ABSD: Questions that beg for answers

[Jadey]

I am not sure what this guy is talking about really. Can only guess he is writing this on behalf of REDAS and the real estate industry.

ABSD: Questions that beg for answers
The need for moderating investment inflow seems to contradict several tenets that have brought Singapore its success

By KU SWEE YONG

IT IS more than a month since the introduction of the additional buyer's stamp duty (ABSD). I am still scratching my head on the whys.

Some buyers have held back their decisions thinking that perhaps prices might fall while others have stepped away for now because their cash-on-cash returns drop if they have to pay the ABSD. We have also read about buyers not exercising their options for Bedok Residences, Archipelago and The Palette.

On the flip side, some sellers have withdrawn their intentions to sell their residential investments because they would not be able to reinvest their cash into another residential unit without having to incur the ABSD.

The secondary market, already quiet in 2011, will be reduced to a whimper in 2012. The number of units sold by developers is also expected to be lower, as some investors wait out for lower prices or look for alternative sectors to invest into.

In explaining the rationale for the ABSD, Tharman Shanmugaratnam, Deputy Prime Minister and Minister for Finance and Manpower, said in a Dec 7, 2011, press release: 'We have always had open markets and must keep them that way. However, the reality is that investment flows into our property market are now larger than before, and unlikely to recede as long as interest rates remain low. The additional buyer's stamp duty should help cool investment demand, and avoid the prospect of a major, destabilising correction further down the road.'

Minister of State for Manpower and National Development Tan Chuan-Jin reiterated at the Redas 52nd Anniversary Dinner on Dec 27, 2011: 'Given volatile equity markets and a worsening economic situation in Europe, our small property market is attractive to foreign funds. The latest measure is a targeted and measured move to moderate such investment demand in order to avoid the need for a major correction down the road.'
The need for moderating investment inflow seems to contradict several tenets that have brought Singapore its success. The last I checked, on the Economic Development Board's website, Singapore held a string of accolades including the top spot 'for having the most open economy for international trade and investment', as ranked by the Global Enabling Trade Report 2010 published by the World Economic Forum.

Now, where and what are the sources of 'investment flows into our property market' and 'foreign funds'? And what is the exact cause for concern to the government that this lopsided ABSD is applied to foreign investors specifically targeting the residential segment and not any other asset classes? Furthermore, there were certain exclusions and permutations which now add complexity to our otherwise rather simple and clear tax system.

We begin by looking at foreigners' purchase of residential units with caveats filed in 2011. Do note that we are limited to the data provided by the Urban Redevelopment Authority's Realis (Real Estate Information System). For purposes of this article, I have assumed that permanent residents (PRs) who purchased homes in Singapore are neither a source of 'foreign funds' nor inward investment flow. Although we know there are PRs who are active in their home countries and who have invested in Singapore's residential properties, let us take it that these PRs' monies are considered local. We narrow our focus on the transactions by foreigners and by companies.

Foreign purchasers
With Singapore's push to develop its trust and fund management services capabilities, the bulk of residential transactions under company name is due to foreign purchasers. Our experience shows that Singaporean investors purchasing properties through companies are few and far between but foreigners, especially those who are planning their wealth transfer in Singapore, are more amenable to invest in properties via trusts, foundations, offshore companies or Singapore entities. There were also foreign private equity funds that invest into Singapore's residential properties such as the collective investments made through the private banks on behalf of their clients.

In 2011, foreigners accounted for 4,939 transactions (or 17.3 per cent of the total for that year) while company-registered purchases accounted for 704 units (2.4 per cent). In comparison, the number of units purchased by foreigners in 2007 was slightly higher at 5,038 (13.1 per cent) while company transactions were much higher at 2,681 units (7.0 per cent). The recent sharp drop in company transactions was caused by government policies restricting the loan-to-value ratio for residential properties purchased under company names and a pullout of real estate funds post-Lehman crisis, for example Wachovia, Citadel. With the introduction of 10 per cent ABSD for residential units purchased under company name, we can expect the numbers to drop further in 2012.
Note that 5,038 residential units (13 per cent of total units) were purchased by foreigners in 2007 at a time when the foreigner population was 1.005 million (22 per cent of total population) while in 2011, foreigners purchased 4,939 units (17 per cent of total units) and the foreigner population is 1.394 million (27 per cent of total population). Foreigner population in our midst increased 39 per cent between 2011 and 2007 but yet the number of units purchased by foreigners remained steady despite a small increase in percentage terms.

