what size/location of condo is best investment?

[howgozit]

Imagine if a new launch now is 100% sold out, chances are you will hardly see transactions (if any) in the next 4 years in that project. Without any transactions within the project, the inflationary pressure is less. Many of the projects (especially in the OCR) will largely be forgotten 4yrs from now.

After 4 years, when "flippers" start unloading, there is a deflationary pressure as there is a pent-up supply with the many waiting to sell. With no transactions in the past 4yrs, benchmarking the price in the same project becomes open to market with only the 4yr old price as the last reference. Of course the overall market will affect the pricing but that is the same with resale as well.

Meanwhile resale mature properties still flow with the market. If the economy still holds up and credit environment is still favourable, a mature project expects steady appreciation transaction upon transaction. This is an inflationary pressure which is not present in a new launch project.

Anyway, I guess everybody has their own point of view and I am not trying to convince anyone. It will take 4yrs to find out whose view is correct. Maybe my analysis is flawed but I am betting on the resale properties.

My guess is that people buying new launches now are genuine buyers. "flippers" if any buying new lauches are probably duped by the agents sweet talk with a fancy calculations.

Just for discussion. Cheers!

[ysyap]

Imagine if a new launch now is 100% sold out, chances are you will hardly see transactions (if any) in the next 4 years in that project. Without any transactions within the project, the inflationary pressure is less. Many of the projects (especially in the OCR) will largely be forgotten 4yrs from now.

After 4 years, when "flippers" start unloading, there is a deflationary pressure as there is a pent-up supply with the many waiting to sell. With no transactions in the past 4yrs, benchmarking the price in the same project becomes open to market with only the 4yr old price as the last reference. Of course the overall market will affect the pricing but that is the same with resale as well.

Meanwhile resale mature properties still flow with the market. If the economy still holds up and credit environment is still favourable, a mature project expects steady appreciation transaction upon transaction. This is an inflationary pressure which is not present in a new launch project.

Anyway, I guess everybody has their own point of view and I am not trying to convince anyone. It will take 4yrs to find out whose view is correct. Maybe my analysis is flawed but I am betting on the resale properties.

My guess is that people buying new launches now are genuine buyers. "flippers" if any buying new lauches are probably duped by the agents sweet talk with a fancy calculations.

Just for discussion. Cheers!

May not wait 4 years. 3 years also can, just minimize profit. Flippers may not tahan so long. Anyway, also must look at market. If market down down down, then no choice but to carry on waiting lor...

[DC33_2008]

You hit the nail on its head. This group is either upgraders or 2nd/3rd home buyers. Their mentality is that they can wait and hope to sell and make some profit rather than leaving the downpayment $ in the bank or making use of CPF money. I believe some of us started off like them. It works very well in a uprising and buoyant market w/o CMs. Not sure about now like what you have highlighted earlier.

Imagine if a new launch now is 100% sold out, chances are you will hardly see transactions (if any) in the next 4 years in that project. Without any transactions within the project, the inflationary pressure is less. Many of the projects (especially in the OCR) will largely be forgotten 4yrs from now.

After 4 years, when "flippers" start unloading, there is a deflationary pressure as there is a pent-up supply with the many waiting to sell. With no transactions in the past 4yrs, benchmarking the price in the same project becomes open to market with only the 4yr old price as the last reference. Of course the overall market will affect the pricing but that is the same with resale as well.

Meanwhile resale mature properties still flow with the market. If the economy still holds up and credit environment is still favourable, a mature project expects steady appreciation transaction upon transaction. This is an inflationary pressure which is not present in a new launch project.

Anyway, I guess everybody has their own point of view and I am not trying to convince anyone. It will take 4yrs to find out whose view is correct. Maybe my analysis is flawed but I am betting on the resale properties.

My guess is that people buying new launches now are genuine buyers. "flippers" if any buying new lauches are probably duped by the agents sweet talk with a fancy calculations.

Just for discussion. Cheers!

[Ultroman]

Even buy resale still need wait for 4 yrs oso. Unless inflationary pressure fr bouyant rising mkt can translate to higher rental. But do agree that during the 4 yrs still have transactions along the way that will move with market direction. So resale prices more volatile?

