Property prices not yet at an acceptable level: Tharman

[luzman]

The Straits Times
www.straitstimes.comPublished on Mar 01, 2013

Property prices not yet at an acceptable level: Tharman

By Fiona Chan

PROPERTY prices in Singapore still have "some ways to go" before they reach an acceptable level, according to Finance Minister Tharman Shanmugaratnam.
"We're still in a wrong part of the cycle," he told Bloomberg Television in an interview on Thursday.
Mr Tharman said the process of property prices becoming appropriate would "happen through a combination of income improvement, as well as prices certainly not going up further".
"Some correction in prices will not be out of order," he added.

[leesg123]

The wage credit scheme will help to up the income, as long as the currebt cooling measure still in place, price will become more appropriate. Wats next after appropriate? Mkt cheong lah!

[proud owner]

The Straits Times
www.straitstimes.comPublished on Mar 01, 2013

Property prices not yet at an acceptable level: Tharman

By Fiona Chan

PROPERTY prices in Singapore still have "some ways to go" before they reach an acceptable level, according to Finance Minister Tharman Shanmugaratnam.
"We're still in a wrong part of the cycle," he told Bloomberg Television in an interview on Thursday.
Mr Tharman said the process of property prices becoming appropriate would "happen through a combination of income improvement, as well as prices certainly not going up further".
"Some correction in prices will not be out of order," he added.

why he never made these statements before ?

[Lemonlaw]

Cm8 coming?

[kane]

Cm8 coming?

or is he planning to up everybody's income?? hurray!

[pool100]

The Straits Times
www.straitstimes.comPublished on Mar 01, 2013

Property prices not yet at an acceptable level: Tharman

By Fiona Chan

PROPERTY prices in Singapore still have "some ways to go" before they reach an acceptable level, according to Finance Minister Tharman Shanmugaratnam.
"We're still in a wrong part of the cycle," he told Bloomberg Television in an interview on Thursday.
Mr Tharman said the process of property prices becoming appropriate would "happen through a combination of income improvement, as well as prices certainly not going up further".
"Some correction in prices will not be out of order," he added.

I think this is the strongest and clearest direction from the gahment about property prices in near to medium term. They want a correction and they will get it... be it CM8, 9 or 10.

Once prices start to fall, we might see more sellers heading to sell off their units in anticipation for the correction.

[Leo.Cheng]

The key is to find out what is an "acceptable" price level. If one can discover the acceptable level, then one's property investment strategy can be fine tuned towards this acceptable level.

[Leo.Cheng]

Did the Minister meant really that our property price level is out of sync with the economic growth?

As far as I am aware, our GDP had already been hammered due to the many cooling measures and labor tightening. I had expected a higher growth of 3%.

If so is the case, what will happen if World's economy recovers from March this year? Would the cooling measures be removed ? Or would the price levels then be acceptable?

Also, which property segment ( condos or landed ) did he exactly mean or did he mean price levels in general?

Many questions for me to ponder

[propertyhans]

Did the Minister meant really that our property price level is out of sync with the economic growth?

As far as I am aware, our GDP had already been hammered due to the many cooling measures and labor tightening. I had expected a higher growth of 3%.

If so is the case, what will happen if World's economy recovers from March this year? Would the cooling measures be removed ? Or would the price levels then be acceptable?

Also, which property segment ( condos or landed ) did he exactly mean or did he mean price levels in general?

Many questions for me to ponder

Dun need to waste brain cells. Minister was trying to buy a landed and found prices too high la...so its unacceptable. Dun think minister will buy condo or hdb. Haha.

I feel that the govt is giving the citizens exactly what they asked for...be it lower coe, lesser ft and then lower house prices so that we will suffer and then in 2016 we will be BEGGING for 10million ppl, higher coe and higher house prices.

Then they will say guniangs...told u so! Who ask u to keep listening to co driver. U still want more co drivers? This is what will happen. Haha!

[roly8]

as good as saying gold is yet to explode to the level we expect..

[smellyfish]

welll, the statement then begs the question what is an acceptable level. a minister cannnot just make this statement and left it hanging

[wind30]

they say so many times already lah.

He wants to raise income to close the GAP???

he must be dreaming lah... our property market cheong up 100% in the past few years.... how can income catch up?

He is not stupid. He knows the only way is to drop property prices but too scared to say up front. Say "Some correction in prices will not be out of order,"

I think the government realised half stop measures will not work. That is why the recent car loan changes and CM is quite drastic. I really wonder who will buy a property now...

[timmy]

welll, the statement then begs the question what is an acceptable level. a minister cannnot just make this statement and left it hanging

More like straits times left it hanging there. Tharman said a lot more so maybe better not to just rely on secondary sources.

See video for full interview.

http://www.bloomberg.com/video/singa...Ua88ckGBA.html

[avo7007]

The key is to find out what is an "acceptable" price level. If one can discover the acceptable level, then one's property investment strategy can be fine tuned towards this acceptable level.

I don't think he will ever reveal that "level". But for sure, he wants to arrest price growth and maybe initiate a moderate price correction (without jeopardizing our banking industry) at least until GDP and income can catch up.

