Property Market Sentiments

[greengiraffe]

http://www.businesstimes.com.sg/premium/...f-20140904

PUBLISHED SEPTEMBER 04, 2014
Samsung Hub floor sold at S$3,225 psf
BYKALPANA RASHIWALA
kalpana@sph.com.sg @KalpanaBT

Samsung Hub: All six strata units totalling 13,132 sq ft on Level 18 have been bought by an Asia-based group that plans to occupy the space. - FILE PHOTO
[SINGAPORE] The entire 18th floor of Samsung Hub has been sold at S$3,225 per square foot - the highest for an entire office floor in the 30-storey office tower in Church Street in the Raffles Place area. The building is popular among office investors due to the long tenure of the site - 999-year leasehold.
Samsung Hub's 18th floor, which has just been transacted, comprises six strata units adding up to 13,132 sq ft, resulting in a total quantum of slightly over S$42.35 million. The entire space is being sold to a single buyer, said to be an Asia-based group involved in the oil and gas business, among others, looking to occupy the space, as existing leases run out in phases starting later this year.
CBRE brokered the sale and Cushman and Wakefield also advised the seller, Church Street Holdings.
The psf pricing surpasses the S$3,030 psf at which the entire 14th floor in the building was sold earlier this year by Arch Capital Management.

[specuvestor]

Just a thought in the morning: Anyone expected high end buyers to flee after just 20% decline?

http://www.themalaysianinsider.com/busin...ces-plunge

http://www.thesgrealtor.com/bad-home-loa...-uob-npls/

Frankly I don' think any sensible (non-populist) governments should encourage "property investors" or specifically real estate investors that are not either staying in them locally or producing goods or services. Land/ property being one of the main factors of production has its own natural demand if the economy progresses. The policy making logic should be to add long term value to the economy rather than add asset inflation to the economy.

Car engine becoming hot after running miles is one thing, making the engine hot by pouring hot water over it is quite another.

[greengiraffe]

http://www.businesstimes.com.sg/premium/...s-20140910

PUBLISHED SEPTEMBER 10, 2014
BOA: Real estate market bogged down by 3 factors
BYMINDY TAN
tanmindy@sph.com.sg @MindyTanBT

Mixed results from Singapore's transition to a productivity-driven growth model, coupled with tighter population policies and housing measures, are weighing on the real estate market, said Bank of America Merrill Lynch (BOAML) in a report on Tuesday - PHOTO: ST
[SINGAPORE] Mixed results from Singapore's transition to a productivity-driven growth model, coupled with tighter population policies and housing measures, are weighing on the real estate market, said Bank of America Merrill Lynch (BOAML) in a report on Tuesday.
On the restructuring front, results have been mixed. GDP (gross domestic product) growth has averaged 3.8 per cent in the last three years versus average growth of over 7 per cent during the 2004-2008 population boom; labour productivity has struggled to compensate for weaker foreign labour growth; and labour constraints are weighing on growth and pushing core inflation higher, said BOAML economist Hak Bin Chua.
"We estimate that about 83,000 jobs have been forgone during 2011-2013 due to stricter labor policies. . . Job creation has declined to 22,000 in Q2 2014, the slowest in almost four years. We believe total job creation is likely to slow to about 100,000 this year, vs. 136,000 in 2013," he said.
The bank estimates productivity growth of one per cent, versus the government's target of 2 to 3 per cent.
"We do not see the government reversing course, but a pause may be in order. Scheduled foreign labour tightening is not over. Levies will be further raised and dependency ratio ceilings tightened next year. The intensity of such tightening will probably reach a crescendo by 2015 unless the government chooses to further tighten in the Budget . . . we think a pause in the restructuring is likely and in order, as companies, particularly SMEs, are having trouble adjusting to the speed of the tightening," said Dr Chua.
A second notable trend is the accelerated shift to a services-based economy, which will slow demand for industrial space and support demand for commercial space.
Such restructuring and stricter foreign worker and immigration policies are lowering potential growth and impacting the property market. Compounded by strict property measures, transaction volumes have fallen sharply and property prices have slid for several quarters. According to property analyst Donald Chua, home prices could fall by 20 per cent over 2014 to 2016.
Separately, while property measures have curbed household leverage, they have been less effective in curbing the overall banking system leverage. Also notable is the fact that households have increased foreign property investments and offshore financing as a result of the measures.
"Overall, Singapore household balance sheets look healthy despite easing property prices. The household asset-liability ratio remains above six times, with 53 per cent in (non-property) financial assets. Household debt has stabilized at about 76 per cent of GDP and is far below past peaks (of over 90 per cent)," noted Dr Chua.
CPF balances have also increased as more members choose to leave their funds in CPF due to the attractive interest rates rather than drawing the funds down for housing. This will help provide a buffer in the event of a sharper property market correction or rising interest rates.
Looking ahead, cyclical property measures - stamp duties and loan-to-value limits - may be relaxed when US interest rates and Singapore mortgage rates begin rising. This would put the timing of any potential relaxation in the second half of 2015.
Residential property prices would have probably declined by more than 10 per cent by the middle of 2015 and highly leveraged households would have de-geared more sufficiently. An earlier relaxation would probably require property prices to fall more sharply or the economy to slip into a recession, concluded the report.

