Property Market Sentiments

[corydorus]

I do a quick Google on rental yield for a few countries and here's what i found.

Gross Rental Yields - Taiwan Compared to Continent
Philippines 7.51%
Singapore 2.83%
Hong Kong 2.82%
India 2.22%
Taiwan 1.57%

What this mean is rental yield has much smaller impact considering Taiwan has only 1.57% whereas Singapore is high 2.83% and S$ currency is stronger than theirs. So I feel for Singapore, Jobless rate will be a key driver and we already see some impact since last year.

The rental yield has to be adjusted by inflation to get the real yield for a better comparison

Just my 2cts

I did add currency strength which should mitigate some.  Taiwan and SG currencies are relatively stable between themselves.

[piggo]

I do a quick Google on rental yield for a few countries and here's what i found.

Gross Rental Yields - Taiwan Compared to Continent
Philippines 7.51%
Singapore 2.83%
Hong Kong 2.82%
India 2.22%
Taiwan 1.57%

What this mean is rental yield has much smaller impact considering Taiwan has only 1.57% whereas Singapore is high 2.83% and S$ currency is stronger than theirs. So I feel for Singapore, Jobless rate will be a key driver and we already see some impact since last year.

The rental yield has to be adjusted by inflation to get the real yield for a better comparison

Just my 2cts

I did add currency strength which should mitigate some.  Taiwan and SG currencies are relatively stable between themselves.

Currency strength has nothing to do with inflation... Taiwan is ~2% while Singapore is almost zero. Also will need to take into account the interest rates... comparing gross yield adjusted for currency strength doesn't prove much. Anyway, The Economist already made this rather nifty chart <6 months ago.

[corydorus]

I do a quick Google on rental yield for a few countries and here's what i found.

Gross Rental Yields - Taiwan Compared to Continent
Philippines 7.51%
Singapore 2.83%
Hong Kong 2.82%
India 2.22%
Taiwan 1.57%

What this mean is rental yield has much smaller impact considering Taiwan has only 1.57% whereas Singapore is high 2.83% and S$ currency is stronger than theirs. So I feel for Singapore, Jobless rate will be a key driver and we already see some impact since last year.

The rental yield has to be adjusted by inflation to get the real yield for a better comparison

Just my 2cts

I did add currency strength which should mitigate some.  Taiwan and SG currencies are relatively stable between themselves.

Currency strength has nothing to do with inflation... Taiwan is ~2% while Singapore is almost zero. Also will need to take into account the interest rates... comparing gross yield adjusted for currency strength doesn't prove much. Anyway, The Economist already made this rather nifty chart <6 months ago.

Didn't S$ use exchange rate to manage inflation. I believe there is some relation nevertheless we are moving away from topic.

Despite higher inflation relative to Singapore, Taiwan still has much lower yield. So capital appreciation is a key motivator.

[funman168]

Thank you all for your response!
All the points raised are actually my concerns!
To me, I think for any property investment, it's all about capital gains at the end of the day. I hope I can get one during this downturn, or within these 2 yrs, and by the next upturn, hopefully it will appreciate in value.
I am still looking out for that piece of property with the X factor!  After all, I have only one bullet, so must hit it right! It's not going to be easy though. Wish me luck!

[specuvestor]

I do a quick Google on rental yield for a few countries and here's what i found.

Gross Rental Yields - Taiwan Compared to Continent
Philippines 7.51%
Singapore 2.83%
Hong Kong 2.82%
India 2.22%
Taiwan 1.57%

What this mean is rental yield has much smaller impact considering Taiwan has only 1.57% whereas Singapore is high 2.83% and S$ currency is stronger than theirs. So I feel for Singapore, Jobless rate will be a key driver and we already see some impact since last year.

The rental yield has to be adjusted by inflation to get the real yield for a better comparison

Just my 2cts

I did add currency strength which should mitigate some.  Taiwan and SG currencies are relatively stable between themselves.

