunities in the suburbs. So it makes sense to benchmark with heartland HDBs in terms of pricing of OCR condos or MMs.
I think it still works. Highly viable in my opinion and experience.
Koreans posted here are generally in middle-management, with family and kids. How to live in MM? :crushed:
A study on those jobs at the decentralized suburban area and their salary will be useful to determine the take-up rate of MM and larger units. Know of some Koreans who are working in the BCA who will be moving to JLD on 22 Dec. They are holding Senior executive/ manager and drawing no more than $7000. How to afford to rent MM at $3000-3500 per month?
Those that I know are singles. It is definitely No No for Korean family.
Koreans posted here are generally in middle-management, with family and kids. How to live in MM? :crushed:
Typically, around 25% of expat salary goes to paying rental
Associate level in banking/law sector (usually late 20s) is paid around 10k so a lot of them stay at CCR MM. Long working hours makes long commute to OCR MM a chore and socializing/networking afterwork in town is crucial at this stage of career.
A study on those jobs at the decentralized suburban area and their salary will be useful to determine the take-up rate of MM and larger units. Know of some Koreans who are working in the BCA who will be moving to JLD on 22 Dec. They are holding Senior executive/ manager and drawing no more than $7000. How to afford to rent MM at $3000-3500 per month?
Do you think they could then afford MMs at $2000 - $2500? That's why I mentioned the minimum benchmark is with HDB rates.
For small families still viable but contingent on a few other factors, for example the availability of food centres and other amenities in close proximity. I have personally experimented before with two adults and two young children, and also two adults only, very comfortable, but cooking and laundry amenities are required. In the future of SG workers (including foreigners) that I envision, no one would be around to cook at home, and no one would be around to eat at home too. Studying children and workers spend so much time away in school or at work that they are unlikely to eat at home. Cooking needs are minimised. This vision might not be comfortable for Gen X and above but might be already familiar with the newer generations who are used to living in even tinier hostels they share with peers.
As mentioned, there will also be demand from single locals intending to live away from their home to be near their work site or to be away from home. Such local singles or a couple of good friends, young couples etc might value privacy over size. Price of privacy at $2,000? I would take it.
And in the worst case situation, an empty MM for a personal holiday hotel suite costs just about 20,000 a year or lower for the owner to maintain. Its risks are hugely mitigated compared to the range of other options.
Typically, around 25% of expat salary goes to paying rental
Associate level in banking/law sector (usually late 20s) is paid around 10k so a lot of them stay at CCR MM. Long working hours makes long commute to OCR MM a chore and socializing/networking afterwork in town is crucial at this stage of career.
Another useful feature that the ideal OCR MM should have is proximity to transport nodes - buses, MRTs.
We are not just referring to banking or law. There are many other occupations mentioned by DC33_2008 that work in the OCR, and those sectors will continue to grow in size.
Koreans posted here are generally in middle-management, with family and kids. How to live in MM? :crushed:
Almost anything we think is impossible is possible as long as it is approached with an open mind. I know of people who house three generations (5-6 persons) in a single MM, for about 4 years already. Children in Primary school and doing fine.
AssetRichMoneyPoor
15-12-14, 11:02
Almost anything we think is impossible is possible as long as it is approached with an open mind. I know of people who house three generations (5-6 persons) in a single MM, for about 4 years already. Children in Primary school and doing fine.
possibly one in a thousand. i also know of an older man (50s only) who stays alone in a semi-D but renting out his 2 other apartments.
4000sqft of space super under-utilized. Tell him but stubborn like mule. His case also another one in a hundreds i believe.
Considering this market, i'm fortunate to not commit a MM 3 months ago i brought up in this forum.
Unit still unsold and vacant quite awhile. Heng ar.
possibly one in a thousand. i also know of an older man (50s only) who stays alone in a semi-D but renting out his 2 other apartments.
4000sqft of space super under-utilized. Tell him but stubborn like mule. His case also another one in a hundreds i believe.
Considering this market, i'm fortunate to not commit a MM 3 months ago i brought up in this forum.
Unit still unsold and vacant quite awhile. Heng ar.
Considering this market, you are indeed fortunate not to have committed to anything, especially huge anythings in Sentosa. I am in your shoes as well, all paid up and waiting.
I have mentioned in a previous post that space is more important to the older generations.
I do see the young supporting MMs in rent and sales. But current market is heavily prejudiced against them - no money for downpayment.
Care to share where the MM unit is located?
AssetRichMoneyPoor
15-12-14, 11:15
Considering this market, you are indeed fortunate not to have committed to anything, especially huge anythings in Sentosa. I am in your shoes as well, all paid up and waiting.
I have mentioned in a previous post that space is more important to the older generations.
thanks kelonguni. i've really learned to appreciate space that i have after witnessing what developments coming up in the past 5years.
of course still many decent size units in market but these really stretched buyer's spending.
uncle hereby gives an honest plea to young married couple/working adults : don't compromise on space just for the sake of achieving private condo living status. hong kongers have been hard done by for decades, we fortunately still have public housing to choose.
i've seen couple with kid in 600sqft home, i shake my head.
i've seen couple with 2 kids in 900sqft home, i shut my eyes and close my head.
if i see kelonguni's 3Gen in MM, think i will collapse.
