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The Big Singapore Market Upgrade – Hype or Reality? (Part 1)
October 3, 2017
By Ku Swee Yong and Shannon Aw
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Positive news in the real estate sector started to stream in early in 2017. We began the year with promising data from the manufacturing sector. The value of imports and exports also rose. Several new properties geared up for launches supported by the efforts of a few thousand agents distributing flyers, sending emails, knocking on the doors of prospective investors and staging road shows all over Singapore. Developers with leftover units in a few dozen projects around Singapore also rode on the media and marketing hype.
Adding to the extensive market outreach of the property agents, real estate and financial analysts weighed in by proclaiming that residential market prices have already reached a bottom and will rise in 2017.
Are we really at the bottom?
Are prices going to move up? Some market watchers point out that after 15 consecutive quarters of price declines, surely the market has to turn up!
Amongst the most bullish proclamations was a 60-page report by a leading global institution titled “Property Prices Inflecting and On Track to Double by 2030”. Published on 12 April 2017, mainstream media hungry for positive news immediately highlighted the key points: we are at the end of a protracted downtrend since 2013, property prices will rise from 2018, prices will sustain a 5% increase in dollar per square foot terms every year such that by 2030, the average values of private residences will double!
Market watchers, commentators, property agents and investors discussed the report in online forums and over social media. Several opined that in order for prices to double by 2030, Singapore would need more immigrants to hit a population of at least 7 million, or even limit new housing supply to market. A few also wondered about the wider implications of a doubling of housing prices.
We liked that the report is packed full of justifications about how strongly the Singapore economy will grow, and how that will push up housing prices. However, in trying so hard to stretch our imaginations about economic growth and home price growth, several justifications in the report seem to tread on the fringe of the debatable and dubious.
We have over a dozen questions about various areas of the report. In this piece, we would like to highlight the areas where the authors’ arguments could be based on stronger foundations.
The report claimed that property prices will double by 2030 if all major economic and demographic factors are aligned. Three key points which contribute to the doubling of prices are: (1) shrinking home sizes, (2) Gross Domestic Product (GDP) and income growth, and (3) the household formation rate of singles and high-skilled Employment Pass holders.
Key Point #1 from the report: “Average unit sizes of private residential units sold by developers fell from 1.3k sqft to 1.1k sqft between 1995 to 2016, while the average size of five-room public housing units has fallen from 123sqm to 110 sqm since 1997. We believe home sizes will continue to decline at a rate of 1% p.a.”
This argument assumes that a decrease in home sizes will lead to an increase in the price per sqft. Due to the generous dollops of cooling measures imposed on the residential market since 2009, developers have squeezed home sizes to keep the investment quantum low and to improve affordability for investors. This has resulted in brisk home sales for studio-sized, 1- bedroom and 2-bedroom units which are mainly purchased by investors who think that they can subsequently rent to low-budget tenants.
Hype in The Singapore Property Market: Downsized Properties
Our questions: Why does the report only consider the sizes of apartments sold by developers and conclude that “home sizes will continue to decline at the rate of 1% p.a.”? In the event that developers only launched and sold apartments of 800sqft in the year 2018, would the report then infer that average home sizes would decline at an even faster rate of say, 5% per year? What about resale transactions? Older properties which are larger in size are more often purchased by families for their own use, and these are less frequently transacted than investors’ units which are, on average, smaller in size.
Fact #1 – Average size of homes did not reduce steadily from 1995 to 2016
The average size of Singapore’s private homes did not reduce steadily from 1,300 sqft in 1995 to 1,100 sqft in 2016. The report charted data of developers’ new sales only. For new sales, large sized apartments and penthouses were the rage in 2006-2008 and therefore average home sizes transacted in that period climbed above 1,500 sqft in early 2007. Sizes of new homes sold do not represent the sizes of all private homes in Singapore. Private homes include landed properties. However, there were few new landed housing projects launched in the last 10 years as compared to compact apartments in high-density developments and the latter contributed to the shrinking sizes of new homes. Do note that new home sales account for about 10,000 to12,000 units per year in the past 10 years but the total stock of private homes reached 348,000 by the end of 2016. Therefore, the smaller average sizes of 10,000 new homes every year will hardly weigh down the average size of the entire stock of private homes.
Fact #2 – The sizes of new HDB flats have remained constant since 1997
The sizes of new HDB flats have remained constant since 1997. HDB made a switch to reduce flat sizes in 1997 and since then, the average sizes of all new 3-room, 4-room and 5-room flats have been maintained. Our gradually shrinking household sizes caused by a falling birth-rate has made HDB build a larger proportion of 3-room and 4-room flats. To cater for the needs of retirees and singles, HDB has also increased the number of studio and 2-room flats in the past few years. As a result, the proportion of 5-room flats has become smaller. The report claimed that “the average size of five-room public housing units has fallen from 123sqm to 110sqm since 1997”. And it followed with the statement “we believe home sizes will continue to decline at the rate of 1% p.a.” Uninformed readers may form an incorrect impression that HDB will reduce the sizes of new flats at a rate of 1% p.a. in future!
Certain data trends are not suitable for extrapolation. Would it be reasonable to extrapolate the world record times for a 100m sprint down to 3 seconds? Would it be reasonable to think that the average Singaporean will live in homes that measure 600 sqft in 50 years’ time? Would this imply that about 50% of Singaporeans live in homes that are 200-600 sqft?
We find it puzzling that the report concluded that Singapore’s average residential sizes will shrink by 1% p.a. from 2017 to 2030 simply based on the average sizes of new private home sales in the last 20 years and a groundless suggestion that HDB will reduce flat sizes in the next 14 years simply due to one reference data point from 1997.
