Property prices not yet at 'meaningful correction': DPM Tharman

[reporter2]

http://www.businesstimes.com.sg/real...on-dpm-tharman

Property prices not yet at 'meaningful correction': DPM Tharman

By Jamie Lee

[email protected]@JamieLeeBT

28 Oct


PROPERTY prices in Singapore have not seen a "meaningful correction" yet, said Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam on Tuesday.

"We've seen some correction in both private property prices and HDB resale prices over the last four to five quarters, but there is some distance to go in achieving a meaningful correction after the sharp run-up in prices in recent years," said the chairman of the Monetary Authority of Singapore at the Credit Counselling Singapore's 10th anniversary luncheon.

"If we do not get a meaningful reversal after each upswing, property prices will run ahead of the growth in household incomes in the long term. And that, we must avoid."


http://www.businesstimes.com.sg/real...-not-there-yet

Tharman: Home prices correction not there yet

By Jamie Lee lee

[email protected]@JamieLeeBT

29 Oct


PROPERTY prices in Singapore have not seen a "meaningful correction" yet, said Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam on Tuesday.

"We have seen some correction in both private property prices and HDB resale prices over the last 4-5 quarters, but there is some distance to go in achieving a meaningful correction after the sharp run-up in prices in recent years," said Mr Tharman, who is also chairman of the Monetary Authority of Singapore (MAS), at the Credit Counselling Singapore's 10th anniversary luncheon.

"If we do not get a meaningful reversal after each upswing, property prices will run ahead of the growth of household incomes over the long term, which we should avoid."

He noted how the risk profiles of borrowers have improved, with the share of borrowers taking up multiple housing loans declining to 13 per cent of new housing loans as at the second quarter of this year, from 30 per cent in 2011.

The average tenure of new private housing loans has also been trimmed to about 25 years, compared to a peak of 30 years in 2012.

Last Friday, figures from the Urban Redevelopment Authority (URA) showed prices of private property falling by 0.7 per cent in the third quarter of this year, compared to three months earlier. That marked the fourth consecutive quarterly drop, though it was also the most benign dip since prices chilled a year ago.

The HDB resale market was hit much harder in the latest quarter, with prices slipping 1.7 per cent from a quarter ago - the biggest decline since the Q3 2001.

Among the cooling measures undertaken by the government was the total debt servicing ratio (TDSR) framework put in place last year. Under TDSR, a borrower's monthly instalments for all debt servicing - including mortgage payments - must not cross 60 per cent of his gross monthly income.

[sunrise]

wah! those bought $1700psf at OCR sure chowlor.

[Rysk]

wah! those bought $1700psf at OCR sure chowlor.

Who bought hah??
I tot got one expert already repeated so many times.. "There is no OCR condo in Singapore that is selling at $1500 to $1700psf... YET..."

"BEWARE....Dont let the troll fool you with wrong information. There is no OCR condo in Singapore that is selling at $1500 to $1700psf...YET..."
Attachment 9534

[teddybear]

What is new from that troll hah?

He said the air in the West region of Singapore, including Jurong, is the MOST CLEAN in Singapore according to NEA PSI !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Wow! HE has made all the petro-refineries, chemical manufacturing plants, power generation plants, and all other heavy industries ALL ONLY LOCATED in the West and Jurong disappeared like David Copperfield !!!!

Who bought hah??
Ppl already repeated so many times.. "There is no OCR condo in Singapore that is selling at $1500 to $1700psf... YET..."

"BEWARE....Dont let the troll fool you with wrong information. There is no OCR condo in Singapore that is selling at $1500 to $1700psf...YET..."
Attachment 9534

wah! those bought $1700psf at OCR sure chowlor.

[solsys]

wah! those bought $1700psf at OCR sure chowlor.

OCR needs to drop by another 65-100psf from today's prices.

RCR, CCR needs to drop by another 130-200psf from today's prices.

[smellyfish]

the way Tharman has been talking, he obviously have a price point in his shiny head that he feels is acceptable, so why not tell the people so no one need to second guess?

and it's a big policy failure to have let prices overshoot their price point by so much.

[sunrise]

Who bought hah??
I tot got one expert already repeated so many times.. "There is no OCR condo in Singapore that is selling at $1500 to $1700psf... YET..."

"BEWARE....Dont let the troll fool you with wrong information. There is no OCR condo in Singapore that is selling at $1500 to $1700psf...YET..."
Attachment 9534

our fren read this news sure collapse. hopes all gone. looks like he has to get back to work to recover the loss.

