Property Market Sentiments

The convoluted argument has always been that when you continue to curb it, it will have a cascading effect on wealth and hence debt servicing and ratios

They forgot which is the horse and which is the cart. Look at the Aussie property thread with credit to GG for updating us with important and sufficient newsflows. I'm too lazy to dig out our discussion on the Singapore property thread when the 7th cooling measure was imposed. They've been saying similar things. Don't have to be a oracle to see that 3 years down the road the Aussie property thread will be a mirror of this thread.

Nothing new under the sun. It's really not unprecedented. Property bubble is one of the most obvious to spot so I always disagree with greenspan that no one can foresee a bubble. What is unforseeable is when it will pop and there are always those willing (both good and bad players) to play the game.

(27-11-2014, 07:06 PM)cfa Wrote:

(27-11-2014, 04:55 PM)specuvestor Wrote: Nov. 27 (Bloomberg) -- Financial vulnerabilities are
building up in the wake of accommodative monetary policies
globally, Monetary Authority of Singapore says in annual
financial stability review today.
* Faster-than-expected rate increases, volatility spikes,
geopolitical tensions could trigger disorderly market
adjustments in G-3 nations that may spill over to other
regions
* Growing leverage among Singapore corporates and households,
still-elevated property prices, rising cross-border banking
exposures warrant close monitoring: MAS
* MAS will continue to monitor and take further measures where
necessary to keep household debt at a manageable level
* Will continue to monitor property mkt, take measures, where
appropriate, to maintain stable, sustainable mkt
* Banks should remain watchful of liquidity, credit risks: MAS
* While banking system is self-sufficient in funding domestic
lending, foreign currency funding risk warrants close
monitoring: MAS

This should be a good reply to Mr. Chia Of REDAS.

From elsewhere in the MAS Financial Stability Review - November 2014 (pg 60-61/103):

Quote:On an aggregate basis, Singapore’s household balance sheets have remained healthy. Household net wealth (defined as household assets less household debt) has grown at an average rate of 7.9 % per annum in the past five years.

Quote:On an aggregate basis, the value of property assets, estimated at $815 billion in Q3 2014, accounted for slightly less than half (at 47%) of total household assets.

Quote:the growth in the value of financial assets was driven by a significant increase in cash and deposits, CPF savings and insurance assets, which grew by 5.7 %, 8.9% and 8.7% y-o-y respectively in Q3 2014.

The value of shares and securities increased by 1.9% compared to a year ago.

On the aggregate, we are a wealthy but cautious lot, preferring to squirrel our monies in cash and cpf rather than investing in equities.
On the aggregate, nearly half of our assets are exposed to physical properties.

Also ref chart 2.3.2 (pg 61/103), on the aggregate, there is enough cash to pay off all the household debt. With cpf added, enough to pay debt twice over.

ok so we better continue to wack more condos!!

wack har!

http://www.valuebuddies.com/thread-4912-...#pid101463

The above thread is by far the best and the most objective article about Australian property.

Being an expert on Australian property, I thought the author was very fair and provided a comprehensive view on Aussie property.

While I respect your views, I think your definition of bubble is not entirely applicable to Aussie properties. Australia is a big continent and to apply a broad brush view is simply to extrapolate a land scarce experience to that of perhaps a small locality within say NSW.

Anyway, I hold a different view to yours.

As I have said, the state of property in Singapore is largely due to greed and fear of policy makers, the lack of control on their part to protect locals to begin with and their subsequent policy correction. End of the day, they have the biggest control on land supplies in Singapore, the impact on affordability. If they choose not to focus on affordability for a start, what can we do apart from casting our frustrations in the ballot boxes to wake them up... which in some ways some Singaporeans have wised up.

I tend to concur with FCL's view and their concrete measures to make Australia a new core focus in their strategic direction. My friends who have done a MBA on properties also agree that Australian property market ranks amongst the top in terms of transparency and hence has been a major destination for global pension and sovereign funds. Of course, it has caught the attention of bloated Chinese real estate companies in recent years.

Anyway, time will tell but being a big country with diverse economic base and population dynamics, Australia will be a lower beta property destination than land scarce Asian capital cities.

