S'pore property prices may continue climbing: survey

[land118]

http://www.channelnewsasia.com/stori...144363/1/.html

S'pore property prices may continue climbing: survey
By Millet Enriquez | Posted: 01 August 2011 1950 hrs


SINGAPORE: Singapore property prices may continue climbing this year, contrary to a widely expected downturn, according to results of a survey by online portal PropertyGuru.com.sg.

Most respondents said property in Singapore will remain expensive, and they are setting their sights on alternatives like commercial property and real estate investments overseas, the survey showed.

Rising property prices are pushing would-be home buyers to hold off their plans as they do not believe that the much-anticipated downturn will materialise this year.

Steve Melhuish, CEO and co-founder of PropertyGuru.com.sg, said the survey itself would not have an impact on the market. However, it is like a temperature check.

He said: "(What it says is that) they expect the transactions and prices to carry on going up and so the expectation is that they are going to have to pay a higher price in the future. And as a result of that, they want the government to do more."

Analysts said prices for government-subsidised housing, or HDB flats, could jump 12 per cent this year, while private homes might climb as much as 10 per cent.

Adam Tan, corporate communications manager, PropNex, said: "I think we can see from the survey that there are people who are unhappy and they would like the prices to come down. And that is reflective of the market, prices are indeed increasing and don't look to drop any further."

This year, HDB resale prices have risen around 3 per cent, while private home prices were up about 2 per cent.

Buyers are now setting their sights on commercial properties - where the rental returns are more attractive - and overseas properties, with Malaysia, India and Australia the top choices.

Tom O'Reilly, director of Singapore Tenancy Management, said: "Malaysia as a country has extremely strong fundamentals and the property market in Malaysia tends to be a lot less volatile than Singapore.

"For the same amount of money, people can often afford to invest in multiple properties in Malaysia, which help them diversify risk but also still generate a positive return."

However, a downward correction for Singapore property prices may still lie ahead.

Analysts such as Bank of America Merrill Lynch are underweighting residential properties on potential oversupply between now and 2015.

It is favouring commercial property stocks like UOL and OUE, and real estate investment trusts like CapitaMall Trust, Starhill and ARA.

SIAS Research also sees positive prospects for commercial REITs on expected rental and values growth in the next few years.

Its top pick is K-REIT for its prime Grade A commercial properties such as Marina Bay Financial Centre and One Raffles Quay.

While Grade A office rentals have increased, analysts say it is still 36 per cent off its peak levels in 2008.

- CNA/al

[sfwoo]

And volume of transactions will continue falling???

[vip]

Sellers are firm on asking prices while buyers are hesitating to commit.

It all depends on the economy in the coming months --- whether there will be further slowdown or onset of a new financial crisis. For the latter, it will start with a drop in volume, followed by transacted prices.

[thomastansb]

No one will know one. Every month, we have few hundred analysts - some saying up, some saying down. Surely, there will be some correct (either up or down isn't it?). In Q12008, many analysts say prices will hold. US will not affect Singapore much because got China. Really?

In Q12009, many analysts say property will continue to drop 20%.

I rest my case. No one will know. Anyway, isn't it a known fact prices only drop in the event of a major shock like Asian Financial Crisis, US financial meltdown etc ?????? So why are analyst still talking as if there are many factors? I think I can be senior analyst already

[evergreen]

Because somebody's loss is another someone else's gain.
US's loss is Asia's gain? Amist the economic turmoil, the rich have grown richer (the poor have become poorer) and some companies have made record profits. The need for products and services won't dissappear suddenly. People will still consume.

For the next 50 years, PM Lee said the government would continue to take a long-term, rational perspective, remain an international hub, and be open to global investments and talent.
The SG population isn't going to decrease. It's going to increase. The transportation companies are investing money in ramping up their capacity.

Demand will increase.
Supply is increasing.
Will supply outpace the demand and cause prices to drop? Place your bets!

[solsys]

In the first place, Asia property prices are not suppose to drop in Year 2009 since problems are in the West but it did drop because of panic running amok globally.

From Year 2009 to 2011, people figured out that Asia is the place that is more stable..... so funds are parking here.

People who are expecting another crash in SG property or severe correction are assuming Singapore market and other Asian markets are very very developed like the West with bubbles, which we aren't.

This is just the beginning of the rise of Asia or East or the bubbles at infant stage.

From Year 2009-2011, people realised that Asia is safer.....