Reposting the 3-part articles of Ku Swee Yong's "The Big Singapore Market Upgrade – Hype or Reality?".
Mr. Ku has alway been my most respected property investment author. He is a veteran in the industry but yet vocal and never afraid of speaking his mind and exposing the truth.
We need more news and articles with unbiased data and detailed analyses like Mr Ku's. Readers are tired of property agencies, developers, analysts and bankers with vested interests who acted nothing more than fortune tellers or amateurs sharing unvalidated views from top of their mind.
Actually the report which was based on very realistic projections forgot how ingenious our Govt can be.
Internal house sizes will not shrink until 2030 or so.
What will happen is that more carpark lots in each development will be allocated to housing instead. The target ratio in new developments will be 50% carpark lots to the number of units.
Another mitigating measure is the first floor of developments will be converted to communal space. Maybe playgrounds or indoor Parks or public carpark or shops, anything communal. New private developments are going to be fenceless.
As for HDB, the void deck is vanished and blocks built closer and closer and higher and higher to accommodate.
Not speculation, minister announced.
So there is no need to reduce home sizes that quickly.
Fact #1 – Average size of homes did not reduce steadily from 1995 to 2016
I don't know much, only know I bought my 5 room HDB 126 sqm in 1995 for $225,600 now rent out for $2800 a month.
Whether size or cost both should be correct right.
Can buy still want to wait, please do wait but please don't complain later.
5room HDB flat nowaday is only 107 sqm!
So if in 1995 5room HDB flat is 126 sqm, that means that after 22 years the size has shrunk by 19 sqm or 204.5 sqft!
In another words, the 5room flat has shrunk by (126-107)/126 = 15.1%
Fact #1 – Average size of homes did not reduce steadily from 1995 to 2016
I don't know much, only know I bought my 5 room HDB 126 sqm in 1995 for $225,600 now rent out for $2800 a month.
Whether size or cost both should be correct right.
Can buy still want to wait, please do wait but please don't complain later.
5room HDB flat nowaday is only 107 sqm!
So if in 1995 5room HDB flat is 126 sqm, that means that after 22 years the size has shrunk by 19 sqm or 204.5 sqft!
In another word, the 5room flat has shrunk by (126-107)/126 = 15.1%
Wrong, according to HDB 5 room flat is 110 also know as 5 room Standard(STD)
So according to the writer, HDB did not reduce in size, HDB just doesn't sell them anymore.
5 room Improved (I) is 126 sqm, 5 room Model A (A) is 133 sqm.
HDB every room count, 3 bedrooms + study room + Living/Dining room
http://www.teoalida.com/singapore/hdbflattypes/
You are Wrong! 110 sqm is inclusive of air-con ledge!
Since the old 5-room HDB flat at 126 sqm has no air-con ledge, so to compare apple-to-apple, we must use comparable usable area and new HDB 5room flat at quoted 110 sqm only has about 107 sqm usable space! vs the older 5room with usable space of 126 sqm!
This is no difference from the new private properties where usable area is only about 80% of quoted area (vs old private properties where usable area is about 97% of quoted area)!
Wrong, according to HDB 5 room flat is 110 also know as 5 room Standard(STD)
So according to the writer, HDB did not reduce in size, HDB just doesn't sell them anymore.
5 room Improved (I) is 126 sqm, 5 room Model A (A) is 133 sqm.
HDB every room count, 3 bedrooms + study room + Living/Dining room
http://www.teoalida.com/singapore/hdbflattypes/
tonymontana
18-10-17, 17:45
https://www.propwise.sg/the-big-singapore-market-upgrade-hype-or-reality-part-1/
7.
Reposting the 3-part articles of Ku Swee Yong's "The Big Singapore Market Upgrade – Hype or Reality?".
Mr. Ku has alway been my most respected property investment author. He is a veteran in the industry but yet vocal and never afraid of speaking his mind and exposing the truth.
We need more news and articles with unbiased data and detailed analyses like Mr Ku's. Readers are tired of property agencies, developers, analysts and bankers with vested interests who acted nothing more than fortune tellers or amateurs sharing unvalidated views from top of their mind.
i am also tired of u as u yourself have vested interest too! u hope property crashes becos u sold too early!
so no need to act so noble, we are all selling something.
bargain hunter
18-10-17, 19:12
5room HDB flat nowaday is only 107 sqm!
So if in 1995 5room HDB flat is 126 sqm, that means that after 22 years the size has shrunk by 19 sqm or 204.5 sqft!
In another words, the 5room flat has shrunk by (126-107)/126 = 15.1%
not as bad as pte which surely has shrunk more.
She never really responds to the facts that were raised, such as the different offering even if size remains.
The days she is trusted as a blogger and guru is numbered if URA shows the coming year to be one of growth.
i am also tired of u as u yourself have vested interest too! u hope property crashes becos u sold too early!
so no need to act so noble, we are all selling something.
Looking at the economic data coming out, I think property prices still has a few more years to grow from here............... :crushed:
She never really responds to the facts that were raised, such as the different offering even if size remains.
The days she is trusted as a blogger and guru is numbered if URA shows the coming year to be one of growth.
From the intel gathered, the so called planning parameter of 6.9 mil is a moving target to 10 mil ? From dual citizenship and so on for the demand , it could be pumped up higher than expected. One industry report was saying 13 mil if it is all in by 2030. Deployed a divison to recce survey on the ground
If foreigners are still willing to pay 18% stamp duty and 20% tax on rental income. Surely local Singaporeans should not be worry.
i am also tired of u as u yourself have vested interest too! u hope property crashes becos u sold too early!
so no need to act so noble, we are all selling something.
