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Thread: Say it until it comes true

  1. #1
    property soul

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    http://propertysoul.com/2016/03/11/s...it-comes-true/

    Say it until it comes true


    March 11, 2016

    In my twelve years studying in a Catholic girls school, I was taught to pray if I need to. Till today, whenever I run into troubles, I just keep praying. And I also visit different temples to say the same prayer just in case. I believe that, in the end, some God will do something. It may have nothing to do with my devotion, but the fact that God just canít stand my nagging any more.


    Play it again, Sam

    I am not alone.

    Recently, stakeholders in the property industry are sharing the same belief: The more you say it, the more chances your wish will come true.

    On February 18, President of REDAS (Real Estate Developersí Association of Singapore) Augustine Tan claimed that there is an ďurgent needĒ to bring stability and ensure a soft landing in the property market ďto prevent further damage to the fragile economyĒ.

    A week later, Kwek Leng Beng, Chairman of Hong Leong Group and City Developments, told the press that the government will press the button at the right time. He suspected that the Additional Buyerís Stamp Duty (ABSD) will be abolished first and he hoped that the authority would do it sooner rather than later.

    Not long ago in July 2014, Mr Kwek had told the government to review the cooling measures, or risk losing property investment dollars to other countries.

    This Wednesday PropNex put forward a proposal to advise the government why and how to tweak property cooling measures, including loosening ABSD, loan-to-value limits and Mortgage Servicing Ratio.

    See how the industry stakeholders are singing the same tune. Their philosophy is: If you want the government to do something, you have to say it again and again.


    If you build it, they will come?

    But the question is: What make them think that their problem will be solved if the government relax the cooling measures tomorrow?

    No one can tell what will happen tomorrow. The uplift of property buying restrictions can be coincided with an untimely stock market clash, financial crisis or economic recession.

    In 2005, the government introduced a series of property measures trying to stimulate the property market. Thatís when loan-to-value limit was raised from 80 percent to 90 percent. But still, there were few takers.

    What the developers and their marketing agents really want is to offload the unsold units to the buyers. Never mind the fact that, the moment buyers sign the Option to Purchase, they are bound by the rules of TDSR, ABSD and Seller Stamp Duty. Buyers are exposed to the risks of supply glut, soft rental, interest rate hike and economic downturn.

    Afterall, it is no longer the developersí problem once their problem becomes someone elseís problem.

    Many projects in the market now are on sites where developers bought from the government at all time high. But just because developers have submitted a high bid to secure the land parcels doesnít mean that buyers have to foot the bill.


    Two ways to save the bell

    There are two feasible solutions to help clearing developersí outstanding stock:

    1. Stimulate the demand

    The government can loosen the existing property cooling measures in TDSR, stamp duties and loan-to-value limits. Or it can increase housing demand by import of more foreigners.

    On the other hand, developers can offer attractive discounts on their unsold units. Potential buyers might be tempted to take the plunge if the price is right. Lowering prices can make the units more affordable which automatically expands the pool of buyers.

    2. Limit the supply

    This is under the complete control of Singapore Land Authority. The government has announced that it would cut land sales. But in the first half of 2016, it is still be selling three confirmed residential sites and another eight sites on the reserve list, with the potential to build 7,420 new homes. This is on top of the 7,825 homes from residential sites released by Singapore land sales in second half of 2015.

    REDAS claimed that, as of end of last year, there are over 60,000 units in the pipeline and a record 26,500 vacant units.

    There is no way for developers to clear their stock if there is incessant supply in the pipeline.


    Developers fighting an uphill battle

    Developers have five years to sell all units in a residential project, or pay ABSD on the unsold units. REDASí Mr Tan estimated that there are some 700 unsold units from 13 projects that will be affected by the Qualifying Certificate rule by the end of this year, with extension charges amounting to S$100 million.

    This is under the law that developers have to obtain Temporary Occupation Permit (TOP) for their projects five years after the land sales and sell all the units two years after TOP. Failing to do so, they have to pay extension charges of 8 to 24 percent of the land cost in the subsequent years. Moreover, land purchased after Dec 8, 2011 are subject to ABSD of 10 percent after five years. The first batch of projects to pay ABSD will be in December this year.

    Of course, developers can take the easy way out by selling the unsold units to an investment holding subsidiary or a cash-rich corporate buyer. Or they can simply unlist from the Singapore stock exchange.