Currency strength has nothing to do with inflation... Taiwan is ~2% while Singapore is almost zero. Also will need to take into account the interest rates... comparing gross yield adjusted for currency strength doesn't prove much. Anyway, The Economist already made this rather nifty chart <6 months ago.

Didn't S$ use exchange rate to manage inflation. I believe there is some relation nevertheless we are moving away from topic.

Despite higher inflation relative to Singapore, Taiwan still has much lower yield. So capital appreciation is a key motivator.

Hi Cory / piggo

This is actually a complicated topic though textbooks try to explain it simply

Real returns including inflation will determine local pricing power. If you have pay rise of 5% every year and inflation of 10%, you will be poorer as time goes by. But if you have zero pay rise but deflation of 1% every year like the japanese you are not getting poorer per se. But consumption and perception will be affected, but that's another story.

Singapore uses exchange rate to manage inflation but inflation hit 5% few years back. That's because our FX rate determines the raw material input cost but the operating cost were moving up due to our myopic policies which FX is not going to help. So inflation and FX is related, not only in Singapore though definitely magnified here, yet not a direct correlation cause monetary policy can be reactive or proactive, and the correlation will be different depending on where one comes from. Current Fed dilemma is classic on which way it wants to swing.

Which comes to the FX adjusted comparison for different countries. In short investors will always seek for the highest REAL return comparing different countries, but adjusted for risk. Countries increasing their real returns when defending their currencies (and of course making it more expensive for the attacker) may not be the best alternative for an investor. In global comparison hence we usually use US$ as a base to compare, which will take into account FX movements.

So depending what you are looking at, real returns is what matters most to a local. FX adjusted return is what you are looking at if you are an international investor, who also looks at real return but also have to guesstimate the currency movement which real return is itself a factor, in addition to demand flows, forward economic outlook, etc. Adding to that complication is of course many of the asian countries you cited, including Singapore to a lesser extent, has some form of currency control.

[specuvestor]

I don't think a rational government should feel threatened that those who increase the cost of production is going away. Short term vested interest vs long term strategic thinking.

____________________

Some prospective property buyers are unhappy over the lack of any measures in the recently announced budget to help Singapore’s sluggish housing market, reported The Straits Times.

Singaporean businesswoman Leena Ganesan, 41, and her husband who is a permanent resident, were upset that the authorities did not repeal or ease the Additional Buyer’s Stamp Duty (ABSD), as they were considering the purchase of a two-bedroom condo.

“We have put our investment plan on hold now for two years. If we don’t see anything moving in the next one year, we may invest in India instead,” said Ms Ganesan, who lives in a landed cluster home in Bukit Timah, which she purchased for $3.05 million four years ago.

According to experts, if the government had relaxed some of the curbs, people like Ms Ganesan would have been encouraged to invest. This could have boosted transaction levels slightly, which would have some positive spillover effect on other sectors.

“It will have some spin-offs in other areas: contractors, banks, property agents, furniture retailers. If foreigners come to view properties here, then the tourism sector may also benefit,” said Mohamed Ismail, CEO of PropNex.

In addition, a rise in transaction levels would spur developers to divert capital back to Singapore, shared EL Development’s Managing Director Lim Yew Soon.

“The market is slow, so you see investors and developers investing overseas. There is an outflow of funds from Singapore.”
http://www.propertyguru.com.sg/property-...-in-budget

[opmi]

^^ ask them to get discounts from developers lor.

[corydorus]

The whole ideal of curbs means to put price as priority over investment and therefore fund outflow. So is kind of silly to point out the side effects of the curbs because that the intention ! The whole idea of their complain is because Singapore is still very attractive but they can't get the bargain for them to act hence their disappointment.

[brattzz]

think must up the 2nd property rental tax...

[cfa]

Some of them said they wanted to buy , but some actually had bought  and waiting to flip/ unload . Many condo projects fully sold by the developers , TOP years ago , but still empty , owners not occupying , not tenanted ,  no lights at night .