[Ray168]

Home prices ‘to fall 20% by 2016 on restructuring, curbs’

SEPTEMBER 10, 2014 Home price "to fall 20% by 2016"

Stricter immigration, foreign worker policies hitting growth and property market:

Home prices in Singapore will decline at a steeper pace, falling by 20 per cent between this year and 2016, as economic restructuring as well as property and loan curbs continue to weigh on the housing market, Bank of America Merrill Lynch (BAML) said in its research report released yesterday.

“Overly tight population policies will imply the dominance of ageing-resident demographics over the influx of younger non-resident workforce. Delays in relaxing property measures would imply a greater negative impact from rising mortgage rates,” said BAML economist Chua Hak Bin.

Under the ongoing economic restructuring that the Government has said is a long-term undertaking, it will slow the flow of foreign workers into Singapore while rolling out incentives for companies to raise productivity.

“Restructuring and stricter foreign worker and immigration policies are lowering potential growth and impacting the property market,” Dr Chua said.

“Foreign labour growth is fast slowing, while permanent resident growth has turned negative … We believe total job creation is likely to slow to about 100,000 this year versus 136,000 in 2013,” he added.

Private home prices fell for a third straight quarter in the three months ended June as cooling measures such as the Additional Buyer’s Stamp Duty and loan restrictions such as the Total Debt Servicing Ratio (TDSR) framework curbed demand. From the beginning of the year, prices had fallen by 2.3 per cent by the end of the second quarter, the Urban Redevelopment Authority’s index showed in July.

On the public housing front, Housing and Development Board (HDB) resale prices shed 3 per cent by the end of the second quarter from the beginning of the year, hit by a reduction in the Mortgage Servicing Ratio cap and the maximum loan term, as well as a three-year wait for new permanent residents before they can enter the market.

Mr Ku Swee Yong, chief executive of property agency Century 21, said more downward pressure will be exerted on private residential prices from current vacancies and new supply. He noted that more than 21,000 private homes remained unoccupied in the second quarter, translating to a vacancy rate of 7.1 per cent, while another 29,000 new units will come on the market in the next two years.

Meanwhile, the decline in HDB resale prices will directly affect the mass market private housing segment, as the pool of upgraders becomes smaller.

Dr Chua said the fate of the property market largely depends on how the Government tweaks its policies, particularly on restructuring, immigration and foreign workers, as well as the timing of the relaxation of property measures.

“Singapore’s transition to a productivity-driven growth model is still ongoing and has produced mixed results so far … Labour productivity has not improved and not compensated for weaker foreign labour growth,” he added.

“We do not see the Government reversing course, but a pause may be in order. Scheduled foreign labour tightening is not over. Levies will be further raised and dependency ratio ceilings tightened next year. The intensity of such tightening will probably reach a crescendo in 2015, unless the Government chooses to further tighten in the Budget, to be announced in February.

“We think a pause in the restructuring is likely and in order, as companies, particularly small and medium enterprises, are having trouble adjusting to the speed of the tightening,” he said.

Dr Chua expects the Government to begin unwinding property measures only from the second half of next year, when the benchmark United States federal funds rate is forecast to begin to rise, with Singapore mortgage rates moving in tandem. He said the structural measures, such as the TDSR and loan tenure curbs, are not likely to be changed. However, cyclical measures such as loan-to-value limits and stamp duties can be calibrated based on market conditions.

“Residential property prices would have probably declined by more than 10 per cent by the middle of 2015 and highly leveraged households would have de-geared sufficiently,” he said.

