Property Market Sentiments

Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
There is nothing new here... key is to buy well in well regulated regime and at reasonable prices... when you are a developer, your core business is property owning and development...

http://www.themalaymailonline.com/money/...e-overseas

MONEY
Singapore developers struggling to sell at home go on buying spree overseas
PUBLISHED: DECEMBER 1, 2014 12:35 PM


Prospective buyers look at a model of an upcoming suburban private condominium development during its launch in Singapore. — Reuters pic
Prospective buyers look at a model of an upcoming suburban private condominium development during its launch in Singapore. — Reuters pic
SINGAPORE, Dec 1 — Singapore developers struggling to sell apartments in their home market are buying property overseas, turning the island-state into the largest foreign investor from the region this year.

Companies including City Developments Ltd. and Keppel Land Ltd. pumped US$2.32 billion (RM7.97 billion) into overseas markets in the nine months through September, a threefold increase from the same period last year and the most in at least eight years, according to data from Real Capital Analytics Inc., a research firm that specializes in investments in commercial property.

The Singapore developers are looking abroad as government measures to rein in property values have caused residential prices to fall for four straight quarters, the longest period of declines since 2009.

“Many Asian countries such as Singapore are facing property cooling measures at home, so they are venturing to Western markets where they can find returns and are seeing a strong recovery,” said Terence Tang, managing director of capital markets and investment services for Asia at Colliers International, a real estate broker.

City Developments, Singapore’s second-largest developer by market value, said in September that it invested in a plot of land in Tokyo valued at S$356 million (RM958.92 million). Keppel Land, Singapore’s third-biggest developer, in July said it made its maiden investment in the US with a prime residential development in New York City. The project, which it said at the time was valued at about US$70 million, is on Manhattan’s Upper East Side and will be developed by Macklowe Properties Inc.

‘Virtually dead’

At the same time, the developers have become increasingly vocal about the difficulties they face in Singapore, where their margins have been squeezed by falling property prices. Government measures to stem growth in the market and prevent a speculative bubble have brought residential prices down about 4 per cent from the peak in September 2013.

“In Singapore, the residential market is virtually dead,” said Desmond Woon, executive director at luxury-home developer Ho Bee Land Ltd. “With the government measures in place, it has become very hard to do development of residential properties.”

The government’s curbs have included a cap on debt at 60 per cent of a borrower’s income and higher stamp duties on home purchases. Additional taxes for foreigners buying residential property were raised to 15 per cent in 2013 from 10 per cent, on top of the basic buyer’s stamp duty rate of about 3 per cent. All home sellers need to pay 16 per cent in levies if they sell within the first year.

City Developments warned last month that Singapore’s housing market may face “fire sales” and mortgage defaults as sales and prices fall.

GIC spree

The overseas investments by developers have helped catapult Singapore into the top place among Asian countries investing in overseas real estate so far this year, according to figures from New York-based RCA.

The country’s sovereign wealth fund, GIC Pte, has been a major buyer of overseas real estate, though its 20-year investment horizon gives it a different profile from the listed Singapore developers. In total, Singapore entities invested US$9.8 billion in overseas commercial property in the nine months to September, overtaking China with US$8.4 billion of overseas investments and Hong Kong with US$7.3 billion, RCA said.

Ho Bee, which has invested in office towers in London and is developing homes in Melbourne and Gold Coast in Australia, is scouting for more buying opportunities in Sydney and London, Woon said.

New York, Australia

The flipside of the developers’ growing interest in overseas real estate has been a drop in bidding at Singapore land auctions as the market cooled. Results of a land auction announced in August showed only three bids were submitted, the fewest in 18 months, and well below 2009 when there were about 16 bids at the auctions, according to Nicholas Mak, executive director at SLP International Property Consultants.

Developers are willing to take on the additional risks associated with overseas investments, Tang at Colliers said.

“Mainland Chinese and Singapore developers are going to New York, Australia and the UK,” Tang said. “They are ready to take a development risk, which is the highest point of the risk curve, as they need higher returns and because they are seeing these markets showing signs of a recovery.”

They are also finding higher yields. Profit margins for developing homes in Singapore are between 5 per cent and 10 per cent while margins in Australia are between 10 per cent and 20 per cent, Ho Bee’s Woon said. Office properties in London can yield between 4 per cent and 6 per cent while Singapore office yields are about 4 per cent, he said.

Shares of City Developments fell 1 per cent to S$9.96 as of 11:39 a.m. in Singapore, while Keppel Land declined 1.5 per cent to S$3.32. Ho Bee lost 0.8 per cent to S$1.97.

