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mr funny
31-07-09, 09:56
http://www.businesstimes.com.sg/sub/news/story/0,4574,344033,00.html?

Published July 31, 2009

A bubble that's a gleam in specuvestors' eyes

Mah Bow Tan's caution aimed at averting pain later, property market watchers say

By EMILYN YAP


(SINGAPORE) Better to suck out the froth now than to burst the bubble later - that was what market watchers saw as the government's intention in warning against rash property purchases.

National Development Minister Mah Bow Tan said on Wednesday that there are signs of speculation in the property market, and the government will act if it overheats. He also urged home seekers to buy only within their means.

On the surface, the message may seem puzzling. By most accounts, speculators from the boom years - those who 'flipped' their freshly bought units in the subsale market for a quick profit - have yet to make a huge comeback. Price increases have surfaced only at some projects, while several others still registered price falls.

At CapitaLand's results briefing yesterday, group president and CEO Liew Mun Leong also observed that home demand is 'healthy', supported partly by home seekers whose estates were sold en bloc.

But dig deeper and the cause for concern becomes more apparent. Some industry watchers acknowledge that a group of 'specuvestors' is emerging. These are buyers who are prepared to keep and lease out their properties over the longer term, but are also open to selling them for capital gains if the opportunity comes along.

Although Singapore's economy is shrinking, several factors are working in specuvestors' favour. Notably, interest rates on bank loans are low, and more small apartments going for less than $1 million have become available. Many of them are also lucky enough to still have jobs, and some could have made a killing from the recent stockmarket rally.

These investors, together with genuine homebuyers, have raised market activity to a level that authorities feel is out-of-sync with weak economic fundamentals. The fear? That some would not be able to repay their loans if they lost their jobs, or if banks raised mortgage rates in the future.

'I have seen sufficient cases in my Meet-the-People sessions, where people have over-committed and now find themselves in difficulty,' Mr Mah recounted on Wednesday.

CIMB economist Song Seng Wun said in a note on Wednesday that Singapore's Q2 09 jobless rate is expected to cross 5 per cent. The unemployment rate for Singaporeans and permanent residents rose to 4.8 per cent in Q1.

Falling rentals would also test buyers' ability to support home loans, said Chesterton Suntec International's research and consultancy director Colin Tan.

So to several industry watchers, the government is sounding a note of caution, just in case. As a developer told BT: 'What if the green shoots turn brown?' The formation of a bubble - particularly on shaky ground - would require overt intervention and the consequences are unlikely to be pretty.

Take a look back at 1996, when the government introduced a surprise anti-speculation package to curb sharp spikes in private home prices. Tighter credit, a tax on gains and higher stamp duty caused sentiment to sink and transaction volumes to plunge. This is history that most would not want to see repeat itself.

The key is whether the government's words will help calm the buying frenzy at this stage. Here, views are mixed.

Some people may cool off, said Wheelock Properties (Singapore) CEO David Lawrence. 'I think (Mr Mah is) more focusing on the greedy people who overgeared, took on too many liabilities, and he's just saying 'be careful' . . . I think that's a reasonable message to the market.'

But some also think the buying will continue as long as money from savings, banks or stockmarket winnings is around. A developer also suggested that a few people might bring forward their purchases in anticipation of anti-speculation measures coming on. 'Singaporeans are a bit 'gan cheong' (panicky),' he joked.

At Optima, where people started queuing days before the showflat was due to open, developer TID has conducted a ballot for the 120 units planned for release. All units have been tentatively accounted for with prices starting from $790 per square foot. TID is a tie-up between Hong Leong Group and Mitsui Fudosan. A Hong Leong spokesman said that the balloting process helps to sieve out genuine buyers and the crowds have thinned. BT understands that there were already plans to conduct a ballot when a queue first formed, before Mr Mah spoke to the press on Wednesday.

Market sources also say that around 80 units have been sold at Centro Residences, out of around 110 released.

mr funny
31-07-09, 10:52
http://www.straitstimes.com/Prime%2BNews/Story/STIStory_410379.html

July 31, 2009 Friday

No property bubble forming, say developers

They say buying frenzy hasn't reached point where Govt needs to intervene

By Joyce Teo

http://www.straitstimes.com/STI/STIMEDIA/image/20090731/a12-1.jpg
Crowds had gathered at the 297-unit Optima showflat last night even though the public launch is scheduled for today. The developer TID held a ballot at midnight for about 300 genuine buyers who were queueing outside the showflat so they did not have to stay overnight. -- ST PHOTO: AZIZ HUSSIN

PROPERTY developers are enjoying the surge in interest from buyers but they do not believe that speculation has reached a stage where the Government needs to step in.

They also maintain that the prevailing economic conditions will begin to cool the buying frenzy and stop a bubble forming in its tracks.

'It's not a bubble, it's just a blister after the pain we experienced in the global financial crisis and it comes before a recovery,' said Cushman and Wakefield managing director Donald Han.

But some developers and industry insiders acknowledge that the comments from National Development Minister Mah Bow Tan this week are timely.

Mr Mah cautioned about a bubble forming, hinted at intervention if speculation got out of hand and advised buyers to tread carefully and not charge headlong into the market.

'The Government's message is quite clear: Don't rush as there is a lot of supply coming onstream,' said Sing Holdings chief executive Lee Sze Hao.

'It's good as a reminder so that people do not over-buy, over-chew. Developers do not want irrational exuberance,' said Mr Han.

A property consultant who declined to be named told The Straits Times: 'There shouldn't be panic-buying. Buyers may pull back a bit, not knowing whether the Government will step in or not. The fact is that the Government has opened its mouth; it can do things indirectly.

'But if the market hype continues to rise, they will have to do something.'

Many feel the hype, which centres on several condominiums, will likely be short-lived amid a recession.

'Inevitably, there will be speculative buyers, but they are for the smaller units...If the market is too speculative, you build up a bubble and that's not real demand,' said Mr Lee.

The market is seeing cashed-up investors ready to spend, which is different from speculators looking to buy another apartment to make a quick buck, he said.

The Government will do something only if there is a queue at every project and every unit is snapped up, he added.

