S'pore home prices still falling

[Fish Head]

I wonder at what price levels, ppl will start to find properties cheap and start buying again. Or when will the government support the price by reversing it's policy, and reignite interest in foreign investors

if compared among global cities such as Hong Kong, London, Tokyo etc, Singapore's house price to income ratio is still one of the lowest

I am worry about you. Saying Singapore home price is not high is politically incorrect in most of internet forums. I said the same thing before, but people prefer to compare with Malaysia in order to complain the government.

[greengiraffe]

http://www.valuebuddies.com/thread-676-page-100.html

I was shocked after reading the statement.

The biggest missing factor is unemployment. It seems that Mr Khaw is still basing housing prices on sustained employment and reasonable wage rises.

With rising global unemployment due to one reason or another, I think global policy makers should factor in reasonable assumptions for unemployment.

Locally the economy is caught between a rock and a hard place with many global price pressures already shocking local support industries such as O&G and even our financial sector...

I hope that I m wrong but SGX being a leading economic indicator...

[CY09]

Personal Opinions: The residential market will hold up for the time being. This is because many individuals who own second properties are on loan repayments of 70% to their income. So this is not too bad. The only time massive foreclosures will happen in our country is when individuals lose their jobs. From the 08/09 recession, it is observed the government is possibly aware of the linkage of work income to mortgage repayment. Attempts were made to ensure workers by introducing the jobs credit scheme in 2009. I will not be surprised if this scheme is reactivated when our economy experiences another recession. This will prevent the domino effects of no income-foreclosure of homes.

Office space- This area is of greater concern to me. With 1.1B sq metre of office space coming out by 2018, similar demand has to be met. Current demand for office space is 6.8B sq m. This means a 16% increase in demand has to be achieved in 3 yrs time. Is this possible? I seriously doubt EDB's capability to do so. Do note in Straits Time today, the money section mentioned the increase is 3.2B sq m by 2018. I do not which figure is true so I stuck to the URA's statistics.

Therefore with this scenario, it is likely office rentals will plummet in 2018. My own estimation is office rentals will be 10% lower than current. If there is a recession, it will be a lot worse. Secondly, some office complexes are held by REITs. Therefore, expect lower yields and possibility of share placements since valuations will fall. There are no "job credit schemes" to save office owners unless the government is creative; maybe pay 20% of their interest payments to banks?

Retail- is less of a concern since the strawberry generation is coming of age. I believe this generation spends more of their income in consumption than the 1965s generation and before. So yup retail demand will meet the retail supply of approx 16%. Retail vacancy rate may increase slightly but this will not be much of an issue.

Hi gg,

Agree with you the missing link is unemployment rates which will hurt housing prices. I believe our current batch of ministers and civil servants are aware of this missing link and thus do have safeguards in place. This is why there was a job credit scheme in 2009 where the government paid part of the wages of private sector employees; this scheme was not present during the AFC.

Given our reserves, it is possible again for our govt to draw down on reserves to keep Singaporeans in their jobs for a sustained period of time. I too am worried about the global outlook where Singapore is likely to suffer in the O&G industry as the integrated Tuas yard opened at the wrong end of the oil cycle, our financial services' growth is now limited because almost everyone, who does not have a strong financial knowledge, has bought whole-life/endowment insurance that benefits financial firms and a slowing real estate market on the back of slow population growth.

As election is imminent, I hope parties will address these challenges and advise how we can sustain the jobs of employees on this island as part of their campaigning. Besides the usual job credit scheme of subsidizing employee's wages to ensure low unemployent

[greengiraffe]

Personal Opinions: The residential market will hold up for the time being. This is because many individuals who own second properties are on loan repayments of 70% to their income. So this is not too bad. The only time massive foreclosures will happen in our country is when individuals lose their jobs. From the 08/09 recession, it is observed the government is possibly aware of the linkage of work income to mortgage repayment. Attempts were made to ensure workers by introducing the jobs credit scheme in 2009. I will not be surprised if this scheme is reactivated when our economy experiences another recession. This will prevent the domino effects of no income-foreclosure of homes.

Office space- This area is of greater concern to me. With 1.1B sq metre of office space coming out by 2018, similar demand has to be met. Current demand for office space is 6.8B sq m. This means a 16% increase in demand has to be achieved in 3 yrs time. Is this possible? I seriously doubt EDB's capability to do so. Do note in Straits Time today, the money section mentioned the increase is 3.2B sq m by 2018. I do not which figure is true so I stuck to the URA's statistics.

