Impact of the ABSD

[peterng8]

I read from some articles and find them interesting to share :

1) Transaction cost for investors will increase substantially, killing
investment demand.

Foreigners and companies will be the hardest hit. For example for a $1 million dollar purchase, the effective buyer’s stamp duty will increase from $24,600 to $124,600, a $100,000 or 500% increase! The effective tax rate will increase from 2.5% to 12.5%. This will effectively stamp out any investment demand from all but the wealthiest who may have other noninvestment considerations.

2) Even for Singaporeans who already own two and PRs who own one unit, they will
be heavily discouraged from investing in property as their effective stamp duty for the $1 million purchase will increase from $24,600 to $54,600, a 220% increase. The message to the rich is clear: “Don’t invest in residential properties.”
Transaction volumes will fall. Some analysts are looking for a 20% fall in volumes next year. With investing sentiments dampened by the continuous stream of government measures and the unstable economy in Developed countries, this is quite probable. Bid-ask spreads between buyers and sellers will increase, tanking volumes and setting the

stage for price decreases later.

3) The impact on prices will be negative but uncertain. The measures were

unexpected as property price momentum has already been falling for the past eight quarters. Some analysts expect a 10-15% fall in prices, but the impact is uncertain as interest rates remain low and unemployment

hasn’t rise, so property owners still have holding power. Furthermore economists are still expecting a 3-5% GDP growth rate for Singapore in 2012, which is not bad, although this number is volatile and can be revised downwards quickly if the external environment deteriorates. The large spike in supply is expected in 2014- 2015 so the market could be hit then if

this measure is still in place.

4)Foreigners will shrink as a percentage of all buyers. The recent wave of

foreigners (especially the Chinese) coming to Singapore to buy property will
think twice. Foreigners (excluding PRs) made up 18% of new units sold in 3Q11, versus ~15% in 1H11 and the last peak of 15% in 2007.

Negative impact on high-end market will be larger. The impact is likely to be
larger on the high end residential market as the share of foreign buyers there is higher. Foreigners (excluding PRs) and companies accounted for 34% of new sales in 3Q11 versus 17% in suburban locations. Some analysts are predicting a 40% fall in volumes in prime districts.

to be continued...

[peterng8]

5) IRAS levy the ABSD on developers if they fail to sell all the units in a residential project within five years. Developers will thus be more careful about stocking up on land

bank unless they are sure they can develop and sell it within that timeframe.
Developers are also incentivized to cut prices to move inventory if they are
approaching this deadline. As the ABSD is based on land price, the impact is likely to be less significant versus general sentiment and investment interest.

Investors may focus on the commercial market instead. Now that the residential property market has been effectively closed to investors both local and foreign, will they turn their attention to the commercial property market? The problem is that with an uncertain global environment and Singapore’s open economy, office and industrial rents could also moderate.

All things considered, it is believed that the ABSD
will be the turning point of the market. Given
the current negative sentiment and slowing
price growth (prices were up just 1.3% in
3Q11), these heavy-handed measures are
likely to be the straw that breaks the

camel’s

back and may mark the turning point of the
property cycle. 2012 could turn out to be a
year of woe for those who are heavily invested
and leveraged, and one of bargain hunting for

cashed-up long term investors and end users

[phantom_opera]

China/HK turned already then we follow, we already a laggard,

China A down 0.9% at 2270 .... if the world factory is not making profit ... u know what happen la

[Leeds]

Looking hard at the CM,it does not much affect locals buying their first and second properties. Even if the locals want to buy their 3rd or 4th properties, they could always use their family members to buy in name instead. Unless there is a serious crisis outbreak or negative economic grow or big retrenchment, the locals may fill the gap of the foreigners. This is a possible scenario which could not be ruled out.