There is no easy way of correlating these data points as there are foreigners who purchased homes in Singapore and who do not live in Singapore. On another hand, foreigner population includes those on dependent passes, student passes, etc.
In order to address the concern about funds inflow, we need to examine the dollar value of residential purchases made by foreigners.

In absolute value terms, foreigners accounted for $10.2 billion of investments into the residential segment in 2007. Adding on the value of transactions made by companies, the total is $18.2 billion. In contrast, against a weak external environment, the investment inflow by foreigners in 2011 accounted for $8.5 billion while company transactions accounted for $1.9 billion. The total is less than $10.4 billion. In fact, the total in 2010 was higher at $12.7 billion (foreigner and company).

Elsewhere in the Singapore real estate scene, funds also flowed into office and retail segments as well as en bloc sales of residential projects. In 2007, $11 billion worth of block deals were inked in the office and retail segments versus $7 billion in 2011. En bloc sales of residential projects totalled $12 billion in 2007 versus the paltry tally of under $3 billion for 2011. Those tracking the market since the 2007 peak will remember that the bulk of these transactions was due to foreign funds and insurance companies.
Developers from Malaysia and China also featured strongly in the en bloc and Government Land Sales arena.

We saw a lot more foreign monies buying into Singapore in 2007 than in 2010 or in 2011. In terms of the number of residential units, 2007 also saw more purchases by foreigners and companies than in 2010 or in 2011.

The analysis generated more questions than answers. Were we similarly concerned about foreign investment inflow in 2007 as compared to now? What is the current stock of residential properties owned by foreigners and is foreign ownership growing at a pace that we should be concerned?

Where is the evidence for foreign money that is anticipated to flow in? Will the total value surpass the $20-40 billion that we saw in 2007? Should we be concerned that the foreign monies may disrupt other real estate segments such as industrial or office?
Should we be concerned that foreign monies may come in strongly on other asset classes - debt, equities, etc? Why did we not curb foreign purchasers with other methods, for example limiting the loan-to-value ratio for their second-home purchase? Are we making Singapore less of a home for the high-skilled foreign families, say biotech researchers, who have been contributing to our economy and now want to buy a home for themselves to settle down for the long term?

Will we maintain our position in the eyes of international investors?
The writer is founder of real estate agency International Property Advisory (IPA). He is also the author of the book 'Real Estate Riches'

[ysyap]

This article addresses much of the foreign funds coming in our country... my question remains... as much as the influx of foreign funds remain an indicator of how open our economy operates, the allowance given to local investors to play in our housing market serves as an indicator on the internal stability (at least on housing matters) of the country. It is one thing to discourage foreigners from investing in our property market which already reflects poorly on our governance of housing matters, it is another thing altogether to discourage Singaporeans from investing in our own property market which reflects the lack of fore sight in looking after our citizens. I feel strongly that locals should not be penalized from buying 3rd or subsequent properties because this is our home. If ABSD is imposed on local investors, we are merely pushing these investors overseas, suggesting that our country will not want to look after local investors.

Some people may argue that the country does not owe us an investment opportunity and I'm not asking for that. Not asking for help from government. Just asking no further restrictions. Just leave the private housing affairs private, at least for the locals.

[teddybear]

[1] The reality? 2011 is much less than 2007! Furthermore, there are even more fund inflow into office, commercial, and industrial properties!
Why no ABSD for them?
Why no ABSD for the companies buying them?
These REITS and companies are monopolizing the whole of these properties and results in ultra-high inflation due to rampant jacking up of rents which then end up being passed to consumers like us!!! Why don't they do something which is so serious now rather than target something that didn't even happened?

[2] our small property (especially office, commercial and industrial properties) market is attractive to foreign funds! Why no cooling for the office, commercial, and industrial properties???

[3] Why REITS (foreigners included) can buy so many commercial and office and industrial properties with no penalty and yet citizens are being penalized for investing in residential properties? REITS and foreigners can be landlords of many many commercial, office, and industrial properties, and yet citizens cannot be landlords of many many private residential properties?

[4] Why they care about private residential properties? That is just a small market of <20% of number of properties in Singapore! Why they don't seem to care about that 80% of HDB properties instead which is already over bubbles stage for those DBSS HDB flats and resale HDB flats? They shooting at wrong thing?

[5] If we look at the data, it is actually citizens who are causing OCR property prices to shoot through the roof! Not foreigners! And they aim at foreigners instead?

[6] Regardless of what has been said, the ABSD is a sort of capital control! Bad for Singapore! We just need to look at Malaysia after capital controls! Only idiot Singaporeans now still go there to invest money, other foreigners simply shunt as you won't know when they will do the same again.

