Has CCR property lost its shine?

[Ringo33]

It has been 5.5 years since the last major price correction in 2008, since then CCR has only surpass its peak by a mere 5% or around 1% per year. In comparison, OCR region has surpassed its last peak by around 45% or 8% per year.

I understand that many people in this forum feels that CCR properties are still the best bet for investment due its centralize location and concentration of higher income earners. But when we look at the price index of chart, it somehow paint a complete different picture.

So the question here is.

Why CCR property is struggling to surpass its peak in 2008 despite so many years of cheap mortgages, increasing population and number of millionaires.

What has change over the last 5 years that causes this dramatic shift?

Is this a result of government's decentralization effort? e.g moving of international schools and establishing new regional commercial centers?

Will this shift be permanent? ie. is this ultimately what the government wants to achieve?

Do note that although OCR index curve is higher than CCR, that doesnt mean that price is higher. It just an index, not price level.

[sporadic]

It's to do with the higher base.

A lot of the OCR action is now driven by upgraders or people trying their hand at owning a second property.

5% increase of a 2 mil CCR property is still $2.1 mil.

50% increase in an 800k OCR property is only $1.2 mil.

It all boils down to the quantum for this lot of OCR buyers, for whom CCR remains out of reach, not least with ABSD, TDSR etc.

[sunrise]

It has been 5.5 years since the last major price correction in 2008, since then CCR has only surpass its peak by a mere 5% or around 1% per year. In comparison, OCR region has surpassed its last peak by around 45% or 8% per year.

I understand that many people in this forum feels that CCR properties are still the best bet for investment due its centralize location and concentration of higher income earners. But when we look at the price index of chart, it somehow paint a complete different picture.

So the question here is.

Why CCR property is struggling to surpass its peak in 2008 despite so many years of cheap mortgages, increasing population and number of millionaires.

What has change over the last 5 years that causes this dramatic shift?

Is this a result of government's decentralization effort? e.g moving of international schools and establishing new regional commercial centers?

Will this shift be permanent? ie. is this ultimately what the government wants to achieve?

Do note that although OCR index curve is higher than CCR, that doesnt mean that price is higher. It just an index, not price level.

wah... a lot of question mark appear on your sentences.
you must be damm lonely to chain yourself on the keyboard.
why don't you go hong lim park to find kakis there to talk your heart out.

[Ringo33]

It's to do with the higher base.

A lot of the OCR action is now driven by upgraders or people trying their hand at owning a second property.

5% increase of a 2 mil CCR property is still $2.1 mil.

50% increase in an 800k OCR property is only $1.2 mil.

It all boils down to the quantum for this lot of OCR buyers, for whom CCR remains out of reach, not least with ABSD, TDSR etc.

5% of $2m is $100,000
50% of $800K is $400,000

The same could be said for CCR properties. It is also driven by upgraders who might move from HDB, OCR or RCR to CCR.

Quantum is relative to income. For a HNWI, their threshold will definitely be higher and thats why there are still buying activities despite CMs.

[proper-t]

Funny...someone below was just recommending CCR property about 12 to 18 mths ago....

I wonder how those who had taken his advice has fared thus far...With so many questions on CCR's future , these poor souls would surely have lots to 'thank' the advice-giver for.

Posted in May/Jun 2012

I like you interpretation. For conservative investors, just pay a little bit more to get a CCR MM or 1 bedder. One of my favorite are those around little india mrt.

I think the idea of investing in CCR is very tempting, however with a $1m budget, what you can get in CCR will be all the left over crumbs, so when there is a over supply in the market, it might be very challenging for you to find tenants If you want to play safe, try to get something that is at least 2 bedders instead of a studio or 1 bedder. with 2 bedders you could possible rent to single or someone with a small family.

[mermaid]

Funny...someone below was just recommending CCR property about 12 to 18 mths ago....