My rule of thumb for a proper house:
1) House for a couple - at least 600 sq ft.
2) For each additional person in the house, add another 250 sq ft.
thanks kelonguni. i've really learned to appreciate space that i have after witnessing what developments coming up in the past 5years.
of course still many decent size units in market but these really stretched buyer's spending.
uncle hereby gives an honest plea to young married couple/working adults : don't compromise on space just for the sake of achieving private condo living status. hong kongers have been hard done by for decades, we fortunately still have public housing to choose.
i've seen couple with kid in 600sqft home, i shake my head.
i've seen couple with 2 kids in 900sqft home, i shut my eyes and close my head.
if i see kelonguni's 3Gen in MM, think i will collapse.
How to ensure good quality and hyigene level if cooking and laundry is outsourced?
For a family, home cooked food is not necssarily more economical but you can control the amount of sodium/oil and quality of ingredients used.
Makes no sense to compromise quality of living just to stay in MM for a family.
When you are young, you can eat macdonalds or hawkerfare everyday with no health concerns. Not when you reach mid 30s
Do you think they could then afford MMs at $2000 - $2500? That's why I mentioned the minimum benchmark is with HDB rates.
For small families still viable but contingent on a few other factors, for example the availability of food centres and other amenities in close proximity. I have personally experimented before with two adults and two young children, and also two adults only, very comfortable, but cooking and laundry amenities are required. In the future of SG workers (including foreigners) that I envision, no one would be around to cook at home, and no one would be around to eat at home too. Studying children and workers spend so much time away in school or at work that they are unlikely to eat at home. Cooking needs are minimised. This vision might not be comfortable for Gen X and above but might be already familiar with the newer generations who are used to living in even tinier hostels they share with peers.
As mentioned, there will also be demand from single locals intending to live away from their home to be near their work site or to be away from home. Such local singles or a couple of good friends, young couples etc might value privacy over size. Price of privacy at $2,000? I would take it.
And in the worst case situation, an empty MM for a personal holiday hotel suite costs just about 20,000 a year or lower for the owner to maintain. Its risks are hugely mitigated compared to the range of other options.
thanks kelonguni. i've really learned to appreciate space that i have after witnessing what developments coming up in the past 5years.
of course still many decent size units in market but these really stretched buyer's spending.
uncle hereby gives an honest plea to young married couple/working adults : don't compromise on space just for the sake of achieving private condo living status. hong kongers have been hard done by for decades, we fortunately still have public housing to choose.
i've seen couple with kid in 600sqft home, i shake my head.
i've seen couple with 2 kids in 900sqft home, i shut my eyes and close my head.
if i see kelonguni's 3Gen in MM, think i will collapse.
Hehe please don't be mistaken, it's also what I see, not mine. I have stayed in one for a while and can understand how some can cope with the space constraints, but luckily also belong to a generation where space was not that costly.
Like I have mentioned, it's the young generation that tends to be able to cope with small spaces. Flat TVs, no need bookshelf cos everything in Ipad or laptop. Some even don't need TV cos laptop can give them the channels they need.
How to ensure good quality and hyigene level if cooking and laundry is outsourced?
For a family, home cooked food is not necssarily more economical but you can control the amount of sodium/oil and quality of ingredients used.
Makes no sense to compromise quality of living just to stay in MM for a family.
When you are young, you can eat macdonalds or hawkerfare everyday with no health concerns. Not when you reach mid 30s
I agree. But this is probably the future of Singapore if you assess the AVERAGE ability of the Gen Y onwards to dish up a decent meal.
AssetRichMoneyPoor
15-12-14, 14:34
Hehe please don't be mistaken, it's also what I see, not mine. I have stayed in one for a while and can understand how some can cope with the space constraints, but luckily also belong to a generation where space was not that costly.
Like I have mentioned, it's the young generation that tends to be able to cope with small spaces. Flat TVs, no need bookshelf cos everything in Ipad or laptop. Some even don't need TV cos laptop can give them the channels they need.
no no, not referring you but that your acquaintance. maybe yes, young generations have different mindset versus me in mid-40s.
especially manufacturers nowadays are getting more innovative with compact furniture/electronic goods/storage etc etc.
last time almost daily basis all family members seat down together on a big table and eat dinner. now this practice is so out of touch.
not enough members stay together, not enough space put big table, not enough kitchen area to whip up 3 veg 1 soup.
give and take another 10-15 years, i can't comprehend what will be haha.
no no, not referring you but that your acquaintance. maybe yes, young generations have different mindset versus me in mid-40s.
especially manufacturers nowadays are getting more innovative with compact furniture/electronic goods/storage etc etc.
last time almost daily basis all family members seat down together on a big table and eat dinner. now this practice is so out of touch.
not enough members stay together, not enough space put big table, not enough kitchen area to whip up 3 veg 1 soup.
give and take another 10-15 years, i can't comprehend what will be haha.
Obviously your grand father will tell your father that his flat is small, while your father will tell you that your flat is even smaller. So just because you think its not livable, that doesnt mean there are no demand for such flat.
no no, not referring you but that your acquaintance. maybe yes, young generations have different mindset versus me in mid-40s.
especially manufacturers nowadays are getting more innovative with compact furniture/electronic goods/storage etc etc.
last time almost daily basis all family members seat down together on a big table and eat dinner. now this practice is so out of touch.
not enough members stay together, not enough space put big table, not enough kitchen area to whip up 3 veg 1 soup.
give and take another 10-15 years, i can't comprehend what will be haha.