This article addresses much of the foreign funds coming in our country... my question remains... as much as the influx of foreign funds remain an indicator of how open our economy operates, the allowance given to local investors to play in our housing market serves as an indicator on the internal stability (at least on housing matters) of the country. It is one thing to discourage foreigners from investing in our property market which already reflects poorly on our governance of housing matters, it is another thing altogether to discourage Singaporeans from investing in our own property market which reflects the lack of fore sight in looking after our citizens. I feel strongly that locals should not be penalized from buying 3rd or subsequent properties because this is our home. If ABSD is imposed on local investors, we are merely pushing these investors overseas, suggesting that our country will not want to look after local investors.

Some people may argue that the country does not owe us an investment opportunity and I'm not asking for that. Not asking for help from government. Just asking no further restrictions. Just leave the private housing affairs private, at least for the locals.

ABSD: Questions that beg for answers
The need for moderating investment inflow seems to contradict several tenets that have brought Singapore its success

By KU SWEE YONG

IT IS more than a month since the introduction of the additional buyer's stamp duty (ABSD). I am still scratching my head on the whys.

Some buyers have held back their decisions thinking that perhaps prices might fall while others have stepped away for now because their cash-on-cash returns drop if they have to pay the ABSD. We have also read about buyers not exercising their options for Bedok Residences, Archipelago and The Palette.

On the flip side, some sellers have withdrawn their intentions to sell their residential investments because they would not be able to reinvest their cash into another residential unit without having to incur the ABSD.

The secondary market, already quiet in 2011, will be reduced to a whimper in 2012. The number of units sold by developers is also expected to be lower, as some investors wait out for lower prices or look for alternative sectors to invest into.

In explaining the rationale for the ABSD, Tharman Shanmugaratnam, Deputy Prime Minister and Minister for Finance and Manpower, said in a Dec 7, 2011, press release: 'We have always had open markets and must keep them that way. However, [1] the reality is that investment flows into our property market are now larger than before, and unlikely to recede as long as interest rates remain low. The additional buyer's stamp duty should help cool investment demand, and avoid the prospect of a major, destabilising correction further down the road.'

Minister of State for Manpower and National Development Tan Chuan-Jin reiterated at the Redas 52nd Anniversary Dinner on Dec 27, 2011: 'Given volatile equity markets and a worsening economic situation in Europe, our small property market is attractive to foreign funds. The latest measure is a targeted and measured move to moderate such investment demand in order to avoid the need for a major correction down the road.'
[6] The need for moderating investment inflow seems to contradict several tenets that have brought Singapore its success. The last I checked, on the Economic Development Board's website, Singapore held a string of accolades including the top spot 'for having the most open economy for international trade and investment', as ranked by the Global Enabling Trade Report 2010 published by the World Economic Forum.

Now, where and what are the sources of 'investment flows into our property market' and 'foreign funds'? And what is the exact cause for concern to the government that this lopsided ABSD is applied to foreign investors specifically targeting the residential segment and not any other asset classes? Furthermore, there were certain exclusions and permutations which now add complexity to our otherwise rather simple and clear tax system.

We begin by looking at foreigners' purchase of residential units with caveats filed in 2011. Do note that we are limited to the data provided by the Urban Redevelopment Authority's Realis (Real Estate Information System). For purposes of this article, I have assumed that permanent residents (PRs) who purchased homes in Singapore are neither a source of 'foreign funds' nor inward investment flow. Although we know there are PRs who are active in their home countries and who have invested in Singapore's residential properties, let us take it that these PRs' monies are considered local. We narrow our focus on the transactions by foreigners and by companies.

Foreign purchasers
With Singapore's push to develop its trust and fund management services capabilities, the bulk of residential transactions under company name is due to foreign purchasers. Our experience shows that Singaporean investors purchasing properties through companies are few and far between but foreigners, especially those who are planning their wealth transfer in Singapore, are more amenable to invest in properties via trusts, foundations, offshore companies or Singapore entities. There were also foreign private equity funds that invest into Singapore's residential properties such as the collective investments made through the private banks on behalf of their clients.

In 2011, foreigners accounted for 4,939 transactions (or 17.3 per cent of the total for that year) while company-registered purchases accounted for 704 units (2.4 per cent). In comparison, the number of units purchased by foreigners in 2007 was slightly higher at 5,038 (13.1 per cent) while company transactions were much higher at 2,681 units (7.0 per cent). The recent sharp drop in company transactions was caused by government policies restricting the loan-to-value ratio for residential properties purchased under company names and a pullout of real estate funds post-Lehman crisis, for example Wachovia, Citadel. With the introduction of 10 per cent ABSD for residential units purchased under company name, we can expect the numbers to drop further in 2012.
Note that 5,038 residential units (13 per cent of total units) were purchased by foreigners in 2007 at a time when the foreigner population was 1.005 million (22 per cent of total population) while in 2011, foreigners purchased 4,939 units (17 per cent of total units) and the foreigner population is 1.394 million (27 per cent of total population). Foreigner population in our midst increased 39 per cent between 2011 and 2007 but yet the number of units purchased by foreigners remained steady despite a small increase in percentage terms.