I wonder how those who had taken his advice has fared thus far...With so many questions on CCR's future , these poor souls would surely have lots to 'thank' the advice-giver for.

Posted in May/Jun 2012

u nid to understand tat in lives, we do not always get wat we want.
if we cannot get our 1st choice, we hv no choice but to settle for the next best.

but I do not believe in bashing/condemning one's 1st choice juz becos one failed to get it.
tat will lead me to conclude tat the person is too ungentleman & sour grapes

[sgbuyer]

It has been 5.5 years since the last major price correction in 2008, since then CCR has only surpass its peak by a mere 5% or around 1% per year. In comparison, OCR region has surpassed its last peak by around 45% or 8% per year.

Market can become irrational towards the end of a bubble, and price can deviate drastically from actual value when the market is manipulated by the largest land owner.

When pennies (blumont) can be worth more than blue chips, you know what is to come. All a bubble.

[Ringo33]

Market can become irrational towards the end of a bubble, and price can deviate drastically from actual value when the market is manipulated.

When pennies (blumont) can be worth more than blue chips, you know what is to come. All a bubble.

OCR property offers best capital gain and rental yield over the past 5 years or so, and government is also investing so much into OCR region, so how can you refer them as Penny stock?

Plus, its not to say that if OCR property crash, CCR is not going to be affected and vice versa.

Singapore is bluechip,

[sgbuyer]

OCR property offers best capital gain and rental yield over the past 5 years or so, and government is also investing so much into OCR region, so how can you refer them as Penny stock?

Plus, its not to say that if OCR property crash, CCR is not going to be affected and vice versa.

Singapore is bluechip,

Rental yield is not guaranteed. There's a huge supply of brand new condos and HDB (reaching 5 years MOP) coming on stream over the next couple of years, coinciding with curbs on foreign PMET, company cost cutting.

The curb on PMET especially will target Asian expats earning $5k-$8k region that rent OCR and shoebox properties. Western expats earning above $12k that rent OCR will not be as affected.

Why does government invest in OCR region? Every property developer will try to keep the jewels and sell off the poorer holdings. For big developers like Far East, they keep the FH and sell off the LH, or even sell the lease on the FH property!

[Ringo33]

Rental yield is not guaranteed. There's a huge supply of brand new condos and HDB (reaching 5 years MOP) coming on stream over the next couple of years, coinciding with curbs on foreign PMET, company cost cutting.

The curb on PMET especially will target expats earning $5k-$8k region that rent OCR properties. Expats earning above $12k that rent OCR will not be as affected.

Why does government invest in OCR region? The rule in investment is keep the valuable and sell off the poorer holdings.

Rental yield data are public information which are available on URA website, and it is very clear the yield in OCR property are much better than CCR.

Why government invest in OCR? Many actually.

1) Ease congestion through decentralization commercial activities
2) Enhancing value of leasehold government land = more revenue for government
3) Wealth distribution to middle and lower class families

[Ringo33]

Rental yield is not guaranteed. There's a huge supply of brand new condos and HDB (reaching 5 years MOP) coming on stream over the next couple of years, coinciding with curbs on foreign PMET, company cost cutting.

The curb on PMET especially will target Asian expats earning $5k-$8k region that rent OCR and shoebox properties. Western expats earning above $12k that rent OCR will not be as affected.

Why does government invest in OCR region? Every property developer will try to keep the jewels and sell off the poorer holdings. For big developers like Far East, they keep the FH and sell off the LH, or even sell the lease on the FH property!

developers cant keep LH land because developer must develop the site within x number of years.

[sgbuyer]

Rental yield data are public information which are available on URA website, and it is very clear the yield in OCR property are much better than CCR.

Why government invest in OCR? Many actually.

1) Ease congestion through decentralization commercial activities
2) Enhancing value of leasehold government land = more revenue for government
3) Wealth distribution to middle and lower class families

Congestion is usually one of the main reason for decentralization. However, I personally think the traffic and human congestion in Jurong, AYE is even more terrible than in the city area on average. Jurong East interchange is notorious. And with the new buildings coming up, the port moving to Tuas, more cars going to the second link, the future congestion will be unimaginable.