No Vested Interest
In properties apart from own Home
GG

(27-11-2014, 07:23 PM)specuvestor Wrote: The convoluted argument has always been that when you continue to curb it, it will have a cascading effect on wealth and hence debt servicing and ratios

They forgot which is the horse and which is the cart. Look at the Aussie property thread with credit to GG for updating us with important and sufficient newsflows. I'm too lazy to dig out our discussion on the Singapore property thread when the 7th cooling measure was imposed. They've been saying similar things. Don't have to be a oracle to see that 3 years down the road the Aussie property thread will be a mirror of this thread.

Nothing new under the sun. It's really not unprecedented. Property bubble is one of the most obvious to spot so I always disagree with greenspan that no one can foresee a bubble. What is unforseeable is when it will pop and there are always those willing (both good and bad players) to play the game.

(27-11-2014, 07:06 PM)cfa Wrote:

(27-11-2014, 04:55 PM)specuvestor Wrote: Nov. 27 (Bloomberg) -- Financial vulnerabilities are
building up in the wake of accommodative monetary policies
globally, Monetary Authority of Singapore says in annual
financial stability review today.
* Faster-than-expected rate increases, volatility spikes,
geopolitical tensions could trigger disorderly market
adjustments in G-3 nations that may spill over to other
regions
* Growing leverage among Singapore corporates and households,
still-elevated property prices, rising cross-border banking
exposures warrant close monitoring: MAS
* MAS will continue to monitor and take further measures where
necessary to keep household debt at a manageable level
* Will continue to monitor property mkt, take measures, where
appropriate, to maintain stable, sustainable mkt
* Banks should remain watchful of liquidity, credit risks: MAS
* While banking system is self-sufficient in funding domestic
lending, foreign currency funding risk warrants close
monitoring: MAS

This should be a good reply to Mr. Chia Of REDAS.

Quote:
SINGAPORE: Property analysts said the rental yield for shoebox units in the suburbs are comparable to their counterparts in the city. But going forward, they warn that landlords may not get the kind of rental income they expect.

This is because the Urban Redevelopment Authority (URA) projects that there will be about 11,000 shoebox units in Singapore by the end of 2015. In turn, this would provide tenants options from which to cherry-pick.

Shoebox units are homes that are less than 500 square feet in size, and are typically one-bedder units with a bathroom.

In 2012, Minister for National Development, Khaw Boon Wan cautioned investors against the influx of shoebox units in the heartlands, and said he would not hesitate to intervene should there be clear evidence of unsustainable investor demand.

However, the experience has been positive so far. Senior director at Savills Singapore, Mr Alan Cheong, said shoebox units in the suburbs have a reasonably high rental yield of around three per cent, which is higher than the two to three per cent yield for other types of private homes.

Mr Cheong added that shoebox units are especially popular with single expatriates because their companies have either increasingly reduced their housing budgets, or because they are hired on local employment terms.

A search on property portal Property Guru, found that the average rent for a shoebox unit in areas like Geylang and Paya Lebar is S$2,500 per month, while prices go up to S$4,000 in prime areas such as Mount Sophia.

Mr Cheong said shoebox units that are in the price range of S$2,000 to S$3,000 have the upper hand: "Today, people coming to Singapore to work... They have that limited budget to spend and S$4,000 seems to be a price where you fall into no man's land territory. Hence, it may be rather difficult to rent out at that price."

Analyst Chris Koh, Director of Chris International, said the appeal of shoebox units remains strong with investors due to its lower capital outlay and rental appeal, but he also cautioned that tenants have other options. "With a budget of S$2,500 to S$3,000, there are some outskirt condominiums with two and three bedrooms that they can rent. So, they do make comparison with these shoebox units because these units are rather small," he added.

- 938LIVE/ac

Quote:
Over 14,600 flats will be subject to ABSD soon.

Too many flats, too little time. The race to move unsold inventory is going to heat up in 2015, as the clock is ticking for policy-battered residential developers whose projects are subject to the Additional Buyer’s Stamp Duty (ABSD).

Under the ABSD, projects built on sites purchased under the Government Land Sales programme since 7 December 2011 have to be fully sold within five years. Otherwise, developers will be fined 10% of the purchase price for sites bought before 11 January 2013, and 15% of the purchase price for sites acquired after this date.

According to Nomura, there are currently about 31,000 units of unsold private housing inventory across the island. Of this, 47% or 14,600 flats are subject to the ABSD rule.