Overseas opportunities

“The Singapore residential real estate market will need to battle headwinds as sentiments remain subdued with little signs of property curbs being tweaked or removed in the near-term,” City Developments said in an e-mailed response, citing their earnings statement. The company is “actively pursuing opportunities in the US, UK, Australia, China and Japan,” it said.

The government said in October that home prices need to fall further.

Other developers going overseas include Pontiac Land Group, owner of the Singapore Ritz-Carlton, which invested US$200 million in reviving a 72-story residential tower project adjacent to the Museum of Modern Art in midtown Manhattan last year. OUE Ltd., owner of Singapore’s Mandarin Gallery shopping mall, agreed to buy US Bank Tower in Los Angeles, California’s tallest building, for US$367.5 million in March 2013.

Yield search

Singapore developers are acquiring mostly offices in London and hotels and commercial properties in Sydney, Colliers said.

“Developers are searching for higher yields and returns,” said Sigrid Zialcita, managing director for Asia- Pacific research at real estate broker Cushman & Wakefield Inc. “Singapore with its cooling measures is quite restrictive in terms of investments. We don’t see a dramatic reversal of policies over the next year so the trend of developers going overseas will continue.”

The city-state has fallen out of a ranking of the top 20 cities for property investment, according to a report by Cushman & Wakefield. Singapore, along with Toronto, Moscow and Seoul, was knocked out by Beijing, Shanghai, Miami and Stockholm, the report showed.

“The risk appetite is getting larger and larger with the profile of investors and the structure of deals changing,” Tang said. “The real estate market has slowed down a fair bit in Asia so developers need to find other alternatives to generate profit so they are going to markets outside Asia where they can see growth potential and a strong recovery.” — Bloomberg
Reply
(02-12-2014, 08:05 AM)greengiraffe Wrote: There is nothing new here... key is to buy well in well regulated regime and at reasonable prices... when you are a developer, your core business is property owning and development...

Developers core business is not property owning. That's a major problem in many countries. That's why the QC extension levy is a good scheme to be in place

Hoarding is a net-net losing game, only developers win
http://www.btinvest.com.sg/dailyfree/uns...-20140607/
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward

Think Asset-Business-Structure (ABS)
Reply
http://www.businesstimes.com.sg/real-est...th-low-srx

HDB resale prices at 40-month low: SRX
Flash estimates put the November price dip at 0.8%; property consultants see further softening

By
Lynette Khoolynkhoo@sph.com.sg@LynetteKhooBT

5 Dec5:50 AM
Singapore

PRICES of HDB resale flats dipped 0.8 per cent last month to a 40-month low, going by flash estimates from the Singapore Real Estate Exchange (SRX). The monthly HDB resale price index published by SRX Property showed a 6.3 per cent year-on-year decline in HDB resale prices in November.

Property consultants are expecting a further softening of resale prices, given a large supply of homes entering the resale market from the 6,000 HDB upgraders selling their current homes and moving to their new Build To Order (BTO) flats next year and also with several executive condominiums being completed.

SRX Property's data, released on Thursday, also put the number of resale transactions last month at 1,350 units, 13.1 per cent lower than in October, and 63 per cent down from the peak of 3,649 units in May 2010.

PropNex chief executive Mohamed Ismail said: "The fact remains the same - whether you look at the HDB resale price index from SRX or HDB, even though each has a different way of computing its index - that there is relatively weak demand for public housing and people are taking a longer time, as long as six months, to secure a buyer."

Noting that the greater supply in the resale market comes from more people collecting their keys to new flats and being required to sell their current homes within six months, he said that this trend was being compounded by lower demand, resulting in the continued downward pressure on HDB resale prices.

"This is expected to continue for the next few months because the landscape of the HDB market is not expected to change in the next year, unless there is any tweaking of policies."

Based on SRX flash estimates, prices have declined 9.8 per cent since the peak in April 2013, a fall which SRX said was "nearly double" the perceived government target of a 5 per cent decline.

In November alone, HDB resale prices declined across all housing types. Executive flats marked the steepest month-on-month decline of 2.2 per cent, followed by four-room flats, with a 1.2 per cent slide.

SRX Property estimates that the median price at which buyers snapped up HDB flats in November was S$3,000 below its computer-generated market value.

ERA Realty key executive officer Eugene Lim said that the continued slide in HDB resale prices is expected, given that the mortgage servicing ratio (MSR) of 30 per cent affects buyers of all flat types; those buying larger flats may, however, be more affected.

He said: "The overall price decline for 2014 is within ERA's projection of not more than a 8 per cent decline. In the absence of any change to the current resale policies and loan criteria, we can expect resale HDB prices to continue their decline in 2015 by another 5-8 per cent for the whole year."

