Singapore private property market is weakening significantly...
You can read the news at this URL...
You can also read the news that I had attached below.
Apparently, Singapore's CCR (Core Central Region) property price has dropped by a lot and the CCR market is very soft now because CCR has traditionally been a foreigners' playing ground. The introduction of Singapore's property cooling measure called "ABSD" (additional buyer's stamp duty) has basically killed it!
However, Singapore's OCR (Outside Core Region) property market is a different story. Singapore's OCR property market is now slowly being killed by Singapore's property cooling measure called "TDSR" (total debt servicing ratio) (Note that I had covered the absurdity of TDSR in my previous post and I will not repeat here again).
Recently, it has been reported that mortgagee sales (i.e. bank forced sales of mortgaged properties) have been on the rise, and even those so-called "mickey-mouse" units (i.e. very small size units of <500 sqft) are under mortgagee sale! Many of these "mickey-mouse" units are in the OCR region, which is very surprising because these units market value are very low and yet the owners still faced mortgagee sale after being unable to pay the small amount of property loan instalment and probably also due to being unable to refinance at cheaper rate and longer loan tenure due to imposition of TDSR!
It seems that while Singapore CCR private property prices has already crashed, and now Singapore's OCR property market is suffering a slow death and the price would likely have crashed by 2016-2018 if no removal of any property cooling measure has been made by then...
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6 months to sell a condo, 3 to offload a flat
Friday, Nov 21, 2014
Rennie Whang
The Straits Times
Private condominium sellers are taking nearly six months to secure a sale, the longest wait in over two years, new data shows.
It also takes far longer now to find a buyer for a Housing Board flat - with a three-month wait on average.
Data compiled by the Singapore Real Estate Exchange (SRX) shows that private non-landed units spent a median of 120 days on the market in the first quarter, rising to 137 days in the second quarter and 154 days in the third.
Last month, they spent 172 days - almost six months - on the market before being sold. It is a far cry from 88.5 days, or less than three months, a year back.
The median wait to sell HDB units has grown as well, from more than 60 days per quarter in 2012 and last year to 91 days in the third quarter this year.
These long waits reflect weakened demand, consultants say. Upcoming increases in total residential stock will further pressure owners to sell, said Century 21 chief executive Ku Swee Yong.
In the HDB market, resale demand has suffered owing to factors such as the large number of new Build-To-Order flats, giving first- and second-time buyers a more affordable option, said PropNex CEO Mohd Ismail.
There has also been growing supply in the HDB resale market from people collecting keys to second homes, leading to sliding prices in the past five quarters.
For private homes, the total debt servicing ratio and additional buyer's stamp duty have discouraged buyers.
New private home sales are not expected to exceed 9,000 this year, far lower than last year's 17,590 annual sales figure.
The median price spread - the difference between asking and transaction prices - has also risen in both public and private residential markets, SRX found.
In the HDB market, the median price spread rose from 4.7 per cent in the first quarter to 4.9 per cent in the second and 5.9 per cent in the third. It was 3.8 per cent in the third quarter last year and 2.1 per cent a year earlier.
For private non-landed properties, the spread went from 6.3 per cent in the first quarter to 7.3 per cent in the second and 8.2 per cent in the third. It was 4.9 per cent in the third quarter last year and 4.1 per cent a year earlier.
While median days on market is expected to rise, price spreads may keep edging up though they are likely to stabilise soon, said OrangeTee research manager Wong Xian Yang. Valuations could be adjusted and sellers are likely to lower asking prices.
Private condo owners tend to have more holding power, but weak leasing demand for newly completed mass market condos may pressure some owners to sell, said R'ST Research director Ong Kah Seng.
The longer waits and growing price spread do not necessarily mean prices will soften further, said Savills Singapore research head Alan Cheong.
"Usually, (this could be the case) for more liquid markets like equities... Fortunately, real estate is not a homogeneous product with factors including location and unit size... all having an effect on pricing. Still, with a negative economic indicator such as increased days on market, creditors may feel compelled to quickly act against delinquent loans."
Showing posts with label property. Show all posts
Showing posts with label property. Show all posts
Thursday, December 18, 2014
Sunday, August 17, 2014
Property News: Developers hard-pressed to price projects modestly
Another private property news, see Business Times URL for details:
I extract some relevant part as below:
" LATEST official statistics showed that developers' housing sales continued to languish last month, but the focus now is on the likely launches for the rest of the year and how much room developers have to price them attractively to get potential buyers into making a commitment.
Many developers paid high prices for 99-year private housing sites at state tenders in the past couple of years as they sought to replenish land following strong home sales at the time.
"Those with a high breakeven cost but who need to launch a project are likely to adopt a "Star Buy" strategy for inferior stacks of units in the development to draw out initial take-up to drive confidence in the launch," a seasoned developer told BT yesterday.