There is no easy way of correlating these data points as there are foreigners who purchased homes in Singapore and who do not live in Singapore. On another hand, foreigner population includes those on dependent passes, student passes, etc.
In order to address the concern about funds inflow, we need to examine the dollar value of residential purchases made by foreigners.

In absolute value terms, foreigners accounted for $10.2 billion of investments into the residential segment in 2007. Adding on the value of transactions made by companies, the total is $18.2 billion. In contrast, against a weak external environment, the investment inflow by foreigners in 2011 accounted for $8.5 billion while company transactions accounted for $1.9 billion. The total is less than $10.4 billion. In fact, the total in 2010 was higher at $12.7 billion (foreigner and company).

Elsewhere in the Singapore real estate scene, funds also flowed into office and retail segments as well as en bloc sales of residential projects. In 2007, $11 billion worth of block deals were inked in the office and retail segments versus $7 billion in 2011. En bloc sales of residential projects totalled $12 billion in 2007 versus the paltry tally of under $3 billion for 2011. Those tracking the market since the 2007 peak will remember that the bulk of these transactions was due to foreign funds and insurance companies.
Developers from Malaysia and China also featured strongly in the en bloc and Government Land Sales arena.

[8] We saw a lot more foreign monies buying into Singapore in 2007 than in 2010 or in 2011. In terms of the number of residential units, 2007 also saw more purchases by foreigners and companies than in 2010 or in 2011.

The analysis generated more questions than answers. Were we similarly concerned about foreign investment inflow in 2007 as compared to now? What is the current stock of residential properties owned by foreigners and is foreign ownership growing at a pace that we should be concerned?

Where is the evidence for foreign money that is anticipated to flow in? Will the total value surpass the $20-40 billion that we saw in 2007? Should we be concerned that the foreign monies may disrupt other real estate segments such as industrial or office?
Should we be concerned that foreign monies may come in strongly on other asset classes - debt, equities, etc? Why did we not curb foreign purchasers with other methods, for example limiting the loan-to-value ratio for their second-home purchase? Are we making Singapore less of a home for the high-skilled foreign families, say biotech researchers, who have been contributing to our economy and now want to buy a home for themselves to settle down for the long term?

Will we maintain our position in the eyes of international investors?
The writer is founder of real estate agency International Property Advisory (IPA). He is also the author of the book 'Real Estate Riches'

[peterng8]

ABSD: Questions that beg for answers
The need for moderating investment inflow seems to contradict several tenets that have brought Singapore its success

By KU SWEE YONG

IT IS more than a month since the introduction of the additional buyer's stamp duty (ABSD). I am still scratching my head on the whys.

Some buyers have held back their decisions thinking that perhaps prices might fall while others have stepped away for now because their cash-on-cash returns drop if they have to pay the ABSD. We have also read about buyers not exercising their options for Bedok Residences, Archipelago and The Palette.

On the flip side, some sellers have withdrawn their intentions to sell their residential investments because they would not be able to reinvest their cash into another residential unit without having to incur the ABSD.

The secondary market, already quiet in 2011, will be reduced to a whimper in 2012. The number of units sold by developers is also expected to be lower, as some investors wait out for lower prices or look for alternative sectors to invest into.

In explaining the rationale for the ABSD, Tharman Shanmugaratnam, Deputy Prime Minister and Minister for Finance and Manpower, said in a Dec 7, 2011, press release: 'We have always had open markets and must keep them that way. However, [1] the reality is that investment flows into our property market are now larger than before, and unlikely to recede as long as interest rates remain low. The additional buyer's stamp duty should help cool investment demand, and avoid the prospect of a major, destabilising correction further down the road.'

Minister of State for Manpower and National Development Tan Chuan-Jin reiterated at the Redas 52nd Anniversary Dinner on Dec 27, 2011: 'Given volatile equity markets and a worsening economic situation in Europe, our small property market is attractive to foreign funds. The latest measure is a targeted and measured move to moderate such investment demand in order to avoid the need for a major correction down the road.'
[6] The need for moderating investment inflow seems to contradict several tenets that have brought Singapore its success. The last I checked, on the Economic Development Board's website, Singapore held a string of accolades including the top spot 'for having the most open economy for international trade and investment', as ranked by the Global Enabling Trade Report 2010 published by the World Economic Forum.