[jwong71]

Looking hard at the CM,it does not much affect locals buying their first and second properties. Even if the locals want to buy their 3rd or 4th properties, they could always use their family members to buy in name instead. Unless there is a serious crisis outbreak or negative economic grow or big retrenchment, the locals may fill the gap of the foreigners. This is a possible scenario which could not be ruled out.

why do locals buy..?
- capital gain,
- hot monies,
- to sell to foreigners..

so if there's no-foreigners to sell to, then sell to locals..?
u scratch my back, and i scratch urs..? or u sell me urs, and i sell u mine.??

now, locals have little hopes in buying now, and to sell to anyone for profits in future

[phantom_opera]

Our PAP is no way as harsh as CCP but it can be

Jim Rogers:

Some Parts Of The Chinese Economy Are Going To Have A Hard Landing
Some parts of the Chinese economy are going to have a hard landing. The Chinese for two years now have been tightening up. They have raised interest rates six times. They have raised reserve requirements a dozen times. Just recently they started to loosen this up a little bit but they are trying. They are trying to bring down real estate, they are trying to make real estate developers go bankrupt so you are going to have a hard landing to use your terms in things like property in China.

But other parts of the Chinese economy are going to continue to boom: water treatment, agriculture, farmers are not going to know that the real estate speculators in Beijing and Shanghai are going bankrupt because they are working too hard and making too much money so you are going to have sectors of the Chinese economy with serious problems but it’s not the whole Chinese economy. It’s not like it was here. - in The Globe & Mail

[phantom_opera]

why do locals buy..?
- capital gain,
- hot monies,
- to sell to foreigners..

so if there's no-foreigners to sell to, then sell to locals..?
u scratch my back, and i scratch urs..? or u sell me urs, and i sell u mine.??

now, locals have little hopes in buying now, and to sell to anyone for profits in future

Ah Kong only want HDB upgraders to buy just one PC, keep their HDB for rental and stay in PC ... Ah Kong learn from China CCP and this is the only way to ensure huge victory in next election without cutting Minister's Pay

Ah Kong don't care about elites or Indon Chinese who own multiple Orchard properties anymore

Pinnacle@Duxton may not be able to sell first 1 million unit anymore because similar unit @ Icon is going to be 1 million only

[peterng8]

remember alots of forummers support PAPA in last polling with blah blah reason on property price up....and later again on the Dr, whose of the perceived reason that can contribute to help solve economy crisis as the most experienced candidate in another recent polling...so dont give up continue to support

[phantom_opera]

In fact HDB resale price will also go down once KBW starts to flood the market with BTO for 2nd timers next year i.e. the resale market has no Singaporeans first timers, no second timers ... only SPRs

HDB 400psf, prime HDB & OCR 600psf, RCR 800psf, CCR 1000psf

[buttercarp]

My neighbour is FT Indian who are now PR.
They are still renting the unit cos they said it was too expensive to buy.
Now with the CM, if prices dive, they may buy a unit rather than continue with the rental.

[yaozong7]

In fact HDB resale price will also go down once KBW starts to flood the market with BTO for 2nd timers next year i.e. the resale market has no Singaporeans first timers, no second timers ... only SPRs

HDB 400psf, prime HDB & OCR 600psf, RCR 800psf, CCR 1000psf

It's not true that the HDB resale mkt will only cater to PRs. How about citizen 1st-timers like me who are not eligible for BTOs and ECs? Resale will be an avenue.

There's also the younger generation who want to marry but dont want to wait 3 years for the BTO. They will buy resale. The resale mkt however, will be hit by KBW's new BTOs in 2 years time though, esp. if population stagnates at 5.2m. KBW's strategy is to let the resale mkt slide gradually through completion of BTOs, so that he will not bear the brunt of current HDB owners' ire.

[jwong71]

My neighbour is FT Indian who are now PR.
They are still renting the unit cos they said it was too expensive to buy.
Now with the CM, if prices dive, they may buy a unit rather than continue with the rental.

will buy, if prices dive.

lately on the street talks, pple are waiting for 2012. for prices to dive down.

so if Mr A wanna buy a property now, Mr B will tell him to wait for 2012.
in 2012 drop by 10%, Mr C will tell him to wait for 20%.
if drop by 20%, Mr D will tell him to wait for 30%...

