IT TOOK a big fire at*Marina Bay Suites*to expose the chill in the*rental market.
One disconcerting fact to emerge from the incident at the posh condo is that less than 10 per cent of the units are occupied even though over 90 per cent of them have been sold by the developer already.
It begs the question: Why would anyone want to buy them in the first place, only to leave them vacant, especially when they come with an expensive price tag?
This newspaper has quoted agents as saying a*three-bedroomunit in the 221-unit development costs $3 million while a four-bedder fetches up to $6 million. One of the three penthouses sold for an eye-popping $19.3 million.
If the buyers had left such big sums in the bank instead, they would still have enjoyed some returns, despite current near-zero interest rates.
Worse, if they continue to be fussy over tenants and asking rentals, they may find themselves with a whopping tax bill. This is because there is no longer any property tax refund on unoccupied units. There is also the hefty sum they have to fork out each month for the condo upkeep.
The sorry episode at Marina Bay Suites reinforces an observation made by this column over a year ago that even then, owners of upmarket condos were facing difficulties in leasing out their units unless they were willing to slash their asking rental.
"On paper, their investments look good because their prices appeared to have appreciated sharply. But they are not getting much by way of returns in the form of rent because the pool of high-flying tenants appears to be drying up," this column had noted.
So far, the chill in the rental market appears to be confined to the upmarket condo segment, but the big worry is that the malaise may spread to the rest of the residential sector as well.
Still, the concerns seem to be unfounded.
A Savills report shows that in the third quarter of last year - the latest quarter for which data is available - a record 15,083 rental transactions were signed. This was a 11.6 per cent jump on the previous quarter.
Data from the Urban Redevelopment Authority shows rentals holding up. For the third quarter, its overall index for private residential properties rose 0.2 per cent.
But a potential oversupply situation looms. A large number of units - 17,459 to be precise - were left vacant in the third quarter, and this will get worse with another 26,000 units slated for completion this year.
Sure, some of the newly completed units will be occupied by HDB upgraders, but the worry is they may add to the already stiff rental competition by putting up their vacated HDB flats for lease if they cannot sell them on the softening*HDB resale*market.
There is also a growing fear that the pool of expatriate tenants may start to shrink, as they face difficulties in getting their employment passes approved or renewed, as companies with more than 25 employees must advertise job openings on a government-sponsored jobs bank website before they can hire foreigners. The jobs bank will be launched by mid-year.
One particular area of concern would be the large number of new shoebox units coming up on the rental market, whose owners had bought in the past few years as they were affordably priced at below $1 million.
For those desperate enough to want to quit being landlords altogether, the moribund state of the housing resale market offers little consolation.
Flash estimates from the Singapore Real Estate Exchange show the number of condo units and*private apartments*resold almost halved to 6,550 last year from 12,278 in 2012.
Worse, the crunch appeared to be more acute in the second half of the year, after the Government capped a home loan applicant's total monthly debt repayments to 60 per cent of his income. In November and again in December, fewer than 400 resale units changed hands a month.
But it would be wrong to think that property investors are behaving like ostriches burying their heads in the sand, oblivious to the hazards ahead.
Most of them believe they can weather the oncoming storm, as long as mortgage rates stay low and they are able to service their monthly instalments.
However, the negative factors have soured their buying appetite. This may help to explain the stunning drop in new home sales to a mere 259 units last month, from 1,271 units in November and 1,410 units in December 2012.
For landlords caught between getting a sub-par rental and a difficult resale market, getting kicked in the belly, even before the Year of the Horse canters in, is painful. They can't wait for the year to be over.
market crash u die i die everybody die...so better dont crash
In the final analysis.....its NOT whether you have a diploma,degree,masters OR PHD....its whether you have a HDB/PC/EC or LANDED...
"At the moment, our policy will be, condominium, private sector. They want to buy, let them buy because they actually bring in money for Singapore. They may not actually stay there but they bring in money.
"They buy from locals, locals are happy to get the money but it's not actually adding to space. In fact, that's actually ideal. They buy here, they don't drive cars, they don't live here, we just get their money! They're buying air!" laughed SM Goh.
http://myanmarinsingapore.com/m/blog...3A12%3A36.917Z
Rich people with tons of money don't usually like to rent out their properties. Rental income is attracting too much attention. The writer is quite ignorant.
One Hyde Park in london, probably having the most expensive address, is too.
Owners leave it unoccupied by choice.
Any issue?
Rental income means income tax
Income tax means financial record
Financial record means your money is traceable
Your money traceable means.....?
Normal people will do not support go green idea by wasting water un-necessary. Rich People have more choice to again go green idea.
So tenant when out for dinner when fire started also count as unoccupied or not?
The Straits Times - January 20, 2014
By: By Goh Eng Yeow Senior Correspondent
http://business.asiaone.com/news/per...not-end-itself
I have overseas biz partners who own units there. They have no intention to rent it out as rental income is miserable compared to their biz dealings and also too much hassle. They buy to park money as well as for their children to use when they are here for holidays. Some of them come to sg regularly for health check at camden so when they are here they stay at mb suites lor.