Now, where and what are the sources of 'investment flows into our property market' and 'foreign funds'? And what is the exact cause for concern to the government that this lopsided ABSD is applied to foreign investors specifically targeting the residential segment and not any other asset classes? Furthermore, there were certain exclusions and permutations which now add complexity to our otherwise rather simple and clear tax system.

We begin by looking at foreigners' purchase of residential units with caveats filed in 2011. Do note that we are limited to the data provided by the Urban Redevelopment Authority's Realis (Real Estate Information System). For purposes of this article, I have assumed that permanent residents (PRs) who purchased homes in Singapore are neither a source of 'foreign funds' nor inward investment flow. Although we know there are PRs who are active in their home countries and who have invested in Singapore's residential properties, let us take it that these PRs' monies are considered local. We narrow our focus on the transactions by foreigners and by companies.

Foreign purchasers
With Singapore's push to develop its trust and fund management services capabilities, the bulk of residential transactions under company name is due to foreign purchasers. Our experience shows that Singaporean investors purchasing properties through companies are few and far between but foreigners, especially those who are planning their wealth transfer in Singapore, are more amenable to invest in properties via trusts, foundations, offshore companies or Singapore entities. There were also foreign private equity funds that invest into Singapore's residential properties such as the collective investments made through the private banks on behalf of their clients.

In 2011, foreigners accounted for 4,939 transactions (or 17.3 per cent of the total for that year) while company-registered purchases accounted for 704 units (2.4 per cent). In comparison, the number of units purchased by foreigners in 2007 was slightly higher at 5,038 (13.1 per cent) while company transactions were much higher at 2,681 units (7.0 per cent). The recent sharp drop in company transactions was caused by government policies restricting the loan-to-value ratio for residential properties purchased under company names and a pullout of real estate funds post-Lehman crisis, for example Wachovia, Citadel. With the introduction of 10 per cent ABSD for residential units purchased under company name, we can expect the numbers to drop further in 2012.
Note that 5,038 residential units (13 per cent of total units) were purchased by foreigners in 2007 at a time when the foreigner population was 1.005 million (22 per cent of total population) while in 2011, foreigners purchased 4,939 units (17 per cent of total units) and the foreigner population is 1.394 million (27 per cent of total population). Foreigner population in our midst increased 39 per cent between 2011 and 2007 but yet the number of units purchased by foreigners remained steady despite a small increase in percentage terms.

There is no easy way of correlating these data points as there are foreigners who purchased homes in Singapore and who do not live in Singapore. On another hand, foreigner population includes those on dependent passes, student passes, etc.
In order to address the concern about funds inflow, we need to examine the dollar value of residential purchases made by foreigners.

In absolute value terms, foreigners accounted for $10.2 billion of investments into the residential segment in 2007. Adding on the value of transactions made by companies, the total is $18.2 billion. In contrast, against a weak external environment, the investment inflow by foreigners in 2011 accounted for $8.5 billion while company transactions accounted for $1.9 billion. The total is less than $10.4 billion. In fact, the total in 2010 was higher at $12.7 billion (foreigner and company).

Elsewhere in the Singapore real estate scene, funds also flowed into office and retail segments as well as en bloc sales of residential projects. In 2007, $11 billion worth of block deals were inked in the office and retail segments versus $7 billion in 2011. En bloc sales of residential projects totalled $12 billion in 2007 versus the paltry tally of under $3 billion for 2011. Those tracking the market since the 2007 peak will remember that the bulk of these transactions was due to foreign funds and insurance companies.
Developers from Malaysia and China also featured strongly in the en bloc and Government Land Sales arena.

[8] We saw a lot more foreign monies buying into Singapore in 2007 than in 2010 or in 2011. In terms of the number of residential units, 2007 also saw more purchases by foreigners and companies than in 2010 or in 2011.

The analysis generated more questions than answers. Were we similarly concerned about foreign investment inflow in 2007 as compared to now? What is the current stock of residential properties owned by foreigners and is foreign ownership growing at a pace that we should be concerned?

Where is the evidence for foreign money that is anticipated to flow in? Will the total value surpass the $20-40 billion that we saw in 2007? Should we be concerned that the foreign monies may disrupt other real estate segments such as industrial or office?
Should we be concerned that foreign monies may come in strongly on other asset classes - debt, equities, etc? Why did we not curb foreign purchasers with other methods, for example limiting the loan-to-value ratio for their second-home purchase? Are we making Singapore less of a home for the high-skilled foreign families, say biotech researchers, who have been contributing to our economy and now want to buy a home for themselves to settle down for the long term?

