Property Market Sentiments

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I guess it's easy to be "blown-away" by the glaring headlines of sizzling sales, record breaking HDB prices. 

The 1H2022 APAC Realty seems to provide a more accurate picture on the ground. Well, it could also be the property market sentiments have improved since Jul 2022... I'd think the buyers are selective, not all projects are doing well.

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Sizzling sale of AMO Residence shows pent-up demand unaffected by rising mortgage rates: Analysts
https://www.channelnewsasia.com/business...es-2838586
“UNSATIATED PENT-UP DEMAND”
The sizzling sales also suggest that local mortgage rates, which have been on the rise along with global interest rates, have not deterred private property buyers so far, the same experts noted....“There seems to be unsatiated pent-up demand in the market,” said Ms He, who cited reasons such as support from a tight labour market and continued income growth in Singapore....."

New all-time high: 5-room resale HDB flat in Dawson sold for record $1.418m
https://www.asiaone.com/money/new-all-ti...cord-1418m

APAC Realty 1H2022 FS Extract
https://links.sgx.com/FileOpen/APAC%201H...eID=727555
"The first half of 2022 saw a decrease in transactions in the new private residential, private residential resale and HDB resale markets following the cooling measures rolled out by the authorities in December 2021......

In 1H2022, developers sold 4,546 private residential units (including ECs), a decrease of 40.2% from 7,601 units sold in 1H2021 (6 months ended 30 June 2021). The private residential resale market recorded sales of 7,932 units, a decrease of 21.4% from 10,090 units sold in 1H2021. The HDB resale market reported a decline of 6.1% to 13,753 units in 1H2022 from 14,644 units in 1H2021....."
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(08-08-2022, 07:41 PM)dreamybear Wrote: I guess it's easy to be "blown-away" by the glaring headlines of sizzling sales, record breaking HDB prices. 

The 1H2022 APAC Realty seems to provide a more accurate picture on the ground. Well, it could also be the property market sentiments have improved since Jul 2022... I'd think the buyers are selective, not all projects are doing well.

Hi dreamybear,
Newspapers fight for our attention and nothing better seizes attention than glaring headlines.

In general, I would guess the buzz in property launches are more marketing than anything else. For HDB prices, those million dollar units are more outliers than the norm. Maybe it is also part of the nation building exercise since most citizens own their own housing in the form of HDB flats.

I would think you are on cue by referencing to APAC Realty's results. Also, I would think that en bloc activity and record land sales are probably accurate indicators too.
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High HDB prices is detrimental to nation building in the long run. Younger generation are unable to afford a home and are disillusioned to be a Singaporean.

Using I as a specific case, I will just exceed the single BTO income by a little and will be 35 next year. This prices me out of subsidized housing and I am forced to partake in buying an expensive home which i will need 25 years to service. If this is called nation building, I will rather call it slave building.

My own views
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The low and middle income is going to get squeezed, no question about that. Repayment period is getting stretched in order to make it more "affordable". Market forces are at play when it comes to private property and resale HDB, very much like COE for cars. So the general population already accepts the norm of paying 25-30 years for a house.

If we have to compare, JB freehold 20"X70" landed costs under 600K RM(reserved for msian, even cheaper for native msian), which is much lower than a resale 3rm HDB here with a short leasehold. In Msia, you can get a few cars that never expire as well for the price of a COE here. But here you do get better overall sercurity/infrastructure/jobs/etc etc Singapore is a good place to stay but it sure aint cheap.

But what goes up too quickly will at least have some form of correction, property price appreciation looks to be outpacing wage growth of late.
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(08-08-2022, 09:47 PM)CY09 Wrote: High HDB prices is detrimental to nation building in the long run. Younger generation are unable to afford a home and are disillusioned to be a Singaporean.

Using I as a specific case, I will just exceed the single BTO income by a little and will be 35 next year. This prices me out of subsidized housing and I am forced to partake in buying an expensive home which i will need 25 years to service. If this is called nation building, I will rather call it slave building.