Thanks for clarifying. It's an unfathomable future that we can't influence or direct, but seems to be happening to many developed countries.
For some Singaporeans, they might have the intention to get a larger HDB, but good location of HDB might be an issue. One friend balloted and balloted and balloted but could never get his choice location. He needed a place as he just got married and settled for a small FH condo in district 14. Some might have exceeded the income threshold - another friend who exceeded it could only get a private apartment.
Tidying up may be a chore for many especially in the case of renting huge apartments. Some contend with room rentals in HDBs, but the added privacy of MMs (compared to room rentals) might appeal to others if they could afford it (say earning 5-7K and above) if they are single, married without children, divorced, or have close workmates or friends who could share with them, the option is really viable or sometimes even inevitable. Such demographic trends and changes are often left out in the analysis of future prices...
On one hand we are told the market is untested. On the other hand we see the Govt busily building studios and 2-rm (1 bedroom) flats, and we saw that the retirement condo in Jurong Kechil was sold out in 1 day. Who are they building for and selling to?
AssetRichMoneyPoor
15-12-14, 17:02
Thanks for clarifying. It's an unfathomable future that we can't influence or direct, but seems to be happening to many developed countries.
For some Singaporeans, they might have the intention to get a larger HDB, but good location of HDB might be an issue. One friend balloted and balloted and balloted but could never get his choice location. He needed a place as he just got married and settled for a small FH condo in district 14. Some might have exceeded the income threshold - another friend who exceeded it could only get a private apartment.
Tidying up may be a chore for many especially in the case of renting huge apartments. Some contend with room rentals in HDBs, but the added privacy of MMs (compared to room rentals) might appeal to others if they could afford it (say earning 5-7K and above) if they are single, married without children, divorced, or have close workmates or friends who could share with them, the option is really viable or sometimes even inevitable. Such demographic trends and changes are often left out in the analysis of future prices...
On one hand we are told the market is untested. On the other hand we see the Govt busily building studios and 2-rm (1 bedroom) flats, and we saw that the retirement condo in Jurong Kechil was sold out in 1 day. Who are they building for and selling to?
you are spot on. no country in the world undergo transition from 3rd to 1st world in shortest span of time. We are facing 1st world problem that has not been helped by the media amplification. i see in some of my nephews & nieces with comfortable payroll up to between 5-8k and plonked into compact units. some go on to live in and complain incessantly on space constraint blah blah blah. these current batch (own stay) are really looking to off-load and hopefully buy a decent 2 bedroom. where does this leaves the MM & with more coming into market in next 1-2 years? historically MM are clustered around CCR & RCR regions but times changed, MM growth spreads into OCR and sustainability will be severely tested with neighborhood HDB rental units. my take is OCR MM will suffer more in the long run.
even our supposedly first world government did not anticipate this and afford too much leeway to developers building odd shape and compact sizes just to maximize profit!
i personally believe they are 2 steps too late to reconcile the difference. Jgate sold out in one day just before CM, Kechil 60yr LH sold out in 1 day and yet no more of this type launching, what's your take is anyone guess and only time will tell.
Similarly Sentosa's novelty has waned, will it experience it's previous high again? Marina One has multi-units buyers paying max 18% ABSD, is it realistic?
i reserved some of my opinion till a further date.
you are spot on. no country in the world undergo transition from 3rd to 1st world in shortest span of time. We are facing 1st world problem that has not been helped by the media amplification. i see in some of my nephews & nieces with comfortable payroll up to between 5-8k and plonked into compact units. some go on to live in and complain incessantly on space constraint blah blah blah. these current batch (own stay) are really looking to off-load and hopefully buy a decent 2 bedroom. where does this leaves the MM & with more coming into market in next 1-2 years? historically MM are clustered around CCR & RCR regions but times changed, MM growth spreads into OCR and sustainability will be severely tested with neighborhood HDB rental units. my take is OCR MM will suffer more in the long run.
even our supposedly first world government did not anticipate this and afford too much leeway to developers building odd shape and compact sizes just to maximize profit!
i personally believe they are 2 steps too late to reconcile the difference. Jgate sold out in one day just before CM, Kechil 60yr LH sold out in 1 day and yet no more of this type launching, what's your take is anyone guess and only time will tell.
Similarly Sentosa's novelty has waned, will it experience it's previous high again? Marina One has multi-units buyers paying max 18% ABSD, is it realistic?
i reserved some of my opinion till a further date.
Great sharing. Thanks.
My take is that Govt will probably retain SSD as a buffering measure to prevent fluctuations.
The cycle continues 4 years later when your relatives want to upgrade in size. A new pool of buyers and renters will come of age or enter SG. This is my take at the moment.
Pending other shocks to system of course.
By the way, "the Govt busily building studios and 2-rm (1 bedroom) flats" - those are for the really poor people lah!
Are the private MMs meant to be sold to the poor people? If not, then MMs cannot be compared to those 1-bedroom flats.
In the past, MM only occur in CCR because of high $PSF and yet there are many people who have desire to live in CCR.