Will we maintain our position in the eyes of international investors?
The writer is founder of real estate agency International Property Advisory (IPA). He is also the author of the book 'Real Estate Riches'[/quote]

----------------------------------------------------------------------

resale market as always mentioned : dead meat liao...

[august]

one simple line to rebut him..
what brought spore success in the past may not bring the same success in the future; don't live in the past.

[teddybear]

What has been most profitable in the past will become unprofitable in the future!
Which segment gone up so much means will come down by 2/3 as much!
Resale HDB flats
ECs
OCR mass market condos!

one simple line to rebut him..
what brought spore success in the past may not bring the same success in the future; don't live in the past.

[peterng8]

What has been most profitable in the past will become unprofitable in the future!
Which segment gone up so much means will come down by 2/3 as much!
Resale HDB flats
ECs
OCR mass market condos!

I think Ku swee yong is a CEO of a IPA...renowned for specialising in investments(high end property) for high net worth individuals ...

[teddybear]

Still, he provide facts and raw data which are convincing! I only believe in raw data!

I don't believe in "statistics", or worse, statements only (regardless of who spoke those) like "the reality is blah blah blah..." and then what? We found that "the reality ..." is not "reality" because 2007 foreigners' investment absolute $$$ is so much more than 2011 even before taking into consideration inflation!!! They implement policy with no hard data to back up?

I think Ku swee yong is a CEO of a IPA...renowned for specialising in investments(high end property) for high net worth individuals ...

[Jadey]

one simple line to rebut him..
what brought spore success in the past may not bring the same success in the future; don't live in the past.

Comparing hot money flowing into real estate to those multi-billion dollar EDB FDIs that create tenths of thousands of high skill jobs is just idiotic

[equalizer]

The gist of his article is simple. He is questioning the real underlying motive behind the ABSD since the facts and figures he provided seem to run counter to what has been published. Also this measure is unique as it was announced by BOTH the Finance minister as well as MND. Go figure.

[hopeful]

My fear is URA will now reduce the data available on REALIS. just like how HDB restrict the information on COV.

[Lovelle]

u see , now Pxx is in the mercy of voters....

[Leeds]

It appears to me that the main objective of the ABSD is more to deter foreigners from buying into mass market segment. These foreigners though not big in number (about 25 to 30% as reported) could distort prices given the hot property market. They are likely to buy at "asking prices" during prelaunches or in the secondary market. Their numbers is enough to create anxiety within this segment of the market and induce locals to enter the market for fear that prices will increase further.

The mass market segment is the utmost concern to the government to make homes more affordable.

[Rosy]

It appears to me that the main objective of the ABSD is more to deter foreigners from buying into mass market segment. These foreigners though not big in number (about 25 to 30% as reported) could distort prices given the hot property market. They are likely to buy at "asking prices" during prelaunches or in the secondary market. Their numbers is enough to create anxiety within this segment of the market and induce locals to enter the market for fear that prices will increase further.

The mass market segment is the utmost concern to the government to make homes more affordable.

However ccr luxury market is the worst hit

[peterng8]

However ccr luxury market is the worst hit

u are most probably rite about this, come out from the horse mouth (the article's author)

[peterng8]

Still, he provide facts and raw data which are convincing! I only believe in raw data!

I don't believe in "statistics", or worse, statements only (regardless of who spoke those) like "the reality is blah blah blah..." and then what? We found that "the reality ..." is not "reality" because 2007 foreigners' investment absolute $$$ is so much more than 2011 even before taking into consideration inflation!!! They implement policy with no hard data to back up?

they are the game master mah...they set the rule to play.

[Jadey]

Still, he provide facts and raw data which are convincing! I only believe in raw data!

I don't believe in "statistics", or worse, statements only (regardless of who spoke those) like "the reality is blah blah blah..." and then what? We found that "the reality ..." is not "reality" because 2007 foreigners' investment absolute $$$ is so much more than 2011 even before taking into consideration inflation!!! They implement policy with no hard data to back up?

statistic never lie, but those who use them often do.

Take this article for example, what he stated was facts, BUT there are also other facts that are not stated as well.

In absolute value terms, foreigners accounted for $10.2 billion of investments into the residential segment in 2007. Adding on the value of transactions made by companies, the total is $18.2 billion. In contrast, against a weak external environment, the investment inflow by foreigners in 2011 accounted for $8.5 billion while company transactions accounted for $1.9 billion. The total is less than $10.4 billion. In fact, the total in 2010 was higher at $12.7 billion (foreigner and company).