You said exactly what I want to say. Real pretenders. She has been camping for years to crash the market. Ku himself is another one. Surely have missed the boat. That is why I always prefer to stay long term vested and have some savings in case got opportunities.
Looking at the economic data coming out, I think property prices still has a few more years to grow from here............... :crushed:
Wow, when Mr Bear turns +ve, I think can get ready to sell sometime later and hopefully can buy later when it crashed. But don't sell all lar, stay vested is still saver..:sentimental:
challenger
19-10-17, 20:35
What is happening
So many enbloc means that a lot of people are going to have a lot of money to buy. Some of those from old HUDC may be retirees downgrading to HDB but there will still be a lot who will go private. So next few years will not be that bad lah.
Rental now like shit for many places. Really jialat and I don't think the general market will improve too much soon. Too many units, too few tenants.
Moving forward, how well the market do depends on general economy. Currently some segments doing well. Singapore will have a fair chance in the future especially if Indo and rest of region do well.
Link to Malaysia with MRT and High Speed Rail. It could result in a hollowing out or it could make Singapore more prominent and connected. One thing for sure, a lot of Malaysians will stay in Malaysia and commute to Singapore using rail. I think demand for room rental in HDB could be affected.
Singapore will be playground for rich, especially China and regional rich. Safe country, good connections to rest of world, good infrastructure and medical. Landed will be good.
When all the enbloc turns to thousands of units for sale and stay, I cannot imagine what the rental going to be like. So many people like shoebox meh?
Malaysia jacking up causeway toll charges is good for singapore property prices!
There are now just too many Malaysians and even Singaporeans living in Malaysia and commuting to Singapore to work every working day!
These are the people who are causing traffic jam at the causeway during morning and evening peak hours!
They will soon learn the lesson that they can't save any money by living in Malaysia while working in Singapore - and they will have their precious time and effort wasted in the traffic jam! Make them feel more hectic and pressured for being cheapskate!
Same for those cheapskates who go to Malaysia on Saturday and Sunday for shopping and coming back to Singapore with whole car full of goods and in turn causing huge traffic jams at the Causeways!
High Speed Rail will not help these cheapskates since the fare will be quite expensive anyway (or slowly jacked up just like the causeway toll charges to trick many cheapskates into buying properties in Malaysia)!
What is happening
So many enbloc means that a lot of people are going to have a lot of money to buy. Some of those from old HUDC may be retirees downgrading to HDB but there will still be a lot who will go private. So next few years will not be that bad lah.
Rental now like shit for many places. Really jialat and I don't think the general market will improve too much soon. Too many units, too few tenants.
Moving forward, how well the market do depends on general economy. Currently some segments doing well. Singapore will have a fair chance in the future especially if Indo and rest of region do well.
Link to Malaysia with MRT and High Speed Rail. It could result in a hollowing out or it could make Singapore more prominent and connected. One thing for sure, a lot of Malaysians will stay in Malaysia and commute to Singapore using rail. I think demand for room rental in HDB could be affected.
Singapore will be playground for rich, especially China and regional rich. Safe country, good connections to rest of world, good infrastructure and medical. Landed will be good.
When all the enbloc turns to thousands of units for sale and stay, I cannot imagine what the rental going to be like. So many people like shoebox meh?
Right now in private properties, there are too many large units still. This trimming exercise will be healthy for normal or large sized units in the future and may help some decouple naturally, freeing names for subsequent purchases. 1 unit change for 2 or more.
Shoebox sector is future living. My guess is that population can only be ramped up more normally after the unit numbers increase.
What is happening
So many enbloc means that a lot of people are going to have a lot of money to buy. Some of those from old HUDC may be retirees downgrading to HDB but there will still be a lot who will go private. So next few years will not be that bad lah.
Rental now like shit for many places. Really jialat and I don't think the general market will improve too much soon. Too many units, too few tenants.
Moving forward, how well the market do depends on general economy. Currently some segments doing well. Singapore will have a fair chance in the future especially if Indo and rest of region do well.
Link to Malaysia with MRT and High Speed Rail. It could result in a hollowing out or it could make Singapore more prominent and connected. One thing for sure, a lot of Malaysians will stay in Malaysia and commute to Singapore using rail. I think demand for room rental in HDB could be affected.
Singapore will be playground for rich, especially China and regional rich. Safe country, good connections to rest of world, good infrastructure and medical. Landed will be good.
When all the enbloc turns to thousands of units for sale and stay, I cannot imagine what the rental going to be like. So many people like shoebox meh?
Shoebox is only fit for mickey mouse!
Let's see whether in future more Singaporeans grow smaller and become like mickey mouse size to fit into shoebox units or not............ :rolleyes:
Right now in private properties, there are too many large units still. This trimming exercise will be healthy for normal or large sized units in the future and may help some decouple naturally, freeing names for subsequent purchases. 1 unit change for 2 or more.
Shoebox sector is future living. My guess is that population can only be ramped up more normally after the unit numbers increase.
400-500 sqft is quite normal for some countries.
Now many single person families, divorcees etc or young couples.
Shoebox is only fit for mickey mouse!
Let's see whether in future more Singaporeans grow smaller and become like mickey mouse size to fit into shoebox units or not............ :rolleyes:
i am also tired of u as u yourself have vested interest too! u hope property crashes becos u sold too early!
so no need to act so noble, we are all selling something.
