Singapore Economic News

[BlueKelah]

https://www.bloomberg.com/news/articles/...ing-slumps

Warning Shot to World Economy as Singapore Slumps, China Exports Drop


And so it begins....

[karlmarx]

And yet STI ended up yesterday...

The strange workings of the market.

https://www.businesstimes.com.sg/investi...e-for-that

[dreamybear]

Yup, on one hand .....

Singapore economic growth slows to 0.1% in Q2, lowest in a decade
Updated: 12 Jul 2019 11:30PM

SINGAPORE: Singapore’s economy grew by a meagre 0.1 per cent year-on-year in the second quarter, the lowest in a decade, according to official estimates released on Friday (Jul 12).....

Read more at https://www.channelnewsasia.com/news/bus...e-11713694

Meanwhile ......

Explainer: What could be driving private home prices to an estimated five-year high?
Updated 03 July, 2019
SINGAPORE — Despite talk of a possible recession and the global economic uncertainty, private property prices in Singapore have hit a five-year high.

This is based on second quarter flash estimates published on Monday (July 1) by the Urban Redevelopment Authority (URA).

The jump follows two straight quarters of falling prices. Industry analysts attribute the rise to factors such as large sums of en-bloc sale money filtering into the market, and Singapore’s reputation as a safe haven in troubled times pulling in some foreign investment money......

Read more at https://www.todayonline.com/singapore/ex...-year-high

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Of course, it takes some time for the economic effects to trigger down to the property sector, but so far, the property mkt still seems pretty strong, i.e. low chance of correction ....

[karlmarx]

Bank fixed deposit rates are now close to 2% p.a..

Does an investment property which generates similar gross yields, still make sense?

[Bibi]

Bank fixed deposit rates are now close to 2% p.a..

Does an investment property which generates similar gross yields, still make sense?

I am actually clueless but can it still make sense due to leveraging? Not taking max loan from bank but sufficiently such that cash flow from rental - loans is still positive and perhaps above 2% return based on investment amount injected into the property?

[karlmarx]

There could be, but loans now cost almost 2% p.a.. So if your property is leased at gross 3.0% p.a., you are only getting 1.0% p.a. in 'gross profit' terms, assuming the property is 100% financed by loans. After adding in taxes, maintenance, and depreciation of furniture, there is not likely to be much left. Maybe a net profit of 0.8% p.a. on asset value? Certainly, this 0.8% will be magnified if the returns are calculated based on your capital (or downpayment). But isn't the gross yield too low to even be considered, given the risks?

Is it unreasonable to say that property values are too high, given their gross yields and interest rates?

[Big Toe]

It only makes sense for/if

i) Foreigner to diversify their investment portfolio from geo-political risks
ii) Foreigner hedge against their own home currency which may not as strong as the SGD.
iii) Your name is James Dyson and your are expanding your biz in Singapore.
iV) Very small pockets of opportunities for Office/commercial or Industrial use.
(i.e there is a slight pick up in certain segments of Industrial Properties, which had been down for 7 or 8 years at least?)

But generally speaking to invest in residential properties now for Singaporeans does not make any sense, at all.
Yields far too low, downside risks far too high.

[BlueKelah]

And yet STI ended up yesterday...

The strange workings of the market.

https://www.businesstimes.com.sg/investi...e-for-that

Big boys push market up to sell off their stocks, soon will let the market fall so they can buy back again.

China already back to back 2 months negative PMI Liao. If u look at many small cap results up to march their revenue has been impacted already . Next wave of June earnings will be out soon in August . 

I am pretty sure sti some correction to 3000 level like we saw last year October time if no trade deal is done and 25% tariff continues. Even with fed easing the money unlikely to flow out to support global economy.

[Behappyalways]

Exclusive: Bearing brunt of trade war, Singapore chipmakers cut jobs
https://www.reuters.com/article/us-singa...SKCN1UJ0PW

[dreamybear]

Exclusive: Bearing brunt of trade war, Singapore chipmakers cut jobs
https://www.reuters.com/article/us-singa...SKCN1UJ0PW

IMO, the S'pore manufacturing sector employs mostly FT / PRs compared to citizens, and thus, the impact of retrenchment to the economy may not be severe. Perhaps, there may be some trigger down effects in terms of consumer spending or the rental market.

While more people renew their COE in recent years, Singapore's private home prices rose to a 5-year high in 2Q2019. Refernce : https://www.channelnewsasia.com/news/bus...y-11676188

Other than many cash rich en bloc-ers in recent years, the current mortgage rates can be as competitive as 2% for the 1st 6 years which translates to a mthly payment of around $3200 for a 25 years $750,000 loan.  Reference : https://www.mortgagewise.sg/mortgage-rates/

On the other hand, the household median income is ard $9,300(abt 3x current monthly repayment), and has been increasing through the past few years. Reference : https://blog.seedly.sg/average-singapore...ome-stand/

Unless the mortgage rate rises, e.g. 4% for the 3rd year and beyond, I don't think there will be any real pain in the property mkt and leading to a dampening mood in the economy or a real (non-technical) recession.