心理学

[devilplate]

My neighbour is FT Indian who are now PR.
They are still renting the unit cos they said it was too expensive to buy.
Now with the CM, if prices dive, they may buy a unit rather than continue with the rental.

rental will crash after px crash

LOL

[hyenergix]

In fact HDB resale price will also go down once KBW starts to flood the market with BTO for 2nd timers next year i.e. the resale market has no Singaporeans first timers, no second timers ... only SPRs

HDB 400psf, prime HDB & OCR 600psf, RCR 800psf, CCR 1000psf

I'm of the view that HDB prices in prime districts will continue to climb gradually. Watch out for HDBs near Jurong East MRT and Tanjong Pagar/Tiong Bahru/ Queenstown MRT. The more the MRT network develops, the more valuable these HDBs in these areas will be. It is hard for KBW to create BTOs in these areas, as the land is designated for more GLS to generate revenue for the government.

[devilplate]

hdb px may not crash so easily..at most correct abit nia.....

its condo tat will suffer big crash....zzzzzzzzzz

u see more foreigners will stop looking to buy liao.....they will go apply PR....once they got PR, they can actually look at resale HDB instead of condo

[jwong71]

hdb px may not crash so easily..at most correct abit nia.....

its condo tat will suffer big crash....zzzzzzzzzz

u see more foreigners will stop looking to buy liao.....they will go apply PR....once they got PR, they can actually look at resale HDB instead of condo

yup. that wad the cbcp foreigner said on tv, ytd nite.

apply pr, may consider hdb. or then pc

[jwong71]

rental will crash after px crash

LOL

rental crash.

hdb rental cash, lead to unable to cover condo mortgages.

then.. u know, i know, history cycles know

[ysyap]

yup. that wad the cbcp foreigner said on tv, ytd nite.

apply pr, may consider hdb. or then pc

Smart move by our govt... more FT applying for PRship in Singapore. Lol!

[hyenergix]

rental crash.

hdb rental cash, lead to unable to cover condo mortgages.

then.. u know, i know, history cycles know

Foreigners are slowly downgrading to HDBs. HDB rental in prime districts will not crash.

[ysyap]

Ah Kong only want HDB upgraders to buy just one PC, keep their HDB for rental and stay in PC ... Ah Kong learn from China CCP and this is the only way to ensure huge victory in next election without cutting Minister's Pay

Ah Kong don't care about elites or Indon Chinese who own multiple Orchard properties anymore

Pinnacle@Duxton may not be able to sell first 1 million unit anymore because similar unit @ Icon is going to be 1 million only

Ah gong only care about whether there are sufficient foreign talents/workers around us to stay and work (not foreign investors who come, buy property and go). Check out our latest foreign worker...

After taking a detour to avoid a traffic jam, an SBS Transit bus driver lost his way, ending up taking more than 10 passengers on a more than two-hour journey.

Channel 8 news reporter Wu Liang Xiang happened to be on SBS bus service 52, which was headed toward Bishan from Jurong East interchange on Sunday.

While travelling along Bukit Timah road, its driver took a left turn off the road to avoid getting stuck in a congested section, but eventually lost his way, Wu reported in a video for the TV channel.

Passengers on board the bus at the time expressed their annoyance at the driver, telling Channel 8 that their time was being wasted.

The news bulletin also reported that a number of passengers on the bus offered to help provide directions to the driver, but were turned down because of a “need to follow the SBS control centre’s instructions”, leading some to lament that the driver and SBS Transit should be more flexible in situations like the one they were in.

“If our passengers are willing to help the driver, and most of us have already been stranded in the bus for about two hours, the control station should allow him to listen to our views,” said an English-speaking passenger in the video.

The report added that ComfortDelgro, which owns SBS Transit, has issued an apology, and are currently investigating the incident. The transportation company, which also controls Singapore’s largest fleet of taxis, has not yet responded to queries from Yahoo! Singapore.

[phantom_opera]

HDB price not crash lah ... just dun expect anymore upside like 1 mio HDB

[lordhawk]

My neighbour is FT Indian who are now PR.
They are still renting the unit cos they said it was too expensive to buy.
Now with the CM, if prices dive, they may buy a unit rather than continue with the rental.