[proud owner]

just 2 days ago was thinking of this too!.. So we must pray that SSD of 4 years starts from OTP, good enough to attract new buyer continue to bite on developers' projects with higher psf.

reslae psf sure continue to appreciate.

just a thought ...

renters in NY think that economy not doing well .. rent will stay low ...

economy not doing well .. developers hold back launches .. in fact no new apts in the city for the last few years ..

however people are still moving into the city ..which resulted in a shortage of rental units .. and the most recent data showed rents going up in manhattan ...


for singapore ..
if developers stop building ... what will happen ?
if developers cont to build ...what will happen to rental ?

assuming economy cont to do well
PR capped

[rockinsg]

just a thought ...

renters in NY think that economy not doing well .. rent will stay low ...

economy not doing well .. developers hold back launches .. in fact no new apts in the city for the last few years ..

however people are still moving into the city ..which resulted in a shortage of rental units .. and the most recent data showed rents going up in manhattan ...


for singapore ..
if developers stop building ... what will happen ?
if developers cont to build ...what will happen to rental ?

assuming economy cont to do well
PR capped

What needs to be matched is risk and rewards.. with all the CMs being introduced, reward is less.. even if prices rises fast..more CMs will kick in to stop the rise..
but risk is more, in case of anything wrong in 2013-2014 buyers will be punished..will too much supply and low rents..

Issue will always be economy..and who is willing to take risks..

People renters are renting cause still got high paying jobs..thus high rents..high home prices..
less job..less renters..low prices.. house ownwers will be hurt..

Renters will just move to low rent locations/their homes.. for transitory places like Singapore risk is people leaving once their is slight downturn in economy.. PR/foreigners are not bound with singapore...

[ysyap]

just a thought ...

renters in NY think that economy not doing well .. rent will stay low ...

economy not doing well .. developers hold back launches .. in fact no new apts in the city for the last few years ..

however people are still moving into the city ..which resulted in a shortage of rental units .. and the most recent data showed rents going up in manhattan ...


for singapore ..
if developers stop building ... what will happen ?
if developers cont to build ...what will happen to rental ?

assuming economy cont to do well
PR capped

Oversupply lor... but I think the projected number of launches, whether in public or private market is pegged tightly to the PR cap that is being projected by MOM. Anyhow, this was an area of lapse which was highlighted in the last GE but I think it has since been bridged so things should look better in the years to come.

[rockinsg]

Oversupply lor... but I think the projected number of launches, whether in public or private market is pegged tightly to the PR cap that is being projected by MOM. Anyhow, this was an area of lapse which was highlighted in the last GE but I think it has since been bridged so things should look better in the years to come.

MOM and govt can decide on PRs caps and decide supply accordinly..
But can they predict how many of these PR will stay/buy house here?
How many won't return home on the first sign of any downturn in economy ?

In the worse situation these will be first to leave as some of them are sitting on handsome profit..and that would be opportunity to cash on it..

[amk]

Howgozit u made it sound like CM4 is a good policy
And devil I'm also happy new sales doing well

[ysyap]

MOM and govt can decide on PRs caps and decide supply accordinly..
But can they predict how many of these PR will stay/buy house here?
How many won't return home on the first sign of any downturn in economy ?

In the worse situation these will be first to leave as some of them are sitting on handsome profit..and that would be opportunity to cash on it..

Therefore govt doing everything they can to ensure the economy will be resilient towards any downturn potentially occurring from Europe or US or even Asia or middle east. They stand to lose more than just these PRs during such down times.

[rattydrama]

You hit the nail on its head. This group is either upgraders or 2nd/3rd home buyers. Their mentality is that they can wait and hope to sell and make some profit rather than leaving the downpayment $ in the bank or making use of CPF money. I believe some of us started off like them. It works very well in a uprising and buoyant market w/o CMs. Not sure about now like what you have highlighted earlier.

so what are you going to do with the cash on hand? continue to keep in the bank?

[ysyap]

so what are you going to do with the cash on hand? continue to keep in the bank?

Keep in bank only if property is falling in price and you are waiting to enter soon...