“While the overall representation is less than half, the situation appears more pressing for unsold inventory in the OCR (a proxy for mass market private housing). Our estimates suggest about 80% of the circa 12,100 units in uncompleted inventory in the OCR are subject to the ABSD rule. We therefore think there could be more urgency for developers with such inventory to cut prices in 2015F to stimulate sales,” noted Nomura.- See more at: http://sbr.com.sg/residential-property/i...NSxDU.dpuf

CPF is mainly compulsory so i dont think we have a choice in squirrelling the money and probably a good choice not putting money into CPFIS since the track record on aggregate is rather dismal

You guys know i am very skeptical about statistics when it doesn't fit observation. And I'm willing to bet that the 80th percentile of the population doesnt have cash and CPF to cover 2X of their mortgage. Assuming average house price is $500k that would mean $1m in cash equivalent. There are about 160k millionaire residents (not citizens) in singapore which gives u a picture of where I am coming from. I think the aggregate number that swakoo is taking comfort from is very much distorted by the uber rich moving here ever since we made Singapore Inc a rich folks' playground.

I'm not saying there's a crisis as government has stepped in early enough to prevent another 1997, but I'm not sure the man on the street is actually not going to be much affected by the property price decline

(27-11-2014, 07:56 PM)swakoo Wrote: From elsewhere in the MAS Financial Stability Review - November 2014 (pg 60-61/103):

Quote:On an aggregate basis, Singapore’s household balance sheets have remained healthy. Household net wealth (defined as household assets less household debt) has grown at an average rate of 7.9 % per annum in the past five years.

Quote:On an aggregate basis, the value of property assets, estimated at $815 billion in Q3 2014, accounted for slightly less than half (at 47%) of total household assets.

Quote:the growth in the value of financial assets was driven by a significant increase in cash and deposits, CPF savings and insurance assets, which grew by 5.7 %, 8.9% and 8.7% y-o-y respectively in Q3 2014.

The value of shares and securities increased by 1.9% compared to a year ago.

On the aggregate, we are a wealthy but cautious lot, preferring to squirrel our monies in cash and cpf rather than investing in equities.
On the aggregate, nearly half of our assets are exposed to physical properties.

Also ref chart 2.3.2 (pg 61/103), on the aggregate, there is enough cash to pay off all the household debt. With cpf added, enough to pay debt twice over.

And as I have also said, US and China are no smaller than Australia. Your argument on size doesnt hold water as property bubble always happens in financial capitals and spreads out. By the time it reaches 3rd tier cities you know it's about the end.

Anyway it is with keen interest im following this because i think not too long later ie 12 months from now we will know

(27-11-2014, 09:44 PM)greengiraffe Wrote: http://www.valuebuddies.com/thread-4912-...#pid101463

The above thread is by far the best and the most objective article about Australian property.

Being an expert on Australian property, I thought the author was very fair and provided a comprehensive view on Aussie property.

While I respect your views, I think your definition of bubble is not entirely applicable to Aussie properties. Australia is a big continent and to apply a broad brush view is simply to extrapolate a land scarce experience to that of perhaps a small locality within say NSW.

Anyway, I hold a different view to yours.

As I have said, the state of property in Singapore is largely due to greed and fear of policy makers, the lack of control on their part to protect locals to begin with and their subsequent policy correction. End of the day, they have the biggest control on land supplies in Singapore, the impact on affordability. If they choose not to focus on affordability for a start, what can we do apart from casting our frustrations in the ballot boxes to wake them up... which in some ways some Singaporeans have wised up.

I tend to concur with FCL's view and their concrete measures to make Australia a new core focus in their strategic direction. My friends who have done a MBA on properties also agree that Australian property market ranks amongst the top in terms of transparency and hence has been a major destination for global pension and sovereign funds. Of course, it has caught the attention of bloated Chinese real estate companies in recent years.

Anyway, time will tell but being a big country with diverse economic base and population dynamics, Australia will be a lower beta property destination than land scarce Asian capital cities.

No Vested Interest
In properties apart from own Home
GG

(27-11-2014, 07:23 PM)specuvestor Wrote: The convoluted argument has always been that when you continue to curb it, it will have a cascading effect on wealth and hence debt servicing and ratios

They forgot which is the horse and which is the cart. Look at the Aussie property thread with credit to GG for updating us with important and sufficient newsflows. I'm too lazy to dig out our discussion on the Singapore property thread when the 7th cooling measure was imposed. They've been saying similar things. Don't have to be a oracle to see that 3 years down the road the Aussie property thread will be a mirror of this thread.

Nothing new under the sun. It's really not unprecedented. Property bubble is one of the most obvious to spot so I always disagree with greenspan that no one can foresee a bubble. What is unforseeable is when it will pop and there are always those willing (both good and bad players) to play the game.