The Real Estate Developers Association of Singapore (Redas) pointed out on Wednesday that only a selected few launches have been highly successful for various reasons.

Buyers have certainly been out in droves visiting the new showflats and buying new homes off the plan. Queues have been forming and developers have raised prices in response.

The interest was evident last night at Tanah Merah, where crowds gathered at the 297-unit Optima showflat although the public launch is scheduled for today.

The response was so strong that the developer TID held a ballot at midnight for about 300 genuine buyers who were queueing outside the showflat earlier so they did not have to stay overnight.

They had submitted cheques together with their application form by 9.30pm for the 120 units on offer at an average early-bird price of $790 per sq ft (psf), said a spokesman.

Another suburban launch, the 329-unit Centro Residences in Ang Mo Kio apparently attracted more than 80 buyers, even though it is priced at $1,150 psf and above - levels more suitable for prime or city-fringe projects.

Such enthusiasm for new projects, which is reminiscent of boom times, and the sudden spike in prices are likely causes for concern, said a developer who declined to be named.

Prices of some new mass market projects have gone above the peak 2007 levels, he said. 'But can the market sell 1,500 units every month in the next 12 months? I don't think so.

'The Government is observing, but it will cease to be overly concerned when things return to normal.'

CapitaLand chief executive Liew Mun Leong said at its results briefing yesterday that there is 'exuberance' in the market but no bubble. 'If it's investment driven, you could call it a bubble...but in our case, it is demand driven.'

He also said he would be the first to be worried if this frenzy is being driven by speculative demand.

He said there are buyers flushed with cash from collective sales in the recent property boom.

Mr Liew estimated there were about 13,000 home owners displaced by en-bloc deals from 2005 to 2007 and these buyers have ready cash of anywhere between $1million and $2 million each to spend.

[email protected]

Additional reporting by Jessica Cheam

Property_Owner
31-07-09, 11:20
'It's not a bubble, it's just a blister after the pain we experienced in the global financial crisis and it comes before a recovery,' said Cushman and Wakefield managing director Donald Han.


They had submitted cheques together with their application form by 9.30pm for the 120 units on offer at an average early-bird price of $790 per sq ft (psf), said a spokesman.



Blister, must be a big one.

Early bird discount? Any buyers looking at Tate Residences? I selling my unit, early bird gets big discount. Up to 30%. Original asking price 3000psf.

bargain hunter
31-07-09, 12:28
why would ppty developers EVER say there is a bubble? its against their interest. the article is pointless.

sabian
31-07-09, 13:21
So Donald Duck is saying shorty made a mistake. No bubble...

andy
31-07-09, 13:34
Blister, must be a big one.

Early bird discount? Any buyers looking at Tate Residences? I selling my unit, early bird gets big discount. Up to 30%. Original asking price 3000psf.

I was told there is not much interest in resale units. Only primary units launched by developers

For resale it is many units under $1.5m.

Is this true?

Localite
31-07-09, 17:55
I was told there is not much interest in resale units. Only primary units launched by developers

For resale it is many units under $1.5m.

Is this true?

I cannot understand why new launch is 20% higher than resale ppty.

Maybe some speculators hoping to reap handsome profits after TOP.

azeoprop
31-07-09, 20:19
So do you think current condo owners should sell at a profit now before the bubble bust? :beats-me-man:

Localite
31-07-09, 20:45
So do you think current condo owners should sell at a profit now before the bubble bust? :beats-me-man:

IMHO in the ppty mkt it is higher risk to sell short than to buy long.

Also remember that transaction cost of buy/sell is about 7%.

Anyway IMHO ppty prices are not near bubble stage yet.

steppy
31-07-09, 20:53
why would ppty developers EVER say there is a bubble? its against their interest. the article is pointless.

Exactly...they have been holding back launches and bleeding for the past year - this is the best time to make a killing and pass the risk to someone else...

Honesty
31-07-09, 20:57
I cannot understand why new launch is 20% higher than resale ppty.

Maybe some speculators hoping to reap handsome profits after TOP.

FAT, FAT , FAT HOPE....Who are they going to sell to...this is just mass condo...how much the mass can afford....THINK!!!!!:doh: :doh: :doh:

andy
31-07-09, 21:19
I cannot understand why new launch is 20% higher than resale ppty.

Maybe some speculators hoping to reap handsome profits after TOP.

I have noticed in the prime areas, resale properties are asking close to newly launched properties but still lower. This includes properties about to TOP vs brochures from developers.

However for sururbia like optima and AMK centro if buyers are paying a 20% premium for similar properties in the same area, does this mean that there is an expectation in 3 year's time the value of these properties can command a similar 20% or more premium. This is only true when demand for sleekly furnished units in ultra convenient location next to MRT exceeds available Govt' Land Sale in that specific area.

Is it as simple as demand vs expected supply for certain properties?

Anyone care to comment?

azeoprop
31-07-09, 21:41
I think the property craze is limited to "good locations" only. E.g. Optima and 8@woodleigh vs oasis@elias which is rather quiet. Some older release seems to be selling slowly also e.g. clover by the park and rosewood suites. :beats-me-man:

proud owner
31-07-09, 22:03
I think the property craze is limited to "good locations" only. E.g. Optima and 8@woodleigh vs oasis@elias which is rather quiet. Some older release seems to be selling slowly also e.g. clover by the park and rosewood suites. :beats-me-man:

lets put it this way ..

older projects ..
1.banks are not keen to extend credit ..cos no developer's guarantee/backing
new projects, developers are paying the interest, not buyer ..


2.tend to be bigger ..


there are many old FH projects are very good locations too ..

d12pxgoskyhigh
31-07-09, 23:12
I have noticed in the prime areas, resale properties are asking close to newly launched properties but still lower. This includes properties about to TOP vs brochures from developers.

However for sururbia like optima and AMK centro if buyers are paying a 20% premium for similar properties in the same area, does this mean that there is an expectation in 3 year's time the value of these properties can command a similar 20% or more premium. This is only true when demand for sleekly furnished units in ultra convenient location next to MRT exceeds available Govt' Land Sale in that specific area.

Is it as simple as demand vs expected supply for certain properties?