My own views

Interestingly, there was a public discussion on affordability years ago.

Lee Kwan Yew and a Poly Student Discuss Affordable Housing : The Singapore Dream Youth Forum August 1996
https://www.reddit.com/r/singapore/comme...t_discuss/

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The older generation do not need to pay as much for their HDB/property, relative to their income. Workwise, some of them are also able to stay in the same job in their entire working lives while enjoying significant capital appreciation for their property. 

I also believe it is impt to ensure citizens can move up the social ladder - work hard and able to upgrade to a private property.

I am not experienced in BTO but was thinking perhaps you can consider approaching your MP to make an appeal if you miss by just a little. No harm trying right ? I feel the govt could offer citizens more leeway, especially for those who have served NS.
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LKY was smart in answering via a Straw Man Fallacy.

If it was present day, I will boldly present my statement as this.

At the age of 35, I aim for a 3 room 90 year lease left resale at Hougang ($430,000). Drawing down on my OA to $0 which I have $89,000 and $20,000 cash for conveyance, stamp duty and furnishing fee. DBS loan calculator informs me that my loan of $340,000 requires me to spend 25-27% of my salary before CPF deductions while taking a 20 year loan.

I should be terrified because I will only be able to save for retirement from age 55 while hoping my CPF SA meets the basic minimum sum dictated under CPF Life in year 2050, just 7 years after I have fully repaid my loan. If the above was a 1 bedroom Condo (priced at $620,000), it will exceed 30% of my salary on a 25 year loan

On the other hand, my parents who had bought their flat for a low $100,000 price tag have retired before 60 and are on CPF life's enhanced retirement sum (the amount is 4 times those who are on CPF's basic sum) because they have saved adequately and repaid their home loan in 10 years at a lower salary ratio than I. Quantitatively, it seems my parents are 4 times better off than I.

Singapore's public housing is tethering on borderline unaffordability even for me who is a top 30% income earner among my cohort (based on Seedly's income survey 2022). A much needed housing correction is required. But as we know: "the market can remain irrational longer than an investor can stay solvent".
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CY09,

Why you don't buy BTO? :O
1) Try NOT to LOSE money!
2) Do NOT SELL in BEAR, BUY-BUY-BUY! invest in managements/companies that does the same!
3) CASH in hand is KING in BEAR! 
4) In BULL, SELL-SELL-SELL! 
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I cant qualify as I slightly exceed the 7k income ceiling for singles at age 35

The popularity of singles BTO flat is extremely high at a ratio of 10:1. So it takes about 8 cycles (2 years) to ballot. If your pay (including bonus) is targeted to hit 7k before age 37, chances are you wont be "poor" enough to be successful for a singles flat. If i were to venture a guess, it is likely at least half of singles fail to qualify for BTO because of the many cycles of BTO they need and the natural increase of their salary causes them to exceed the ceiling.

The result is that they are forced to buy 3 room resale off others
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An income ceiling is essential to prevent the high earners from applying for a BTO flat and depriving the lower-income earners of a chance to own a home.
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With sizzling million dollar HDB flat sales hogging the headlines, it feels inevitable that there are special measures to cap the top end of the market.

Housing loan limits – including for HDB loans – tightened in fresh measures to cool property market

To further moderate demand in the HDB resale market, where million dollar HDB flats continue to change hands, the government will impose a wait-out period of 15 months for private residential property owners as well as former private property owners to buy a non-subsidised HDB resale flat. Currently, private property owners are able to buy a non-subsidised HDB resale flat on the open market provided they sell their private properties within six months of the HDB flat purchase. This will no longer be allowed.

The wait-out period will however not apply to seniors aged 55 and above who are moving from their private property to a 4-room or smaller resale flat.

https://www.businesstimes.com.sg/real-es...l-property
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