    Look like industry stakeholders have no choice but continue their prayers until they see the silver lining.
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  2. #2
    Ultimate Underdog

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    Quote Originally Posted by vip View Post
    http://propertysoul.com/2016/03/11/s...it-comes-true/

    Say it until it comes true


    March 11, 2016

    Play it again, Sam

    If you build it, they will come?

    But the question is: What make them think that their problem will be solved if the government relax the cooling measures tomorrow?

    No one can tell what will happen tomorrow. The uplift of property buying restrictions can be coincided with an untimely stock market clash, financial crisis or economic recession.

    In 2005, the government introduced a series of property measures trying to stimulate the property market. That’s when loan-to-value limit was raised from 80 percent to 90 percent. But still, there were few takers.

    Many projects in the market now are on sites where developers bought from the government at all time high. But just because developers have submitted a high bid to secure the land parcels doesn’t mean that buyers have to foot the bill.


    Two ways to save the bell

    There are two feasible solutions to help clearing developers’ outstanding stock:

    1. Stimulate the demand

    The government can loosen the existing property cooling measures in TDSR, stamp duties and loan-to-value limits. Or it can increase housing demand by import of more foreigners.

    On the other hand, developers can offer attractive discounts on their unsold units. Potential buyers might be tempted to take the plunge if the price is right. Lowering prices can make the units more affordable which automatically expands the pool of buyers.

    2. Limit the supply

    This is under the complete control of Singapore Land Authority. The government has announced that it would cut land sales. But in the first half of 2016, it is still be selling three confirmed residential sites and another eight sites on the reserve list, with the potential to build 7,420 new homes. This is on top of the 7,825 homes from residential sites released by Singapore land sales in second half of 2015.

    REDAS claimed that, as of end of last year, there are over 60,000 units in the pipeline and a record 26,500 vacant units.

    There is no way for developers to clear their stock if there is incessant supply in the pipeline.


    Developers fighting an uphill battle

    Developers have five years to sell all units in a residential project, or pay ABSD on the unsold units. REDAS’ Mr Tan estimated that there are some 700 unsold units from 13 projects that will be affected by the Qualifying Certificate rule by the end of this year, with extension charges amounting to S$100 million.

    This is under the law that developers have to obtain Temporary Occupation Permit (TOP) for their projects five years after the land sales and sell all the units two years after TOP. Failing to do so, they have to pay extension charges of 8 to 24 percent of the land cost in the subsequent years. Moreover, land purchased after Dec 8, 2011 are subject to ABSD of 10 percent after five years. The first batch of projects to pay ABSD will be in December this year.

    Of course, developers can take the easy way out by selling the unsold units to an investment holding subsidiary or a cash-rich corporate buyer. Or they can simply unlist from the Singapore stock exchange.

    Look like industry stakeholders have no choice but continue their prayers until they see the silver lining.
    For 1, I think both are happening. It is just happening very slowly and gradually. We are still increasing population by around 60K in 2015. And developers are indeed lowering prices sincerely. Their asking prices in 2013 and today PSF wise is different by at least over 10%, with some over 20%. Just like how much EU and Japan can lower interest rate. Until negative how to lower some more? Even 0.1% more, meaningful?

    For 2. Confirmed sites and reserve sites are very different in nature and intent. My confirmed site in Holland V was moved to reserve site in 2014 and until today no news... Supply is definitely drying up if developers do not meet reserve bids or they bid even higher to secure reserve sites which undergo open bidding.

    I guess your intent is for developers to lower prices further so you can go and buy resales at an even cheaper price. I doubt it will really happen, but I wish you the best in this.
    The three laws of Kelonguni:

    Where there is kelong, there is guni.
    No kelong no guni.
    More kelong = more guni.

  3. #3
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    In 2005, the government introduced a series of property measures trying to stimulate the property market. That’s when loan-to-value limit was raised from 80 percent to 90 percent. But still, there were few takers.

    Guess who was one of those FEW TAKERS ?

    Singaporeans are trained to FOllOW ....

    the FEW who have learned to LEAD have gained ... since 2005 ...

    Cutting prices alone will not help, really.

    I know of many foreigners, who are staying away from Singapore properties because of the ABSD.