"But even those who paid high land prices and left with less room for price adjustment may be willing to lower their price expectations. This could enable them to clear some units and generate cash flow - rather than maintaining the status quo and doing nothing as market conditions deteriorate further."
There will be heightened competition for buyers as more property launches are expected by developers who had bought residential land after December 2011. These developers are required to complete the projects and sell all units within five years, otherwise they would have to pay a hefty additional buyer's stamp duty on the land price with interest, Ms Chia noted.
"This goes to show that developers can revive sales at existing launches with meaningful price cuts. What remains to be seen, however, is whether this will result in a price war, which could be triggered, for instance, if one player were to sharply cut prices relative to other projects in the vicinity." "
From my past experience, when developers need to cut prices to move sales, they will always incorporate the strategy of cutting materials, construction, workmanship, and furnishing costs to bone, ending up with very inferior quality products!
I extract some relevant part as below:
" LATEST official statistics showed that developers' housing sales continued to languish last month, but the focus now is on the likely launches for the rest of the year and how much room developers have to price them attractively to get potential buyers into making a commitment.
Many developers paid high prices for 99-year private housing sites at state tenders in the past couple of years as they sought to replenish land following strong home sales at the time.
"Those with a high breakeven cost but who need to launch a project are likely to adopt a "Star Buy" strategy for inferior stacks of units in the development to draw out initial take-up to drive confidence in the launch," a seasoned developer told BT yesterday.
"But even those who paid high land prices and left with less room for price adjustment may be willing to lower their price expectations. This could enable them to clear some units and generate cash flow - rather than maintaining the status quo and doing nothing as market conditions deteriorate further."
There will be heightened competition for buyers as more property launches are expected by developers who had bought residential land after December 2011. These developers are required to complete the projects and sell all units within five years, otherwise they would have to pay a hefty additional buyer's stamp duty on the land price with interest, Ms Chia noted.
"This goes to show that developers can revive sales at existing launches with meaningful price cuts. What remains to be seen, however, is whether this will result in a price war, which could be triggered, for instance, if one player were to sharply cut prices relative to other projects in the vicinity." "
From my past experience, when developers need to cut prices to move sales, they will always incorporate the strategy of cutting materials, construction, workmanship, and furnishing costs to bone, ending up with very inferior quality products!
Wednesday, August 13, 2014
Main secrets to making a lot of money - "Leverage"!
My blog is about make / making money secrets, so time to cover this main topic:
To people who are interest in the secrets to making a lot of money, especially if you have only small limited capital to start with, I can sum up for you, very simple, and it is just 1 word: "Leverage"!
Trading futures by itself is based on "leverage" (if you understand the principle of the "futures" financial instrument).
In fact, many Singaporeans have knowingly or unknowingly been using "leverage" in their favourite investment: property!
Property investment is an investment that is fundamentally based on "leverage", because there is basically no other asset / financial instrument where you can get 80% loan from banks on the cheap! (Property mortgage loan is the cheapest form of bank loan available anywhere in the world compared to renovation loan, personal loan, business loan, etc!).
Trading futures is also by itself based on "leverage", because for each US$1 position you opened (be it "long" or "short"), you are controlling about $20 position!
That is to say, when you open a $50,000 position, you are exposed to $1,000,000 ($1 MILLION) opened position and hence market risk!
To people who are interest in the secrets to making a lot of money, especially if you have only small limited capital to start with, I can sum up for you, very simple, and it is just 1 word: "Leverage"!
Trading futures by itself is based on "leverage" (if you understand the principle of the "futures" financial instrument).
In fact, many Singaporeans have knowingly or unknowingly been using "leverage" in their favourite investment: property!
Property investment is an investment that is fundamentally based on "leverage", because there is basically no other asset / financial instrument where you can get 80% loan from banks on the cheap! (Property mortgage loan is the cheapest form of bank loan available anywhere in the world compared to renovation loan, personal loan, business loan, etc!).
Trading futures is also by itself based on "leverage", because for each US$1 position you opened (be it "long" or "short"), you are controlling about $20 position!
That is to say, when you open a $50,000 position, you are exposed to $1,000,000 ($1 MILLION) opened position and hence market risk!
Tuesday, August 12, 2014
Read NEWS with eyes wide open and brain functioning!
On 24 July 2014, we saw NEWS on Channel News Asia with headline news like this:
"‘Too early’ to ease property cooling measures: MAS"
The news article then continues to say:
"Property prices have risen 60 per cent over the last four years but have declined by just 3.3 per cent over the last three quarters, MAS says."
You can read the full details at this URL.
There is no doubt that the above is true in the overall sense, but only on face value.
If you delve deeper into the overall conclusion, you will find that the conclusion is NOT true of Singapore properties in certain specific localities, mainly the Core Central Region or CCR (i.e. the urban city area).