‘Experts’ like her may have self seeking agenda for personal interest by virtue of media coverage and ‘guru’ status. As mentioned previously, it is her futile attempt to ‘talk down’ the market by influencing her audience and audience’s audience.
Shoebox is only fit for mickey mouse!
Let's see whether in future more Singaporeans grow smaller and become like mickey mouse size to fit into shoebox units or not............ :rolleyes:
For your reference.
http://www.propertyguru.com.sg/question/274942/is-there-any-landlord-renting-out-private-studio
Nobody likes to stay in small studios apartments
But when prices climbed to an extent that larger units are out of reach, then people will need to look to them for whatever reasons that suit them
In land scarce Singapore, especially in city areas, it is inevitable that studios will find a niche among certain groups of people and retirees for their convenience and maintenance
Top cities in the world have already shown the way.
For your reference.
http://www.propertyguru.com.sg/question/274942/is-there-any-landlord-renting-out-private-studio
From what i see price of HDB will decouple from price of condo. If no money just stay in hdb will do. Hdb size is very decent.
Their offer price should be able to rent a 2 or 3-room flat.
It’s a specific request for private studio.
Nobody likes to stay in small studios apartments
But when prices climbed to an extent that larger units are out of reach, then people will need to look to them for whatever reasons that suit them
In land scarce Singapore, especially in city areas, it is inevitable that studios will find a niche among certain groups of people and retirees for their convenience and maintenance
Top cities in the world have already shown the way.
Shoebox is only fit for mickey mouse!
Let's see whether in future more Singaporeans grow smaller and become like mickey mouse size to fit into shoebox units or not............ :rolleyes:
Usual tock cock again. Singaporean can go buy HDB who so backside itchy like you must die die stay private and kpkb about shoebox size. usual bullshit cock talk.
What you said is questionable though.
Please read reply from minority:
Usual tock cock again. Singaporean can go buy HDB who so backside itchy like you must die die stay private and kpkb about shoebox size. usual bullshit cock talk.
He is saying you tock cock again. since Singaporean can go buy HDB who so backside itchy like these people must die die stay private and kpkb about shoebox size. usual bullshit cock talk.
minority said one hor, I just making plain clear for you in case you don't know he directly at you........... :teapot:
Their offer price should be able to rent a 2 or 3-room flat.
It’s a specific request for private studio.
Where did you get the impression that these are Singaporeans?
I think Minority gets it totally.
It's you who are clueless.
There are those (especially non-Singaporeans) that prefer some facilities and a smaller place?
What you said is questionable though.
Please read reply from minority:
He is saying you tock cock again. since Singaporean can go buy HDB who so backside itchy like these people must die die stay private and kpkb about shoebox size. usual bullshit cock talk.
minority said one hor, I just making plain clear for you in case you don't know he directly at you........... :teapot:
Singapore government and newspapers usually use "Singaporeans" to mean Singapore Citizens + P.R.s (who are foreigners according to Nationality).
Those real "foreigners", they either are expats that want to live in luxury condos and landed, who want to live in shoebox units fit for mickey mouse?
The others are foreigner workers and maids, they can afford shoebox units mah?!
Who is clueless hah?
Ok I see, minority is tock cock again! :tongue3:
Where did you get the impression that these are Singaporeans?
I think Minority gets it totally.
It's you who are clueless.
There are those (especially non-Singaporeans) that prefer some facilities and a smaller place?
My outskirts shoebox was rented out to a British caucasian actually as his identification papers show. A couple under 30.
I guess you are really not in touch with the recent reality.
Singapore government and newspapers usually use "Singaporeans" to mean Singapore Citizens + P.R.s (who are foreigners according to Nationality).
Those real "foreigners", they either are expats that want to live in luxury condos and landed, who want to live in shoebox units fit for mickey mouse?
The others are foreigner workers and maids, they can afford shoebox units mah?!
Who is clueless hah?
Ok I see, minority is tock cock again! :tongue3:
Recommend this book for you Teddybear:
http://jef.mentalis.org/hersenspinsels/downloads/WhoMovedMyCheese_DrSpencerJohnson.pdf
Singapore government and newspapers usually use "Singaporeans" to mean Singapore Citizens + P.R.s (who are foreigners according to Nationality).
Those real "foreigners", they either are expats that want to live in luxury condos and landed, who want to live in shoebox units fit for mickey mouse?
The others are foreigner workers and maids, they can afford shoebox units mah?!
Who is clueless hah?
Ok I see, minority is tock cock again! :tongue3:
You sound like someone I know who can be sharp in argument (or just curt) but oftentimes is illogical.
tonymontana
23-10-17, 14:37
OCR, RCR, CCR, FH, LH, 60 year lease, one , two , three bedroom, all property have some use to whoever buys them. If an OCR, 60 yr lease, studio is so poorly conceived, surely it would not sell out in a day. Whenever I see people adopting such adversarial positions posting in the forum I inadvertently recall this classic movie line: "Only a Sith deals in absolutes."
Y'all have a good day now. :p
Can't see which of my statement is illogical. They are all perfectly logical!
Can you be specific on which of my statement is illogical (instead of trying to rubbish everything)?
You sound like someone I know who can be sharp in argument (or just curt) but oftentimes is illogical.
Singapore government and newspapers usually use "Singaporeans" to mean Singapore Citizens + P.R.s (who are foreigners according to Nationality).
Those real "foreigners", they either are expats that want to live in luxury condos and landed, who want to live in shoebox units fit for mickey mouse?
The others are foreigner workers and maids, they can afford shoebox units mah?!
