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http://www.straitstimes.com/archive/wednesday/premium/money/story/cooling-measures-not-dragging-down-home-prices-report-20141224
Cooling measures not dragging down home prices: Report
Published on Dec 24, 2014 1:05 AM
By Rennie Whang
HOMES have become only marginally more affordable following the many cooling measures introduced over recent years, according to a CBRE report.
Prices have dropped only slightly and the declines for new homes are likely due in part to the median size for a new apartment shrinking, said Ms Han Huan Mei, associate director of research at CBRE Singapore.
She noted that cooling measures have not caused prices to plummet as economic fundamentals are still sound, adding: "As long as home buyers are able to service their loans and developers have the power to hold, home prices are less likely to slide."
The Urban Redevelopment Authority (URA) private residential price index shows that prices peaked in the third quarter of last year, having risen 62 per cent from the second quarter of 2009 when the market began recovering from the global financial crisis.
A range of cooling measures since those heady days have seemingly had only a minor effect on values, with the index down just 3.9 per cent in the 12 months from Oct 1 last year to Sept 30 this year.
On closer look, the median price of new homes rose by 12 per cent to $1.08 million from the start of 2009 to the end of last year but has fallen 9 per cent to $1.02 million over this full year, Ms Han said.
Resale prices have suffered less.
The median price of a home rose by 65 per cent to $1.4 million from the start of 2009 to the end of last year before easing 4 per cent to $1.34 million over this year.
The threshold for new homes has held steady at about $1 million while that for resale homes has been at about $1.3 million for the past five years, Ms Han said.
But the median size of a new home has fallen steadily, from 1,195 sq ft in 2009 to 753 sq ft this year.
Developers have opted to build compact units for new projects to keep the lump sum price affordable, Ms Han said.
But the median size of a resale home has remained constant at above 1,200 sq ft through the years.
Ms Han said the $1 million threshold for new homes is likely to stay as long as wages remain stable and in line with inflation but the squeeze on space will continue if costs increase.
Overall, the URA residential price index - which factors in a weighted "moving average" of transactions over 12 quarters - for all residential homes showed a decline in prices of 3 per cent over the first nine months of this year.
But the fall for new homes was likely around 6 per cent, which is "more likely a function of shrinking size", said Ms Han, while resale home prices fell by about 4 per cent over the same period.
The sharper fall in new home values may also be due to price cuts in some projects nearing completion, as developers focus on clearing unsold units.
The Vermont At Cairnhill sold 37 units in August after prices were trimmed by 12 per cent while about 130 homes at Sky Habitat were sold in April after a price cut of 10 to 15 per cent.
Home sale volumes have dropped by about half one year after the Total Debt Servicing Ratio was introduced and have "continued at a lukewarm pace", Ms Han noted.
She tipped next year's home sales volume to be similar to this year's.
Home prices are likely to "see modest corrections until they reach an equilibrium", she added.
[email protected]
http://www.straitstimes.com/archive/wednesday/premium/money/story/cooling-measures-not-dragging-down-home-prices-report-20141224
Cooling measures not dragging down home prices: Report
Published on Dec 24, 2014 1:05 AM
By Rennie Whang
HOMES have become only marginally more affordable following the many cooling measures introduced over recent years, according to a CBRE report.
Prices have dropped only slightly and the declines for new homes are likely due in part to the median size for a new apartment shrinking, said Ms Han Huan Mei, associate director of research at CBRE Singapore.
She noted that cooling measures have not caused prices to plummet as economic fundamentals are still sound, adding: "As long as home buyers are able to service their loans and developers have the power to hold, home prices are less likely to slide."
The Urban Redevelopment Authority (URA) private residential price index shows that prices peaked in the third quarter of last year, having risen 62 per cent from the second quarter of 2009 when the market began recovering from the global financial crisis.
A range of cooling measures since those heady days have seemingly had only a minor effect on values, with the index down just 3.9 per cent in the 12 months from Oct 1 last year to Sept 30 this year.
