Is sg property cheap now?

So if a company with Book $100 say $10 annual net cashflow pass through issues 50 X shares with 100% pass through dividend and 50 Y shares with 100% retained dividend, which one will we buy determines what type of investors we are. For the former, 10 years later the X shares will be worth say same $50 but investors hold $50 cash, while the latter holds $100 worth of Y shares. The former can use the $50 cashflow to invest in other opportunities whereas the latter will have to sell his stake to realise the cashflow. So imagine the latter wants to have the same amount of $50 cash for whatevewr purpose he will have to sell 25 Y shares say to investors in X. So investors in X shares will have 50 X shares & 25 Y shares while investor in Y shares hold 25 Y shares. Their net worth is the same at this point but from there it will start to diverge. Just a simplified story.

Asset is same; Business is same but the Structure is very different will lead to different consequences. Mr Market though emotional is not stupid: He values X shares differently from Y shares in actual market valuation. Cashflow and capital appreciation is not the same thing though numbers wise looks same

When COE price goes up recently, some that bought on the low may have made money from cars. But unless you generate cashflow from usage of cars eg sales or grab, it is unlikely cars is deem as an asset rather than expense per say, though accounting wise it is stated as such.

So own stay house would be what type of asset? Cost of living going higher hence owning a house as a hedge is right. But that does not change the fact that it is a hedge against expense.

https://www.businesstimes.com.sg/real-es...xury-homes

“Private home prices rose unexpectedly to a five-year high in the second quarter, driven by Singaporeans who make up the bulk of the market. But a detailed analysis of transaction data also shows a rise in foreign demand.

Some of the Chinese investors are apparently buying into these luxury homes in the city state as a safety bet against the US-China trade war. Fresh interest is also being driven by instability in rival financial hub Hong Kong, the brokers say.”

tonnes of cash jumping all over the place (uk, hk, china, sg)... some look for safe haven, some hungry for yields... suspect ABSD going up to fill up gov coffers!

On a historical income to hdb price basis, this graphs confirms the common opinion of how hdbs are 'not as cheap as it used to be,' where the mortgage could be paid off on a single income, and in far shorter time than the current norm of 30 years.

https://www.businesstimes.com.sg/sites/d...840515.pdf

But it is unlikely that the divergence between income to hdb price will converge anytime soon. At least, it will not be realistic (and perhaps practical) to expect the government to depress hdb prices. If they can keep hdb price inflation below income growth rates, the divergence should narrow after a long period of time.

But a populace with low mortgage and high disposable income may have implications on the size of the labour force, and productivity. I don't think the planners will prefer a return to single-income households, or a large number of early retirees. There will also be an impact on government revenues if land were to be sold at 'below market' prices.

More expensive flats on the way, getting harder for property prices to correct downwards ....

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HDB flats on prime Keppel Club site: Premium prices or tweaked sales terms?
Tue, Aug 20, 2019 - 5:50 AM

Singapore

THE prospect of having public housing on the plum Keppel Club site after its lease expires in two years has excited property market watchers.

They have, however, offered ideas on how to find an equitable solution to the "lottery effect", given that public-housing owners stand to make windfalls from selling these units after having been lucky enough to land them through a ballot.

Prime Minister Lee Hsien Loong said at the National Day Rally on Sunday that the Keppel Club site has enough land for 9,000 homes - HDB and private housing with waterfront promenades, greenery and open spaces.


The site will be part of the Greater Southern Waterfront (GSW), comprising 30 km of coastline stretching from Gardens by the Bay East to Pasir Panjang.

Given its prime city-fringe, waterfront location, property consultants say Housing and Development Board (HDB) flats on the site will not come cheap.

Edmund Tie & Co (SEA) chief executive Ong Choon Fah said: "The Keppel Club site is a coveted site with panoramic views of the sea and Mount Faber, and is near the CBD and accessible to all parts of Singapore."

ERA Realty Network key executive officer Eugene Lim expects the HDB to launch Build-to Order (BTO) flats on the site at close to S$1 million for a five-room unit, "so one can expect that the resale prices, when the time comes, will be even higher".

He noted that HDB's Sale of Balance Flats exercise in May included three units of five-room flats in Queenstown priced at between S$720,000 and S$757,000 each. "With waterfront views, BTO flats on the Keppel Club site are likely to be priced even higher," he reasoned...........

Read more : https://www.businesstimes.com.sg/governm...ales-terms

Relax... it's correcting downwards. The reason is obvious -- if the market is good, the government would have sold those prime land to Private developers.
Why would they build HDB there? Analogy is similar to building HDB at Orchard Road

Personally I think building HDB on Primeland is waste of national reserve unless they can price it fairly. No matter how fairly priced, it will be still much more cheaper than if is sold to private developers for Condo. I am not sure the rationale of doing this. Maybe as time goes we will have clearer picture. Probably to allow mix of society and not just elites. Another concern I have is those Prime HDB likely be first selected by those "Connected". So this could another reason to kind of "reserve" for them.

Nothing is wasted here. Currently a few projects from Shenton way till Vivocity are not doing very well. You can drive around the entire stretch at 8 PM, around 70% of the units are dark. There are many unsold units there.
There is insufficient demand for condo. So the next group of buyer is richer-HDB-locals, who can't afford to pay $1500 psf. The government did a good job on maximizing profit with Price Discrimination.

"Probably to allow mix of society and not just elites" -- It is applicable now, because Sentosa Cove is a failure. The rich aren't interested to migrate to a fantasy island with humid weather and limited growth prospects. They did try to create an Elite area, similar to Monaco.
With tourist spending falling, it's good to bring in more locals to the area to liven up the area. Hopefully supply Sentosa with more local tourist, and support more variety of goods and services.

(23-08-2019, 09:18 AM)pencilin Wrote: Nothing is wasted here. Currently a few projects from Shenton way till Vivocity are not doing very well. You can drive around the entire stretch at 8 PM, around 70% of the units are dark. There are many unsold units there.
There is insufficient demand for condo. So the next group of buyer is richer-HDB-locals, who can't afford to pay $1500 psf. The government did a good job on maximizing profit with Price Discrimination.

What I mean if you to sell as entire condo project vs HDB on same plot of land regardless where, surely there is more returns to national reserve if is condo.