Anyone care to comment?

People living in Spore like to queue...
Mentality is: If there is a queue, there is a BARGAIN!
In crowded showflats, BARGAIN mentality kicks in....buyers pay higher price than similar completed units mearby.

For property appreciation, if price is going to increase 3 yrs later, whether new or old units, all should go up...
If the premium paid for new units is for the expected appreciation in value 3 yrs later, then completed unit should also command this premium...
Cos 3 yrs later, the completed unit is still going to be there...

My opinion is buyers in Spore will pay a premium for new units...

Regulators
01-08-09, 02:18
queuing for condos not as bad as queuing for hello kitty dolls....



People living in Spore like to queue...
Mentality is: If there is a queue, there is a BARGAIN!
In crowded showflats, BARGAIN mentality kicks in....buyers pay higher price than similar completed units mearby.

For property appreciation, if price is going to increase 3 yrs later, whether new or old units, all should go up...
If the premium paid for new units is for the expected appreciation in value 3 yrs later, then completed unit should also command this premium...
Cos 3 yrs later, the completed unit is still going to be there...

My opinion is buyers in Spore will pay a premium for new units...

Property_Owner
01-08-09, 10:13
I was told there is not much interest in resale units. Only primary units launched by developers

For resale it is many units under $1.5m.

Is this true? I really dun know pal. But guess there's still interest in resale, cause some agents already PM me asking to market my tate residences.

andy
01-08-09, 14:57
My opinion is buyers in Spore will pay a premium for new units...

A unit that is going to TOP in 3 months is still a new unit and buyers can collect rental after TOP or enjoy if you live in it. I just don't understand why buyers in Spore is willing to pay a 10-20% premium for units that will TOP in 3 years and during that time pay interest according to NPS..... unless it is a given there will not be other new, sleek condos next to MRT in 3 years;-)

Prevailing mentality seems to be it must be good to ballet (like balleting for P1 entry) and there's a bargain. Is it possible that if 1 person lose money cannot ask gov't to save the individual. However 1000 persons lose money can ask gov't to get money back from developer?

Property_Owner
01-08-09, 22:17
A unit that is going to TOP in 3 months is still a new unit and buyers can collect rental after TOP or enjoy if you live in it. I just don't understand why buyers in Spore is willing to pay a 10-20% premium for units that will TOP in 3 years and during that time pay interest according to NPS..... unless it is a given there will not be other new, sleek condos next to MRT in 3 years;-)

Prevailing mentality seems to be it must be good to ballet (like balleting for P1 entry) and there's a bargain. Is it possible that if 1 person lose money cannot ask gov't to save the individual. However 1000 persons lose money can ask gov't to get money back from developer?

Agree pal. :cheers1:

jlrx
02-08-09, 00:51
People living in Spore like to queue...
Mentality is: If there is a queue, there is a BARGAIN!
In crowded showflats, BARGAIN mentality kicks in....buyers pay higher price than similar completed units mearby.

For property appreciation, if price is going to increase 3 yrs later, whether new or old units, all should go up...
If the premium paid for new units is for the expected appreciation in value 3 yrs later, then completed unit should also command this premium...
Cos 3 yrs later, the completed unit is still going to be there...

My opinion is buyers in Spore will pay a premium for new units...

Let me list you two advantages of a new unit versus a completed unit:

1. The developers put out large, attractive advertisements which small 4-line classifieds cannot compete.

Look at this advertisement for a condo at Upper Changi.

http://i305.photobucket.com/albums/nn211/jlrx_bucket/FlowerCondo.jpg

Don't you think it is far more attractive compared to your 4-line advertisment in the classifieds? "Upper Changi Condo for Sale. As beautiful as a flower maiden resting on top of a rose overlooking the swimming pool and praying to the sky. Call Richard 9999 9999".

2. When you queue up to view a new condo, there is a chance that reporters might turn up to take a photo of you, like this which appeared in friday's papers:

http://www.straitstimes.com/STI/STIMEDIA/image/20090731/a12-1.jpg

Don't you think it is very glamorous to appear in the papers? Then let your colleagues/ relatives identify you "Hey! Isn't that so and so standing third row behind? ... Wow! she is so rich can afford to buy condo! Must congratulate her!"

Do you think any reporter will come to take a photo of you buying a second hand condo?

Not unless you find a dead body inside the wardrobe.

PN
02-08-09, 11:17
A unit that is going to TOP in 3 months is still a new unit and buyers can collect rental after TOP or enjoy if you live in it. I just don't understand why buyers in Spore is willing to pay a 10-20% premium for units that will TOP in 3 years and during that time pay interest according to NPS..... unless it is a given there will not be other new, sleek condos next to MRT in 3 years;-)

Prevailing mentality seems to be it must be good to ballet (like balleting for P1 entry) and there's a bargain. Is it possible that if 1 person lose money cannot ask gov't to save the individual. However 1000 persons lose money can ask gov't to get money back from developer?


Since a large percentage is HDB upgraders, you need to understand what is their main concern. I used to be a HDB upgrader many years back, so maybe I can comment a bit here. Below may not apply to all but should apply to a large percentage.

Typically, they have saved enough for the first 20% installment, this is easily 120k-200k depending on the size of the unit purchased. To buy a new condo that has TOP, you have a big commitment immediately. Monthly installment is easily 3 to 4k. To many people, it's a mix feeling of excitment, fear and pressure. To see your bank account going down by 100-200k after paying the first 20% does give you a chill somehow. Further to that, if you need to start paying the monthly installment immediately, it will put a lot of pressure on both couples. Things can turn sour if not managed properly.

But if you buy from a new lauch, the unit is only available after 2-3 yrs. This means that you can take a breather & relax for the next 2-3yrs. This is a good buffer period to starts saving again in preparation for monthly installment in 2-3yrs time. Usually you can save quite a healthy sum in this time span.