Who is clueless hah?
Ok I see, minority is tock cock again! :tongue3:
This is like saying a company that has been popular before with shares all snapped up and bidded sky high (e.g. Swissco) can never go bankrupt! :crushed:
OCR, RCR, CCR, FH, LH, 60 year lease, one , two , three bedroom, all property have some use to whoever buys them. If an OCR, 60 yr lease, studio is so poorly conceived, surely it would not sell out in a day. Whenever I see people adopting such adversarial positions posting in the forum I inadvertently recall this classic movie line: "Only a Sith deals in absolutes."
Y'all have a good day now. :p
Wow! Didn't know British caucasian and a couple some more their combined income are now so low in Singapore that they can only afford shoebox here? :crushed:
Given a choice, if money is not an issue, would anybody want to live in a shoebox unit (let alone 2 people) that are fit only for mickey mouse?!
I think the answer is obvious!
My outskirts shoebox was rented out to a British caucasian actually as his identification papers show. A couple under 30.
I guess you are really not in touch with the recent reality.
Wow! Didn't know British caucasian and a couple some more their combined income are now so low in Singapore that they can only afford shoebox here? :crushed:
Given a choice, if money is not an issue, would anybody want to live in a shoebox unit (let alone 2 people) that are fit only for mickey mouse?!
I think the answer is obvious!
Shoebox rental ranges $1700-$2000. At purchase price 500-700k.
Likewise bigger unit like 500-700sqft rental $2000-2100, however purchase price easily 750-800k++. Those bigger units at higher prices are renting out at bleeding rental, same to shoexbox rental.
Of course some would go for bigger units at same prices, while some would go for location despite smaller but convenient to travel to and fro
tonymontana
24-10-17, 06:58
This is like saying a company that has been popular before with shares all snapped up and bidded sky high (e.g. Swissco) can never go bankrupt! :crushed:
Dear teddy, I don't think those buyers of the hillford studio (bought at 398k and renting out at 1700$ today, with transacted prices at 500k) will be going bankrupt anytime soon. That's 100k profit and 5.1% gross yield p.a. Rent out 20 years, already make back the capital, and that's assuming rental stays stagnant for the next two decades.
Anyway I don't see the point of your arguments. Yes, FH D10 is the best, everyone knows that, but the price is also the best. Not everyone can afford a Bellevue unit.
Wow! Didn't know British caucasian and a couple some more their combined income are now so low in Singapore that they can only afford shoebox here? :crushed:
Given a choice, if money is not an issue, would anybody want to live in a shoebox unit (let alone 2 people) that are fit only for mickey mouse?!
I think the answer is obvious!
Living in showbox unit does not equate to low income. Hasn't it occured to you there could a preference of convenient location and the choice of using the balance disposable cash for other use such as entertainment and travel? If the only logical thing is to live in a big enough house for the sake of bigger space when it is not even essential or within priority, then that cannot be anymore skewed.
thomastansb
24-10-17, 14:10
Actually my clift shoebox also rented out to ang mohs all these years. 495 sqft somemore.
Actually my clift shoebox also rented out to ang mohs all these years. 495 sqft somemore.
Come on, teddybear will NOT believe you. Your tenant is ang moh, ya know?!! ;)
My outskirts shoebox was rented out to a British caucasian actually as his identification papers show. A couple under 30.
I guess you are really not in touch with the recent reality.
Amber Woods
24-10-17, 18:46
Europeans are not adverse to compact unit because back home, their apartments are not big unlike the Americans. However, when they come to Singapore for the first time to work, they will discover how small our apartments are especially if they are looking for newer units to rent. For those who are here for a longer time, they will know what to look for when renting.
tonymontana
24-10-17, 19:39
My outskirts shoebox was rented out to a British caucasian actually as his identification papers show. A couple under 30.
I guess you are really not in touch with the recent reality.
have seen many angmoh in shoeboxes. not every AM has a generous housing package, unlike pre 2000 era!
tonymontana
24-10-17, 19:41
Europeans are not adverse to compact unit because back home, their apartments are not big unlike the Americans. However, when they come to Singapore for the first time to work, they will discover how small our apartments are especially if they are looking for newer units to rent. For those who are here for a longer time, they will know what to look for when renting.
the reason is same as others, they are single or couple who wants to save money. they are actually very careful with money.
markets surely have ups and downs so i never believed those who forever talk down it
thomastansb
01-11-17, 22:30
Yup. Nothing stays down forever. Nothing goes up forever. But if it is down for 15 quarters, then maybe it is time to go up.
Yup. Nothing stays down forever. Nothing goes up forever. But if it is down for 15 quarters, then maybe it is time to go up.
Seems like you are quite right.
What happen to the TS and the pessimist Ku guy? Become so quiet.
I am bullish for the next three years
1. Why are Developers bidding such high prices ? I believe they know something we don't
2. I believe by 2020 the working population in Singapore will decline for the first time, with Thomson line and dtl all up by then, and no more backlog for hdb and many vacant condo, I am quite certain government will open the floodgate again.
3.we currently have such onerous cooling measures, if at anytime these measures are released prices will go up more
4. Prices in Singapore have already decline 4 years while other cities have been rising, Singapore prices are playing catch up
5.in the next three years there will be a crunch in supply as more than 10k units will be enbloc while supply have a lag time of three years before completion.
In conclusion. From what we have seen in the last four years those who cash out too early regret... renting is costly and if prices rises you will be caught pants down on rental rising and sale prices rising as well... I feel for Singapore property it's not worth taking this risks, at most cash out one property but definitely must at least keep one for own stay or else very risky
Many thanks for sharing
What does "bullish" mean?