[greengiraffe]

http://www.businesstimes.com.sg/premium/...s-20140916

PUBLISHED SEPTEMBER 16, 2014
Developer sales fall 15% in August amid slow launches
BYLEE MEIXIAN
leemx@sph.com.sg @LeeMeixianBT

Developers' residential sales continued to languish in August, falling 15 per cent to 432 homes sold as launches were delayed until after the Hungry Ghost Festival - PHOTO: ST
[SINGAPORE] Developers' residential sales continued to languish in August, falling 15 per cent to 432 homes sold as launches were delayed until after the Hungry Ghost Festival.
This was the lowest number of new private units sold in a month so far in 2014, according to figures from the Urban Redevelopment Authority. It excludes executive condominiums (ECs), a public-private housing hybrid. Including ECs, developers sold 490 homes last month, a 13 per cent drop from July.
Developers usually avoid launching projects during the Hungry Ghost month because superstitious buyers consider it inauspicious to purchase property during that period. SLP International executive director Nicholas Mak counted 21 days in August that were part of the Hungry Ghost month.
As a result, only 351 new units were launched in August, a 20 per cent drop from July and the lowest in the year so far. In fact, no new residential project was launched, but only various phases of previous projects were launched.

[greengiraffe]

consultant also need to make a living mah...

PUBLISHED SEPTEMBER 22, 2014
Danger lurks when property consultants also trade
BYKALPANA RASHIWALAPRINT
PROPERTY consultants may be tempted to invest in real estate, but to be a good consultant, one needs to be somewhat detached and not get carried away, says a veteran in the business.
"Some of them think that with the knowledge they have, it is a sure thing; so they start to take positions. They may get carried away and start trading in property. But in their job as a property consultant, they are not supposed to do that," says Knight Frank Singapore's executive chairman, Tan Tiong Cheng, when asked to offer advice to those planning a career as a property consultant.
Apart from clouded judgement, there could also be potential conflict of interest issues.
"As a property consultant or as an agent, you are supposed to serve your client, yet there have been cases where the agent took a position by buying the property from the client,'' said Mr Tan.

[greengiraffe]

http://www.businesstimes.com.sg/premium/...z-20140929

PUBLISHED SEPTEMBER 29, 2014
Demand-supply mismatch fuels surge in medical suite prices: DTZ
Recent rule change sees non-medical practitioners joining market
BYLEE MEIXIAN
leemx@sph.com.sg @LeeMeixianBT

The rental range in Orchard/Tanglin is the widest, from S$9 psf at Orchard Medical Specialists Centre (Lucky Plaza) to S$27 psf at Mount Elizabeth (Orchard) Medical Centre - PHOTO: SPH
[SINGAPORE] Prices and rents of medical suites are on the rise and expected to keep increasing, given strong demand amid under-supply, DTZ said in a recent report.
These private clinics, increasingly housed in commercial buildings rather than private hospitals, are also shrinking in size, going below 600 sq ft in newer developments in a bid to make them more affordable to investors on a quantum basis, it noted.
Only until recently were non-medical-practitioners allowed to buy certain medical suites; the sector has grown in appeal to developers and investors alike, thanks to their freedom from the restrictions of any current property cooling measures.
But these investments can be rather pricey, with the capital value of medical suites at Orchard Road/Tanglin averaging S$6,730 psf as at end-2013, while those of prime retail and office space averaged S$4,710 and $2,700 psf respectively.

[greengiraffe]

http://www.businesstimes.com.sg/premium/...h-20141001

PUBLISHED OCTOBER 01, 2014
Just two bids for Sembawang Road EC site, but top bid bullish
Qingjian's S$353 psf ppr close to January bid for adjacent site
BYKALPANA RASHIWALA
kalpana@sph.com.sg @KalpanaBT

A TENDER for an executive condominium (EC) site along Sembawang Road/Canberra Link drew just two bids - one of the poorest participation rates ever for an EC site tender. However, the top bid of S$353 per square foot per plot ratio (psf ppr) by Qingjian Realty is considered on the high side.
It was close to the S$350 psf ppr fetched for an adjacent site in January this year - despite the worsening property market sentiment since then.
What is noteworthy is that a tie-up between City Developments Ltd (CDL) and TID that had clinched the January site, placed a bid of only S$320.88 psf ppr at Tuesday's tender for the latest site.
This reflects the current cautious sentiment in the EC market, factoring in significant supply of some 2,000 units in the vicinity from projects to be launched including the latest plot as well as unsold units in Skypark Residences, said JLL national director Ong Teck Hui. Based on monthly developer sales data released by URA, as at end-August, there were 199 unsold units in the 506-unit development.