However, I do agree that the new launch price is on the high side. Hopefully, these buyers have done proper sum. Anyway, every individual has their own view of things happening in the market today. In the long run, price will be going up. But nobody can predict what's going to happen in the near future. I may be wrong and everyone is right. OR everyone is wrong and only the developer is right. The developers are the one who benefited in this interesting property market.

dfstan
02-08-09, 14:29
of course they claimed to be no bubble lah, shooting themselves in their foot meh!!!??? only idiots believed them...

let the bubble burst and blood on the street!!!!

wqmai
02-08-09, 16:19
Since a large percentage is HDB upgraders, you need to understand what is their main concern. I used to be a HDB upgrader many years back, so maybe I can comment a bit here. Below may not apply to all but should apply to a large percentage.

Typically, they have saved enough for the first 20% installment, this is easily 120k-200k depending on the size of the unit purchased. To buy a new condo that has TOP, you have a big commitment immediately. Monthly installment is easily 3 to 4k. To many people, it's a mix feeling of excitment, fear and pressure. To see your bank account going down by 100-200k after paying the first 20% does give you a chill somehow. Further to that, if you need to start paying the monthly installment immediately, it will put a lot of pressure on both couples. Things can turn sour if not managed properly.

But if you buy from a new lauch, the unit is only available after 2-3 yrs. This means that you can take a breather & relax for the next 2-3yrs. This is a good buffer period to starts saving again in preparation for monthly installment in 2-3yrs time. Usually you can save quite a healthy sum in this time span.

However, I do agree that the new launch price is on the high side. Hopefully, these buyers have done proper sum. Anyway, every individual has their own view of things happening in the market today. In the long run, price will be going up. But nobody can predict what's going to happen in the near future. I may be wrong and everyone is right. OR everyone is wrong and only the developer is right. The developers are the one who benefited in this interesting property market.

I totally agreed with you. Its a hugh committment to buy TOP property unless you can get a good bargain and rent out immediately to cover the monthly installment. For own stay, its a hugh sum paying $3000 per month even though majority of it comes from CPF. Even worse is if the interests rate rises from the current less than 2% to 4%. A lot of people would be crying..... Come to think of it is really scary. In a way, I believe the bubble would form somehow or rather, just depend on when.

Honesty
02-08-09, 17:52
Since a large percentage is HDB upgraders, you need to understand what is their main concern. I used to be a HDB upgrader many years back, so maybe I can comment a bit here. Below may not apply to all but should apply to a large percentage.

Typically, they have saved enough for the first 20% installment, this is easily 120k-200k depending on the size of the unit purchased. To buy a new condo that has TOP, you have a big commitment immediately. Monthly installment is easily 3 to 4k. To many people, it's a mix feeling of excitment, fear and pressure. To see your bank account going down by 100-200k after paying the first 20% does give you a chill somehow. Further to that, if you need to start paying the monthly installment immediately, it will put a lot of pressure on both couples. Things can turn sour if not managed properly.

But if you buy from a new lauch, the unit is only available after 2-3 yrs. This means that you can take a breather & relax for the next 2-3yrs. This is a good buffer period to starts saving again in preparation for monthly installment in 2-3yrs time. Usually you can save quite a healthy sum in this time span.

However, I do agree that the new launch price is on the high side. Hopefully, these buyers have done proper sum. Anyway, every individual has their own view of things happening in the market today. In the long run, price will be going up. But nobody can predict what's going to happen in the near future. I may be wrong and everyone is right. OR everyone is wrong and only the developer is right. The developers are the one who benefited in this interesting property market.

I think, if any buyer bought the property at 1 million, the monthly installment anytime more than $5,000 to $6,000, base on $800,000 loan

How a HDB's upgrader afford to pay every month?

andy
02-08-09, 18:26
Typically, they have saved enough for the first 20% installment, this is easily 120k-200k depending on the size of the unit purchased. To buy a new condo that has TOP, you have a big commitment immediately. Monthly installment is easily 3 to 4k. To many people, it's a mix feeling of excitment, fear and pressure. To see your bank account going down by 100-200k after paying the first 20% does give you a chill somehow. Further to that, if you need to start paying the monthly installment immediately, it will put a lot of pressure on both couples. Things can turn sour if not managed properly.


If you only have enough for the 20% and need to defer the monthly payments for 3 years, then you are betting on one of the following:
a) Total Monthly pay in 3 years will exceed 3 times monthly repayment at $4K. This is providing interest rate does not escalate.
b) Buyer can unload the property before TOP at a small profit even offsetting the stamp duties and legal fees.

What if your household income does not meet expectations? What if interest rate escalate and you can't find a buyer within 3 years. I believe subprime happens when the money you owe the bank after TOP becomes more than what the property is worth:-(

All I know the majority of the pple buying prime areas either have the cash or enough income to hold the property even if they don't get any rentals.

PN
02-08-09, 18:58
I think, if any buyer bought the property at 1 million, the monthly installment anytime more than $5,000 to $6,000, base on $800,000 loan

How a HDB's upgrader afford to pay every month?

Based on $800K loan with 3% interest rate (purposely make it 3 as it will not stay low forever) for 30yrs, the monthly installment is about 3.4k. Working couples should have about $1800 going into ordinary accounts monthly. The rest will need to come from cash.

If the interest goes up to 4%, it will be around 3.8k based on the same loan tenure.

It's more than simply interest rate. Affordability varies from one individual to another. Some feel that with $8K income, it's enough to buy a $1.2M home. Another say at least $15k. Also it depends on life style & when you plan to retire & what kind of life you want live at old age.

I've been argueing on this topic in another thread some months back.
You may refer back to this link
http://forums.condosingapore.com/showthread.php?t=7196&page=2

Localite
02-08-09, 20:55
Since a large percentage is HDB upgraders, you need to understand what is their main concern. I used to be a HDB upgrader many years back, so maybe I can comment a bit here. Below may not apply to all but should apply to a large percentage.

Typically, they have saved enough for the first 20% installment, this is easily 120k-200k depending on the size of the unit purchased. To buy a new condo that has TOP, you have a big commitment immediately. Monthly installment is easily 3 to 4k. To many people, it's a mix feeling of excitment, fear and pressure. To see your bank account going down by 100-200k after paying the first 20% does give you a chill somehow. Further to that, if you need to start paying the monthly installment immediately, it will put a lot of pressure on both couples. Things can turn sour if not managed properly.