Prices stable and inch up a bit or prices will surge?
Granted that prices have stopped dropping after 3-4 years, the price drop has been very limited. Price are still very high
Agree that keeping roof over head is very important
I am bullish for the next three years
1. Why are Developers bidding such high prices ? I believe they know something we don't
2. I believe by 2020 the working population in Singapore will decline for the first time, with Thomson line and dtl all up by then, and no more backlog for hdb and many vacant condo, I am quite certain government will open the floodgate again.
3.we currently have such onerous cooling measures, if at anytime these measures are released prices will go up more
4. Prices in Singapore have already decline 4 years while other cities have been rising, Singapore prices are playing catch up
5.in the next three years there will be a crunch in supply as more than 10k units will be enbloc while supply have a lag time of three years before completion.
In conclusion. From what we have seen in the last four years those who cash out too early regret... renting is costly and if prices rises you will be caught pants down on rental rising and sale prices rising as well... I feel for Singapore property it's not worth taking this risks, at most cash out one property but definitely must at least keep one for own stay or else very risky
What you mentioned about price still very high is only true for OCR private properties, which are still near the highest peak hit since 2013 (and already much higher than 2007 peak).
On the other hand, CCR private property prices are now >30% below 2013 and 2007 peak and cannot be considered expensive right?
Many thanks for sharing
What does "bullish" mean?
Prices stable and inch up a bit or prices will surge?
Granted that prices have stopped dropping after 3-4 years, the price drop has been very limited. Price are still very high
Agree that keeping roof over head is very important
Bullish means it will rise 5% at least per year for the next three years if no global crisis and new cooling measures.
Ccr resale property is definitely cheap... would you pay 1300 psf to 1500 psf for a ccr resale or a brand new OCR property ?
oldfreehold
29-01-18, 07:08
CCR resale price already went up a lot during the past 6 months.
Not to mention that CCR resale are mostly Freehold and the brand new OCR property mostly 99-years leasehold! :smug:
Bullish means it will rise 5% at least per year for the next three years if no global crisis and new cooling measures.
Ccr resale property is definitely cheap... would you pay 1300 psf to 1500 psf for a ccr resale or a brand new OCR property ?
oldfreehold
29-01-18, 09:33
CCR supply suddenly shrink so much, if you really want to buy house this year. Need to give sincere offer higher than last transacted price. Btw, I don't think OCR will crash also due to the limited supply in the resale market.
bargain hunter
29-01-18, 09:37
there's a lot of brand new units supply in CCR BUT they are all asking record prices. Marina One, South Beach, the few projects in Ardmore etc.
CCR supply suddenly shrink so much, if you really want to buy house this year. Need to give sincere offer higher than last transacted price. Btw, I don't think OCR will crash also due to the limited supply in the resale market.
Who in the right mind would sell now though? Former zouk land will have a break even psf of 2700-2800 despite being leasehold. 99-year lease martin modern is selling at 2500-2600 psf. new futura selling above 3200 psf. New MRT is coming online in 2021. housing price is expected to increase by 3 to 5% per year for the next 3 years (sure this is just expectation, but i would take my chances and wait while collecting rent).
so it wouldn't make a whole lot of sense if you own a freehold unit in the area to sell right now unless someone offers you 15 to 20% higher than last transacted? (as if someone is paying you the 3 year future price right now)
oldfreehold
29-01-18, 11:40
there's a lot of brand new units supply in CCR BUT they are all asking record prices. Marina One, South Beach, the few projects in Ardmore etc.
That's why if you want a bargain, have to go for resale, but now the resale market suddenly supply all withdrawn. The best timing is last year.
bargain hunter
29-01-18, 11:45
Who in the right mind would sell now though? Former zouk land will have a break even psf of 2700-2800 despite being leasehold. 99-year lease martin modern is selling at 2500-2600 psf. new futura selling above 3200 psf. New MRT is coming online in 2021. housing price is expected to increase by 3 to 5% per year for the next 3 years (sure this is just expectation, but i would take my chances and wait while collecting rent).
so it wouldn't make a whole lot of sense if you own a freehold unit in the area to sell right now unless someone offers you 15 to 20% higher than last transacted? (as if someone is paying you the 3 year future price right now)
correction: Martin Modern has raised prices, I think its now FROM 2700psf to be in line with Zouk plot. So far only 2 caveats in 2018 as they had halted sale for about one month after the Zouk plot was sold at >1700psf. 3 bedders remain NOT FOR SALE as has been the case for some time now.
MARTIN MODERN MARTIN PLACE Condominium 09 CCR 99 years leasehold New Sale 1 1,986,930 - 764 Strata 11 to 15 2,600 Jan-18
MARTIN MODERN MARTIN PLACE Condominium 09 CCR 99 years leasehold New Sale 1 2,391,360 - 883 Strata 21 to 25 2,709 Jan-18
bargain hunter
29-01-18, 11:47
That's why if you want a bargain, have to go for resale, but now the resale market suddenly supply all withdrawn. The best timing is last year.
i think everyone who has bargained to buy resale from 2014 to 2017 has done well.
prashantnative
29-01-18, 11:50
Are prices going to move up? Some market watchers point out that after 15 consecutive quarters of price declines, surely the market has to turn little up.
oldfreehold
29-01-18, 11:51
i think everyone who has bargained to buy resale from 2014 to 2017 has done well.
Thank you Bargin Hunter, I gained a lot from your posts here.
