5 indications why Singapore residential prices will dip 10%

[lifeline]

http://sg.finance.yahoo.com/news/5-i...010200199.html

Next year's decline imminent, says Maybank.
According to Maybank Kim Eng, there are 5 indications that the Singapore residential market will turn in 2014 due mainly to the effects of thhe QE tapering, "culminating in an expected 10% decline in residential prices."
Here's the complete analysis from Maybank:
1. Sentiment to get worse before it gets better; cut to Neutral. We downgrade the Singapore property sector from Overweight to Neutral as we believe the prospect of QE tapering in 2014 will be a drag on Singapore developers’ share prices. Physical prices look set to correct and we expect continued share price weakness unless the government removes some of the cooling measures. Inexpensive stock valuations notwithstanding, we will adopt a Neutral view on the sector for 2014.
2. Point of inflexion looms. Private residential property prices in Singapore have been rising since 2Q09, but there are indications that prices will turn in 2014. Higher borrowing costs, falling HDB resale flat prices, slower population growth and a record number of physical completions in the near term all suggest that residential demand will wane. We reiterate our belief that private property prices will decline by 10% in 2014, led by the mass market segment.
3. New options for retail developers. Even as most developers reduce exposure to the Singapore residential segment, we see new openings for those with the expertise to develop and manage retail malls. The Urban Redevelopment Authority’s Draft Master Plan 2013 heralds opportunities in mixed developments, namely, integrated transport hubs. Toa Payoh HDB Hub and Compass Point in Sengkang are two examples of transport nodes integrated with commercial elements.
4. Overseas forays gather steam. Most of the developers under our coverage are increasingly looking to diversify overseas, particularly in China. We concur with such a move as long as they do not overpay for land. We believe China’s market will continue to be underpinned by growing affluence and the urbanisation process and favour names with a proven track record in that market.
5. Valuations inexpensive but be selective; TPs trimmed. We cut our TPs for all the stocks that we cover in this universe, based on slightly steeper discounts to RNAV (lowered by 5ppts). This is to factor in the uncertainties associated with QE tapering. The exception is CapitaMalls Asia, which remains our top pick as it benefits from new malls opening in Singapore and China. Maintain BUY on CapitaLand and Keppel Land as well, given their diversified business models, reduced exposure in the Singapore residential sector and strong execution in China.

news and sentiments always cluster together...
just like birds of the same feathers gather together...
wonder when more bullish reports will begin to show.

[star]

When all property over the world is rising, Singapore property is becoming very attractive.

[Ringo33]

What if Singapore government sign a new FTA agreement with some Asian power house that allow their citizens to buy into Singapore property without ABSD?

[phantom_opera]

休息是为了走更长远的路

[Allthepies]

if analysts can be believed, then everyone will huat liao =) =)

[lifeline]

休息是为了走更长远的路

Like !!! aka consolidation.

[princess_morbucks]

Some more bearish property news :

Property bull run set to end, says analyst.

According to Maybank Kim Eng, looking forward to 2014, it reiterates its belief that conditions would likely culminate in a ~10% decline in private residential property prices, led by the mass market segment.

Maybank also expects new home sales to moderate to 13,000-14,000 in 2014, down from the estimated ~16,000 units to be sold in 2013. In other words, Maybank thinks the property sector will tip next year.

Here's more:

After almost four years of uninterrupted increase, residential prices in Singapore are finally set to dip in 2014 in our view.

Following seven rounds of property cooling measures since 2009, the QoQ increase in the Urban Redevelopment Authority’s (URA) Residential Property Price Index (PPI) is moderating. However, the PPI for 3Q13 was still 3.9% higher than a year ago.

The number of new private homes sold by developers also declined by 30% in 11M13 to 14,964 units (excluding Executive Condominiums or ECs) from 21,288 in 11M12. We expect 2013 to end with sales of ~16,000 units, ie, ~30% drop from 2012’s robust figure of 22,698 units.

- See more at: http://sbr.com.sg/residential-proper....cyNFGgHE.dpuf

[lifeline]

http://sg.finance.yahoo.com/news/why...060200490.html


even SB price is slated to drop at launch !
good for the bulls with liquidity and willing to pay absd !