[Condo Kaiser]

go buy short dated distressed corp bonds....

[rattydrama]

just a thought ...

renters in NY think that economy not doing well .. rent will stay low ...

economy not doing well .. developers hold back launches .. in fact no new apts in the city for the last few years ..

however people are still moving into the city ..which resulted in a shortage of rental units .. and the most recent data showed rents going up in manhattan ...


for singapore ..
if developers stop building ... what will happen ?
if developers cont to build ...what will happen to rental ?

assuming economy cont to do well
PR capped

base on history, SG gov will stop the supply of land. With all the CMs, it restricts flippers. Currently all are potential buyers buying for own stay. maybe some are multiple owners and their existing units may not be restricted by CMs if they decide to sell now. And really the price over the past 3 years had appreciated quite a fair bite so I dont think they are making a lost.

going forward, I think if the PRs starts to flock in and only at this window period, then I think their is opportunity for buyers now.

economy cannt do well, the rent will go down..maybe condo can only rent out at 1k.

cheers

[rattydrama]

go buy short dated distressed corp bonds....

are you sure?

[rockinsg]

are you sure?

Can buy Capitaland stock.. if bullish on property...
Its beaten down.. funny, how come ppl so bullish on property.. but not on developer

[Condo Kaiser]

haha... don't take me as an investment guru but i think there is value in distressed corp bonds.. especially asian corp..

[Condo Kaiser]

Can buy Capitaland stock.. if bullish on property...
Its beaten down.. funny, how come ppl so bullish on property.. but not on developer

because stock prices are truer reflection on the market sentiment.... all the smart people in investment bank prop desk and fund houses know where to park their money and it is certainly not property counters in singapore, HK or China....

on the other hand.. property prices in singapore are largely driven by ordinary working people who out of sheer luck have accumulated a substantial amount of cash for them to feel rich enough to want to invest in property... all hoping to one day become biggest land lord....

unfortunately... the lay-man property buyers are never going to be smarter than the quant analysts...

the day u see fund houses start buying units in bulk then u know prices are at a reasnoable level...

[SpinCity]

because stock prices are truer reflection on the market sentiment.... all the smart people in investment bank prop desk and fund houses know where to park their money and it is certainly not property counters in singapore, HK or China....

on the other hand.. property prices in singapore are largely driven by ordinary working people who out of sheer luck have accumulated a substantial amount of cash for them to feel rich enough to want to invest in property... all hoping to one day become biggest land lord....

unfortunately... the lay-man property buyers are never going to be smarter than the quant analysts...

the day u see fund houses start buying units in bulk then u know prices are at a reasonable level...

stocks in natural are more liquid than properties, so the stock prices are meant to be more volatile than properties
institutional investors sell stocks for various reasons. They sell it today doesn't mean that they won't come back in tomorrow. Lots of the transactions are driven by technical signals and market sentiment, not necessary by fundamentals

just look back in the past 5 years, many funds paid hefty prices for commercial and residential buildings in SG and still holding on to their investments. Whether they are really long term investors or just got trapped is up to your view, but they are not necessary smarter in terms of real estate investment

[DC33_2008]

Fortunately, I do not have this problem as I have invested in properties way before the CM. There are still many other investment opportunities besides property. Will go back to property when the time is right unless there can really find a good buy at this point in time.

so what are you going to do with the cash on hand? continue to keep in the bank?

[rockinsg]

stocks in natural are more liquid than properties, so the stock prices are meant to be more volatile than properties
institutional investors sell stocks for various reasons. They sell it today doesn't mean that they won't come back in tomorrow. Lots of the transactions are driven by technical signals and market sentiment, not necessary by fundamentals

just look back in the past 5 years, many funds paid hefty prices for commercial and residential buildings in SG and still holding on to their investments. Whether they are really long term investors or just got trapped is up to your view, but they are not necessary smarter in terms of real estate investment

I agree that even the fund investors are not smarter..
But for singaporeans investing in singapore itself defy the logic of "divesification".

If singapore prosper they will prosper..but they will prosper anyway cause of good paying jobs..
but if singapore job growth/economy slows down..they will lose both job and property value..
How that justify diversification logic? I will have to say that average singaporean pouring money there money into property "investment" is bit stupid, if not well divesified...