Therefore with this scenario, it is likely office rentals will plummet in 2018. My own estimation is office rentals will be 10% lower than current. If there is a recession, it will be a lot worse. Secondly, some office complexes are held by REITs. Therefore, expect lower yields and possibility of share placements since valuations will fall. There are no "job credit schemes" to save office owners unless the government is creative; maybe pay 20% of their interest payments to banks?

Retail- is less of a concern since the strawberry generation is coming of age. I believe this generation spends more of their income in consumption than the 1965s generation and before. So yup retail demand will meet the retail supply of approx 16%. Retail vacancy rate may increase slightly but this will not be much of an issue.

Hi gg,

Agree with you the missing link is unemployment rates which will hurt housing prices. I believe our current batch of ministers and civil servants are aware of this missing link and thus do have safeguards in place. This is why there was a job credit scheme in 2009 where the government paid part of the wages of private sector employees; this scheme was not present during the AFC.

Given our reserves, it is possible again for our govt to draw down on reserves to keep Singaporeans in their jobs for a sustained period of time. I too am worried about the global outlook where Singapore is likely to suffer in the O&G industry as the integrated Tuas yard opened at the wrong end of the oil cycle, our financial services' growth is now limited because almost everyone, who does not have a strong financial knowledge, has bought whole-life/endowment insurance that benefits financial firms and a slowing real estate market on the back of slow population growth.

As election is imminent, I hope parties will address these challenges and advise how we can sustain the jobs of employees on this island as part of their campaigning. Besides the usual job credit scheme of subsidizing employee's wages to ensure low unemployent

I think they are still pre-occupied with fixing each other... Its accumulation of policies "errors" over the years. U can have job credit but first of all, the employers must be able to survive before employees are on the payroll.

Anyway, let them do what they can do since they are high pay folks that is supposed to know what is the best.

[Fish Head]

I wonder at what price levels, ppl will start to find properties cheap and start buying again. Or when will the government support the price by reversing it's policy, and reignite interest in foreign investors

if compared among global cities such as Hong Kong, London, Tokyo etc, Singapore's house price to income ratio is still one of the lowest

I am worry about you. Saying Singapore home price is not high is politically incorrect in most of internet forums. I said the same thing before, but people prefer to compare with Malaysia in order to complain the government.

Strongly agree with you.

I think not making complain on government is also politically incorrect on internet forum.

[cfa]

Personal Opinions: The residential market will hold up for the time being. This is because many individuals who own second properties are on loan repayments of 70% to their income. So this is not too bad. The only time massive foreclosures will happen in our country is when individuals lose their jobs. From the 08/09 recession, it is observed the government is possibly aware of the linkage of work income to mortgage repayment. Attempts were made to ensure workers by introducing the jobs credit scheme in 2009. I will not be surprised if this scheme is reactivated when our economy experiences another recession. This will prevent the domino effects of no income-foreclosure of homes.

Office space- This area is of greater concern to me. With 1.1B sq metre of office space coming out by 2018, similar demand has to be met. Current demand for office space is 6.8B sq m. This means a 16% increase in demand has to be achieved in 3 yrs time. Is this possible? I seriously doubt EDB's capability to do so. Do note in Straits Time today, the money section mentioned the increase is 3.2B sq m by 2018. I do not which figure is true so I stuck to the URA's statistics.

Therefore with this scenario, it is likely office rentals will plummet in 2018. My own estimation is office rentals will be 10% lower than current. If there is a recession, it will be a lot worse. Secondly, some office complexes are held by REITs. Therefore, expect lower yields and possibility of share placements since valuations will fall. There are no "job credit schemes" to save office owners unless the government is creative; maybe pay 20% of their interest payments to banks?

Retail- is less of a concern since the strawberry generation is coming of age. I believe this generation spends more of their income in consumption than the 1965s generation and before. So yup retail demand will meet the retail supply of approx 16%. Retail vacancy rate may increase slightly but this will not be much of an issue.

Hi gg,

Agree with you the missing link is unemployment rates which will hurt housing prices. I believe our current batch of ministers and civil servants are aware of this missing link and thus do have safeguards in place. This is why there was a job credit scheme in 2009 where the government paid part of the wages of private sector employees; this scheme was not present during the AFC.

Given our reserves, it is possible again for our govt to draw down on reserves to keep Singaporeans in their jobs for a sustained period of time. I too am worried about the global outlook where Singapore is likely to suffer in the O&G industry as the integrated Tuas yard opened at the wrong end of the oil cycle, our financial services' growth is now limited because almost everyone, who does not have a strong financial knowledge, has bought whole-life/endowment insurance that benefits financial firms and a slowing real estate market on the back of slow population growth.