I live at Bishan Thomson area, this area so quiet, so few people, when I go to Jurong or Tampines, I thought I'm in another country. Boon Lay being the worst, the congestion is equivalent to tier one China city.

developers cant keep LH land because developer must develop the site within x number of years.

They can alway rent out. FEO has plenty of freehold property which they rent out or make into service apartments.

[Ringo33]

Congestion is usually one of the main reason for decentralization. However, I personally think the traffic and human congestion in Jurong, AYE is even more terrible than in the city area on average. Jurong East interchange is notorious. And with the new buildings coming up, the port moving to Tuas, more cars going to the second link, the future congestion will be unimaginable.

I live at Bishan Thomson area, this area so quiet, so few people, when I go to Jurong or Tampines, I thought I'm in another country. Boon Lay being the worst, the congestion is equivalent to tier one China city.




They can alway rent out. FEO has plenty of freehold property which they rent out or make into service apartments.

this thread is not about Jurong, its about CCR lousing its shine.

The reason why developers has to develop LH land is not because LH land are not worth keeping, they just cant and its not to say that the best land in Singapore are FH

[proper-t]

this thread is not about Jurong, its about CCR lousing its shine.

Really, so are you saying that your advice given in May/Jun 2012 below is wrong and no longer valid ? What a major disappointment for your fans here.

I like you interpretation. For conservative investors, just pay a little bit more to get a CCR MM or 1 bedder. One of my favorite are those around little india mrt.

I think the idea of investing in CCR is very tempting, however with a $1m budget, what you can get in CCR will be all the left over crumbs, so when there is a over supply in the market, it might be very challenging for you to find tenants If you want to play safe, try to get something that is at least 2 bedders instead of a studio or 1 bedder. with 2 bedders you could possible rent to single or someone with a small family.

[sgbuyer]

this thread is not about Jurong, its about CCR lousing its shine.

The reason why developers has to develop LH land is not because LH land are not worth keeping, they just cant and its not to say that the best land in Singapore are FH

Fine, maybe because the government and the developers are "pushing" OCR. Just like what the punters were doing to Blumont until last week.

Anyway, all is a bubble and bubble come to an end in a spectacular way.

[Ringo33]

Fine, maybe because the government and the developers are "pushing" OCR. Just like what the punters were doing to Blumont until last week.

Anyway, all is a bubble and bubble come to an end in a spectacular way.

Government is not pushing up the price by doing nothing, they are deveoping OCR to make it more valuable. E.g. relocating international schools from CCR to OCR is a good example because it will mean families will have to relocate to OCR. And this is something which investors should not take it lightly.

[DKSG]

Property Investment Principle 101

Buy Low, Sell High!

When people say - wah! How come this Newton new launch is selling lower than Novena new launch - we buy Newton!

Either people think CCR is now low or OCR is too high.

Principle 102 - Price equilibrium in market will be restored over time.
So investors buy low and wait for market equilibrium to be restored.

Above only for knowledgeable investors - those who dont understand why Newton is higher value than Novena or Bishan/Thomson higher than Jurong need not respond.

DKSG

[Ringo33]

Property Investment Principle 101

Buy Low, Sell High!

When people say - wah! How come this Newton new launch is selling lower than Novena new launch - we buy Newton!

Either people think CCR is now low or OCR is too high.

Principle 102 - Price equilibrium in market will be restored over time.
So investors buy low and wait for market equilibrium to be restored.

Above only for knowledgeable investors - those who dont understand why Newton is higher value than Novena or Bishan/Thomson higher than Jurong need not respond.

DKSG

yes, its has been over 5 years since its last peak and price of CCR is now continuing its downward trend.

While you are waiting for the durian to drop in CCR, those investors who have put money into OCR are enjoying stellar growth of around 8% per year over the past 5 years.