[howgozit]

just a thought ...

renters in NY think that economy not doing well .. rent will stay low ...

economy not doing well .. developers hold back launches .. in fact no new apts in the city for the last few years ..

however people are still moving into the city ..which resulted in a shortage of rental units .. and the most recent data showed rents going up in manhattan ...


for singapore ..
if developers stop building ... what will happen ?
if developers cont to build ...what will happen to rental ?

assuming economy cont to do well
PR capped

Rental culture in places like US and Singapore are fundamentally different.

Society in the US expects an adult to live out on his/her own. Adults living with their parents are considered losers, a big social stigma. Even parents want to kick their adult children out. This creates a perpetual ready supply of renters as these young adults probably will not be able to afford to buy a property at this point. Renting is so prevalent that even later in life, for many Americans it is an acceptable lifestyle option. How many Singaporeans are comfortable with that idea? Perpetually renting.

Therefore, in Singapore the rental market for domestic consumption is comparatively low. Locals who rent are usually transitional renters, either those waiting for their homes to be renovated or those caught in between transactions. There are some young Singaporeans who do live out and rent, but they are too few and far in between to support the rental market.

In short, we are very dependant on foreigners to keep the rental market not just buoyant but viable.

If the economy falters, there will be an exodus of foreigners. Property investors are hit with a double whammy of loss in value and rental. Not just low rental but possibly even no rental.

[Condo Kaiser]

Totally agree with the above...

[ysyap]

Just ask the investors how many manage to rent to locals? The largest pool of local renters are probably for rooms near varsities and polytechnics. Seldom whole units to local families.

Then again I managed to rent to two local families but both are short term of about 1 yr while waiting to buy and then move to new place.

[rattydrama]

Can buy Capitaland stock.. if bullish on property...
Its beaten down.. funny, how come ppl so bullish on property.. but not on developer

my observation is only buy ppty stock if the price is very low cos its the faster counter to drop.

buy house still can hold & collect miserable rent.

[rattydrama]

In short, we are very dependant on foreigners to keep the rental market not just buoyant but viable.

If the economy falters, there will be an exodus of foreigners. Property investors are hit with a double whammy of loss in value and rental. Not just low rental but possibly even no rental.

we have a substaintial amount of foreigners with salary of 2-4k per month who are renters. they are willing to work long hours without good benefits with the view to get a PR in Singapore at a later time.

I think there are still renters in down market..it is just a matter of how much they are willing to pay.

[rockinsg]

my observation is only buy ppty stock if the price is very low cos its the faster counter to drop.

buy house still can hold & collect miserable rent.

Property stocks are already beaten down.. and reflecting reality..its the property which is now out of sync..
miserable GDP.. Still people think property prices will remain this high?

No way property can stay up if stocks going down..
Stocks are liquid property is illiquid.. 6-7 months, property prices will start decline..

[SpinCity]

Property stocks are already beaten down.. and reflecting reality..its the property which is now out of sync..
miserable GDP.. Still people think property prices will remain this high?

No way property can stay up if stocks going down..
Stocks are liquid property is illiquid.. 6-7 months, property prices will start decline..

What if stocks recover by October or even Jan 2012 which is about 6 months from now? will property price still fall 6-7 months from now?

[rockinsg]

What if stocks recover by October or even Jan 2012 which is about 6 months from now? will property price still fall 6-7 months from now?

What I said was
"No way property can stay up if stocks going down.. "

Ofcourse if stock recovers then property will stay strong...property is always last to react and thats a fact..

its always risk reward game.. and risk isnt worth it now to buy property..
Even stocks are better play then property right now...

[DC33_2008]

Good time to buy stock now then to buy property. Just like two days ago. It is really like Yo-Yo these days. Make $ from stock and wait to buy property.

What I said was
"No way property can stay up if stocks going down.. "

Ofcourse if stock recovers then property will stay strong...property is always last to react and thats a fact..

its always risk reward game.. and risk isnt worth it now to buy property..
Even stocks are better play then property right now...