Fewer launches in store.
According to Maybank Kim Eng, in view of the likely slowdown in the Singapore residential property market and increase in interest rates, it believes it will be more difficult for CDL to repeat its strong sales performance in 2014.
Here's more:
Being a bellwether for the Singapore property market, the stock may remain an underperformer in 2014, particularly as its current valuations are relatively unattractive.
We maintain our SELL recommendation, with a reduced TP of SGD8.30, pegged to a steeper 35% discount to our RNAV of SGD12.77.
Fewer launches in store in 2014. After a series of successful launches in 2013, CDL has significantly drawn down on its landbank of affordable mass market sites. The next launch is likely the Commonwealth Avenue site it had acquired from the Government Land Sales programme in Feb 2013.
We estimate an ASP of SGD1,500 psf, which translates to a pre-tax margin of ~13% on an estimated breakeven of SGD1,300 psf. High-end projects such as New Futura and Gramercy Park (the former Lucky Tower) may continue to be shelved until market sentiment improves.
South Beach ASP may have to be moderated. Based on the sales of DUO Residences by M+S Pte Ltd in November at an ASP of ~SGD2,000 psf, we believe it will be a stretch to expect South Beach Residences to go for SGD3,000 psf.
We have lowered our ASP expectation for South Beach Residences to SGD2,500 psf instead, which still suggests a fairly healthy pre-tax margin of 30%.
Slower to diversify. We expect it will take some time before CDL’s overseas residential projects start to contribute to earnings. Currently, works have either not begun or are at the very preliminary stages for its projects in China.
Even when launch-ready, it remains to be seen if CDL can carve a niche for itself in thehighly competitive Chinese market. It is also still early days for its foray into London, having just made its first acquisition there in September.

[princess_morbucks]

Prices inched up a tad 0.4%.

According to DBS, following the implementation of the Total Debt Service Ratio (TDSR) limit and increasing completions of new homes, both private and public resale home prices have experienced decelerating price growth momentum.

For 9MTD, private home prices rose a marginal 0.4% q-o-q and 2% since Dec 2012, much slower than the 2.6% appreciation in 2012.

Here's more from DBS:

In the HDB resale market, prices dipped for the first time, retracing 0.9% q-o-q, a sign that incoming supply and tighter financing terms in this segment are cooling down demand.
2014 will likely see an inflexion of residential prices. Anecdotal evidence is showing slower transaction volumes in both the public and private markets amid deceleration in price momentum.
In the HDB resale market, average cash premiums for secondary market sales have also retraced back to 2010 levels, with a greater number of transactions being concluded at below independent valuers’ valuations.
These are signs that a market correction is imminent.

- See more at: http://sbr.com.sg/residential-proper....gd6q7OKD.dpuf

[CCR]

http://sg.finance.yahoo.com/news/why...060200490.html


even SB price is slated to drop at launch !
good for the bulls with liquidity and willing to pay absd !

I don't believe SO will be selling at 2500 psf.... sure at least 3k Psf....

[blackjack21trader]

I don't believe SO will be selling at 2500 psf.... sure at least 3k Psf....

Most likely near the upper S$3000psf. Mark this post, it will prove that I mingle among the elites and the analysts do not have this same privilege.

The guniang bankers will be chasing after these buyers who have their own financiers.

[Ringo33]

Most likely near the upper S$3000psf. Mark this post, it will prove that I mingle among the elites and the analysts do not have this same privilege.

The guniang bankers will be chasing after these buyers who have their own financiers.

I can double confirm SB price will be that level and UP. and there will also be a super penthouse. but I dont like to mingle leh..

[CCR]

Most likely near the upper S$3000psf. Mark this post, it will prove that I mingle among the elites and the analysts do not have this same privilege.

The guniang bankers will be chasing after these buyers who have their own financiers.

near the upper $3000 psf? meaning 2900psf or 3900psf?

[CCR]

actually if they sell at below 3000 psf very no face leh..... Clermont which i feel is not as atas as SB and also in a more inferior location dare to sell at 3k psf

[Rosy]

actually if they sell at below 3000 psf very no face leh..... Clermont which i feel is not as atas as SB and also in a more inferior location dare to sell at 3k psf

It is because clermont units start from 4xth floor. It should be 2.5kpsf if it starts from 1xth floor.

[Ringo33]

It is because clermont units start from 4xth floor. It should be 2.5kpsf if it starts from 1xth floor.

mark my words, SB will be more expensive due to its more superior location and permanent unblock view over padang and CBD. Imaging having F1 track and MRT at your door steps and 6 star Raffles Hotel across the road.

Actually if there is good view, there is no need to stay so high up.