Do you see many people aspiring to live in OCR so much so that they want to pay so much higher $PSF compared to those HDB flats nearby? :rolleyes:
Thanks for clarifying. It's an unfathomable future that we can't influence or direct, but seems to be happening to many developed countries.
For some Singaporeans, they might have the intention to get a larger HDB, but good location of HDB might be an issue. One friend balloted and balloted and balloted but could never get his choice location. He needed a place as he just got married and settled for a small FH condo in district 14. Some might have exceeded the income threshold - another friend who exceeded it could only get a private apartment.
Tidying up may be a chore for many especially in the case of renting huge apartments. Some contend with room rentals in HDBs, but the added privacy of MMs (compared to room rentals) might appeal to others if they could afford it (say earning 5-7K and above) if they are single, married without children, divorced, or have close workmates or friends who could share with them, the option is really viable or sometimes even inevitable. Such demographic trends and changes are often left out in the analysis of future prices...
On one hand we are told the market is untested. On the other hand we see the Govt busily building studios and 2-rm (1 bedroom) flats, and we saw that the retirement condo in Jurong Kechil was sold out in 1 day. Who are they building for and selling to?
By the way, "the Govt busily building studios and 2-rm (1 bedroom) flats" - those are for the really poor people lah!
Are the private MMs meant to be sold to the poor people? If not, then MMs cannot be compared to those 1-bedroom flats.
In the past, MM only occur in CCR because of high $PSF and yet there are many people who have desire to live in CCR.
Do you see many people aspiring to live in OCR so much so that they want to pay so much higher $PSF compared to those HDB flats nearby? :rolleyes:
Hi Teddybear, is retirement condo also for poor people?
The Govt is busy building because of ultra strong demand. And these flats can't feasibly be rented out, meaning that the demand to rent this type of housing filters elsewhere. Foreigners also can't buy this from Govt. If all they are keen is a small space to work and privacy for themselves, what choice do they have?
I think we have to adopt a broader view of many nationalities from all over the world aspiring to come to SG. Not all are bankers or lawyers earning five-figure. If they can't afford CCR in terms of downpayment or loans or rent, where should this demand go to?
My rule of thumb for a proper house:
1) House for a couple - at least 600 sq ft.
2) For each additional person in the house, add another 250 sq ft.
I'm ok even if is 500 sq ft.. Cos is for investment only..
I'm waiting for those $700k MM unit to fall till $500k.. Beware of those OCR MM! Is coming soon!!
saw today news and one of the comment was
developer bid land at high price ... one of the way to bring property price down is to build smaller unit ... 300+ sqft ... walao ehh ... win liao
actually already happening now, isn't it ... 650-700 sqft 2 bedder ...
I'm ok even if is 500 sq ft.. Cos is for investment only..
I'm waiting for those $700k MM unit to fall till $500k.. Beware of those OCR MM! Is coming soon!!
My rule of thumb for a proper house:
1) House for a couple - at least 600 sq ft.
2) For each additional person in the house, add another 250 sq ft.
This is still abit small.
My rule of thumb: 1) First person needs 500 sq ft; 2) for each additional person (2nd onwards), add 300 sq ft.
Thus, 500 sq ft for 1, 800 for 2, 1100 for 3, 1400 for 4, 1700 for 5.
Actually these are common sizes for condos not so long ago!
I suppose these figures can vary abit depending on layout but should not be much less if one wants long term "sanity" and comfort.
I am honestly clueless about why people here needs to go around teaching others how to live their lives? Its like trying to show off who has got a bigger tools.. If you ask someone who is living in GCB, they will tell you that your 600sqft is too small for their helpers. If you ask someone who living in a mansion, they will say that GCB is a barn.
What you said about "500 sq ft for 1, 800 for 2, 1100 for 3, 1400 for 4, 1700 for 5. " is true now, if you replace "person" by "bedroom" (and it still include 15-20% un-usable space)... :cheers3:
Actually in the past, the following is true for usable space (not like current condo with 15-20% un-usable space)...:
700 sqft for 1 BR,
950 sqft for 2 BR,
1200 sqft for 3 BR
This is still abit small.
My rule of thumb: 1) First person needs 500 sq ft; 2) for each additional person (2nd onwards), add 300 sq ft.
Thus, 500 sq ft for 1, 800 for 2, 1100 for 3, 1400 for 4, 1700 for 5.
Actually these are common sizes for condos not so long ago!
I suppose these figures can vary abit depending on layout but should not be much less if one wants long term "sanity" and comfort.
AssetRichMoneyPoor
15-12-14, 23:29
We should all ask ourselves this question: why does the government allows 300+/500+/700+ sqft 1/2/3 bedder?
The number of units in these denomination by & large is not great but fast becoming a reality.
Is it a mis-step from the government or does consumer plays a part too? There's always 2 sides to an equation.
Which country property model is Singapore taking a leaf out from?
Our constraint is we are only a little red dot. This serves as double-edged sword to achieve a desired sustainable population parallel to running economy.