[pmet]

Tharman is one of the rare good ministers. Respect!

[mosaic]

the way Tharman has been talking, he obviously have a price point in his shiny head that he feels is acceptable, so why not tell the people so no one need to second guess?

and it's a big policy failure to have let prices overshoot their price point by so much.

Lol would you reveal your price point if you were the minister? Are you prepared to face the people who bought above that price point?

[newbie11]

When it's such a controlled market, no one can tell future. Does mas know which measure to rollback when preferred price point is reached?

[Arcachon]

Don't think they looking at the preferred price point, they are looking at the price not going up.

The Control measure are all calculated move, they want the property to go up to the point the ROI for the infrastructure is met.

As to those who MTB, guess got to wait for the next downturn.

Looking at the experience they gain after the AFC in 1997 till 2003, guess they have lots of way to move the market.

[Ringo33]

Here is my 2 cents.

Tharman being the honcho of MOF, he knows very well that the AAA rating of banking system in Singapore is heavily expose to the property sector. And if Singapore property would to collapse, Singapore banks will be in trouble and this is going to bring the entire economy down.

As such, there is no reason why Tharman would want to force a major correction in the property market while they are dealing with a weak global economy. If you read what he said carefully

"We've seen some correction in both private property prices and HDB resale prices over the last four to five quarters, but there is some distance to go in achieving a meaningful correction after the sharp run-up in prices in recent years," said the chairman of the Monetary Authority of Singapore at the Credit Counselling Singapore's 10th anniversary luncheon.

"If we do not get a meaningful reversal after each upswing, property prices will run ahead of the growth in household incomes in the long term. And that, we must avoid."

He mention distant to go and he mention household income. What he is saying is that the property prices need to slow down to let household income to catch up. And that could mean that they want property prices to remain at this lever for X number of years to give time for household income to catch up. And if the government would want to engineer a drastic price correction, they would have introduce a surprise new cooling measure and then tell you why they need to do that.

Which mean, the name of the game for property right now is to invest in high yield asset rather than wasting time thinking about capital gain, at least for the next 5 years.

[wt_know]

what is meaningful level?
when property prices skyrocketed to insane level, why did he not mention not meaningful

[Kelonguni]

Where does that yield focus leave owners who are waiting for TOP in the next few years?

Here is my 2 cents.

Tharman being the honcho of MOF, he knows very well that the AAA rating of banking system in Singapore is heavily expose to the property sector. And if Singapore property would to collapse, Singapore banks will be in trouble and this is going to bring the entire economy down.

As such, there is no reason why Tharman would want to force a major correction in the property market while they are dealing with a weak global economy. If you read what he said carefully



He mention distant to go and he mention household income. What he is saying is that the property prices need to slow down to let household income to catch up. And that could mean that they want property prices to remain at this lever for X number of years to give time for household income to catch up. And if the government would want to engineer a drastic price correction, they would have introduce a surprise new cooling measure and then tell you why they need to do that.

Which mean, the name of the game for property right now is to invest in high yield asset rather than wasting time thinking about capital gain, at least for the next 5 years.

[Ringo33]

Where does that yield focus leave owners who are waiting for TOP in the next few years?

That is really a question about the pros and cons of buying new launch vs resale. I believe there are already several thread on this subject

[heehee]

What you said do not gel with what Tharman said.
Furthermore, Minister Khaw is MND & he said most explicitly & clearly that they consider price now with respect to 2009 low & income increase from then to determine over-priced or not.
As investor, then we look at respective districts price increases also, & income increase of potential buyers there to determine over valued.

Here is my 2 cents.

Tharman being the honcho of MOF, he knows very well that the AAA rating of banking system in Singapore is heavily expose to the property sector. And if Singapore property would to collapse, Singapore banks will be in trouble and this is going to bring the entire economy down.

As such, there is no reason why Tharman would want to force a major correction in the property market while they are dealing with a weak global economy. If you read what he said carefully



He mention distant to go and he mention household income. What he is saying is that the property prices need to slow down to let household income to catch up. And that could mean that they want property prices to remain at this lever for X number of years to give time for household income to catch up. And if the government would want to engineer a drastic price correction, they would have introduce a surprise new cooling measure and then tell you why they need to do that.

Which mean, the name of the game for property right now is to invest in high yield asset rather than wasting time thinking about capital gain, at least for the next 5 years.

[stl67]

This kind of repeated news + cooling measures surely are not favourable and fair to investors like myselfy who buy CDL, Capital land shares. More air/land storm coming. URA has reserved price for land bidding,
so imagine land price is expensive + labour cost, how can developers be dropping their price unless they are here to charity work.

