Singapore home prices drop in Q4

[chialc88]

Yes, we are well verse and connect with the market news (some-one says noise?)

For 1 million dollar:
what are you doing now?

[Stocker]

Yes, we are well verse and connect with the market news (some-one says noise?)

For 1 million dollar:
what are you doing now?

HDB 5R flat in Redhill , maybe.

[Tiggerbee]

T,
Agree that ideally, we should have both.
The current challenge is there are too many -ve news/sentiments on buying properties.
Big pie now I'm seeing is by rich parents investing for their adult/teen children.
While waiting for the child to take over the new properties, they don't mind the hassle of renting it out and get some real cash.
For those who had never brought a property for rental yield, they will be scare by the current market sentiments and status quo.
My thinking process tells me that GOV will continue to curb the property market (because it's not dropping).
The real sigh of property market crash will be when the GOV stops the curb....
YMMV.
Enjoy ... What a beautiful weekend...

well thoughts. i doubt the real sign of crash will come because so many people are doing well in their stock portfolio, plus unemployment is so low here, plus the white paper already clearly states the magical 6.9m, plus analysts and economists are bullish on the global economy come 2014, plus fed for a fact is still printing paper money. it may be a long wait before property market really crashes. this is gg to be a very resilent bubble

Government is trying to engineer a soft landing. There will only be a crash when there's another crisis triggering a correction of more than 20%.

[chialc88]

stocker wrote: RedHill 5RM

Sharp!
Mature estate is usually hot pursuits by wealthier buyer... minimum impact by GOV curb.

I wish you luck in getting a 5RM in RedHill which your family will love too.

family come first!


A Life not Reflected is a Life not Worth Living.

[pianist]

Buying a property now is like buying a hot stock that has already peaked. The bid and offer price gap will widen as transaction vol increases in the secondary market. And when the selling vol increases, more people will be willing to transact at lower prices.

Ipos (new launches) have to be priced lower to attract more investors or buyers. With the lock up periods of past ipos coming up (sellers ABSD), there will be more people eager to sell their stocks (properties) invested in 2010-2012. I foresee that the transaction vol will pick up between 2H 2014 to 2015 when prices will fall at a faster pace.

tigerbee buddy, what is that lock up period?

I made a typo error in my earlier mail. I was referring to SSD (sellers' stamp duty). You can find the details on the SSD measures from these 2 links. The SSD penalties act as a form of "self imposed lock up periods" on the buyers.

http://www.iras.gov.sg/irashome/page04.aspx?id=10212
http://www.iras.gov.sg/irasHome/page04.aspx?id=10202

The SSD measure is a double edge sword, it deter shorter term speculators who are in for a quick buck but also deter investors from selling. Investors who bought properties after Jan 2011 are not likely to sell their properties before Jan 2014 to avoid the 8-16% SSD penalty. That's why if you check the URA websites for those projects launched after Jan 2011, you will hardly see any transactions in the secondary market. However, these potential sellers in the 4th year after their purchase are already sitting on unrealized capital gains (as prices had risen about 40% since Jan 2011) might be more willing to take the 4% hit when the property prices decline accelerate. This will increase the number of available for sale properties in the secondary market and exert more pressure on new launches.

The new SSD measure had infact held back potential sellers who had purchased their properties after Jan 2011 and create a pent up selling supply of properties that will start to increase at a faster pace after Jan 2014. And it's not just new launches purchased after Jan 2011, we also need to include the re-sale properties as well. So there's gonna be a lot more available for sale properties from Jan 2014 onwards.

just read the urls, seems like the ssd set before jan 2011 were merely a scratch on the back

[chialc88]

Exactly.
SSD remove those short term speculator from flipping their properties. (These speculator usually buy a few units in one go. You might also remember a few cases that you can actually sell your queue number for a big fortune or OTP got sell off just few days/hours it sign）

However, SSD does not hurt the sentiment because most buyers have reasonably good holding power. While waiting for holding period to expire, they enjoy real cash thru rental.

That's why instead of SSD, GOV using ABSD and TDSR to restrict the over-stretch buyer.

the ssd set before jan 2011 were merely a scratch on the back

A Life not Reflected is a Life not Worth Living.