On closer look, the median price of new homes rose by 12 per cent to $1.08 million from the start of 2009 to the end of last year but has fallen 9 per cent to $1.02 million over this full year, Ms Han said.
Resale prices have suffered less.
The median price of a home rose by 65 per cent to $1.4 million from the start of 2009 to the end of last year before easing 4 per cent to $1.34 million over this year.
The threshold for new homes has held steady at about $1 million while that for resale homes has been at about $1.3 million for the past five years, Ms Han said.
But the median size of a new home has fallen steadily, from 1,195 sq ft in 2009 to 753 sq ft this year.
Developers have opted to build compact units for new projects to keep the lump sum price affordable, Ms Han said.
But the median size of a resale home has remained constant at above 1,200 sq ft through the years.
Ms Han said the $1 million threshold for new homes is likely to stay as long as wages remain stable and in line with inflation but the squeeze on space will continue if costs increase.
Overall, the URA residential price index - which factors in a weighted "moving average" of transactions over 12 quarters - for all residential homes showed a decline in prices of 3 per cent over the first nine months of this year.
But the fall for new homes was likely around 6 per cent, which is "more likely a function of shrinking size", said Ms Han, while resale home prices fell by about 4 per cent over the same period.
The sharper fall in new home values may also be due to price cuts in some projects nearing completion, as developers focus on clearing unsold units.
The Vermont At Cairnhill sold 37 units in August after prices were trimmed by 12 per cent while about 130 homes at Sky Habitat were sold in April after a price cut of 10 to 15 per cent.
Home sale volumes have dropped by about half one year after the Total Debt Servicing Ratio was introduced and have "continued at a lukewarm pace", Ms Han noted.
She tipped next year's home sales volume to be similar to this year's.
Home prices are likely to "see modest corrections until they reach an equilibrium", she added.
[email protected]
Exactly what I was thinking! CMs have been useless!
CMs have been BIG FAILURE!
Exactly what I was thinking! CMs have been useless!
If the Bank can loan me money I will still buy.
If the Bank can loan me money I will still buy.
Supposing you can loan max 1.5million, would you rather loan 1.2 million for buffer? Or no buffer?
Supposing you can loan max 1.5million, would you rather loan 1.2 million for buffer? Or no buffer?
Depends on what is your next purchase, your max 1.5 million is base on.
e.g.
If you buy SGD 535,000 and valuation is 1.5 million what will you do.
a. 80% of 1.5 million is 1.2 million. - 428,000 (535,000 x 0.8) = 772,000.(can loan)
b. Do nothing.
c. Wait for Durian to fall.
After you have loan let say 660,000 what will you do.
a. Buy another 1.2 , 1.3, or 1.4
b. Do nothing.
c. Wait for Durian to fall.
After you have buy and you have another 330,000 what will you do.
If bank can loan me I will still buy.
GLS is always high then the previous sale if low they stop selling. Buy new launch take 4 years to build, one years inflation 4%, 4 yrs 16%.
https://lh5.googleusercontent.com/_vg-y6kAhp90/Td1AGn21GnI/AAAAAAAAGGs/f_9wFE-ssdk/s800/MCL%20%24456%20psf%20ppr%20breakeven%20of%20%24780%20to%20%24880%20selling%20900-950%20psf.JPG
dropbox
https://www.dropbox.com/s/ns5x5mp0m0qmrqi/Terrasse%20Condo%20Report%209%20Jan%202014.pdf?dl=0
Can ask GLS to sell nearby land for SGD 456 psf/ppr
https://www.squarefoot.com.sg/price-alert/off-high
http://ifonlysingaporeans.blogspot.fr/2011/11/government-land-sales.html
CMs have been BIG FAILURE!