As an "investor", I will tell you that if the region cannot recover despite the favorable interest rate and liquidity, going forward it can only get tougher.
unless God of Prosperity remove cooling measures. And every year that you spend hopelessly waiting will be one year less loan tenure.

like in any investment, the wiser investors would cut lost and move their money else where. Perhaps to places like J Gateway where they know that their investment be able to ride on the growth momentum of JLD.

Property 101? thats too elementary of the complex real world.

[sporadic]

yes, its has been over 5 years since its last peak and price of CCR is now continuing its downward trend.

Strange. I bought a CCR in Sep 09 for 1050 psf, and the last done in Aug '13was 1621 psf.

Maybe it was the exception?

Agree it could go down from here, but certainly it wasn't going down over the last five years...

[DKSG]

Strange. I bought a CCR in Sep 09 for 1050 psf, and the last done in Aug '13was 1621 psf.

Maybe it was the exception?

Agree it could go down from here, but certainly it wasn't going down over the last five years...

In Aug13 your CCR PC is done at 1621 psf ?!

If people are paying $1,6xx-$17xx for Jurong MM, they cannot understand.

Government is helping aspiring people who can afford to give them a window to upgrade to CCR. Which is the aspiration of many middle income Singaporeans. Imagine if you can sell your Tiong Bahru PC for $1,7xx psf (again $17xx psf for Tiong Bahru PC! - same price as Jurong MM !!) and move to River Valley at $2,0xx, why not ? Right ?

So readers who can afford should seriously consider this small step big reward upgrading. There is that long the government can keep the floodgate of foreigners coming in.

When you see international news that Singapore is one of the best place to work and live in, do they think they are making references to Jurong ? nonononono ... they meant D1,9,10,11 ...

Property Investment Princple 101

BUY LOW, SELL HIGH!

OCR High now - Sell!
CCR Low now - BUY!

If the opposite is true, say, CCR is now HIGH (like in 2008)---> then SELL !

Dont buy dont sell is ok, but just dont Buy HIGH scream like a wailing Hungry Ghost every day and night.

DKSG

[Ringo33]

Strange. I bought a CCR in Sep 09 for 1050 psf, and the last done in Aug '13was 1621 psf.

Maybe it was the exception?

Agree it could go down from here, but certainly it wasn't going down over the last five years...

Self explanatory. Anybody who bought right after the lehman crisis would have made money. But since then OCR has continued to surge pass its 08 peak by more than 45%.

[DKSG]

Strange. I bought a CCR in Sep 09 for 1050 psf, and the last done in Aug '13was 1621 psf.

Maybe it was the exception?

Agree it could go down from here, but certainly it wasn't going down over the last five years...

So people ask you to cut loss ar !
Sell your CCR PC at $1621 psf and buy a few Jurong MM at $1,6xx psf ?!

Will you do this kinda of things ?

What you are more likely to do is to sell the Jurong MMs at $1,6xx and buy CCR PC (even if need to sell 2-3 to buy one) at $1,6xx psf. Right ?

Tio bo ?

DKSG

[Ringo33]

In Aug13 your CCR PC is done at 1621 psf ?!

If people are paying $1,6xx-$17xx for Jurong MM, they cannot understand.

Government is helping aspiring people who can afford to give them a window to upgrade to CCR. Which is the aspiration of many middle income Singaporeans. Imagine if you can sell your Tiong Bahru PC for $1,7xx psf (again $17xx psf for Tiong Bahru PC! - same price as Jurong MM !!) and move to River Valley at $2,0xx, why not ? Right ?

So readers who can afford should seriously consider this small step big reward upgrading. There is that long the government can keep the floodgate of foreigners coming in.

When you see international news that Singapore is one of the best place to work and live in, do they think they are making references to Jurong ? nonononono ... they meant D1,9,10,11 ...