See, we're not that foreigner unfriendly after all!

[devilplate]

See, we're not that foreigner unfriendly after all!

yeah

cm5 is to protect our beloved foreigners!!!

sad to hear more singkies entering the market even after cm5......zzzzzzzzzzzzzzzzzzzzzz

[lordhawk]

yeah

cm5 is to protect our beloved foreigners!!!

sad to hear more singkies entering the market even after cm5......zzzzzzzzzzzzzzzzzzzzzz

Well, you know what bro equalizer says, Denial....

Sinkies flushed with cash, dunno where to throw...

[peterng8]

Well, you know what bro equalizer says, Denial....

Sinkies flushed with cash, dunno where to throw...

seller still hold high high price if not rather hold that is the common answer now...

[hyenergix]

HDB price not crash lah ... just dun expect anymore upside like 1 mio HDB

>$1 million HDB http://www.propertyguru.com.sg/singa...ms_per_page=30

Just wait for those at Tanjong Pagar and Queenstown to meet 5 years MOP...

[Leeds]

why do locals buy..?
- capital gain,
- hot monies,
- to sell to foreigners..

so if there's no-foreigners to sell to, then sell to locals..?
u scratch my back, and i scratch urs..? or u sell me urs, and i sell u mine.??

now, locals have little hopes in buying now, and to sell to anyone for profits in future

The thinking is that hot money does not confine to just foreigners. Many cash rich locals also do not know where to part their excess cash. They will continue to buy properties for investment. A friend of mine who is cash rich went ahead to buy just before the CM knowing that prices are likely to fall even without the CM. His thinking was that it is better to get rental income than bank interest. He prefers to get $3000 rental than $1000 bank interest for the $1m property he invested. There are many cash rich people who think this way. There are also locals who buy for own stay and will buy as long as the price fits their budget. They care not about capital gain.

If developers continue to hold on to prices, these group of locals can still create some demand with the usual marketing tactics by less than professional developers. The market can be rather distorted in this case.

[jwong71]

The thinking is that hot money does not confine to just foreigners. Many cash rich locals also do not know where to part their excess cash. They will continue to buy properties for investment. A friend of mine who is cash rich went ahead to buy just before the CM knowing that prices are likely to fall even without the CM. His thinking was that it is better to get rental income than bank interest. He prefers to get $3000 rental than $1000 bank interest for the $1m property he invested. There are many cash rich people who think this way. There are also locals who buy for own stay and will buy as long as the price fits their budget. They care not about capital gain.

If developers continue to hold on to prices, these group of locals can still create some demand with the usual marketing tactics by less than professional developers. The market can be rather distorted in this case.

1 million property rental 3k..

once drop to 800k value, rental..?? 3k..?? or 2.5k..??

so ur frd doesnt mind lose on 200k, if he see rental..??

why not ask ur frd pass me 1 million, i can give him 3k for next 12months.
then his principal amount i returned 800k.

mine is the best, cos the 3k is net net.
do not have to minus off mortgages, maintaince fee, and property taxes. which eventually he get per month basis 1-1.5k from props

[jwong71]

The thinking is that hot money does not confine to just foreigners. Many cash rich locals also do not know where to part their excess cash. They will continue to buy properties for investment. A friend of mine who is cash rich went ahead to buy just before the CM knowing that prices are likely to fall even without the CM. His thinking was that it is better to get rental income than bank interest. He prefers to get $3000 rental than $1000 bank interest for the $1m property he invested. There are many cash rich people who think this way. There are also locals who buy for own stay and will buy as long as the price fits their budget. They care not about capital gain.

If developers continue to hold on to prices, these group of locals can still create some demand with the usual marketing tactics by less than professional developers. The market can be rather distorted in this case.

in short, the rich do not mind to lose a 100-300k. as long got rental..?

indeed very smart rich one, then i wonder hw they acculmate their wealth through such smartness

[buttercarp]

Well, you know what bro equalizer says, Denial....

Sinkies flushed with cash, dunno where to throw...

Better buy property than leave it in bank.
Property especially residential, can keep for future generation.