I asked too many questions sometimes. Time to rest, good night everyone
I am honestly clueless about why people here needs to go around teaching others how to live their lives? Its like trying to show off who has got a bigger tools.. If you ask someone who is living in GCB, they will tell you that your 600sqft is too small for their helpers. If you ask someone who living in a mansion, they will say that GCB is a barn.
ur point that size is relative is probably true.
was viewing a MM show unit and overheard someone saying the unit is smaller than his house toilet. But for someone from a big family who has lived like sardines in a very cramped space all his/her life, the MM size may well be like a little bungalow.
Big or small, once one gets used to it, one won't feel it unless the family number subsequently increases.
When first time I come to work and Leave in Singapore I rent study room. When I got married I rent 3 room HDB. When I have 2 doughtier I move to 4 Room HDB. Now I am staying in 1238sqf Condo. If I have choice I do not want to go back to 3 room HDB size. I am not saying that everyone will make the same decision like me. I am trying to say that if people have choice they prefer to stay in bigger size place.
We are just following the footstep of large cities of developed countries like Paris, London, Tokyo, etc. I was shocked when I have to pay so much to rent a small apartment in London when I was studying there. Well, got use to it after a while. Singapore will be the similar but we should not forget our publics housing (hdb flat) which is rather unique of Singapore as compared to the other large cities. We have to consider hdb flat in our equation when we are assessing the viability of MM in OCR.
We should all ask ourselves this question: why does the government allows 300+/500+/700+ sqft 1/2/3 bedder?
The number of units in these denomination by & large is not great but fast becoming a reality.
Is it a mis-step from the government or does consumer plays a part too? There's always 2 sides to an equation.
Which country property model is Singapore taking a leaf out from?
Our constraint is we are only a little red dot. This serves as double-edged sword to achieve a desired sustainable population parallel to running economy.
I asked too many questions sometimes. Time to rest, good night everyone
When first time I come to work and Leave in Singapore I rent study room. When I got married I rent 3 room HDB. When I have 2 doughtier I move to 4 Room HDB. Now I am staying in 1238sqf Condo. If I have choice I do not want to go back to 3 room HDB size. I am not saying that everyone will make the same decision like me. I am trying to say that if people have choice they prefer to stay in bigger size place.
I have also experienced the range of housing sizes stated.
Given a choice, I would prefer to live in a 2000sqm mansion with minimum 3 helpers, a butler and a driver.
But I have to be realistic.
Your nationality, the time you live in and the choices you have may not totally be in your control. For example, foreigners can't buy HDB and also face restrictions in renting, quota and shorter contracts. If they can't afford full size condo in purchase or rent, what choices still avail?
We are just following the footstep of large cities of developed countries like Paris, London, Tokyo, etc. I was shocked when I have to pay so much to rent a small apartment in London when I was studying there. Well, got use to it after a while. Singapore will be the similar but we should not forget our publics housing (hdb flat) which is rather unique of Singapore as compared to the other large cities. We have to consider hdb flat in our equation when we are assessing the viability of MM in OCR.
Very balanced analysis. Thanks for sharing.
HDBs are a huge component in the equation. A 3rm (2 bedroom) flat can be shared between 2 tenants and this means the rent can typically supported at a higher level as compared to MMs that typically can be rented to 1 tenant.
MMs should shine in facilities, privacy and other factors when compared to 3rm HDB flats.
To find out the ultimate price support is not easy as only Queenstown has 2rm flat rental, the median at which is $1700. A conservative discount of 20% for OCR MM rental (ultimate firesales rental support) is $1460. That should be the lowest support level logically possible for SG.
Owners will do well to factor in the worst case scenario and decide if the risk is worth taking.
hi all,
i have this PR friend who sold his resale hdb 2 yrs ago, and had been renting a hdb 5rm to stay... waiting for the right price to get a ocr condo.
the right price havent come, and he cant get another resale hdb as he have oversea properties...
he is sored about the rental $...
now i dun noe whether to advise him to wait or buy now.
if for investment, i will advise him to wait... since, from my prospective, the concenus seems to be property prices will only go down from here...
but to weigh against continue paying rental $...?
Your PR friend is helping to pay the mortgage of someone's dream home.
hi all,
i have this PR friend who sold his resale hdb 2 yrs ago, and had been renting a hdb 5rm to stay... waiting for the right price to get a ocr condo.
the right price havent come, and he cant get another resale hdb as he have oversea properties...
he is sored about the rental $...
now i dun noe whether to advise him to wait or buy now.
if for investment, i will advise him to wait... since, from my prospective, the concenus seems to be property prices will only go down from here...
but to weigh against continue paying rental $...?
It really depends who (ie. which profession) you are attracting to MM apartment. I have seen MM units that are used for Home Office, and in some cases packed with more people than normal as they have budget constraint but want to stay in a place with amenities as compared to a HDB flat. They tend to wear out the unit faster and give more problem. Hence, it is always better to attract those who can afford and better still with only one person staying in the apartment whether it is a MM, 1+1, 2 or even 2+1.
Very balanced analysis. Thanks for sharing.
HDBs are a huge component in the equation. A 3rm (2 bedroom) flat can be shared between 2 tenants and this means the rent can typically supported at a higher level as compared to MMs that typically can be rented to 1 tenant.
MMs should shine in facilities, privacy and other factors when compared to 3rm HDB flats.
To find out the ultimate price support is not easy as only Queenstown has 2rm flat rental, the median at which is $1700. A conservative discount of 20% for OCR MM rental (ultimate firesales rental support) is $1460. That should be the lowest support level logically possible for SG.
