Property curbs slow investor demand for city fringe homes

[Musicwhiz]

Personally, I am still hearing stories from a friend whose three colleagues purchased condos recently, two of them investment properties for about $2m each (one is a live-in one for about $900k). These are cash-rich people and high-earners, so cooling measures are NOT going to deter them from their investment aspirations.

The Straits Times
www.straitstimes.com
Published on Apr 02, 2013
Property curbs slow investor demand for city fringe homes

By Esther Teo Property Correspondent

JANUARY'S property curbs seem to have been effective in dissipating investor demand for city fringe apartments.

Prices for these homes, many of which are smaller in size and popular with investors, have been flatlining since the measures kicked in.

Non-landed home prices for city fringe areas posted zero growth compared with a 0.9 per cent increase in the final quarter of last year, according to fresh data from the Urban Redevelopment Authority yesterday.

City centre apartments posted a marginal 0.4 per cent price gain and suburban homes lodged a 1.7 per cent rise.

Experts say that the cooling measures have decelerated investment demand.

The measures include higher stamp duty for those buying investment homes and tighter rules limiting how much they can borrow.

Mr Nicholas Mak, head of research at SLP International, noted that home prices in the region posted a rise of less than 1 per cent every quarter from the April to December period last year.

"The flat growth in the first quarter of 2013 illustrates that residential capital values in this segment are likely to continue facing slow growth and even an occasional contraction in the months ahead," he added.

This is because a significant proportion of the residential projects offered for sale in the city fringe in the January to March period was targeted at investors, added Mr Mak.

These could include Echelon next to Redhill MRT station, SeaSuites in Pasir Panjang and Spottiswoode Suites near Outram MRT station.

All three projects have a significant number of one- and two- bedroom units which are typically bought by investors.

Ms Alice Tan, senior manager of consultancy and research at Knight Frank Singapore, agreed that many investors are taking a wait-and-see approach on the back of the curbs.

She added, however, that city fringe prices might see an upturn as buyer interest could re-enter the segment on the back of the buoyant suburban market in recent months where thousands of new homes have been snapped up.

City fringe areas include Balestier and Thomson in the Novena planning area and the Outram and Rochor planning areas.

esthert@sph.com.sg

[greengiraffe]

Hi MW,

Your observations are exactly right. Asset inflation is a modern economics phenomenon that no modern policy makers and economists have a clue how to tame it.

I have long given up on looking at what others can do. I simply MYOB and see how well I can manage my own business. How well and badly I have performed is really ME. I run my own race and as long as I meet my own set benchmark, I can pat myself that I have done my best.

It remains good to be in touch with reality but need not push yourself to unreasonable targets.

GG

Personally, I am still hearing stories from a friend whose three colleagues purchased condos recently, two of them investment properties for about $2m each (one is a live-in one for about $900k). These are cash-rich people and high-earners, so cooling measures are NOT going to deter them from their investment aspirations.

The Straits Times
www.straitstimes.com
Published on Apr 02, 2013
Property curbs slow investor demand for city fringe homes

By Esther Teo Property Correspondent

JANUARY'S property curbs seem to have been effective in dissipating investor demand for city fringe apartments.

Prices for these homes, many of which are smaller in size and popular with investors, have been flatlining since the measures kicked in.

Non-landed home prices for city fringe areas posted zero growth compared with a 0.9 per cent increase in the final quarter of last year, according to fresh data from the Urban Redevelopment Authority yesterday.

City centre apartments posted a marginal 0.4 per cent price gain and suburban homes lodged a 1.7 per cent rise.

Experts say that the cooling measures have decelerated investment demand.

The measures include higher stamp duty for those buying investment homes and tighter rules limiting how much they can borrow.

Mr Nicholas Mak, head of research at SLP International, noted that home prices in the region posted a rise of less than 1 per cent every quarter from the April to December period last year.

"The flat growth in the first quarter of 2013 illustrates that residential capital values in this segment are likely to continue facing slow growth and even an occasional contraction in the months ahead," he added.

This is because a significant proportion of the residential projects offered for sale in the city fringe in the January to March period was targeted at investors, added Mr Mak.

These could include Echelon next to Redhill MRT station, SeaSuites in Pasir Panjang and Spottiswoode Suites near Outram MRT station.

All three projects have a significant number of one- and two- bedroom units which are typically bought by investors.

Ms Alice Tan, senior manager of consultancy and research at Knight Frank Singapore, agreed that many investors are taking a wait-and-see approach on the back of the curbs.

She added, however, that city fringe prices might see an upturn as buyer interest could re-enter the segment on the back of the buoyant suburban market in recent months where thousands of new homes have been snapped up.

City fringe areas include Balestier and Thomson in the Novena planning area and the Outram and Rochor planning areas.

esthert@sph.com.sg

[Musicwhiz]

Hi MW,

Your observations are exactly right. Asset inflation is a modern economics phenomenon that no modern policy makers and economists have a clue how to tame it.

I have long given up on looking at what others can do. I simply MYOB and see how well I can manage my own business. How well and badly I have performed is really ME. I run my own race and as long as I meet my own set benchmark, I can pat myself that I have done my best.

It remains good to be in touch with reality but need not push yourself to unreasonable targets.

GG

Hi GG,

Thanks. In truth, the information I obtained was not requested for - my friend simply started telling me about her observations and being curious, I simply asked for a few more details. But my aspirations have always been made clear here on this forum - I am very happy and satisfied living in my HDB flat and do not feel a desire to "upgrade" or to covet for beautiful spanking new condos. I understand my financial means and I am averse to borrowing, therefore am happy with my current financial position.