HHAHA...does it mean that your prediction of a CRASH is nothing more than just hot air? (EBD : ALL FART NO SHIT)
OK, point taken. But if you are international traveller, why invest here despite all the restrictions? Are there any other localities (countries) that you would consider? In a strong way, TDSR and ABSD acts in a big way to restrict multiple leveraging in this manner if I am not mistaken.
Is there a need to balance the investment portfolio with other instruments? Or all SG property?
Depends on what is your next purchase, your max 1.5 million is base on.
e.g.
If you buy SGD 535,000 and valuation is 1.5 million what will you do.
a. 80% of 1.5 million is 1.2 million. - 428,000 (535,000 x 0.8) = 772,000.(can loan)
b. Do nothing.
c. Wait for Durian to fall.
After you have loan let say 660,000 what will you do.
a. Buy another 1.2 , 1.3, or 1.4
b. Do nothing.
c. Wait for Durian to fall.
After you have buy and you have another 330,000 what will you do.
If bank can loan me I will still buy.
GLS is always high then the previous sale if low they stop selling. Buy new launch take 4 years to build, one years inflation 4%, 4 yrs 16%.
I have been thinking about this as well on the diversification. hmnmn
currently owned 3 units and looking forward to build to 10 units in SG for passive income/retirement plan
would you fully paid all units if you could or leverage further?
how to invest up to 10 units when you have all these ABSD in place?
IMO, SG property owners who have bought properties more than 3 years ago should keep them and can consider to diversify into other markets with spare cash and minimal mortgage loan or better still w/o mortgage loan as interest will rise when Fed raise rates.
I have been thinking about this as well on the diversification. hmnmn
currently owned 3 units and looking forward to build to 10 units in SG for passive income/retirement plan
would you fully paid all units if you could or leverage further?
It is the mother of all Cooling measures, TDSR, that kills the opportunity of owning more properties. Only able to achieve half before the 2nd CM.
how to invest up to 10 units when you have all these ABSD in place?
smellyfish
31-12-14, 11:28
CM has killed the volume, that's for sure. not sure if that is intended effect….
SSD also have killed the speculator market, so that's very successful. not sure if having SSD all the way to 4 years in this market is necessary...
OK, point taken. But if you are international traveller, why invest here despite all the restrictions? Are there any other localities (countries) that you would consider? In a strong way, TDSR and ABSD acts in a big way to restrict multiple leveraging in this manner if I am not mistaken.
Is there a need to balance the investment portfolio with other instruments? Or all SG property?
Staying in France since Mar 2007, look into their property for a few years not much capital appreciation.
Was in US for 30 months, the distance from Singapore to US is too far.
Went to London for a Day Trip, don't like the place prefer Singapore.
Singapore is still the best place to park your money, the day of capital appreciation from SGD 535,000 to SGD 1,550,000 in 4 years period are over.
But for long term Singapore is still the best against inflation and money printing.
The Government have change a lot since the last election, the next election should see more clearly where is Singapore heading toward.
When too many Smart people try to steer the ship most of the time the ship go nowhere and worst reverse to where it start like Taiwan.
When I buy share, the whole market crash better don't. Other instruments are under someone control, small fishes normally get eaten alive.
It is the mother of all Cooling measures, TDSR, that kills the opportunity of owning more properties. Only able to achieve half before the 2nd CM.
MAS know the Fed cannot stop printing money only way to control the market is TDSR.
The US is going for QE4 soon, money is not going to the people, the Bank is still holding the money. Swiss is going for negative deposit interest.
Money is not mean to keep in the Bank, money is to loan and generate income. The higher the Money deposited the more risk you have, if you are in Russia, India, Malaysia........
Staying in France since Mar 2007, look into their property for a few years not much capital appreciation.
Was in US for 30 months, the distance from Singapore to US is too far.
Went to London for a Day Trip, don't like the place prefer Singapore.
Singapore is still the best place to park your money, the day of capital appreciation from SGD 535,000 to SGD 1,550,000 in 4 years period are over.