Dont blame the journalist he is reporting numerical facts. But he dont have access to the full story.
http://www.straitstimes.com/archive/...arket-20140120
CAI JIN
The chill spreads in the home rental market
Looming oversupply may mean not just upmarket condos will be hit
Published on Jan 20, 2014
By Goh Eng Yeow Senior Correspondent
IT TOOK a big fire at Marina Bay Suites to expose the chill in the rental market.
One disconcerting fact to emerge from the incident at the posh condo is that less than 10 per cent of the units are occupied even though over 90 per cent of them have been sold by the developer already.
It begs the question: Why would anyone want to buy them in the first place, only to leave them vacant, especially when they come with an expensive price tag?
This newspaper has quoted agents as saying a three-bedroom unit in the 221-unit development costs $3 million while a four-bedder fetches up to $6 million. One of the three penthouses sold for an eye-popping $19.3 million.
If the buyers had left such big sums in the bank instead, they would still have enjoyed some returns, despite current near-zero interest rates.
Worse, if they continue to be fussy over tenants and asking rentals, they may find themselves with a whopping tax bill. This is because there is no longer any property tax refund on unoccupied units. There is also the hefty sum they have to fork out each month for the condo upkeep.
The sorry episode at Marina Bay Suites reinforces an observation made by this column over a year ago that even then, owners of upmarket condos were facing difficulties in leasing out their units unless they were willing to slash their asking rental.
"On paper, their investments look good because their prices appeared to have appreciated sharply. But they are not getting much by way of returns in the form of rent because the pool of high-flying tenants appears to be drying up," this column had noted.
So far, the chill in the rental market appears to be confined to the upmarket condo segment, but the big worry is that the malaise may spread to the rest of the residential sector as well.
Still, the concerns seem to be unfounded.
A Savills report shows that in the third quarter of last year - the latest quarter for which data is available - a record 15,083 rental transactions were signed. This was a 11.6 per cent jump on the previous quarter.
Data from the Urban Redevelopment Authority shows rentals holding up. For the third quarter, its overall index for private residential properties rose 0.2 per cent.
But a potential oversupply situation looms. A large number of units - 17,459 to be precise - were left vacant in the third quarter, and this will get worse with another 26,000 units slated for completion this year.
Sure, some of the newly completed units will be occupied by HDB upgraders, but the worry is they may add to the already stiff rental competition by putting up their vacated HDB flats for lease if they cannot sell them on the softening HDB resale market.
There is also a growing fear that the pool of expatriate tenants may start to shrink, as they face difficulties in getting their employment passes approved or renewed, as companies with more than 25 employees must advertise job openings on a government-sponsored jobs bank website before they can hire foreigners. The jobs bank will be launched by mid-year.
One particular area of concern would be the large number of new shoebox units coming up on the rental market, whose owners had bought in the past few years as they were affordably priced at below $1 million.
For those desperate enough to want to quit being landlords altogether, the moribund state of the housing resale market offers little consolation.
Flash estimates from the Singapore Real Estate Exchange show the number of condo units and private apartments resold almost halved to 6,550 last year from 12,278 in 2012.
Worse, the crunch appeared to be more acute in the second half of the year, after the Government capped a home loan applicant's total monthly debt repayments to 60 per cent of his income. In November and again in December, fewer than 400 resale units changed hands a month.
But it would be wrong to think that property investors are behaving like ostriches burying their heads in the sand, oblivious to the hazards ahead.
Most of them believe they can weather the oncoming storm, as long as mortgage rates stay low and they are able to service their monthly instalments.
However, the negative factors have soured their buying appetite. This may help to explain the stunning drop in new home sales to a mere 259 units last month, from 1,271 units in November and 1,410 units in December 2012.
For landlords caught between getting a sub-par rental and a difficult resale market, getting kicked in the belly, even before the Year of the Horse canters in, is painful. They can't wait for the year to be over.
[email protected]
Is there a problem with people buying the air?
It the same as giving PR to those who think they are very smart and intelligent, when they do something stupid they have to get the next flight out of the country. Whatever they have contribute to the country become the past. If they are truly smart and intelligent they should take up SC.
"At the moment, our policy will be, condominium, private sector. They want to buy, let them buy because they actually bring in money for Singapore. They may not actually stay there but they bring in money.
"They buy from locals, locals are happy to get the money but it's not actually adding to space. In fact, that's actually ideal. They buy here, they don't drive cars, they don't live here, we just get their money! They're buying air!" laughed SM Goh.
http://myanmarinsingapore.com/m/blog...3A12%3A36.917Z
on propertyguru,
there are 407 sales adverts vs 553 rent adverts.
http://www.propertyguru.com.sg/listi...ina-bay-suites
read advert above, like that still not considered rent out to tom dick or harry?
http://www.propertyguru.com.sg/listi...ina-bay-suites
http://www.propertyguru.com.sg/listi...ina-bay-suites
cheapest such unit was bought for $3.3m. Gross yield is < 2.5%
These units are best used as small company office , this one at $4 psf would be very good value for a small company relative to $10 spf next door in orq , my friend uses a unit in the sail next door as an office , it is a good environmnt if you refit to be an office and the condo facilities and free parking make it good for employees . This area is not residential at all , I cant see why any family would want to live here ...
Very often, there are many multiple listings from many different agents!
If you don't believe, you try to approach the agents and see whether you end up viewing the same few units?
For Sales, you try put in a lower than asking figure and see whether they willing to sell to you?