[greengiraffe]

http://www.businesstimes.com.sg/premium/...t-20141002

PUBLISHED OCTOBER 02, 2014
Home price fall eases but no rebound in sight
Q3 flash numbers show widening HDB-condo gap, worsening soft private mass market
BYLYNETTE KHOO
lynkhoo@sph.com.sg @LynetteKhooBT

Prices of private homes and HDB resale flats softened further in the third quarter, albeit at a slower rate for the private market. This, market players say, could be due to the holding power of private home owners and developers - PHOTO: ST
application/pdf iCONDownward trend
[SINGAPORE] Prices of private homes and HDB resale flats softened further in the third quarter, albeit at a slower rate for the private market. This, market players say, could be due to the holding power of private home owners and developers.
Consultants added that the resulting stalemate does not mean private home prices have bottomed out, but could instead lead to a protracted and slow price correction.
Flash estimates released by the Urban Redevelopment Authority (URA) on Wednesday showed that the overall Private Residential Property Price Index, comprising both landed and non-landed homes, fell 0.6 per cent over the third quarter - after slipping one per cent in the preceding quarter. Prices have fallen 3.8 per cent over four consecutive quarters.
Resale HDB prices also showed continued weakness under the weight of the mortgage servicing ratio (MSR) that has shrunk the pool of potential buyers, particularly for larger units, while a continual supply of BTO (build-to-order) flats has soaked up some demand for resale flats.
Flash estimates from the HDB showed the resale price index falling 1.6 per cent in the third quarter, after slipping 1.4 per cent in the second quarter. Resale prices have fallen by 6.8 per cent since the third quarter of last year.
"With the widening of the price gap between HDB resale flats and private homes, HDB residents will find it more difficult to upgrade into the private mass market," said Ong Teck Hui, JLL national research director. "The weakened support from the HDB resale market will exacerbate the softening of the private mass market."
While the price decline in private homes in the third quarter has been most moderate since prices turned south in the fourth quarter of 2013, Mr Ong said it is not a sign of prices bottoming out, but a result of thin sales volumes and sellers maintaining their asking prices.
Chia Siew Chuin, director of research and advisory at Colliers International, also noted that the impasse between buyers and sellers has lent support to private home prices.
She added that given their current financial muscle and the belief that it will be some time before interest rates rise, sellers are in no hurry to lower their price expectations.
"Developers too have enjoyed the gains in the residential property price run-up from 2005," she added. "With the amount of profits made during the boom years, some of them have the financial power to maintain current prices or else offer moderate discounts."
At the same time, potential buyers are holding back in anticipation of lower prices down the road, consultants noted.
While the price fall for non-landed residential homes has moderated, the URA flash estimates showed that prices of landed properties extended a 1.7 per cent fall in the third quarter.
Mr Ong felt that this is because the pool of buyers for the more pricey landed properties has shrunk much more than that for private condos due to borrowing constraints under the total debt servicing ratio (TDSR).
Private non-landed homes in the Core Central Region saw prices slipping 0.9 per cent in Q3, after a 1.5 per cent fall in Q2, while prices in the Rest of Central Region slid 0.1 per cent, after a 0.4 per cent dip in the previous quarter. Prices in the Outside Central Region dipped 0.2 per cent, after a 0.9 per cent fall in the previous quarter.
URA's flash estimates are based on transaction prices from caveats lodged during the first 10 weeks of the quarter, supplemented by survey data on new units sold by developers. The figures will be updated four weeks later when the URA releases the full real estate statistics for the third quarter.
CBRE research head Desmond Sim believed the flash estimates might not have included units sold from Highline Residences and Seventy St Patrick's, which were launched in the later half of September. Highline Residences reportedly sold 140 units at around $1,900 per square foot (psf) while Seventy St Patrick's sold 96 units at $1,630 psf.
"By the time these units are added in the computation, it is probable that the quarter-on-quarter fall in the URA price index for Q3 2014 might be less than 0.6 per cent," he said.
Given the lending restrictions and fewer new project launches, the number of new homes sold in Q3 could have fallen to 1,500-1,600 units, down from 2,665 in Q2, based on CBRE estimates.
Consultants' estimates for the full year generally fall within a total 5-6 per cent drop in private home prices and a 5-8 per cent fall in HDB resale prices.
ERA Realty key executive officer Eugene Lim noted that the moderate price declines reflect some market resilience, underpinned by stable economic and employment fundamentals.
He added: "Also, the measures implemented by the government are designed to stabilise prices and not cause any huge sudden drop."

[opmi]

^^ public listed developers cannot hold forever also because of QC levy.