Decided not to wait any more, sold my hdb and bought 2 CCR old freehold apartments at the same time, almost missed the boat...
bargain hunter
29-01-18, 11:55
Thank you Bargin Hunter, I gained a lot from your posts here.
Decided not to wait any more, sold my hdb and bought 2 CCR old freehold apartments at the same time, almost missed the boat...
hehehe, no need to decouple, one name each. :smug:
bargain hunter
29-01-18, 11:57
Are prices going to move up? Some market watchers point out that after 15 consecutive quarters of price declines, surely the market has to turn little up.
i think its inevitable in the short term. supply is reduced and demand is going to outweigh the supply in the short term.
do you think it is also because people are starting to accept ABSD as normal part of life or just "cost of doing business"? I saw some foreign buyers paying 32xx psf for 2 bedders at the gramercy park and happily forking out 15% ABSD
PropVestor
29-01-18, 12:28
do you think it is also because people are starting to accept ABSD as normal part of life or just "cost of doing business"? I saw some foreign buyers paying 32xx psf for 2 bedders at the gramercy park and happily forking out 15% ABSD
It depends where the foreigner is from. If buyer is from HK, their equivalent ABSD is currently 30%. Their psf can be as high as SGD10,000psf if compare prime to prime, Gramercy (CCR, FH) can be quite a bargain to them. These are the countries below which will share the same ABSD bracket like us.
Conditions for Remission
Under the respective FTAs, Nationals or Permanent Residents of the following countries will be accorded the same Stamp Duty treatment as Singapore Citizens:
Nationals and Permanent Residents of Iceland, Liechtenstein, Norway or Switzerland
Nationals of the United States of America
Source: IRAS
It depends where the foreigner is from. If buyer is from HK, their equivalent ABSD is currently 30%. Their psf can be as high as SGD10,000psf if compare prime to prime, Gramercy (CCR, FH) can be quite a bargain to them. These are the countries below which will share the same ABSD bracket like us.
Conditions for Remission
Under the respective FTAs, Nationals or Permanent Residents of the following countries will be accorded the same Stamp Duty treatment as Singapore Citizens:
Nationals and Permanent Residents of Iceland, Liechtenstein, Norway or Switzerland
Nationals of the United States of America
Source: IRAS
Thanks PropVestor. my agent told me that one particular buyer at gramercy park is from indonesia. personally, i would never have bought in Singapore if werent for the fact that i am american citizen. Just wondering if there is a change in attitude towards ABSD by the rest of the foreigners from non-free-trade agreement countries
Thanks again
PropVestor
29-01-18, 12:40
I am not entirely sure to claim that we will have a strong up tick for a few consecutive years.
Namely because of 3 fundamental factors; shrinking-greying population, low rental returns and Cooling Measures largely in place. I think a longer, moderate growth of ~3% growth per year in overall prices across all regions until a Black Swan event happens. Things should be largely stable until GE circa 2020. For a ten year cycle, we are procrastinating 'recession' as much as possible. GFC is really a big, giant sledgehammer with deep seated repercussions.
The longer the door stop short of welcoming new migrants, our productivity will be pegged against technological/skill growths which will not be lightning quick or even across industries. As landlords, we just got to hand tight for a little longer.
Many Indian expats coming soon.
They have the funds and they like Singapore.
Unlike the western expats, the Indians are planning to stay long term and raise their families here.
Look at the number of indian-oriented international schools coming up, you have got to be blind to not see the writing on the wall.
oldfreehold
29-01-18, 20:04
Many Indian expats coming soon.
They have the funds and they like Singapore.
Unlike the western expats, the Indians are planning to stay long term and raise their families here.
Look at the number of indian-oriented international schools coming up, you have got to be blind to not see the writing on the wall.
🙄 Those who bought condo in the east . Should be happy or not ?
🙄 Those who bought condo in the east . Should be happy or not ?
My friend is not amused. Praying hard 'they' will move away from the East.
bargain hunter
30-01-18, 15:07
My friend is not amused. Praying hard 'they' will move away from the East.
they don't move away. they spread out all over. As Lord Anus had mentioned, there are many Indian International Schools all over the island.
they don't move away. they spread out all over. As Lord Anus had mentioned, there are many Indian International Schools all over the island.
Doesn't help that Chennai Business Park is in the East.
Doesn't help that Chennai Business Park is in the East.
They have good IT skills and can contribute in those areas? Not a bad thing overall.
I am not entirely sure to claim that we will have a strong up tick for a few consecutive years.
Namely because of 3 fundamental factors; shrinking-greying population, low rental returns and Cooling Measures largely in place. I think a longer, moderate growth of ~3% growth per year in overall prices across all regions until a Black Swan event happens. Things should be largely stable until GE circa 2020. For a ten year cycle, we are procrastinating 'recession' as much as possible. GFC is really a big, giant sledgehammer with deep seated repercussions.
The longer the door stop short of welcoming new migrants, our productivity will be pegged against technological/skill growths which will not be lightning quick or even across industries. As landlords, we just got to hand tight for a little longer.
I don't agree on shrinking population...
Government will not let it happen, what is going to happen will be that the floodgates will open again as our working population start shrinking by 2020. This will cause demand to rise as the feeling population have not pass on, while new immigrants have housing needs.
Low rental yield, same point as above, once immigration floodgates open. Rental demand will increase too... New immigrants will initially rent first... Once rental yield goes up prices will be supported. The last four years would have shown us that with low interest rates, propel don't mind holding on to their properties. Four years of low rental yield and high vacany rates and yet prices only dropped 12%
Cooling measures are now implemented in most top cities in the world so it's neutral to buyers..