In his article, he only compare the absolute amount without consider the percentage of the total pie. In 2007, during the peak of the property boom, foreigners only account for 16% of the total purchase, in 2011 foreigners accounts for 20% of the total purchase, a 25% jump from 2010 when foreign purchase was only 15%.

In 2007, the average price of unit purchase by foreigner is $2.03m, in 2011, it is $1.75m. Is there a trend that foreigners moving away from luxury into the midend and mass market which will create a bigger impact on average Singaporeans who dream of owning private property.

what was no highlighted in the article is that in 2010, there was a 45% jump in foreigner transaction volume against 2009 vs the overall increase of 15% in 2010, and in 2011, we again see a 14% increase in foreigners buying volume against 2010 vs a 23% overall decline.

If there are no ABSD, could we assume that foreigner buying interest in Singapore property will continue to increase even when local buying are retreating due to poor economic conditions and existing cooling measures?

[teddybear]

1. Yah right, didn't I say that before? Foreigners moving to OCR, particularly the China's Chinese? Otherwise how to explain OCR selling average $1350 psf? The easiest is to ban all foreigners from buying OCR properties or they can't buy anything below $1.5m! They have free choice anywhere else, still Ok right? (rather than also kill the CCR when the price didn't move and transactions are already low enough. Shouldn't they just aim & directly root of the problem? It is just like If 1 area in house got termite they tear down the whole house to rebuild? ).
But anyway, while lamenting unfairness, I like it because I am waiting to buy more!

2. Consider the %age pie? To be fair, you also need to consider the number of foreigners as well, as we know, there is big surge in 2011 from 2007! PRs are also considered as foreigners right (legally in terms of voting rights)?

3. Compare 2011 to 2009? Not fair without comparing 2007 to 2005. I can tell you 2007 is much much worst!

4. How about you ask about commercial, industrial and office properties that they cause the huge ultra-inflation?

statistic never lie, but those who use them often do.

Take this article for example, what he stated was facts, BUT there are also other facts that are not stated as well.


In his article, he only compare the absolute amount without consider the percentage of the total pie. In 2007, during the peak of the property boom, foreigners only account for 16% of the total purchase, in 2011 foreigners accounts for 20% of the total purchase, a 25% jump from 2010 when foreign purchase was only 15%.

In 2007, the average price of unit purchase by foreigner is $2.03m, in 2011, it is $1.75m. Is there a trend that foreigners moving away from luxury into the midend and mass market which will create a bigger impact on average Singaporeans who dream of owning private property.

what was no highlighted in the article is that in 2010, there was a 45% jump in foreigner transaction volume against 2009 vs the overall increase of 15% in 2010, and in 2011, we again see a 14% increase in foreigners buying volume against 2010 vs a 23% overall decline.

If there are no ABSD, could we assume that foreigner buying interest in Singapore property will continue to increase even when local buying are retreating due to poor economic conditions and existing cooling measures?

[august]

there is definitely an increase in presence of foreigners in OCR condos in the past 2 yrs.. and these are not exactly the traditional high income tier foreigners or expats.

[peterng8]

there is definitely an increase in presence of foreigners in OCR condos in the past 2 yrs.. and these are not exactly the traditional high income tier foreigners or expats.

thanks to our garmen...

[Leeds]

However ccr luxury market is the worst hit

CCR is no so much a concern to the government. It appears again to me that If CCR gets hit hard because of the government trying to protect the mass market, so be it. After all, what is 10% to the super rich foreigners if they really need a place to part their funds.

[maisonjai]

CCR is no so much a concern to the government. It appears again to me that If CCR gets hit hard because of the government trying to protect the mass market, so be it. After all, what is 10% to the super rich foreigners if they really need a place to part their funds.

Casino - faster, better, nearer.

[teddybear]

But there are many coffeeshop talks that are raising a lot of concern and goes like this:
1997: some people are in the "game", so little CM even when red hot.
2010: some people missed the boat, so give you lots of CM even if they are not necessary yet (may not even be necessary).
The lack of transparency give people rumours to talk about or???

CCR is no so much a concern to the government. It appears again to me that If CCR gets hit hard because of the government trying to protect the mass market, so be it. After all, what is 10% to the super rich foreigners if they really need a place to part their funds.