Property Investment Princple 101

BUY LOW, SELL HIGH!

OCR High now - Sell!
CCR Low now - BUY!

If the opposite is true, say, CCR is now HIGH (like in 2008)---> then SELL !

Dont buy dont sell is ok, but just dont Buy HIGH scream like a wailing Hungry Ghost every day and night.

DKSG

Readers?

Aiyo give some respect lah. Want attention as least address them as fellow property investors. What READER?

If you need to wait 5.5 years to recover from peak despite favorable interest rate and liquidity, then you better sell.

[DKSG]

Readers?

Aiyo give some respect lah. Want attention as least address them as fellow property investors. What READER?

If you need to wait 5.5 years to recover from peak despite favorable interest rate and liquidity, then you better sell.

If CCR needs 5.5 years to recover from whereever, Jurong will certainly take another 20 years to surpass $1,7xx psf.

But then, not everyone can understand the theory of price equilbrium in Singapore property market.

DKSG

[Ringo33]

If CCR needs 5.5 years to recover from whereever, Jurong will certainly take another 20 years to surpass $1,7xx psf.

But then, not everyone can understand the theory of price equilbrium in Singapore property market.

DKSG

Your theory have failed you many times before, so based on your track record over the past 3 to 4 month, anyone who do the opposite of what yu said will have a higher chance of making the right investment decision.

CCR MM apartment are already in the region of >$3500psf, so $1700psf is nothing to shout about.

[sporadic]

In Aug13 your CCR PC is done at 1621 psf ?!

If people are paying $1,6xx-$17xx for Jurong MM, they cannot understand.

Government is helping aspiring people who can afford to give them a window to upgrade to CCR. Which is the aspiration of many middle income Singaporeans. Imagine if you can sell your Tiong Bahru PC for $1,7xx psf (again $17xx psf for Tiong Bahru PC! - same price as Jurong MM !!) and move to River Valley at $2,0xx, why not ? Right ?

Agree, DKSG. Which was what I did in 2009. I'm just a working class boy. But sold my OCR at 859 psf (low now on hindsight!), but allowed me to jump to District 9, and also a bigger apt, for just 1050 psf.

[DKSG]

If CCR needs 5.5 years to recover from whereever, Jurong will certainly take another 20 years to surpass $1,7xx psf.

But then, not everyone can understand the theory of price equilbrium in Singapore property market.

DKSG

I made a terrible mistake!
I said I will not reply to people who cannot understand normal human aspirations. Yet I did it.

I apologise!

For that, I stay back office 10 more mins to make it up.

Hahaaa!

Boss go home already! I wanna go home NOW!

DKSG

[Ringo33]

I made a terrible mistake!
I said I will not reply to people who cannot understand normal human aspirations. Yet I did it.

I apologise!

For that, I stay back office 10 more mins to make it up.

Hahaaa!

Boss go home already! I wanna go home NOW!

DKSG

glad you brought that up as I have mentioned before dont let the troll fool you into believe that human aspiration is limited to people buying or living within CCR

[k00L]

The chart shows OCR has peaked while CCR has bottomed as massive supplies of new BTO and condos in OCR coming in next few years. FH CCR supply remains limited, and once the next upturn cycle comes, it will first to cheong

[Ringo33]

The chart shows OCR has peaked while CCR has bottomed as massive supplies of new BTO and condos in OCR coming in next few years. FH CCR supply remains limited, and once the next upturn cycle comes, it will first to cheong

No, this chart doesnt show the price of OCR has peaked, it shows that price is still rising, hitting record high in last quarter. As for RCR and CCR, its price recovery has started to stall.

Talking about supply only give you half the story, you need to also factor in the demand, e.g newly wed or new citizens. Without putting 2 numbers together, it will be impossible to tell how bad is the over supply.

With existing cooling measures in place its very unlikely to see any upswing. And with international school moving out of CCR, it will again put more pressure on the rental demand for CCR, especially large homes.