But if you buy from a new lauch, the unit is only available after 2-3 yrs. This means that you can take a breather & relax for the next 2-3yrs. This is a good buffer period to starts saving again in preparation for monthly installment in 2-3yrs time. Usually you can save quite a healthy sum in this time span.

However, I do agree that the new launch price is on the high side. Hopefully, these buyers have done proper sum. Anyway, every individual has their own view of things happening in the market today. In the long run, price will be going up. But nobody can predict what's going to happen in the near future. I may be wrong and everyone is right. OR everyone is wrong and only the developer is right. The developers are the one who benefited in this interesting property market.

good point.

but it is a sign of speculation - if ppl are buying 3 years ahead of their needs

rattydrama
02-08-09, 21:51
Not too long ago D10 6 Ave Residences selling at around $1300psf. Going to TOP somemore. Is it better then the recently launch condos. Those who bough the so near mrt could be people who still want to stay near where they used to be without putting into consideration of future price. They are certainly rich.

tamp81
02-08-09, 21:53
Seems like most buyers of Optima bought for rental income and investment reasons.

rattydrama
02-08-09, 22:04
With all the IR thing and more foreigners coming, up-graders are expecting the property price to be better in 3 years time.

Can the property price go down again to Dec 2008 price?

In the last few decades, property price went down but it went up and up eventually so alot of people still think buying property is a good bet, including my old grand mother.

I think the more concerning issue is if the 1m buyer can hold on to the property for the next 10 years if the market cannot climb up quickly and they are unable to dispose off with a profits.

Potential buyers still buy after so many successful launches were reported. Another possible reason is the parents will help up to the loan if the young couple cannot afford it down the road.

We have a small family size after all and parents could easily help up by selling away their old homes either willingly or unwillingly.






good point.

but it is a sign of speculation - if ppl are buying 3 years ahead of their needs

rattydrama
02-08-09, 22:17
If buy for rental, 2 bedroom will be a good bet. At least can open up to many different groups. Eg. Rich Single Professional, students, small family or wort come to worst for own stay.

Those who bought studio and not in CBD areas will be taking a big risk.

I visited one show flat recently, only 380psf so small until I feel that the walls are collapsing in front of me.

Very uncomfortable.




Seems like most buyers of Optima bought for rental income and investment reasons.

Douk
02-08-09, 22:39
:confused: how do you tell ?


Seems like most buyers of Optima bought for rental income and investment reasons.

jitkiat
02-08-09, 22:53
If buy for rental, 2 bedroom will be a good bet. At least can open up to many different groups. Eg. Rich Single Professional, students, small family or wort come to worst for own stay.

Those who bought studio and not in CBD areas will be taking a big risk.

I visited one show flat recently, only 380psf so small until I feel that the walls are collapsing in front of me.

Very uncomfortable.

Optima @ 900psf 2 bedroom, quantum 840k (with stamp duty). Assume 20% downpayment and borrow 80% for 30 years, how much rental you need per month to even service the bank loan assuming low interest per annum at 3% ?? We have not even factored in 10% gov property tax.

tamp81
02-08-09, 23:17
It was on the news. A reporter was interviewing some ppl who bought units at optima and all of them said it would be for investment and renting out in future.

tamp81
02-08-09, 23:22
For a 2BR to breakeven on the monthly instalment, the rent has to be $2850/month assuming 2% interest.

I guess it is anyone guess whether future rent wil fetch such a pricing with Casa Merah, Optima and Double Bay all in the market.

But certainly, any projects near to MRT should be easily rentable if asking is reasonable.

Douk
02-08-09, 23:26
It was on the news. A reporter was interviewing some ppl who bought units at optima and all of them said it would be for investment and renting out in future.
ic. hmm.. probably too painful to move from a spacious 5rm or massionette into the 2bedroom. :D

jitkiat
02-08-09, 23:26
For a 2BR to breakeven on the monthly instalment, the rent has to be $2850/month assuming 2% interest.

I guess it is anyone guess whether future rent wil fetch such a pricing with Casa Merah, Optima and Double Bay all in the market.

But certainly, any projects near to MRT should be easily rentable if asking is reasonable.

The current bank interest of 2% can only be guaranteed (if you take up fixed rate 3 years) for 3 years. After that, it is highly unlikely to get 2%. It will be more like above 3%. How about 10% property tax, how about renovation to be done to the unit, how about furniture and maintenance fee per month???

Honesty
03-08-09, 02:07
The current bank interest of 2% can only be guaranteed (if you take up fixed rate 3 years) for 3 years. After that, it is highly unlikely to get 2%. It will be more like above 3%. How about 10% property tax, how about renovation to be done to the unit, how about furniture and maintenance fee per month???

No matter how much you help them to calculate for the risk they take and the danger of buying for rental at sure a high price, these people can't see and hear what you say.

They are now dumb and deaf...

They only know one thing....cheong ah....

Property_Owner
03-08-09, 10:19
Those who bought studio and not in CBD areas will be taking a big risk.


What about those who bought Scott Square?

proud owner
03-08-09, 21:16
Since a large percentage is HDB upgraders, you need to understand what is their main concern. I used to be a HDB upgrader many years back, so maybe I can comment a bit here. Below may not apply to all but should apply to a large percentage.

Typically, they have saved enough for the first 20% installment, this is easily 120k-200k depending on the size of the unit purchased. To buy a new condo that has TOP, you have a big commitment immediately. Monthly installment is easily 3 to 4k. To many people, it's a mix feeling of excitment, fear and pressure. To see your bank account going down by 100-200k after paying the first 20% does give you a chill somehow. Further to that, if you need to start paying the monthly installment immediately, it will put a lot of pressure on both couples. Things can turn sour if not managed properly.

But if you buy from a new lauch, the unit is only available after 2-3 yrs. This means that you can take a breather & relax for the next 2-3yrs. This is a good buffer period to starts saving again in preparation for monthly installment in 2-3yrs time. Usually you can save quite a healthy sum in this time span.