[Jadey]

1. Yah right, didn't I say that before? Foreigners moving to OCR, particularly the China's Chinese? Otherwise how to explain OCR selling average $1350 psf? The easiest is to ban all foreigners from buying OCR properties or they can't buy anything below $1.5m! They have free choice anywhere else, still Ok right? (rather than also kill the CCR when the price didn't move and transactions are already low enough. Shouldn't they just aim & directly root of the problem? It is just like If 1 area in house got termite they tear down the whole house to rebuild? ).
But anyway, while lamenting unfairness, I like it because I am waiting to buy more!

2. Consider the %age pie? To be fair, you also need to consider the number of foreigners as well, as we know, there is big surge in 2011 from 2007! PRs are also considered as foreigners right (legally in terms of voting rights)?

3. Compare 2011 to 2009? Not fair without comparing 2007 to 2005. I can tell you 2007 is much much worst!

4. How about you ask about commercial, industrial and office properties that they cause the huge ultra-inflation?

I am not sure how you would propose to have a CM that is targeted at OCR.

a) Will it be fair to the people living in OCR as I expect their property value to drop?
b) Will such cooling measure drives more demand toward RCR which will ultimately have effect on the price of OCR as local investors cash out and reinvest in cheaper OCR property.

If a rise in foreigners buying during unfavorable economic situation such as in 2011 could translate to increase in foreigner population in Singapore, can a decrease in citizen purchase translate to an decrease in citizen population as well?

2007 is worst in terms of what?

[CCR]

Dont have anymore CM!!!! REmove all the CMs.....

Just price BTo and EC reasonably.... build 10,000 EC per year....

Then let the 20% population invest in condos in anyway they want...

All happy............

[ysyap]

Dont have anymore CM!!!! REmove all the CMs.....

Just price BTo and EC reasonably.... build 10,000 EC per year....

Then let the 20% population invest in condos in anyway they want...

All happy............

Totally agreed... slow down the sale of land parcel to control the private sector. Sell 5rm BTO @ $200k. 1st timers who meet income ceiling will never want to buy PC le... just leave the remaining 20% of private housing to be on autopilot. Govt is currently using 20% of market to control whole market. It'll be much more effective to use the 80% instead to control the market. Even a kid knows that!

However, the problem remains about the profit margin of each BTO project that the govt is willing to take...

[Leeds]

Dont have anymore CM!!!! REmove all the CMs.....

Just price BTo and EC reasonably.... build 10,000 EC per year....

Then let the 20% population invest in condos in anyway they want...

All happy............

Unfortunately, economic does not works this way. If BTO and EC flats were to prices very low, mass market PC will be affected. It will then create a demand for mass market PC and the cycle goes on and on and on........

If economic is so easy to understand, there is no need for government intervention. Remember the father of Economic; Adam Smith and the Invisible Hand's Theory?

[peterng8]

Totally agreed... slow down the sale of land parcel to control the private sector. Sell 5rm BTO @ $200k. 1st timers who meet income ceiling will never want to buy PC le... just leave the remaining 20% of private housing to be on autopilot. Govt is currently using 20% of market to control whole market. It'll be much more effective to use the 80% instead to control the market. Even a kid knows that!

However, the problem remains about the profit margin of each BTO project that the govt is willing to take...

maybe look at other perspective...who earning big buck from playing this game? guess loh...

[CCR]

Unfortunately, economic does not works this way. If BTO and EC flats were to prices very low, mass market PC will be affected. It will then create a demand for mass market PC and the cycle goes on and on and on........

If economic is so easy to understand, there is no need for government intervention. Remember the father of Economic; Adam Smith and the Invisible Hand's Theory?

Dont artificially price the BTO and EC very low...
I think 250+k for 5 rooms is quite reasonable.... Then EC about 600-700k for 3 bedrooms and keep rolling them out in enough quantity to make the young couples and upgraders happy....

Then if anyone want to buy condo, just warn them that its market pricing so be careful and then let them make own decisions...

Let that our market remains open to foreigners, we attract rich talents, singaporeans can upgrade to condo like "EC" and feel happy and those that really want condo then go buy condo...

That is so much better than to control 20% of the market....

[Leeds]

Dont artificially price the BTO and EC very low...
I think 250+k for 5 rooms is quite reasonable.... Then EC about 600-700k for 3 bedrooms and keep rolling them out in enough quantity to make the young couples and upgraders happy....

Then if anyone want to buy condo, just warn them that its market pricing so be careful and then let them make own decisions...

Let that our market remains open to foreigners, we attract rich talents, singaporeans can upgrade to condo like "EC" and feel happy and those that really want condo then go buy condo...

That is so much better than to control 20% of the market....

Market forces will be at play again. Resale prices of EC and HDB flats will once again increase as PC prices increase. The cycle will goes on and on and on.... The Invisible Hand is in play.