    These buyers have money to spend, but they are not stupid to pay that ABSD where the Govt is the sole beneficiary in the name of "Cooling the market"

  4. #4
    Ultimate Underdog

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    Quote Originally Posted by proud owner View Post
    In 2005, the government introduced a series of property measures trying to stimulate the property market. Thatís when loan-to-value limit was raised from 80 percent to 90 percent. But still, there were few takers.

    Guess who was one of those FEW TAKERS ?

    Singaporeans are trained to FOllOW ....

    the FEW who have learned to LEAD have gained ... since 2005 ...

    Cutting prices alone will not help, really.

    I know of many foreigners, who are staying away from Singapore properties because of the ABSD.

    These buyers have money to spend, but they are not stupid to pay that ABSD where the Govt is the sole beneficiary in the name of "Cooling the market"
    You also a taker? Mine was 2006. Really moved into an empty building then.
    The three laws of Kelonguni:

    Where there is kelong, there is guni.
    No kelong no guni.
    More kelong = more guni.

  5. #5
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    Quote Originally Posted by Kelonguni View Post
    You also a taker? Mine was 2006. Really moved into an empty building then.
    Started taking in end 2004...

    began with landed ... then PHs..... basically went for all huge units....

  6. #6
    OCR properties going to crash!

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    As I have said before, when market is down (and caused by their property cooling measures), by then, all kind of stimulus they thought they can implement will actually be useless.
    They still haven't learnt their lesson yet (no wonder many of them missed the 2009 boat)............

    Quote Originally Posted by proud owner View Post
    In 2005, the government introduced a series of property measures trying to stimulate the property market. Thatís when loan-to-value limit was raised from 80 percent to 90 percent. But still, there were few takers.

    Guess who was one of those FEW TAKERS ?

    Singaporeans are trained to FOllOW ....

    the FEW who have learned to LEAD have gained ... since 2005 ...

    Cutting prices alone will not help, really.

    I know of many foreigners, who are staying away from Singapore properties because of the ABSD.

    These buyers have money to spend, but they are not stupid to pay that ABSD where the Govt is the sole beneficiary in the name of "Cooling the market"

  7. #7
    Junior

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    Quote Originally Posted by proud owner View Post
    In 2005, the government introduced a series of property measures trying to stimulate the property market. Thatís when loan-to-value limit was raised from 80 percent to 90 percent. But still, there were few takers.

    Guess who was one of those FEW TAKERS ?

    Singaporeans are trained to FOllOW ....

    the FEW who have learned to LEAD have gained ... since 2005 ...

    Cutting prices alone will not help, really.

    I know of many foreigners, who are staying away from Singapore properties because of the ABSD.

    These buyers have money to spend, but they are not stupid to pay that ABSD where the Govt is the sole beneficiary in the name of "Cooling the market"

    "Singaporeans are trained to FOllOW." Truer statements have never been uttered before. I literally cannot tell two sinporeans apart.

  8. #8
    Newbie

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    Quote Originally Posted by stalingrad View Post
    "Singaporeans are trained to FOllOW." Truer statements have never been uttered before. I literally cannot tell two sinporeans apart.
    haha, that's why

  9. #9
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    I think current market is already quite stabilize. There's still demand but given the sentiments and measures, a lot of funds are divested out to other markets which is a great disadvantage for SG ... while most are waiting at the sidelines given the sentiments.
    - removing absd
    - removing the penalty where the developers have to sell within 5-6years
    will actually help stabilize the market and maintaining a stable prize .. the other measures can probably remain to maintain a healthy market ..
    TDSR literally killed most speculations .. so the rest of the measures are really pointless.

  10. #10
    Ultimate Underdog

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    The other measures are becoming apparent as tax generating measures similar to GST, ironically largely supported by the population whom the measures tax.

    In the end, PPI drops say 10-15% but tax generated from stamp duties also increase by 10-15%.

    Quote Originally Posted by diveaces View Post
    I think current market is already quite stabilize. There's still demand but given the sentiments and measures, a lot of funds are divested out to other markets which is a great disadvantage for SG ... while most are waiting at the sidelines given the sentiments.
    - removing absd
    - removing the penalty where the developers have to sell within 5-6years
    will actually help stabilize the market and maintaining a stable prize .. the other measures can probably remain to maintain a healthy market ..
    TDSR literally killed most speculations .. so the rest of the measures are really pointless.
    The three laws of Kelonguni:

    Where there is kelong, there is guni.
    No kelong no guni.
    More kelong = more guni.

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