Owners will do well to factor in the worst case scenario and decide if the risk is worth taking.
most of MM i know were used for brothel hahaaa...
It really depends who (ie. which profession) you are attracting to MM apartment. I have seen MM units that are used for Home Office, and in some cases packed with more people than normal as they have budget constraint but want to stay in a place with amenities as compared to a HDB flat. They tend to wear out the unit faster and give more problem. Hence, it is always better to attract those who can afford and better still with only one person staying in the apartment whether it is a MM, 1+1, 2 or even 2+1.
Affordability is a huge issue in SG, a city state with no hinterland. It is always better and preferable to have "A" and "B" and so on...
But limited to realistic and practical constraints. Like high cost of private housing. Like reduction of expat package. Like overwhelming density and transport issues in some nodes. Like decentralisation of some industries. Like how technology reduces required living spaces etc...
most of MM i know were used for brothel hahaaa...
This tells us much about the area of the MMs you frequent.
Actually even HDBs have been used for this business as well, nothing new.
Your PR friend is helping to pay the mortgage of someone's dream home.
hi all,
i have this PR friend who sold his resale hdb 2 yrs ago, and had been renting a hdb 5rm to stay... waiting for the right price to get a ocr condo.
the right price havent come, and he cant get another resale hdb as he have oversea properties...
he is sored about the rental $...
now i dun noe whether to advise him to wait or buy now.
if for investment, i will advise him to wait... since, from my prospective, the concenus seems to be property prices will only go down from here...
but to weigh against continue paying rental $...?
landlords definitely welcome more of this group of people... and he is not the only person i know, who sold their home away, waiting for price to fall.
as a friend, i dun like to see him waste $ on rent... but ask him to buy, if price crash, he is going blame me manz :D
landlords definitely welcome more of this group of people... and he is not the only person i know, who sold their home away, waiting for price to fall.
as a friend, i dun like to see him waste $ on rent... but ask him to buy, if price crash, he is going blame me manz :D
Advice is the worst vice, a quote I read before.
If he gains, do you get a treat or some rewards? Worse still if he is the type who will blame you for price dips.
Best to present evidence to him, and get him to make the decision for himself.
With the tightening of foreigners coming into Singapore to work, they don't even need to choose?
Now only real foreign talents and construction workers can come to work in Singapore! Those earning in between very few! Very bad for people intending to rent out their OCR private condos, let alone OCR MMs!
I have also experienced the range of housing sizes stated.
Given a choice, I would prefer to live in a 2000sqm mansion with minimum 3 helpers, a butler and a driver.
But I have to be realistic.
Your nationality, the time you live in and the choices you have may not totally be in your control. For example, foreigners can't buy HDB and also face restrictions in renting, quota and shorter contracts. If they can't afford full size condo in purchase or rent, what choices still avail?
Affordability of HOUSING is NEVER an issue in Singapore for Singapore Citizens & PRs! They can always buy HDB flats which are very cheap! If they don't want to buy, they can RENT!
Given the above, people live in private properties because they CAN AFFORD, NOT because they have no choice!
Similarly for foreigners - If they can't afford to rent private properties, they can rent HDB flats!
Affordability is a huge issue in SG, a city state with no hinterland. It is always better and preferable to have "A" and "B" and so on...
But limited to realistic and practical constraints. Like high cost of private housing. Like reduction of expat package. Like overwhelming density and transport issues in some nodes. Like decentralisation of some industries. Like how technology reduces required living spaces etc...
With the tightening of foreigners coming into Singapore to work, they don't even need to choose?
Now only real foreign talents and construction workers can come to work in Singapore! Those earning in between very few! Very bad for people intending to rent out their OCR private condos, let alone OCR MMs!
I am sure you are not aware of the profiles of those earning in between.
We have discussed this before, that at certain price ranges comparable to HDB rates, even locals might rent.
Affordability of HOUSING is NEVER an issue in Singapore for Singapore Citizens & PRs! They can always buy HDB flats which are very cheap! If they don't want to buy, they can RENT!
Given the above, people live in private properties because they CAN AFFORD, NOT because they have no choice!
Similarly for foreigners - If they can't afford to rent private properties, they can rent HDB flats!
I am wondering if you think that there is absolutely no difference between HDB and private condo.
I think affordability ranges on a gradient. It is obvious that you think affordability is either a yes or no switch.
We are talking about private OCR condo rent similar in rate (on par) with HDB in absolute and psf quantum. I don't think you have been following the thread.
There was a hdb flat in jurong west that was caught for running a brothel biz recently.
This tells us much about the area of the MMs you frequent.
Actually even HDBs have been used for this business as well, nothing new.
There is obviously big difference between HDB and private condo.
If people can't afford, they can rent HDB room, or share a HDB with other room-mates, these are absolutely cheap in quantum.
However, only very desperate private condo owners will want to rent out their private condo by rooms or to a bunch of room-mates that do not form a family! (I WON'T!)
As to same quantum HDB flat and private condo, obviously they come in different sizes!
If a person needs a bigger family size unit but has small budget, he can rent HDB.
If a person need only small space and has big budget, doubt they will rent OCR MM. More likely they will go luxury MM.
So conclusion: OCR MM unlikely to have much rental market.