[pianist]

T,
Agree that ideally, we should have both.
The current challenge is there are too many -ve news/sentiments on buying properties.
Big pie now I'm seeing is by rich parents investing for their adult/teen children.
While waiting for the child to take over the new properties, they don't mind the hassle of renting it out and get some real cash.
For those who had never brought a property for rental yield, they will be scare by the current market sentiments and status quo.
My thinking process tells me that GOV will continue to curb the property market (because it's not dropping).
The real sigh of property market crash will be when the GOV stops the curb....
YMMV.
Enjoy ... What a beautiful weekend...

well thoughts. i doubt the real sign of crash will come because so many people are doing well in their stock portfolio, plus unemployment is so low here, plus the white paper already clearly states the magical 6.9m, plus analysts and economists are bullish on the global economy come 2014, plus fed for a fact is still printing paper money. it may be a long wait before property market really crashes. this is gg to be a very resilent bubble

Government is trying to engineer a soft landing. There will only be a crash when there's another crisis triggering a correction of more than 20%.

20% correction imo is quite impossible in our local context unless our dear govt like the eastern Europe govt goes belly up or bankrupt..

[chialc88]

It's difficult to say...
不好说，不好说。

Keep your eyes open and don't sway by the news (noise I meant)


A Life not Reflected is a Life not Worth Living.

[Tiggerbee]

Exactly.
SSD remove those short term speculator from flipping their properties. (These speculator usually buy a few units in one go. You might also remember a few cases that you can actually sell your queue number for a big fortune or OTP got sell off just few days/hours it sign）

However, SSD does not hurt the sentiment because most buyers have reasonably good holding power. While waiting for holding period to expire, they enjoy real cash thru rental.

That's why instead of SSD, GOV using ABSD and TDSR to restrict the over-stretch buyer.

the ssd set before jan 2011 were merely a scratch on the back

A Life not Reflected is a Life not Worth Living.

When interest rates start to rise and rental yields decline, over leveraged home owners who had bought before the TDSR measure will find themselves in a fix. They will not be able to refinance their loans so they will be at the mercy of the banks. There is also the risk of declining rental income due to an oversupply situation from 2014-2016. Those who had holding power now will not have holding power when their rental income is not able to pay for their mortgage loans.

In this week's The Edge, it was stated that there will be a total supply of about 168k residential units (going to TOP) from 2014-2016 while demand will only be about 72k, based on an analyst's research report. The 168k does not include those condos that had already TOP before 2014, but owners were deterred from selling to avoid paying for the higher SSD. So the total supply might be greater than 168k.

[pianist]

thanks forsharing..sounds a bit scary indeed. also saw the forecast table from edge magazine for 23 dec 2013 publication.

my sense - interest rate unlikely to go up. rental yield indeed may weaken. the way the supply & demand part was handled doesn't indicate a good grip by the chenghu on their soft landing part. perhaps they will scrap off the absd, ssd & the suffocating LTV for 2nd & 3rd purchase soon?

and most importantly, I dun think they have reached to the level of corrective measure suugested by this brilliant guy:-


""In a recent hour-long interview with Yahoo! Singapore, former chief economist at the Government of Investment Corporation Yeoh Lam Keong asked this question.

A former schoolmate of Deputy Prime Minister Tharman Shanmugaratnam’s at the Anglo-Chinese School, and later the London School of Economics, Yeoh spent almost all his adult life working on government economic policy, and in that time experienced a social awakening to what he feels are inherent problems in the system.

“(The current model is) essentially relying on individual and family savings to fund these public services,” said the 54-year-old economist, who left GIC last June after 26 years to spend more time with his family.

“At the same time, it pegs the price of these public services to market prices when they don’t have to.”

Acknowledging that the majority of Singaporeans do have access to these three areas through the HDB scheme, subsidised and compulsory primary school education, as well as subsidised hospitalisation wards, he said nonetheless that the current model used in the delivery of these three services in particular needs to be rethought.

‘Lower cost of housing’

Yeoh gave an example of how Build-to-Order (BTO) flats are linked to general market prices by being pegged to the cost of resale housing.

“Once you do that, BTO prices will rise as general property prices rise, and resale prices are already often five to six times that of low to median (annual) incomes, making housing very unaffordable by most conventional housing industry measures,” he says.

Property market prices tend to be pulled up by the cost of upscale, private and landed property, he explains. These are subject to speculative forces and can be bought by people all over the world, so it tends to move toward price levels in other major cities such as Hong Kong and Beijing, where property prices are notoriously sky-high.

“That will then price out everybody else who falls below the top 20 to 30 per cent of households,” he adds.

In light of this, Yeoh, who himself stays with his wife and two children in a five-room flat in Marine Terrace, says BTO flats should be priced at a range of between two and three times of low to median annual incomes instead of between five and six times, where BTO prices currently stand.

This artificially lower subsidised price would be available only to Singapore citizens. In this situation, however, he notes further measures will be needed to prevent excessive speculation, recommending for example that Singaporean buyers should only be permitted to purchase flats at these lower prices once — for their housing needs — and suitably long “no resale” periods should be imposed""