Assuming if US and Europe tanks..... where would the funds go?

Which currency can survive as the next safe haven?

The answer is pretty clear.

Credit given to government for re-branding Singapore using 2 x IR and Formula One.

[joycewangwen]

Assuming if US and Europe tanks..... where would the funds go?

Which currency can survive as the next safe haven?

I think those western country politicians should be smart enough to avoid that to happen.

Printing money is the 1st step...

[rockinsg]

In the first place, Asia property prices are not suppose to drop in Year 2009 since problems are in the West but it did drop because of panic running amok globally.

From Year 2009 to 2011, people figured out that Asia is the place that is more stable..... so funds are parking here.

People who are expecting another crash in SG property or severe correction are assuming Singapore market and other Asian markets are very very developed like the West with bubbles, which we aren't.

This is just the beginning of the rise of Asia or East or the bubbles at infant stage.

From Year 2009-2011, people realised that Asia is safer.....

Assuming if US and Europe tanks..... where would the funds go?

Which currency can survive as the next safe haven?

The answer is pretty clear.

Credit given to government for re-branding Singapore using 2 x IR and Formula One.

If US and EU tanks then what you think will happen? What US will do with all its military might?
War is the way US and EU had economic prosperity ..why you think it will be different this time?

[ysyap]

Will supply outpace the demand and cause prices to drop? Place your bets!

I suspect demand will outpace supply. Our lovely govt kept saying our country need foreign talents blar blar blar so they will merely open that tap whenever the need arises coz its the easiest way to solve any dire manpower shortages! What are you betting on?

[evergreen]

I just placed my 20% bet on demand outpacing supply. Good luck to me

[amk]

Guys , if US and EU tank, SG sure suffer big time. As a trading hub, there is no way it can survive without trading. I think there is no illusion on this.

The issue is, will these entities collapse overnite ? My reading is a no. Dun forget Japan had been in deflation for 20 yrs. A very likely scenario will be for US to enter into that.

Extraordinary times call for extraordinary thinking.

[bargain hunter]

let's say US goes into the 20 year deflation. your take is interest rates will stay low. will that cause the ppty boom in sg to continue? or as u said below, US suffer, we also suffer.

Guys , if US and EU tank, SG sure suffer big time. As a trading hub, there is no way it can survive without trading. I think there is no illusion on this.

The issue is, will these entities collapse overnite ? My reading is a no. Dun forget Japan had been in deflation for 20 yrs. A very likely scenario will be for US to enter into that.

Extraordinary times call for extraordinary thinking.

[Komo]

when even more people start to say price can climb even high, beware, crash is coming even closer...

[ysyap]

when even more people start to say price can climb even high, beware, crash is coming even closer...

What is crash to you? >20% price drop?

[Komo]

What is crash to you? >20% price drop?

30% will be about right

[Fisherman]

when even more people start to say price can climb even high, beware, crash is coming even closer...

Everyone invested in properties is now in a slow boiling pot with the temperature getting higher without knowing it. Before long all will be COOKED!

[kane]

I just placed my 20% bet on demand outpacing supply. Good luck to me

Which development did you place your bet on?

[thomastansb]

Say one bought early 2009 and getting a very decent rental at 10%. Why would this person be in a slow boiling pot and be cooked? Your analogy is flawed.

And many bought before 2007 boom and is getting like 10-15% yield easily. I think these group are watching their pot cooking and producing delicious soup. Getting more and more delicious.

Everyone invested in properties is now in a slow boiling pot with the temperature getting higher without knowing it. Before long all will be COOKED!

[ysyap]

30% will be about right

Lovely... I also waiting but when was the last time 30% price drop occurred? 1997?

[evergreen]

All that talk about soup is making me hungry!

Which development did you place your bet on?

Shoebox @ Braddell

[windcar]

Say one bought early 2009 and getting a very decent rental at 10%. Why would this person be in a slow boiling pot and be cooked? Your analogy is flawed.

And many bought before 2007 boom and is getting like 10-15% yield easily. I think these group are watching their pot cooking and producing delicious soup. Getting more and more delicious.

can you give me an example of a property that was bought in 2009 has a rental yield of 10%? Does it mean that if the property cost 1m, the rental income will be 100k/year?

[popoty]

why would garment open FT tap to the extend of demand outstrip supply?
at best demand close to supply, that is good enough liao, to keep price stable as much as possible

[amk]

let's say US goes into the 20 year deflation. your take is interest rates will stay low. will that cause the ppty boom in sg to continue? or as u said below, US suffer, we also suffer.