(27-11-2014, 07:06 PM)cfa Wrote:

(27-11-2014, 04:55 PM)specuvestor Wrote: Nov. 27 (Bloomberg) -- Financial vulnerabilities are
building up in the wake of accommodative monetary policies
globally, Monetary Authority of Singapore says in annual
financial stability review today.
* Faster-than-expected rate increases, volatility spikes,
geopolitical tensions could trigger disorderly market
adjustments in G-3 nations that may spill over to other
regions
* Growing leverage among Singapore corporates and households,
still-elevated property prices, rising cross-border banking
exposures warrant close monitoring: MAS
* MAS will continue to monitor and take further measures where
necessary to keep household debt at a manageable level
* Will continue to monitor property mkt, take measures, where
appropriate, to maintain stable, sustainable mkt
* Banks should remain watchful of liquidity, credit risks: MAS
* While banking system is self-sufficient in funding domestic
lending, foreign currency funding risk warrants close
monitoring: MAS

This should be a good reply to Mr. Chia Of REDAS.

(28-11-2014, 08:20 AM)specuvestor Wrote: Assuming average house price is $500k that would mean $1m in cash equivalent. There are about 160k millionaire residents (not citizens) in singapore which gives u a picture of where I am coming from. I think the aggregate number that swakoo is taking comfort from is very much distorted by the uber rich moving here ever since we made Singapore Inc a rich folks' playground.

Do not dispute the inequality of distribution of wealth at all.

If we look at just cpf, there is a contribution cap per contributor per month. And the uber rich probably don't contribute as they are not part of the worker bee caste. Hence the unequal distribution distortion here is probably not as great as cash. Ref the same chart 2.3.2, there is just about enough cpf alone (ignoring inability to use minimum sum and special account, for simplicity) to pay off all household debt, on the aggregate, of course.

(The 160K millionaire residents - this number excludes the value of their primary residences. Couldn't find in the report but assume it excludes cpf too as the investable part of cpf is subject to strict rules. Ref: http://www.capgemini.com/resource-file-a...2013_0.pdf )

http://www.valuebuddies.com/thread-6021.html

Being a financial centre in SE Asia, Singapore is a hot $ centre for the regions' able and capable before 2000.

Post IR era, Singapore's aspiration to be a global city has attracted more hot money globally including the commodities rich emerging BRIC economies...

I think the top guys are well aware of the presence of hot $. However, their choice to ignore the impact on land scarce and its most precious commodities - land and property is always a puzzle to me...

Hence I stand corrected on my comments that initial bubble of this phase is being seeded by policy makers and they are the ones that can help correct the course. Unfortunately, as usual the man in the streets are towards the receiving end when the bubble finally burst... sad but always true...

Luckily, I m not a fan of leverage and asset bubbles hence I remain sober and objective...

GG

Human nature when it comes to making $... no money no honey so go hunt for next pot of honey else where... for those who missed out on the musical chairs... it will be sucking thumb time... however given that Singapore property market is a top-down regulated one... still my question as to the slowness on the part of the regulators to ensure the orderliness in the market place...

http://www.straitstimes.com/news/busines...g-20141128

Four signs Singaporeans' passion for property is cooling
Published on Nov 28, 2014 6:30 AM


Skyline of the private property, developments and commercial buildings seen from Scotts Road on 18 February 2014. -- ST PHOTO: KUA CHEE SIONG

1. Monthly transaction volumes have fallen to less than half the numbers seen in the past two years. Subsale and resale activity has been subdued, while new sales, which had held up when subsales and resales declined previously, have also begun falling.

-- PHOTO: URA

2. Prices in the private housing market have declined for four straight quarters, by 3.9 per cent in total, since the fourth quarter of last year. However, prices had surged 62 per cent between the second quarter of 2009 and the third quarter of 2013.

-- PHOTO: URA

3. The pool of outstanding housing loans has been growing at a much slower pace. In August 2010, for example, outstanding loans grew 23 per cent from the same month a year before. But in September this year, the pool expanded by just 6 per cent from a year ago.

-- PHOTO: MAS

4. Even overseas property seem to be losing their shine for Singaporean investors. The value of overseas property purchases transacted in Singapore fell to $1.1 billion in the first half of this year, from about $1.6 billion in the same period last year.

MAS survey on overseas property transactions by real estate agencies in Singapore, July 2014 -- PHOTO: MAS