But for long term Singapore is still the best against inflation and money printing.
The Government have change a lot since the last election, the next election should see more clearly where is Singapore heading toward.
When too many Smart people try to steer the ship most of the time the ship go nowhere and worst reverse to where it start like Taiwan.
When I buy share, the whole market crash better don't. Other instruments are under someone control, small fishes normally get eaten alive.
For an international investor, not sure if SG is really such a fantastic market, when you compare with the likes of London, HK, Tokyo, Sydney, even Jakarta. London has certainly outperformed SG since 2009, and it is a far more vibrant & mature market.
Being Singaporeans, we too often tend to bask in our own perceived glory. Does an international investor really want to fork out 15% ABSD? I believe most foreigners who buy now have plenty of spare money, and SG is just a small diversification of their considerable wealth.
I take a more conservative stance and have already diversified into other types of investment tools given the volatile market ahead.
MAS know the Fed cannot stop printing money only way to control the market is TDSR.
The US is going for QE4 soon, money is not going to the people, the Bank is still holding the money. Swiss is going for negative deposit interest.
Money is not mean to keep in the Bank, money is to loan and generate income. The higher the Money deposited the more risk you have, if you are in Russia, India, Malaysia........
For an international investor, not sure if SG is really such a fantastic market, when you compare with the likes of London, HK, Tokyo, Sydney, even Jakarta. London has certainly outperformed SG since 2009, and it is a far more vibrant & mature market.
Being Singaporeans, we too often tend to bask in our own perceived glory. Does an international investor really want to fork out 15% ABSD? I believe most foreigners who buy now have plenty of spare money, and SG is just a small diversification of their considerable wealth.
When you build infrastructure you need money where you get it, from the land sale and property tax, sale tax etc. When you have recover your investment and you still trying to suck the market, the market have only one way and that is to go up and soon it become a bubble. Responsible government know when to stop, they don't need the hot money.
I will get out of S$ cash (except my properties)........... :rolleyes:
After GE, S$ sure drop!
Oh, by the way, according to historical precedence, after GE, many things prices will also increase... Likely more "wealth" tax to tax almost everybody living in Singapore (even though >90% of people are not considered "wealthy" - but never mind because that is our definition, not theirs)............ This is especially so when SO MUCH MONEY has been dispensed before GE for PGP, wage credit, productivity scheme for companies, child-care subsidies (just for the companies to raise their fares! :sorrow:), more $$$ for the low and now including middle-income families etc!
GE heard speculation around 2016 H1. :teapot:
I take a more conservative stance and have already diversified into other types of investment tools given the volatile market ahead.
They have to also see if all the stars are aligned before they decide on the date. Look at the way EU, Japan and China print money. It is scary.
I will get out of S$ cash (except my properties)........... :rolleyes:
After GE, S$ sure drop!
Oh, by the way, according to historical precedence, after GE, many things prices will also increase... Likely more "wealth" tax to tax almost everybody living in Singapore (even though >90% of people are not considered "wealthy" - but never mind because that is our definition, not theirs)............ This is especially so when SO MUCH MONEY has been dispensed before GE for PGP, wage credit, productivity scheme for companies, child-care subsidies (just for the companies to raise their fares! :sorrow:), more $$$ for the low and now including middle-income families etc!
GE heard speculation around 2016 H1. :teapot:
Problem are people in Singapore look at TDSR instead and waiting for Durian to drop.
walkthetiger
31-12-14, 18:25
I will get out of S$ cash (except my properties)........... :rolleyes:
After GE, S$ sure drop!
Oh, by the way, according to historical precedence, after GE, many things prices will also increase... Likely more "wealth" tax to tax almost everybody living in Singapore (even though >90% of people are not considered "wealthy" - but never mind because that is our definition, not theirs)............ This is especially so when SO MUCH MONEY has been dispensed before GE for PGP, wage credit, productivity scheme for companies, child-care subsidies (just for the companies to raise their fares! :sorrow:), more $$$ for the low and now including middle-income families etc!