The recent mortgagee sales of MMs say it all!
I am wondering if you think that there is absolutely no difference between HDB and private condo.
I think affordability ranges on a gradient. It is obvious that you think affordability is either a yes or no switch.
We are talking about private OCR condo rent similar in rate (on par) with HDB in absolute and psf quantum. I don't think you have been following the thread.
There is obviously big difference between HDB and private condo.
If people can't afford, they can rent HDB room, or share a HDB with other room-mates, these are absolutely cheap in quantum.
However, only very desperate private condo owners will want to rent out their private condo by rooms or to a bunch of room-mates that do not form a family! (I WON'T!)
As to same quantum HDB flat and private condo, obviously they come in different sizes!
If a person needs a bigger family size unit but has small budget, he can rent HDB.
If a person need only small space and has big budget, doubt they will rent OCR MM. More likely they will go luxury MM.
So conclusion: OCR MM unlikely to have much rental market.
The recent mortgagee sales of MMs say it all!
1. Please check the rental prices of OCR condo as well as HDB prices. Actually HDB rental is not cheap at all, 1-BR (MM size) starting rate median is already $1,700 (Queenstown), but I calculated that even at a further firesale 20% discount, OCR MMs are still largely very viable. HDB rates easily overlaps into the rental rates for many OCR condo.
2. Some groups are missing in your scenario analysis. What happens to the person who need small space and has medium budget say around 2-3K? Its completely omitted? What happens to the scenario where the person needs to stay in a location in the OCR near his/her workplace? Remember he/she is neither a banker nor lawyer and probably has no car and works in one of the alternative business or research areas (for e.g. Changi area, Paya Lebar, JLD, Seletar, Science Park etc). If prices of HDB and OCR condo or MM is comparable in psf and quantum, should he/she still choose HDB?
3. How about the much greater proportion of mortgagee sales of other property types, especially large, older and central units? Conveniently omitted from your analysis?
Quoted from STproperty "UOB disclosed only that the rise in bad home loans was mostly the result of mortgages at one luxury condominium, but Maybank Kim Eng analysts Ng Wee Siang and Ng Li Hiang noted in a report that it was "largely from one key project in Sentosa".
Meanwhile, two units were put up for mortgagee sale at a Colliers auction last Friday. The three-bedders at The Laurels in Cairnhill had opening prices of $4.1 million and $3.6 million but were not sold."
1) I thought Queenstown is RCR and not OCR?
1-BR HDB flat is bigger than 500 sqft MM!
So, again, it is SIZE vs BUDGET.
2) Those foreigners who have budget $2-3K have shrunk by a lot and will CONTINUE TO SHRINK following tightening of foreigners coming into Singapore! Many will continue to be kicked out of Singapore because their EP would not be renewed in coming few years (until Govt reverse their policy)!
3) Mortgagee sales of large units especially in CCR is understandable, because involves BIG QUANTUM.
Mortgagee sales of small MM units (especially OCR MM) with SMALL QUANTUM just tells us how desperate these MM owners are! Imagine, so small sum, so small mortgage monthly instalments they also can't afford to pay without rental income cover their instalments?????????? :hopelessness:
1. Please check the rental prices of OCR condo as well as HDB prices. Actually HDB rental is not cheap at all, 1-BR (MM size) starting rate median is already $1,700 (Queenstown), but I calculated that even at a further firesale 20% discount, OCR MMs are still largely very viable. HDB rates easily overlaps into the rental rates for many OCR condo.
2. Some groups are missing in your scenario analysis. What happens to the person who need small space and has medium budget say around 2-3K? Its completely omitted? What happens to the scenario where the person needs to stay in a location in the OCR near his/her workplace? Remember he/she is neither a banker nor lawyer and probably has no car and works in one of the alternative business or research areas (for e.g. Changi area, Paya Lebar, JLD, Seletar, Science Park etc). If prices of HDB and OCR condo or MM is comparable in psf and quantum, should he/she still choose HDB?
3. How about the much greater proportion of mortgagee sales of other property types, especially large, older and central units? Conveniently omitted from your analysis?
Quoted from STproperty "UOB disclosed only that the rise in bad home loans was mostly the result of mortgages at one luxury condominium, but Maybank Kim Eng analysts Ng Wee Siang and Ng Li Hiang noted in a report that it was "largely from one key project in Sentosa".
Meanwhile, two units were put up for mortgagee sale at a Colliers auction last Friday. The three-bedders at The Laurels in Cairnhill had opening prices of $4.1 million and $3.6 million but were not sold."
1. I already factored in a further 20% discount for RCR to OCR HDB 1BR. Unfortunately from HDB website, Queenstown is the only town to have more than 20 transactions per quarter for us to access the actual rent. This is the ultimate lowest floor rate I believe to pay for privacy in SG in HDB if we do not consider the condo factor. Honestly I don't think it will get so low, but this is the worst case scenario to weather. If you hold a CCR any property, can you take this rate ?
Also, please check HDB website for the typical 2rm (1BR) sizes.
http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyingNewFlat2room?OpenDocument
2. We have already stated that the rate of around 2K will appeal to many people including Singaporeans if other factors like amenities are present. The next thing you might ask is why they would rent. I know several who do for all kinds of reasons including moving near to workplace, independence from parents, divorcees etc.