ERA is projecting total HDB resale volumes this year to be 17,000 units, historically the lowest annual level, but is hopeful that volumes may rebound next year as HDB scales down its BTO programme, Mr Lim said.

R'ST Research director Ong Kah Seng said that, notwithstanding the drop in HDB resale prices this year, people were not making a loss from selling their units. This "soft landing" will entail a stabilising of resale prices next year, he added.
Reply
Lagging land sale mechanism kicking in...

http://www.todayonline.com/business/prop...ut-sharply

property
Land sales for private homes, ECs cut sharply

Potentially 23% fewer homes in first half of 2015 compared with second half of this year
BY
LEE YEN NEE
leeyennee@mediacorp.com.sgPUBLISHED: 4:02 AM, DECEMBER 5, 2014
SINGAPORE — The Government has scaled back sharply the supply of land for the development of private homes and executive condominiums (ECs) in a move that property analysts say is timely following the slowdown in the housing market.

Under the Confirmed List of the Government Land Sales (GLS) programme for the first six months of next year, six residential sites that can yield about 3,020 homes, including 490 ECs, will be made available, the Ministry of National Development (MND) said yesterday. This is almost 23 per cent lower than the 3,900 units on the Confirmed List in the second half of this year and the fewest since the first half of 2010.

The cut comes after successive rounds of property cooling measures and loan curbs, including the Total Debt Servicing Ratio framework imposed in June last year, led to private home prices falling for the fourth straight quarter in the three months ended September, with sales remaining in the doldrums. And even while the measures have curbed buying, more homes are being completed to add to a rising wave of supply.
Reply
http://www.todayonline.com/business/prop...10-15-ocbc

Private home prices to fall 10 to 15%: OCBC
1/2

Physical completion rate exceeding population growth.

Today File Photo

Physical completion rate exceeding population growth.


Drop caused by oversupply of homes, anticipated rise in US interest rates: Analysts
PUBLISHED: 4:02 AM, DECEMBER 5, 2014(PAGE 1 OF 2) - NEXT PAGE | SINGLE PAGE
SINGAPORE — Private residential property prices in the Republic will dip 10 to 15 per cent over 2015 and 2016, while developer sales next year are likely to stay muted at between 8,000 and 10,000 units, OCBC analysts Eli Lee and Wong Teck Ching forecast in a research report yesterday, citing the large oversupply of homes here and the anticipated interest rate hike by the United States Federal Reserve.

However, they said significant buyer demand will come into the market at the lower price points to limit the overall decline.
Reply
(05-12-2014, 07:59 AM)greengiraffe Wrote: Lagging land sale mechanism kicking in...

http://www.todayonline.com/business/prop...ut-sharply

property
Land sales for private homes, ECs cut sharply

Potentially 23% fewer homes in first half of 2015 compared with second half of this year
BY
LEE YEN NEE
leeyennee@mediacorp.com.sgPUBLISHED: 4:02 AM, DECEMBER 5, 2014
SINGAPORE — The Government has scaled back sharply the supply of land for the development of private homes and executive condominiums (ECs) in a move that property analysts say is timely following the slowdown in the housing market.

Under the Confirmed List of the Government Land Sales (GLS) programme for the first six months of next year, six residential sites that can yield about 3,020 homes, including 490 ECs, will be made available, the Ministry of National Development (MND) said yesterday. This is almost 23 per cent lower than the 3,900 units on the Confirmed List in the second half of this year and the fewest since the first half of 2010.

The cut comes after successive rounds of property cooling measures and loan curbs, including the Total Debt Servicing Ratio framework imposed in June last year, led to private home prices falling for the fourth straight quarter in the three months ended September, with sales remaining in the doldrums. And even while the measures have curbed buying, more homes are being completed to add to a rising wave of supply.

They finally bow to pressure from REDAS ?
Reply
^^ if they don't want their jobs.


Sent from my iPhone using Tapatalki
"... but quitting while you're ahead is not the same as quitting." - Quote from the movie American Gangster
Reply
Thought Finance Minister just repeated and said no significant correction on property prices few week ago ?
“risk comes from not knowing what you’re doing.”
I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.
Reply
I read the article. It stated cut in land supply, and none on removing property curbs or anything similar.

Am i missing something here??
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
Reply
Sounds right to me if they are engineering a soft landing rather than a crash?

What does the others suggest they should have done? Continue to oversupply (which was considered UNDERsupply just 18 months ago) with 3 years lag?

I think they did well... though late. Credit where credit's due. They also had to be reactive to external liquidity flows, rather than hindside proactive.
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward

Think Asset-Business-Structure (ABS)
Reply


Forum Jump:


Users browsing this thread: 7 Guest(s)