As election is imminent, I hope parties will address these challenges and advise how we can sustain the jobs of employees on this island as part of their campaigning. Besides the usual job credit scheme of subsidizing employee's wages to ensure low unemployent

I think they are still pre-occupied with fixing each other... Its accumulation of policies "errors" over the years. U can have job credit but first of all, the employers must be able to survive before employees are on the payroll.

Anyway, let them do what they can do since they are high pay folks that is supposed to know what is the best.

If it doesn't hurt their pockets, why should they care ? Short of fund , just raise whatever taxes they can , e.g. Oil price down , petrol tax up . what so difficult to fix the problems ?

[jjlim84]

Personal Opinions: The residential market will hold up for the time being. This is because many individuals who own second properties are on loan repayments of 70% to their income. So this is not too bad. The only time massive foreclosures will happen in our country is when individuals lose their jobs. From the 08/09 recession, it is observed the government is possibly aware of the linkage of work income to mortgage repayment. Attempts were made to ensure workers by introducing the jobs credit scheme in 2009. I will not be surprised if this scheme is reactivated when our economy experiences another recession. This will prevent the domino effects of no income-foreclosure of homes.

Office space- This area is of greater concern to me. With 1.1B sq metre of office space coming out by 2018, similar demand has to be met. Current demand for office space is 6.8B sq m. This means a 16% increase in demand has to be achieved in 3 yrs time. Is this possible? I seriously doubt EDB's capability to do so. Do note in Straits Time today, the money section mentioned the increase is 3.2B sq m by 2018. I do not which figure is true so I stuck to the URA's statistics.

Therefore with this scenario, it is likely office rentals will plummet in 2018. My own estimation is office rentals will be 10% lower than current. If there is a recession, it will be a lot worse. Secondly, some office complexes are held by REITs. Therefore, expect lower yields and possibility of share placements since valuations will fall. There are no "job credit schemes" to save office owners unless the government is creative; maybe pay 20% of their interest payments to banks?

Retail- is less of a concern since the strawberry generation is coming of age. I believe this generation spends more of their income in consumption than the 1965s generation and before. So yup retail demand will meet the retail supply of approx 16%. Retail vacancy rate may increase slightly but this will not be much of an issue.

Hi gg,

Agree with you the missing link is unemployment rates which will hurt housing prices. I believe our current batch of ministers and civil servants are aware of this missing link and thus do have safeguards in place. This is why there was a job credit scheme in 2009 where the government paid part of the wages of private sector employees; this scheme was not present during the AFC.

Given our reserves, it is possible again for our govt to draw down on reserves to keep Singaporeans in their jobs for a sustained period of time. I too am worried about the global outlook where Singapore is likely to suffer in the O&G industry as the integrated Tuas yard opened at the wrong end of the oil cycle, our financial services' growth is now limited because almost everyone, who does not have a strong financial knowledge, has bought whole-life/endowment insurance that benefits financial firms and a slowing real estate market on the back of slow population growth.

As election is imminent, I hope parties will address these challenges and advise how we can sustain the jobs of employees on this island as part of their campaigning. Besides the usual job credit scheme of subsidizing employee's wages to ensure low unemployent

I think there is potential market in the ASEAN or Asia region, and as long Singapore continues to be stable and liveable, companies would want to set up base here

By attracting the correct people and jobs, in the long term housing and wage will continue to grow

[CityFarmer]

The Sibor is creeping up. It is still no issue, with the current pace. Once the US rate raised too fast, the Sibor will catch up quickly, thus the mortgaged rate, IMO...

Sibor hits five-month high

SINGAPORE (Aug 25): The three-month Singapore interbank offered rate (Sibor),used to set interest rates on mortgages, spiked to a new five-month high of 1.00208% on Tuesday from 0.9960% a day earlier.

The three-month Sibor has more than doubled since January. It hit its highest level of 1.02705% on April 9.

Sibor is likely to face further upward pressure as regional currencies continue to weaken against the U.S. dollar after the yuan's devaluation. A softer Singapore dollar can put upward pressure on local interest rates as investors seek higher yields as compensation for holding the weakening currency.
...
http://www.theedgemarkets.com/sg/article...month-high

[valuebuddies]

I couldn't imagine how the Singapore suicide rate would be with the falling housing prices, rising finance costs, upcoming stock market crisis and the contagious effects of political instability of neighbour countries. Cash is king during this anticipated difficult time ahead IMO.

[corydorus]

Unlikely because we still have low jobless rate. In fact the managed effort to control down the housing price past years probably avoided a contingent bubble which maybe uncontrollable.