Luckily my commercial property investment is still holding up.

[Ringo33]

URA has already cut down the supply of GLS and HDB has already cut down the supply of BTO. All these are signs that the government are trying not to crash the market. And if Tharman intention is see a more drastic price correction, he would have announce another round of cooling measures instead of just talk about what he feel.

To me this is more of a political move to claim some political points for the coming election.

[k00L]

The title already says it very clearly "Property prices not yet at 'meaningful correction': DPM Tharman"

The URA index only dropped 3-4% since it peaked in Jul last year.
For the drop to be "meaningful", expect another 10% drop from here in next few years

[DMCK]

He also talk about this..

http://www.channelnewsasia.com/news/...s/1439228.html

What do you think?

[Ringo33]

The title already says it very clearly "Property prices not yet at 'meaningful correction': DPM Tharman"

The URA index only dropped 3-4% since it peaked in Jul last year.
For the drop to be "meaningful", expect another 10% drop from here in next few years

This is no the title of Tharman speech, it just a quote that journalist use to sell news.

[smellyfish]

Lol would you reveal your price point if you were the minister? Are you prepared to face the people who bought above that price point?

if you dont reveal, then people continue to second guess with none knowing the better. already in this thread, some are saying 10% $65-$100, $135-$200 - all are none the wiser and wild guesses what is in that shiny head.

if they just reveal the number and say that they will bring it to around that number, then i would think the market will simply trend towards that number.

now its like talking to a woman: why are you unhappy? is it this? no, is it that? no, what is it then? i dont feel like saying...

[k00L]

"If we do not get a meaningful reversal after each upswing, property prices will run ahead of the growth in household incomes in the long term. And that, we must avoid."

What is worrying is that household income growth of 4% in past few years is due to tightening of foreign labour, not due to improved productivity.
Clearly the wage inflation is not sustainable and will slow down .. which means property prices will fall more.

[stl67]

What you say is true. Do you think 6.9 mio will sustain the air storm?

[Ringo33]

"If we do not get a meaningful reversal after each upswing, property prices will run ahead of the growth in household incomes in the long term. And that, we must avoid."

What is worrying is that household income growth of 4% in past few years is due to tightening of foreign labour, not due to improved productivity.
Clearly the wage inflation is not sustainable and will slow down .. which means property prices will fall more.

Doesnt make sense here.

The tightening of foreign labour will contribute to inflation, not income growth.

E.g. how does the reduction of foreign labour in the construction industry contribute pay rise in white collar jobs?

Your inability to understand what you are saying is worrying.

[Arcachon]

The tightening of foreign labour will contribute to inflation, not income growth.

I got lot of Chinese and Indian and others willing to work with less pay, some even pay the employer, now I reduce them do I get income growth.

Inflation is when more people with spare cash is buying and the supply is the same.

[Warren49]

The tightening of foreign labour will contribute to inflation, not income growth.

I got lot of Chinese and Indian and others willing to work with less pay, some even pay the employer, now I reduce them do I get income growth.

Inflation is when more people with spare cash is buying and the supply is the same.

Well, the tightening of foreign labour contributes to income growth among low-wage, and potentially income reduction for elites, in the short term..... In the LT, unproductive companies depending on cheap labor are supposed to relocate overseas or close down. The trick is not to over-tighten the screws on the SMEs such that too many close down in the short term.

[walkthetiger]

Well, the tightening of foreign labour contributes to income growth among low-wage, and potentially income reduction for elites, in the short term..... In the LT, unproductive companies depending on cheap labor are supposed to relocate overseas or close down. The trick is not to over-tighten the screws on the SMEs such that too many close down in the short term.

Inevitable...when the demand decline...struggling SMEs should be down sizing or close down...we can't rely on cheap foreign labours all the time...

[Yuki]

the way Tharman has been talking, he obviously have a price point in his shiny head that he feels is acceptable, so why not tell the people so no one need to second guess?

and it's a big policy failure to have let prices overshoot their price point by so much.

Humm..politicians playing politics.

I never trust their words 100%. It's not being a price point or not. It's giving vague answers so that either ways their words seem right.

[mosaic]

Humm..politicians playing politics.

I never trust their words 100%. It's not being a price point or not. It's giving vague answers so that either ways their words seem right.

yes but most importantly property prices are falling? isn t that what many singaporeans want? In any case the continual price increase was never sustainable. At least policies here actually work.