My take is, SG will suffer. Unemployment rate will have to go up. Job security will not be a given. Wage increase will not be a given. Pty price will be stagnant. And because of loss of jobs there will have selling pressure. All those 1st timers buying to invest hoping to get easy rental income will face the reality of low or no rental. Thanks to strict lending criteria and sustained low rates, many may not be desperate, but there is no more easy money on pty.

[Jadey]

Say one bought early 2009 and getting a very decent rental at 10%. Why would this person be in a slow boiling pot and be cooked? Your analogy is flawed.

And many bought before 2007 boom and is getting like 10-15% yield easily. I think these group are watching their pot cooking and producing delicious soup. Getting more and more delicious.

There are many ways to look at rental yield. If you want to make yourself feel good, just use your original purchased price even if it was bought 10, 15 or 20 years go.

However I would prefer to calculate rental yield based on existing valuation, rather than historic prices because the money we collect today is a lot smaller than 10 years ago.

[hyenergix]

My take is, SG will suffer. Unemployment rate will have to go up. Job security will not be a given. Wage increase will not be a given. Pty price will be stagnant. And because of loss of jobs there will have selling pressure. All those 1st timers buying to invest hoping to get easy rental income will face the reality of low or no rental. Thanks to strict lending criteria and sustained low rates, many may not be desperate, but there is no more easy money on pty.

There are many levers that the government can use to prevent property market crash: LTV, HDB ruling, Stamp duty... I'm of the view that at current interest rates, the property prices will rise gradually about 3-5% per annum. However for those in booming areas, there will still be high demand and price growth. Looking at how our infrastructure is struggling to cope with traffic, the higher transportation costs, and the increasing cost of time, people will pay a premium to be near their work places.

[rockinsg]

There are many levers that the government can use to prevent property market crash: LTV, HDB ruling, Stamp duty... I'm of the view that at current interest rates, the property prices will rise gradually about 3-5% per annum. However for those in booming areas, there will still be high demand and price growth. Looking at how our infrastructure is struggling to cope with traffic, the higher transportation costs, and the increasing cost of time, people will pay a premium to be near their work places.

Right now everything is just too good to be true.. low unemployment..low interest rate..high rental demand... what else you can ask for....?

Its economy..what if it falter at 2012 or 2013?...How many people would be willing to buy if they are not sure about their jobs..?

[CCR]

When times are good, economy doing well, interest rates low, we complain prices too high.... When crash and economy doing badly then we worry about our jobs and dare not to buy.... So all these fence sitters will never commit

[thomastansb]

Take the one who bought Clift around 500k. 10% yield give and take.

can you give me an example of a property that was bought in 2009 has a rental yield of 10%? Does it mean that if the property cost 1m, the rental income will be 100k/year?

[thomastansb]

Of course use the purchase price. That is the bank installment I have to pay. Anyway, he was saying about people in a slow boiling pot which I don't agree at all. Which is why I use the example of someone buying in early 2009 who is enjoying like 10% rental yield now. How would that person be dying slowly????

There are many ways to look at rental yield. If you want to make yourself feel good, just use your original purchased price even if it was bought 10, 15 or 20 years go.

However I would prefer to calculate rental yield based on existing valuation, rather than historic prices because the money we collect today is a lot smaller than 10 years ago.

[solsys]

Guys , if US and EU tank, SG sure suffer big time. As a trading hub, there is no way it can survive without trading. I think there is no illusion on this.

The issue is, will these entities collapse overnite ? My reading is a no. Dun forget Japan had been in deflation for 20 yrs. A very likely scenario will be for US to enter into that.

Extraordinary times call for extraordinary thinking.

If US and Europe tanks, yes we will be affected, but we are the next best thing liao.

HSBC is selling their branches in US, cutting people globally especially in west and intend to hire more in Asia.

Go figure the demand supply.

This is Asia's era now.

Prices rate of increase now will be inflation driven.

Those waiting for crash? Wait long long. CM5 already eliminate possibility of a crash in next 4-5years.

Correction maybe. Severe correction unlikely.

Year 2009 is the beginning of the crisis era, it started with a bang but we will get used to the noise of crises in the years to come so much so we just get on with life and if we have to buy, we just buy. Same goes for the foreigners in Singapore.