[Allthepies]

Once FT reduce, housing demand drop, the next step is to enlarge the ban on the type of hdb that can be rented out. This will indirect out lead to a further drop in hdb price. HDB will slowly revert to its basic function of owner occupation, less of an appreciating asset. This is what the people wanted.

[avo7007]

HDB will slowly revert to its basic function of owner occupation, less of an appreciating asset. This is what the people wanted.

I think you need to qualify it with "some people" instead. Have you look at the latest stats about buyer of private properties majority being HDB owners? They definitely want HDB to be an appreciating asset so that they can afford their upgrade.

[phantom_opera]

wage inflation will support prices, family median income up 7.5pc in 2012
another 7pc or more in 2013 likely

gls price still firm, no sign of softening

hk and shanghai dragon heads we dragon tail

[RCT]

I think the government is going to complete the combo on the property like what I have say earlier... They have already flank in on the property owners slowly without them knowing it. Now is to surround them and go for the kill.

Low interest rate environment and promise of high upside is the bait used to lure potential buyers into the net.

SSD is used to close up the escape route of buyers. ABSD is used to further reduce the chances of escaping of buyers.

The final few step is clear. Increase tax and interest rate. Both are within the power of the government. People always look at interest rate in USA and think that Singapore government cannot do anything to it. But they must remember, the government can anytime say they will not use US interest rate for our loans.

[avo7007]

wage inflation will support prices, family median income up 7.5pc in 2012l

Income and property price growth aside, it is obvious that the government is not even comfortable with our current property price level. At the minimum , they want to put a freeze on any more price appreciation and perhaps even fashion some sort of correction.

[roly8]

they say so many times already lah.

He wants to raise income to close the GAP???

he must be dreaming lah... our property market cheong up 100% in the past few years.... how can income catch up?

He is not stupid. He knows the only way is to drop property prices but too scared to say up front. Say "Some correction in prices will not be out of order,"

I think the government realised half stop measures will not work. That is why the recent car loan changes and CM is quite drastic. I really wonder who will buy a property now...

probably up salary 1-2% every few years? not sure if this is possible or not... definitely will hurt alot of private companies..

And, govt can always 'tank' with minor correction and give reason like due to limited land etc.. all kind of excuses to justify the high price..

sad but the hard truth is no way govt will give in to big correction. ..even they do, those developers buying land at rocket high price will not let go too..

[Leo.Cheng]

I believe one can still sell those OCR condos not under CM to enhance them to a single big CCR unit. In this case, still not under the CM7 except you have to wait another further 4 years to sell the new unit

[Leo.Cheng]

I believe one can still sell those OCR condos not under CM to enhance them to a single big CCR unit. In this case, still not under the CM7 except you have to wait another further 4 years to sell the new unit

meaning you realise all your profits and use a portion to buy only one single CCR unit for own stay as well as for investment. this means you own only 1 property so not under CM7 but only have to pay if you sell the new unit within 4 years

[Leo.Cheng]

meaning you realise all your profits and use a portion to buy only one single CCR unit for own stay as well as for investment. this means you own only 1 property so not under CM7 but only have to pay if you sell the new unit within 4 years

obviously you will save on the new property tax regulations as well

[kane]

probably up salary 1-2% every few years? not sure if this is possible or not... definitely will hurt alot of private companies..

And, govt can always 'tank' with minor correction and give reason like due to limited land etc.. all kind of excuses to justify the high price..

sad but the hard truth is no way govt will give in to big correction. ..even they do, those developers buying land at rocket high price will not let go too..

salary up 1-2% can't even keep pace with inflation. in real wage terms it is called a real wage drop.

[phantom_opera]

since EP min salary is 3.2k now .. local graduates will ask for 4k ..family income starts at 8k , after 3y 10k cannot buy BTOs must either go for EC or PC

housing so affordable lol

[Leo.Cheng]

obviously you will save on the new property tax regulations as well

not only reducing your risks in property investment, you are actually realising paper gains which could vanish if not careful. when you find one very good unit to stay in and invest, you will not loose out on any property bull run. but you will also not be affected by any crash

[roly8]

salary up 1-2% can't even keep pace with inflation. in real wage terms it is called a real wage drop.

we know inflation will continue to go up for these few years..

what are the chances of 2% wage increase for every 3 years? possible?
how bad will this increase affect the private companies business?

[CCR]

If inflation stays at 4% per year for 5 years, it will be 23% in 5 years.... So property prices staying stagnant for 5 years means prices actually drop 20%?

[hopeful]

probably up salary 1-2% every few years? not sure if this is possible or not... definitely will hurt alot of private companies..

And, govt can always 'tank' with minor correction and give reason like due to limited land etc.. all kind of excuses to justify the high price..

sad but the hard truth is no way govt will give in to big correction. ..even they do, those developers buying land at rocket high price will not let go too..

developer has to sell completely within 5 years.

[phantom_opera]

roly simi 2pc increase .. min also 6 to 10 lah