Overall if you take into account inflation rate at 2.5% per year for the last 4 years plus the 12% drop in prices, our property prices is actually at least 23% cheaper than 4 years ago... While the last four years most major cities prices have risen..
So bottomline is if population increase by 1% per year which is 55k the needs for housing will be at least 15k units per year plus newly wed family formation, who will buy hdb and allow hdb upgraders to buy condo then prices should rise.
PropVestor
05-02-18, 15:28
I don't agree on shrinking population...
Government will not let it happen, what is going to happen will be that the floodgates will open again as our working population start shrinking by 2020. This will cause demand to rise as the feeling population have not pass on, while new immigrants have housing needs.
Low rental yield, same point as above, once immigration floodgates open. Rental demand will increase too... New immigrants will initially rent first... Once rental yield goes up prices will be supported. The last four years would have shown us that with low interest rates, propel don't mind holding on to their properties. Four years of low rental yield and high vacany rates and yet prices only dropped 12%
Cooling measures are now implemented in most top cities in the world so it's neutral to buyers..
Overall if you take into account inflation rate at 2.5% per year for the last 4 years plus the 12% drop in prices, our property prices is actually at least 23% cheaper than 4 years ago... While the last four years most major cities prices have risen..
So bottomline is if population increase by 1% per year which is 55k the needs for housing will be at least 15k units per year plus newly wed family formation, who will buy hdb and allow hdb upgraders to buy condo then prices should rise.
While I do agree that opening up to quality migrants is the way for economic progress, it has yet to happen. Your timeline are speculative but you might be right? I also believe Population White Paper in 2013 will come true but we do not know when the ramp up will be and how steep. All I know MND has learned their lesson and will have enough trains/buses and houses for everyone so much so the housing prices remain affordable and not spike suddenly.
What I am trying to get across is that our low birth rate (1.2 versus 1.4 in Japan) and fast greying population are a known fact today. Based on its current trajectory, they are not going away anytime soon. These factors alone will have an effect on household needs and design. Remember Mickey mouse apartments? They are a reflection of requiring less space due to these demographic changes. Thank God they removed those from the markets today.
Right now, the work is on re-distributing tenants from private and recently HDBs across all vacant properties, with the cap of unrelated tenants at 6 per unit.
Roads and MRT wise, the work is also on redistributing the networks for a more comfortable and sustainable future. Wider roads, more distributed train and comprehensive bus networks.
The redistribution will help in alleviating issues related to some units having many more tenant per unit than others, and further reduce vacancy rates. These will also aid in reducing congestion in the heavily populated areas / blocks. The travel networks should also be more comfortable although I really find the buses tremendous in numbers!
Once those are in place, we will be poised for the next phase of population growth.
Mickey mouse apartments will also be more heavily featured in the next phase of developments, attributed mainly to the ultra high psf prices of new developments. We would be lucky if the developers do not go nano-housing directions in the city (exempt from minimum average sizes). This will also be in line with the reduced numbers of persons per unit and long term growth of population.
Almost there!
While I do agree that opening up to quality migrants is the way for economic progress, it has yet to happen. Your timeline are speculative but you might be right? I also believe Population White Paper in 2013 will come true but we do not know when the ramp up will be and how steep. All I know MND has learned their lesson and will have enough trains/buses and houses for everyone so much so the housing prices remain affordable and not spike suddenly.
What I am trying to get across is that our low birth rate (1.2 versus 1.4 in Japan) and fast greying population are a known fact today. Based on its current trajectory, they are not going away anytime soon. These factors alone will have an effect on household needs and design. Remember Mickey mouse apartments? They are a reflection of requiring less space due to these demographic changes. Thank God they removed those from the markets today.
PropVestor
05-02-18, 16:45
Right now, the work is on re-distributing tenants from private and recently HDBs across all vacant properties, with the cap of unrelated tenants at 6 per unit.
Roads and MRT wise, the work is also on redistributing the networks for a more comfortable and sustainable future. Wider roads, more distributed train and comprehensive bus networks.
The redistribution will help in alleviating issues related to some units having many more tenant per unit than others, and further reduce vacancy rates. These will also aid in reducing congestion in the heavily populated areas / blocks. The travel networks should also be more comfortable although I really find the buses tremendous in numbers!
Once those are in place, we will be poised for the next phase of population growth.
Mickey mouse apartments will also be more heavily featured in the next phase of developments, attributed mainly to the ultra high psf prices of new developments. We would be lucky if the developers do not go nano-housing directions in the city (exempt from minimum average sizes). This will also be in line with the reduced numbers of persons per unit and long term growth of population.
Almost there!
The distribution you mentioned is highly challenging. Private properties are dependent on foreign buyers to some extent and they are way under-represented in the last few years. I see a sharp reversal soon. Though these must not be confused with migrants. They park their cash here for capital appreciation and do not worry so much on rental. CCR should experience this quite soon or already have.
North South Highway where Rochor Centre is making way for is one such infrastructure. Next few Budget announcements we will see massive spending on these. Lawrence Wong has already hinted over the news just over last weekend. The ramp up is far from over to accomodate more people, its all a matter of when is the ramp up. At the bottom left corner of the article where we talked about growing the size of Singapore, you can see URA shaping up the island quite differently from today. That to me is a good blue print on where to buy/invest next. Concept plan for 30 years vision and Master Plan for every 5 years adjustments. My hats off to this government.
Indeed it is car lite and not bus lite.
I definitely welcome a less xeno-phobic Singapore!
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