However, I do agree that the new launch price is on the high side. Hopefully, these buyers have done proper sum. Anyway, every individual has their own view of things happening in the market today. In the long run, price will be going up. But nobody can predict what's going to happen in the near future. I may be wrong and everyone is right. OR everyone is wrong and only the developer is right. The developers are the one who benefited in this interesting property market.

i used to be like that ..save and save and save by the time you have enough ..prices are higher ..

ITS NEVER ENOUGH

lucky for me , i had a few good years at work and recieved good bonuses which enabled me to buy 2 properties almost using cash ..

but for the general upgraders, its very scarey ..what they are doing now ..is simply postponing the fear and pressure to a later date ..

so to rebuild their savings, CPF, etc in 2 - 3 yrs, they would still have to save 2-3k a month ..

if they can do tat , why cant they pay 2-3k instalment every month now ?
as oppose to saving it ?

in my opinion thats the mistake that they are making ..

to postpone/delay the eventual payment, they end up paying a higher psf ..

proud owner
03-08-09, 21:32
For a 2BR to breakeven on the monthly instalment, the rent has to be $2850/month assuming 2% interest.

I guess it is anyone guess whether future rent wil fetch such a pricing with Casa Merah, Optima and Double Bay all in the market.

But certainly, any projects near to MRT should be easily rentable if asking is reasonable.

its crazy that "IR will spur rental" now reaches the urban area .. resulting in 900-1100 psf pricing

for a 2 bedroom to breakeven ..rental has to be 2850 a mth ..

to spare 2.8k a mth on rental .. and have enuff for other expenses ..your take home has to be 5.5k and higher .. thats 7.5k before tax ..

please please go to Macau .. and talk to those working in the casinos ..

how many are 'high income' and how many are 'low income' ..

you will be very surprised ... that many cannot afford a studio rent .. most will share a room with another colleague/friends ..

if 3-4 share a unit of 2 bedroom .. how many units are needed to house the whole IR work force ?

1500 works ..assuming 300 higher salaried .. remaning 1200
1200/3 = 400 assuming 3 will share a 2 bedroom unit .. they only need 400 (low salaried) + 300 (high salaried) = 700 units ..

how many people bought during this run up ..hoping to rent to IR workers ?

how many projects launched and agents saying "IR will need alot of rental units" ?

and i have not considered the certainty of some work force being sporeans who dont need to rent at all ..

rattydrama
03-08-09, 21:55
Optima @ 900psf 2 bedroom, quantum 840k (with stamp duty). Assume 20% downpayment and borrow 80% for 30 years, how much rental you need per month to even service the bank loan assuming low interest per annum at 3% ?? We have not even factored in 10% gov property tax.


Yes exactly, may not cover unless 1) buy for own stay and sell away HDB flat and dont mind paying a premium for private property 2) the rental suddenly surge.

Buying studio will be worst, - might need to fork out from own pocket to serve the loan and cannot stay cos so small! harder to off load too.

Honesty
03-08-09, 21:59
its crazy that "IR will spur rental" now reaches the urban area .. resulting in 900-1100 psf pricing

for a 2 bedroom to breakeven ..rental has to be 2850 a mth ..

to spare 2.8k a mth on rental .. and have enuff for other expenses ..your take home has to be 5.5k and higher .. thats 7.5k before tax ..

please please go to Macau .. and talk to those working in the casinos ..

how many are 'high income' and how many are 'low income' ..

you will be very surprised ... that many cannot afford a studio rent .. most will share a room with another colleague/friends ..

if 3-4 share a unit of 2 bedroom .. how many units are needed to house the whole IR work force ?

1500 works ..assuming 300 higher salaried .. remaning 1200
1200/3 = 400 assuming 3 will share a 2 bedroom unit .. they only need 400 (low salaried) + 300 (high salaried) = 700 units ..

how many people bought during this run up ..hoping to rent to IR workers ?

how many projects launched and agents saying "IR will need alot of rental units" ?

and i have not considered the certainty of some work force being sporeans who dont need to rent at all ..


I really pity those buyers that paid so much now.

It is so danger that the govt have to alert the buyers to stop buying.

Property_Owner
03-08-09, 22:08
I really pity those buyers that paid so much now.

It is so danger that the govt have to alert the buyers to stop buying.

I guess paying 2500psf foa a bay view now is still better then those in 07.

wqmai
03-08-09, 22:14
Yes exactly, may not cover unless 1) buy for own stay and sell away HDB flat and dont mind paying a premium for private property 2) the rental suddenly surge.

Buying studio will be worst, - might need to fork out from own pocket to serve the loan and cannot stay cos so small! harder to off load too.


Anyway I am not vested. But why studio cannot stay? Last time when studio is 700 sq ft, people say cannot stay. When it become 600 sq ft, also say cannot say. When it become 500 sq ft, still cannot stay. When it become 400 sq ft, still cannot stay. Now it become 366 sq ft, also cannot stay. When it become like Hongkong or Japan size, 200 sq ft, then people will look back and see that it can stay.:doh:

proud owner
03-08-09, 22:22
Anyway I am not vested. But why studio cannot stay? Last time when studio is 700 sq ft, people say cannot stay. When it become 600 sq ft, also say cannot say. When it become 500 sq ft, still cannot stay. When it become 400 sq ft, still cannot stay. Now it become 366 sq ft, also cannot stay. When it become like Hongkong or Japan size, 200 sq ft, then people will look back and see that it can stay.:doh:


so true

are we getting smaller in size ? Or
luxury takes on a new meaning ? small is good ? Or
our money getting smaller ?


it such a scenario i would go for BIG units ...they are becoming more and more rare ...

gfoo
03-08-09, 22:28
Anyway I am not vested. But why studio cannot stay? Last time when studio is 700 sq ft, people say cannot stay. When it become 600 sq ft, also say cannot say. When it become 500 sq ft, still cannot stay. When it become 400 sq ft, still cannot stay. Now it become 366 sq ft, also cannot stay. When it become like Hongkong or Japan size, 200 sq ft, then people will look back and see that it can stay.:doh:

HK and Japan have very diff building environments to Singapore. Japan has high populations concentrated in the city centres but they cannot build up due to earthquake restrictions. In HK, only certain areas can build high rise, and inter-island connectivity is always an issue with main economic activity on hk island.

there is a lot of flat land in singapore and due to our stable topography, the sky's the limit.

small units in japan are more driven by necessity/physical constraints, and Singapore which is driven more by developers' creativity.

xtink
03-08-09, 22:35
the agent probably said half the story. the calculations is correct, but narrowly focused. It is the hope for the bigger picture, i.e. the IR will bring in more tourists, make the economy grows, and in turn lure more investments into Spore. the setup of one single company/industry does not bring in the dough, it is the investments of many many big companies that does.