GE heard speculation around 2016 H1. :teapot:
Teddy, all depend of the result.. if result turn out poor, u will know what it will be like.
Result? PAP win >2/3 of the MP seats lah! Will there be a 2nd outcome? :cheers1:
S$ drop is quite sure, a matter of time only, otherwise GDP cannot grow......... :scared-3:
After GE tax increases also most likely because give out too much "goodies", must recover costs otherwise will be in deficit, no money to pay salary and to give out "goodies" next time before GE again................... :devilish:
Teddy, all depend of the result.. if result turn out poor, u will know what it will be like.
I will get out of S$ cash (except my properties)........... :rolleyes:
After GE, S$ sure drop!
Oh, by the way, according to historical precedence, after GE, many things prices will also increase... Likely more "wealth" tax to tax almost everybody living in Singapore (even though >90% of people are not considered "wealthy" - but never mind because that is our definition, not theirs)............ This is especially so when SO MUCH MONEY has been dispensed before GE for PGP, wage credit, productivity scheme for companies, child-care subsidies (just for the companies to raise their fares! :sorrow:), more $$$ for the low and now including middle-income families etc!
GE heard speculation around 2016 H1. :teapot:
Talk is cheap. Get out of S$? Buy what? Hell money? LOL
You don't know how to get out of S$ to get better deal? Oh, pity your ignorance or you have no $$$ to get out of S$? :pig:
Talk is cheap. Get out of S$? Buy what? Hell money? LOL
walkthetiger
01-01-15, 08:34
Result? PAP win >2/3 of the MP seats lah! Will there be a 2nd outcome? :cheers1:
S$ drop is quite sure, a matter of time only, otherwise GDP cannot grow......... :scared-3:
After GE tax increases also most likely because give out too much "goodies", must recover costs otherwise will be in deficit, no money to pay salary and to give out "goodies" next time before GE again................... :devilish:
History just a reference/guide, major things appear similar but doesn’t always turn out like a carbon copy of past event. It is constantly evolving to something else. Happy New Year.
You don't know how to get out of S$ to get better deal? Oh, pity your ignorance or you have no $$$ to get out of S$? :pig:
All that big talk about you know so much are just BIG TALK (aka talk cock sing song) unless you are tell us specifically what you are trading your S$ and why it it better.
So teddybear, please for once tell us something that we dont already know.
perhaps investing in air filtration business using human lungs? LOL!!
When I see people pay so much money to buy a piece of property to live in so that he can help other people to filter the air (for free after paying SO MUCH), I can give some advice BUT that is the most I can do.................... :rolleyes:
All that big talk about you know so much are just BIG TALK (aka talk cock sing song) unless you are tell us specifically what you are trading your S$ and why it it better.
So teddybear, please for once tell us something that we dont already know.
perhaps investing in air filtration business using human lungs? LOL!!
When I see people pay so much money to buy a piece of property to live in so that he can help other people to filter the air (for free after paying SO MUCH), I can give some advice BUT that is the most I can do.................... :rolleyes:
When I see people flipping prata and talking big about selling S$ to invest in other form of assets without mention what when how and why, you need to BEWARE because its all just BIG Teddybear TALK.
LOL...
Green horn teaching ecperienced investor how to invest? Wow!
They sure will die pain pain in 6 years time! For SURE because OCR private condos crashing!
Teddybear, something is not right here, 1 WEEK ago you said that 2 to 3 years the price will drop by 20-30%,
now you are saying 6 years. Why so ? Because lack of confident in your prediction so need to buy a bit of time? LOL!!
As we all know, OCR private condos are seriously OVER-PRICED!
should see JGateway drop another 20-30% below $1400 psf in next 2-3 years!
http://forums.condosingapore.com/showthread.php/18201-Owners-in-the-West-beware!!/page1045?p=492623#post492623
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