Since they said "Property prices risen 60% over last 4 years", I will look at the property prices from 2009 - 2014 now specifically in different locations, E.g.:
1) In 2009, a 1367 sqft 99-years leasehold property in Outside Core Region (OCR) or suburb, Sengkang, was transacted at about $500 psf.
In 2014 Jun, the property was transacted at $929 psf. This is a gain of 85.8%.
2) In 2009, a 2293 freehold sqft property in Core Central Region or urban city in Orchard, was transacted at $1153 psf.
In 2014 July, the property was transacted at $1168 psf. This is a gain of only 1.3% (after about 5 years!).
Similar transacted price trends can be seen for most other properties in the OCR and CCR neighbourhood whereby there is very little price increase for CCR properties bought in 2009 and now, while there is a huge increase of almost 85% or more for OCR properties.
You will be even more confused if you know that during the 2007 property price peak, similar OCR property was only transacted at about $700 psf while similar CCR property was transacted at >$2500 psf!
Thus, we can see that statement that the private property prices have risen 60% over last 4 years is a serious under-statement for OCR property prices AND yet a serious over-statement for CCR property prices. This is despite of the so many cooling measures and the most recent most damning ABSD and TDSR.
On the other hand, we can see that the biggest bargain to be had right now is the CCR private residential properties (vs historical prices)!
However, I also note that despite of this fact, most ordinary Singaporeans can't afford such CCR properties, rendering them no choice but to buy "expensive" OCR properties that are "more affordable" to them. The truly rich are having their big cherry to picks (other than having to pay ABSD)! These CCR properties are mostly fire-sale by those owners who are not rich and are now in need of money, partially also squeezed by TDSR and inability to re-finance at a better terms and rate etc.
"‘Too early’ to ease property cooling measures: MAS"
The news article then continues to say:
"Property prices have risen 60 per cent over the last four years but have declined by just 3.3 per cent over the last three quarters, MAS says."
You can read the full details at this URL.
There is no doubt that the above is true in the overall sense, but only on face value.
If you delve deeper into the overall conclusion, you will find that the conclusion is NOT true of Singapore properties in certain specific localities, mainly the Core Central Region or CCR (i.e. the urban city area).
Since they said "Property prices risen 60% over last 4 years", I will look at the property prices from 2009 - 2014 now specifically in different locations, E.g.:
1) In 2009, a 1367 sqft 99-years leasehold property in Outside Core Region (OCR) or suburb, Sengkang, was transacted at about $500 psf.
In 2014 Jun, the property was transacted at $929 psf. This is a gain of 85.8%.
2) In 2009, a 2293 freehold sqft property in Core Central Region or urban city in Orchard, was transacted at $1153 psf.
In 2014 July, the property was transacted at $1168 psf. This is a gain of only 1.3% (after about 5 years!).
Similar transacted price trends can be seen for most other properties in the OCR and CCR neighbourhood whereby there is very little price increase for CCR properties bought in 2009 and now, while there is a huge increase of almost 85% or more for OCR properties.
You will be even more confused if you know that during the 2007 property price peak, similar OCR property was only transacted at about $700 psf while similar CCR property was transacted at >$2500 psf!
Thus, we can see that statement that the private property prices have risen 60% over last 4 years is a serious under-statement for OCR property prices AND yet a serious over-statement for CCR property prices. This is despite of the so many cooling measures and the most recent most damning ABSD and TDSR.
On the other hand, we can see that the biggest bargain to be had right now is the CCR private residential properties (vs historical prices)!
However, I also note that despite of this fact, most ordinary Singaporeans can't afford such CCR properties, rendering them no choice but to buy "expensive" OCR properties that are "more affordable" to them. The truly rich are having their big cherry to picks (other than having to pay ABSD)! These CCR properties are mostly fire-sale by those owners who are not rich and are now in need of money, partially also squeezed by TDSR and inability to re-finance at a better terms and rate etc.
Friday, August 8, 2014
What is the outlook of private residential property prices in Singapore?
Property investment seems like a favourite investment class in Singapore. This is particularly so for private residential property prices in Singapore where there is "more free" market and can be purchased by foreigners (compared to the public HDB flats - which is restricted to citizens). It is not difficult to see why, given that the best place to invest in properties have the following characteristics:
1) Small available land area (Singapore is just a small dot of about 700 sqm in the world!)
2) High population density (Singapore is the top most populated country in the world!)
3) High GDP per capita (Singapore has one of the highest GDP per capita in the world!)
But given the many private residential property cooling measures implemented by the Singapore government, what is the private residential property price outlook from here?
Let me make a proper summary and will get back here to let you know my view............
1) Small available land area (Singapore is just a small dot of about 700 sqm in the world!)
2) High population density (Singapore is the top most populated country in the world!)
3) High GDP per capita (Singapore has one of the highest GDP per capita in the world!)
But given the many private residential property cooling measures implemented by the Singapore government, what is the private residential property price outlook from here?
Let me make a proper summary and will get back here to let you know my view............