1500 works ..assuming 300 higher salaried .. remaning 1200
1200/3 = 400 assuming 3 will share a 2 bedroom unit .. they only need 400 (low salaried) + 300 (high salaried) = 700 units ..

how many people bought during this run up ..hoping to rent to IR workers ?

how many projects launched and agents saying "IR will need alot of rental units" ?

and i have not considered the certainty of some work force being sporeans who dont need to rent at all ..

proud owner
03-08-09, 22:40
the agent probably said half the story. the calculations is correct, but narrowly focused. It is the hope for the bigger picture, i.e. the IR will bring in more tourists, make the economy grows, and in turn lure more investments into Spore. the setup of one single company/industry does not bring in the dough, it is the investments of many many big companies that does.

correct

but tourists wil not rent yo;ur apt ..

tourist will not buy your apt ..

so buying to rent to IR related is just not there

xtink
03-08-09, 22:44
granted. what i meant was the follow-on influx of foreign investments would bring along with it more FT, and hence demand for rental. BUT one thing - the govt must do alot more to make Spore remains competitive and be pro-biz.


correct

but tourists wil not rent yo;ur apt ..

tourist will not buy your apt ..

so buying to rent to IR related is just not there

gfoo
03-08-09, 22:49
correct

but tourists wil not rent yo;ur apt ..

tourist will not buy your apt ..

so buying to rent to IR related is just not there

As with las vegas, and macau, and morocco and every other locale with significant casino presence - it would only widen the rich-poor divide. The people that make the real money are the ones serving and surrounding the whales, and many are foreigners. All others are $1600pm croupiers etc, and I tell you we will sooner or later end up with Filipinos/Msians/China as croupiers and service staff, as with all other Singapore businesses today.

The only hope the likes of Centro etc actually renting out studios and mickey mouse units lie in the world's oldest profession. That industry will grow significantly - and they will be the only ones that might have the means to afford ridiculous rents (i know locals won't) - and make full use of studios. nowadays they are the same size as hotel 81 anyways

proud owner
03-08-09, 22:52
As with las vegas, and macau, and morocco and every other locale with significant casino presence - it would only widen the rich-poor divide. The people that make the real money are the ones serving and surrounding the whales. All others are $1600pm croupiers etc, and I tell you we will sooner or later end up with Filipinos/Msians/China as croupiers and service staff, as with all other Singapore businesses today.\


when i was in spore .. my part time maid stays in a apt behind Gleneagles ... 1600 sqft ... there are 16 of them living in there she pays 400 rent a mth

gfoo
03-08-09, 23:01
\


when i was in spore .. my part time maid stays in a apt behind Gleneagles ... 1600 sqft ... there are 16 of them living in there she pays 400 rent a mth

Power, even a maid would rather pay for orchard - i reckon it's a 5 rmr at $6000p.m. A 500 sqft studio in Centro will need $2500 to cover loan and conservancy (zero yield). That's about 6 pax in a single studio unit to make it affordable for the likes of service staff. mana ada apa? 60sqft a person excl toilet, PES and kitchen sink. that's 8 tiles by 8 tiles. A single bed is 3 tiles by 6 tiles. Squat on floor at least 2 tiles by 2 tiles.

proud owner
03-08-09, 23:07
Power, even a maid would rather pay for orchard - i reckon it's a 5 rmr at $6000p.m. A 500 sqft studio in Centro will need $2500 to cover loan and conservancy (zero yield). That's about 6 pax in a single studio unit to make it affordable for the likes of service staff. mana ada apa? 60sqft a person excl toilet, PES and kitchen sink. that's 8 tiles by 8 tiles. A single bed is 3 tiles by 6 tiles. Squat on floor at least 2 tiles by 2 tiles.


thats right .. only SAF personal can live in it ..excluding the webbing, full pack, helmet.. etc ..

cos only SAF personnel can Sleep standing up

gfoo
03-08-09, 23:10
thats right .. only SAF personal can live in it ..excluding the webbing, full pack, helmet.. etc ..

cos only SAF personnel can Sleep standing up

not true, got one fambly stay oxley wan can also sleep hanging from ceiling - whole bunch of bloodsuckers.

proud owner
03-08-09, 23:15
not true, got one fambly stay oxley wan can also sleep hanging from ceiling - whole bunch of bloodsuckers.


cannot compare lah ...those vampires have big wings ...sometimes they do lie down ... they fly SIA from london direct ..

gfoo
03-08-09, 23:21
cannot compare lah ...those vampires have big wings ...sometimes they do lie down ... they fly SIA from london direct ..

lol...yeah, but i give up liao, too many super powers. One ugly laocharboh dark clouds come go into grave, sun come up rise from the dead. Another one sick but never die, children all white as ghost. another one old also never die, and will likely rise from the dead too. k k enough liao, sekali i have to pull toilet trick too and selamat hari ini in johor

proud owner
03-08-09, 23:25
lol...yeah, but i give up liao, too many super powers. One ugly laocharboh dark clouds come go into grave, sun come up rise from the dead. Another one sick but never die, children all white as ghost. another one old also never die, and will likely rise from the dead too. k k enough liao, sekali i have to pull toilet trick too and selamat hari ini in johor

whatever happened to the Scotts 28 that they bought many years ago ..??

wqmai78
04-08-09, 10:52
As with las vegas, and macau, and morocco and every other locale with significant casino presence - it would only widen the rich-poor divide. The people that make the real money are the ones serving and surrounding the whales, and many are foreigners. All others are $1600pm croupiers etc, and I tell you we will sooner or later end up with Filipinos/Msians/China as croupiers and service staff, as with all other Singapore businesses today.

