S'pore home prices still falling

[corydorus]

I think we need to be reminded HDB is not for speculation. