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Thread: Demand for private homes in the city expected to rebound

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    Default Demand for private homes in the city expected to rebound

    http://www.channelnewsasia.com/news/...medium=twitter

    SINGAPORE: The buying interest for private homes in the city is expected to make a comeback as prices continue to moderate.
    Some property analysts believe demand for these high-end homes could pick up as early as the middle of next year.
    But others have said the cooling measures may still weigh on buying sentiment going forward.
    The brisk sales at DUO Residences at Bugis recently showed that there is still strong interest for private residential properties in the city, if the price is right.
    For example, its average selling price of S$2,000 per square foot was 20 per cent lower than units in the vicinity.
    Analysts said foreigners account for about one-third of the demand for high-end homes and the cooling measures have kept them on the sidelines. However, analysts note that some foreign investors are coming back to the market.
    As at the third quarter of 2013, 10,538 units of completed and uncompleted private homes in the Core Central Region (CCR) are unsold.
    That is about one-third of the unsold inventory islandwide.
    Unsold stock in the city fringe stands at 9,039 units and 12,655 units in the suburban areas, according to property consultancy Knight Frank.
    Knight Frank said the number of unsold units has started to decline since the second quarter of last year.
    Alice Tan, associate director and head of consultancy and research at Knight Frank, said: "The unsold inventory in the Core Central Region has actually started to see a gradual decline since the second quarter 2012. The gradual decline is about 4 per cent per quarter. This actually reflects that the demand for CCR private homes is gradually returning.
    “From the middle of next year, demand for high-end homes could return as prices start to moderate to a level that more potential buyers start to see its value. So there could be an uptick in overall home prices from the second half of next year onwards.”
    Knight Frank said that according to its research, in the last few quarters, prices of new high-end homes in districts 1, 2 and 9 were about five to eight per cent lower compared to the period before the seventh round of cooling measures, which was implemented in January this year.
    Another property firm, Century 21, said homes in the CCR are relatively under-valued.
    Prices there have only climbed 7 per cent since the peak in 2008, compared to 17 per cent for homes in the city fringe, and 47 per cent for suburban homes.
    Ku Swee Yong, CEO of Century 21, said: "Where we find most value for money now would be in CCR properties, especially in freehold properties, because the proportion of freehold properties in Singapore has been reducing quite quickly with more Government Land Sales sites that are coming out with 99-year leases.
    “In terms of rebound, we would need to see renewed foreign buying into CCR and foreign buying could probably go up only if there are adjustments to the 15 per cent ABSD (Additional Buyer's Stamp Duty) for foreigners and 10 per cent for PRs (Permanent Residents) holding more than one unit."

    According to the Urban Redevelopment Authority, CCR home prices have fallen in the second and third quarter.

    Prices of non-landed properties in the CCR increased by 0.6 per cent in the first quarter of 2013, but fell 0.2 per cent in the second quarter and 0.3 per cent in the third quarter.

    And analysts expect a further moderation of 0.5 to 1 per cent this quarter.

    As prices weaken, demand for city homes could return, possibly in the second half of next year.

    Knight Frank said this could spark a gradual increase in home prices in the CCR.

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    The current market pricing is very simple..... it's either OCR overpriced or ccr underpriced.... One has to be true.....

    If OCR is not overpriced means ccr is underpriced.....

    I think in all other cities, the gap should be about 3-4 times, for similar quality condo in ccr and ocr

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    Actually Singapore being a small country, whether OCR, RCR or CCR, it doesn't matter much in terms of distance to the CBD.
    Hence the important factor for investment property still lies in the rental yield.

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    Quote Originally Posted by princess_morbucks View Post
    Actually Singapore being a small country, whether OCR, RCR or CCR, it doesn't matter much in terms of distance to the CBD.
    Hence the important factor for investment property still lies in the rental yield.
    actually it does... look at all other global cities and compare the price difference between core central and outlying areas..... London shanghai, new york, and closer to home, hong kong and you will know what I mean

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    Quote Originally Posted by princess_morbucks View Post
    Actually Singapore being a small country, whether OCR, RCR or CCR, it doesn't matter much in terms of distance to the CBD.
    Hence the important factor for investment property still lies in the rental yield.
    It's only in these few years where OCR booms.eventually mkt will find equilibrium

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    Quote Originally Posted by CCR View Post
    actually it does... look at all other global cities and compare the price difference between core central and outlying areas..... London shanghai, new york, and closer to home, hong kong and you will know what I mean
    How CCR property will perform next year will really depends on expat housing budget offer by companies operating here in Singapore, particularly those in the banking and service sector.

    Singapore government is actually a lot smarter than those government of those cities you mention above. For our government their objective is make land in every corner of Singapore valuable and thats the reason why they are spending more of their focus on developing outskirt area, like Woodland, Seletar, Jurong, and very soon the southern coastal area.

    Like I said before, to government, LH land are more worthy of infrastructure development as compare to FH ones. So for CCR, I think the buying activities will center around Marina Bay area.
    "Never argue with an idiot, or he will drag you down to his level and beat you with experience."

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    Singapore home prices could fall 20% by 2015: Barclays
    Published: Friday, 27 Sep 2013 | 5:31 AM ET
    By: Ansuya Harjani | Writer, CNBC Asia

    Residential property prices in the wealthy island nation of Singapore could be headed for a sizable correction of up to 20 percent by 2015, according to Barclays.

    "We believe the risk of a residential property market correction in the next two years is rising, as expected higher interest rates look set to coincide with a large increase in housing supply over 2014-15," Tricia Song, analyst at Barclays wrote in a report on Friday.

    The bank forecasts prices will remain flat in 2013, before falling 5 percent in 2014 and another 5-15 percent in 2015.

    (Read more: Are Singapore home prices about to ease, finally ?)

    Southeast Asia's financial center is home to one of the most expensive real estate markets in the world. Prices have soared over 60 percent since mid-2009, spurred by low interest rates.

    The outlook is based on expectations that short-term interest rates will begin their ascent in the second quarter of 2015, and rise 200 basis points over a period of six months. The pace of property price declines will be tied to the pace of interest rate rises, Song explained.

    Singapore mortgage rates are typically pegged to the short-term three-month Singapore Interbank Offered Rate (SIBOR) rate, which tracks the direction of the U.S. federal funds rate.

    Adding to higher mortgage rates, a bumper supply of private and public housing is due to complete starting in 2014.

    (Read more: Household debt: Singapore's 'Achilles heel'?)

    Almost 95,000 private units are expected to come on stream over the next five years, alongside 25,000-27,000 public housing flats per annum, according to the Urban Redevelopment Authority.

    "Total housing supply could average 40,000 units per annum and peak at 47,000 in 2015 - significantly above the historical average annual supply of 12,300 units," Song said.

    "Assuming occupier demand of 15,500 units of private housing per annum, we expect the private vacancy rate to rise from 5.6 percent currently to 9.9 percent in 2016," she added, noting that historically when vacancy rates hit 8 percent, rents and prices start declining.

    (Read more: More pain to come for Singapore REITs?)

    Home sales have begun softening as the government's cooling measures start to bite, with the latest monthly data showing developers sold 742 units in August, compared with an average of 1,000-1,500 units in the recent years, according to Barclays.

    This year, the bank expects primary home sales to total 15,500 units, 30 percent below last year's 22,179 units.

    The government has introduced nine rounds of market-cooling measures since 2009, most recently targeted at the public housing market, which house 80 percent of the country's citizens. The measures announced in August included shortening the maximum loan tenure to 25 years from 30 years, and reducing the mortgage ratio limit against the borrower's salary to 30 percent from 35 percent previously.

    —By CNBC's Ansuya Harjani; Follow her on Twitter @Ansuya_H

    http://www.cnbc.com/id/101067872

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    Quote Originally Posted by hyenergix View Post
    Singapore home prices could fall 20% by 2015: Barclays
    Published: Friday, 27 Sep 2013 | 5:31 AM ET
    By: Ansuya Harjani | Writer, CNBC Asia

    Residential property prices in the wealthy island nation of Singapore could be headed for a sizable correction of up to 20 percent by 2015, according to Barclays.

    "We believe the risk of a residential property market correction in the next two years is rising, as expected higher interest rates look set to coincide with a large increase in housing supply over 2014-15," Tricia Song, analyst at Barclays wrote in a report on Friday.

    The bank forecasts prices will remain flat in 2013, before falling 5 percent in 2014 and another 5-15 percent in 2015.

    (Read more: Are Singapore home prices about to ease, finally ?)

    Southeast Asia's financial center is home to one of the most expensive real estate markets in the world. Prices have soared over 60 percent since mid-2009, spurred by low interest rates.

    The outlook is based on expectations that short-term interest rates will begin their ascent in the second quarter of 2015, and rise 200 basis points over a period of six months. The pace of property price declines will be tied to the pace of interest rate rises, Song explained.

    Singapore mortgage rates are typically pegged to the short-term three-month Singapore Interbank Offered Rate (SIBOR) rate, which tracks the direction of the U.S. federal funds rate.

    Adding to higher mortgage rates, a bumper supply of private and public housing is due to complete starting in 2014.

    (Read more: Household debt: Singapore's 'Achilles heel'?)

    Almost 95,000 private units are expected to come on stream over the next five years, alongside 25,000-27,000 public housing flats per annum, according to the Urban Redevelopment Authority.

    "Total housing supply could average 40,000 units per annum and peak at 47,000 in 2015 - significantly above the historical average annual supply of 12,300 units," Song said.

    "Assuming occupier demand of 15,500 units of private housing per annum, we expect the private vacancy rate to rise from 5.6 percent currently to 9.9 percent in 2016," she added, noting that historically when vacancy rates hit 8 percent, rents and prices start declining.

    (Read more: More pain to come for Singapore REITs?)

    Home sales have begun softening as the government's cooling measures start to bite, with the latest monthly data showing developers sold 742 units in August, compared with an average of 1,000-1,500 units in the recent years, according to Barclays.

    This year, the bank expects primary home sales to total 15,500 units, 30 percent below last year's 22,179 units.

    The government has introduced nine rounds of market-cooling measures since 2009, most recently targeted at the public housing market, which house 80 percent of the country's citizens. The measures announced in August included shortening the maximum loan tenure to 25 years from 30 years, and reducing the mortgage ratio limit against the borrower's salary to 30 percent from 35 percent previously.

    —By CNBC's Ansuya Harjani; Follow her on Twitter @Ansuya_H

    http://www.cnbc.com/id/101067872
    The funny thing is...... During a GLOBAL financial meltdown in 2008, prices only drop from the peak by 25%..... so now with full employment, low interest rates, no crisis yet, we are expected to drop 20%? What are the chances of this Happening?

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    the moral of the story is:
    ccr will always be ccr

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    Hope CCR will rebound although I can't see that happening..

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    Depends where in CCR and price range.
    Quote Originally Posted by thomastansb View Post
    Hope CCR will rebound although I can't see that happening..

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    First article is from property agencies, second article is from bank.

    The former needs business, the latter is telling its borrowers to watch out, i.e. borrow at your own risk.

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    from just recent 2008 till now, what is percentage increases in general for sg property? so let say 20% drop as predicted in near future is it tolerable?

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    Quote Originally Posted by 玉格格 View Post
    the moral of the story is:
    ccr will always be ccr
    Just Jiao wei will always be Jiao wei regardless what new account name you use
    "Never argue with an idiot, or he will drag you down to his level and beat you with experience."

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    A restart to base price is not impossible consider BTOs n hdb resale has taken d lead.

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    Quote Originally Posted by oops View Post
    A restart to base price is not impossible consider BTOs n hdb resale has taken d lead.
    Base Price? 1600 psf for Admour Park? Like in 1996 Peak!

    Drop 40%? Lol I will be damn happy.... I will buy a few more....

    buy alas it is impossible.....

    ccr luxury 2k psf
    Ccr high end 1500 psf
    Ccr normal condo 1200 psf

    RCR condo 900 psf
    OCR condo 700 Psf?

    Far flung ocr 550 Psf?

    EC 400 psf

    resale hdb 200 psf

    Bto 100 Psf?


    Like that ah Oops?

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    Quote Originally Posted by Ringo33 View Post
    Just Jiao wei will always be Jiao wei regardless what new account name you use
    dun worry, I wun be offended, cos ppl noe how sore u r feeling right now.

    not many ppl can see their investment still being the most pricey OCR project with no one to break the record yet still laughing away

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    Quote Originally Posted by thomastansb View Post
    Hope CCR will rebound although I can't see that happening..
    Remove ABSD n TDSR n CCR will chiong lol

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    Quote Originally Posted by Adva181 View Post
    Remove ABSD n TDSR n CCR will chiong lol
    but ppty prices will chiong even faster! lol!

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    Quote Originally Posted by 玉格格 View Post
    dun worry, I wun be offended, cos ppl noe how sore u r feeling right now.

    not many ppl can see their investment still being the most pricey OCR project with no one to break the record yet still laughing away
    wrong again. J Gateway is not the most price OCR property. told you dont kong jiao wei liao
    "Never argue with an idiot, or he will drag you down to his level and beat you with experience."

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    Just paint a scenario: US recovery and follow by EU recovery. Interest rate increase gradually but not suddenly back to 5%. China, Japan, South Korea will boom. What do you think of Singapore economy and property market?
    Quote Originally Posted by CCR View Post
    Base Price? 1600 psf for Admour Park? Like in 1996 Peak!

    Drop 40%? Lol I will be damn happy.... I will buy a few more....

    buy alas it is impossible.....

    ccr luxury 2k psf
    Ccr high end 1500 psf
    Ccr normal condo 1200 psf

    RCR condo 900 psf
    OCR condo 700 Psf?

    Far flung ocr 550 Psf?

    EC 400 psf

    resale hdb 200 psf

    Bto 100 Psf?


    Like that ah Oops?

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    Technically CCR should recover in normal circumstances, but we are living in extraordinary times with CMs.

    Foreigner investors interested in buying more than 1 unit are weed out by government.

    CCR will only be propped by if there are new super high pay jobs attracting first time foreigner buyers, which can happen with improved global fundamentals.

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    people seeking yield will also not find them in CCR. The downtown area of bugis, raffles and tanjong pagar are too expensive to offer good yields, wihlst the Orchard, holland, bukit timah are more your leafy school districts which means nothing to the vast majority of Singapore's mid range migrant workers.

    people looking for a self financing asset should look elsewhere...

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    Quote Originally Posted by smellyfish View Post
    people seeking yield will also not find them in CCR. The downtown area of bugis, raffles and tanjong pagar are too expensive to offer good yields, wihlst the Orchard, holland, bukit timah are more your leafy school districts which means nothing to the vast majority of Singapore's mid range migrant workers.

    people looking for a self financing asset should look elsewhere...
    And this is despite low int rates. Jia lat

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    Quote Originally Posted by oops View Post
    A restart to base price is not impossible consider BTOs n hdb resale has taken d lead.

    very possible that it will drop 20% or more as mentioned by article?

    considering One of the scenerios only:

    - the roll out of all those new condo completed in the market at 2015....

    - rental demand optimistic or pessimistic will depend on tenant demand vs condo supply, how good is it ? 2015 is also an important year for those above 18 yrs old Sgrean too...first time to tick at the box on card...


    - rental yield goes low? refinancing not possible due to TDSR as most of the condo bought high that are due for completion are bought before TDSR?

    - QE at 2015? interest rate?

    if int goes high and cannot refinance due to TDSR..want to sell?

    but CMs and condo supply restricting foreign n local buyers (again TDSR) to buy at good price?

    so How?

    Sell low lo.....how low as many want to sell? .undercut each others lo? 20% drop achieved...

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    Quote Originally Posted by peterng8 View Post
    very possible that it will drop 20% or more as mentioned by article?

    considering One of the scenerios only:

    - the roll out of all those new condo completed in the market at 2015....

    - rental demand optimistic or pessimistic will depend on tenant demand vs condo supply, how good is it ? 2015 is also an important year for those above 18 yrs old Sgrean too...first time to tick at the box on card...


    - rental yield goes low? refinancing not possible due to TDSR as most of the condo bought high that are due for completion are bought before TDSR?

    - QE at 2015? interest rate?

    if int goes high and cannot refinance due to TDSR..want to sell?

    but CMs and condo supply restricting foreign n local buyers (again TDSR) to buy at good price?

    so How?

    Sell low lo.....how low as many want to sell? .undercut each others lo? 20% drop achieved...
    For remaining ones who are hanging on, especially those "half baked" project, just one word "good luck" to you, you are going to feel stuck for years. Take care...
    A bottle of Lafite '82 for all my coffeeshop friends yesterday...many don't know what is it....haha...

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    Quote Originally Posted by peterng8 View Post
    very possible that it will drop 20% or more as mentioned by article?

    considering One of the scenerios only:

    - the roll out of all those new condo completed in the market at 2015....

    - rental demand optimistic or pessimistic will depend on tenant demand vs condo supply, how good is it ? 2015 is also an important year for those above 18 yrs old Sgrean too...first time to tick at the box on card...


    - rental yield goes low? refinancing not possible due to TDSR as most of the condo bought high that are due for completion are bought before TDSR?

    - QE at 2015? interest rate?

    if int goes high and cannot refinance due to TDSR..want to sell?

    but CMs and condo supply restricting foreign n local buyers (again TDSR) to buy at good price?

    so How?

    Sell low lo.....how low as many want to sell? .undercut each others lo? 20% drop achieved...
    great news to buyers if that happens.

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    Quote Originally Posted by 4wheels View Post
    great news to buyers if that happens.
    Haha….the best bargain has yet to come…

    At least, it’s worth to wait to see the 1st wave of frantic sell, from the few middle class hang on but finally decided to let go their "half baked" investment properties.
    A bottle of Lafite '82 for all my coffeeshop friends yesterday...many don't know what is it....haha...

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    The best bargain for sellers has yet to come!!!!!!!!!!!!!!! Don't any how sell now, wait till after 2016 and they will be rewarded!

    Quote Originally Posted by walkthetiger View Post
    Haha….the best bargain has yet to come

    At least, it’s worth to wait to see the 1st wave of frantic sell, from the few middle class hang on but finally decided to let go their "half baked" investment properties.

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    Quote Originally Posted by teddybear View Post
    The best bargain for sellers has yet to come!!!!!!!!!!!!!!! Don't any how sell now, wait till after 2016 and they will be rewarded!
    Agree with you too...I also hope to see the best bargain to happen just before 2016 election...

    Not everybody can survive the worst, especially 2016 election is two years from now, the many common folks will lose faith easily and give up before that, as they did not foresee the CMs before they invest during the high, with this current sentiment many of them will wish to break even or even by making just some thousands profit will make them very happy.
    A bottle of Lafite '82 for all my coffeeshop friends yesterday...many don't know what is it....haha...

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