The only hope the likes of Centro etc actually renting out studios and mickey mouse units lie in the world's oldest profession. That industry will grow significantly - and they will be the only ones that might have the means to afford ridiculous rents (i know locals won't) - and make full use of studios. nowadays they are the same size as hotel 81 anyways

Talking abt sizes. Just receive an sms on airstream at St Michael.
Studio (31 sqm), 1 rm(38 sqm), 1+1(47 sqm), 2 rm(58sqm), Avg - $1180psf.

My studio also bigger than their 1+1. So last time the same size apartment, we called studio, now change name to 1+1. Studio now refer to super small. Can live????

gfoo
04-08-09, 11:45
Talking abt sizes. Just receive an sms on airstream at St Michael.
Studio (31 sqm), 1 rm(38 sqm), 1+1(47 sqm), 2 rm(58sqm), Avg - $1180psf.

My studio also bigger than their 1+1. So last time the same size apartment, we called studio, now change name to 1+1. Studio now refer to super small. Can live????

300sqft for studio? zhun bo? how to live? - hotel 81 size dey

EBD
04-08-09, 12:02
I heard casino's intend to hire lots of locals.
Won't they already be living here & have current accommodation? How will this increase demand?

I have never bought into the IR = property boom.


correct

but tourists wil not rent yo;ur apt ..

tourist will not buy your apt ..

so buying to rent to IR related is just not there

Regulators
04-08-09, 13:34
size is relative to needs n lifestyle. Ur own tiny unit in D1 wud definitely make a sucker for space like me feel claustrophobic as well.
300sqft for studio? zhun bo? how to live? - hotel 81 size dey

wqmai78
04-08-09, 20:37
300sqft for studio? zhun bo? how to live? - hotel 81 size dey

After conversion, should be 333 sq ft. How to live??? Maybe those agent marketing for air stream can advise, hehe.

proud owner
04-08-09, 20:41
After conversion, should be 333 sq ft. How to live??? Maybe those agent marketing for air stream can advise, hehe.

the rich will buy ..to use as storeroom

just like REGULATOR .. my master bedroom is 800 sqft excluding walk in wardrobe and terrace .. 333 sqft is smaller than my walk in wardrobe

gfoo
04-08-09, 21:40
the rich will buy ..to use as storeroom

just like REGULATOR .. my master bedroom is 800 sqft excluding walk in wardrobe and terrace .. 333 sqft is smaller than my walk in wardrobe

jeepers - that makes your bedroom almost 2/3 of my place! well done mate!

jlrx
04-08-09, 22:34
the rich will buy ..to use as storeroom

just like REGULATOR .. my master bedroom is 800 sqft excluding walk in wardrobe and terrace .. 333 sqft is smaller than my walk in wardrobe

Wow! Which part of Singapore you stay?

You must be a tycoon! :spliff2: :spliff:

No wonder your name is "Proud Owner"!

proud owner
04-08-09, 22:41
Wow! Which part of Singapore you stay?

You must be a tycoon! :spliff2: :spliff:

No wonder your name is "Proud Owner"!

no lah

i grew up in the kampung which is now Florence area in district 19 ...

used to share a room with my 2 brothers and my granny ..


when i have the chance and capabilty to .. i make sure i have big big rooms and space ...

gfoo
05-08-09, 00:31
no lah

i grew up in the kampung which is now Florence area in district 19 ...

used to share a room with my 2 brothers and my granny ..


when i have the chance and capabilty to .. i make sure i have big big rooms and space ...

i miss those days. My grandad used to have those old kampung + chicken thingie in the east side - so much space, can fly kit using fishing line, got durian, rambutan, mango tree etc etc, can play soccer with my cuzs and the eurasian neighbours. heck he even had a goat - used the milk to chong kopi on demand type.

Then govt came, paid him peanuts, gave him a landed hdb thingamagig, and took back everything.

proud owner
05-08-09, 01:42
i miss those days. My grandad used to have those old kampung + chicken thingie in the east side - so much space, can fly kit using fishing line, got durian, rambutan, mango tree etc etc, can play soccer with my cuzs and the eurasian neighbours. heck he even had a goat - used the milk to chong kopi on demand type.

Then govt came, paid him peanuts, gave him a landed hdb thingamagig, and took back everything.

you are teochew ?

i used to roam inside Woodbridge hospital ... it used to be really huge and had lots of greenery ..

i used to tease my teacher whenever she asked what we did over weekend .. i always said "picnic in woodbridge"

gfoo
05-08-09, 01:56
you are teochew ?

i used to roam inside Woodbridge hospital ... it used to be really huge and had lots of greenery ..

i used to tease my teacher whenever she asked what we did over weekend .. i always said "picnic in woodbridge"

yup my grandad and my mum was! (i'm half teochew, but spent all my time growing up on the teochew side)

those were the fun days - even had those taoist priests you see in mr vampire doing stunts for the kampung, and he would always one-on-one with the bomoh. according to my mum, although different races stay same kampong, got a lot of strife esp in the 60-70s coz the chinese/eurasians were far better off than the malays.

proud owner
05-08-09, 23:50
yup my grandad and my mum was! (i'm half teochew, but spent all my time growing up on the teochew side)

those were the fun days - even had those taoist priests you see in mr vampire doing stunts for the kampung, and he would always one-on-one with the bomoh. according to my mum, although different races stay same kampong, got a lot of strife esp in the 60-70s coz the chinese/eurasians were far better off than the malays.

yes

i remember ..we were in only family in the kampung to have 3-4 cars in our garden ..massive garden.. 3 rambutan trees left to right , not touch each otehr .. durian, even sour sop .. ..my grandma and grand dad's birthday celebrations were always held in the garden .. engaged 'tao chew' to come and cook ..
my bro and i used to play tennis ..'sand court' ahhaha

and my granny's favorite Teochew wayang records ..those day the famous actresses were from HK ...singing teochew songs..

and i could hear them miles away .. which was awful ..

and our neighbours were really happy with us ..

we didnt have a nice house ..just big , and big land .. 4 toilets, 2 indoor, 2 outdoor ahhaha those that you dig a deep hole type ..

good memories ..