3. Maybe they hold many units? Maybe they were releasing to get another larger property and avoid ABSD? Maybe personal troubles like gambling and credit management? Need to broaden the thoughts about various probabilities.
1) I thought Queenstown is RCR and not OCR?
1-BR HDB flat is bigger than 500 sqft MM!
So, again, it is SIZE vs BUDGET.
2) Those foreigners who have budget $2-3K have shrunk by a lot and will CONTINUE TO SHRINK following tightening of foreigners coming into Singapore! Many will continue to be kicked out of Singapore because their EP would not be renewed in coming few years (until Govt reverse their policy)!
3) Mortgagee sales of large units especially in CCR is understandable, because involves BIG QUANTUM.
Mortgagee sales of small MM units (especially OCR MM) with SMALL QUANTUM just tells us how desperate these MM owners are! Imagine, so small sum, so small mortgage monthly instalments they also can't afford to pay without rental income cover their instalments?????????? :hopelessness:
I actually agree with your point 3 somewhat. It should be a case of poor projection. But with changing real estate climate, many people are caught by the change in rules. Like luxury condo owners, I think their buckets of losses already can fully pay off an MM condo anywhere on the island.
I have several rental enquiries for my condo in D1 10 months ago when I was looking for new tenant. I do not rent to them for several reasons: (1) it may be subletted by them; (2) lots of party in my place; and (3) can be more demanding.
1. I already factored in a further 20% discount for RCR to OCR HDB 1BR. Unfortunately from HDB website, Queenstown is the only town to have more than 20 transactions per quarter for us to access the actual rent. This is the ultimate lowest floor rate I believe to pay for privacy in SG in HDB if we do not consider the condo factor. Honestly I don't think it will get so low, but this is the worst case scenario to weather. If you hold a CCR any property, can you take this rate ?
Also, please check HDB website for the typical 2rm (1BR) sizes.
http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyingNewFlat2room?OpenDocument
2. We have already stated that the rate of around 2K will appeal to many people including Singaporeans if other factors like amenities are present. The next thing you might ask is why they would rent. I know several who do for all kinds of reasons including moving near to workplace, independence from parents, divorcees etc.
3. Maybe they hold many units? Maybe they were releasing to get another larger property and avoid ABSD? Maybe personal troubles like gambling and credit management? Need to broaden the thoughts about various probabilities.
I have several rental enquiries for my condo in D1 10 months ago when I was looking for new tenant. I do not rent to them for several reasons: (1) it may be subletted by them; (2) lots of party in my place; and (3) can be more demanding.
For D1, heard that there are Service companies that rent on behalf of tenants from different sources but tenants may change. But contracts are with service companies. Would these be more or less reliable?
I have several rental enquiries for my condo in D1 10 months ago when I was looking for new tenant. I do not rent to them for several reasons: (1) it may be subletted by them; (2) lots of party in my place; and (3) can be more demanding.
So what happened in the end?
My views are as follows:
1. Larger units more likely to be further sublet, especially if you get tenants with family. I think singles with strong needs for privacy are very unlikely to further sublet MM units. My thoughts only, not verified.
2. D1 itself is a party spot with lots of activities ongoing late into midnight. It is very likely to attract tenants with strong party and perhaps clubbing needs. Again, my thoughts only.
3. Whether demanding or not may be a different factor as compared to the amount they are able to pay.
What are the factors that you look out for when selecting tenants?
AssetRichMoneyPoor
17-12-14, 10:40
Uncle me personally knows quite a handful of expats/locals renting D1 MM. These are the "bachelor/bachelorette" profile and rather savvy individuals.
Rentals may be on the higher side but cheap food and amenities are plentiful. Not least with so many drinking holes, pubs, night clubs, restaurants etc within 5mins drive/walk.
I must say this area has the highest mixed of tenants of different nationalities especially conducive for singles, party loving, sociable creatures.
In fact i can't quite think of any downside to this area and only if i own one to stay and experience for myself :)
Manage to rent to an expat couple on corporate lease in less than two weeks. They love the food and short walk to their office. The tenants have to be professionals. My condos have been rented to usually single and couples without children. I am rather lucky that they have engaged also part-time cleaner on weekend to clean the place. They are mainly non Asians working as bankers, lawyers, financial director, IT manager, etc.
So what happened in the end?
My views are as follows:
1. Larger units more likely to be further sublet, especially if you get tenants with family. I think singles with strong needs for privacy are very unlikely to further sublet MM units. My thoughts only, not verified.
2. D1 itself is a party spot with lots of activities ongoing late into midnight. It is very likely to attract tenants with strong party and perhaps clubbing needs. Again, my thoughts only.
3. Whether demanding or not may be a different factor as compared to the amount they are able to pay.
What are the factors that you look out for when selecting tenants?
Manage to rent to an expat couple on corporate lease in less than two weeks. They love the food and short walk to their office. The tenants have to be professionals. My condos have been rented to usually single and couples without children. I am rather lucky that they have engaged also part-time cleaner on weekend to clean the place. They are mainly non Asians working as bankers, lawyers, financial director, IT manager, etc.
Thanks for sharing. Is good fortune to be able to choose but the cost of owning and affordability to shoulder such risks should be out of reach for some of us.
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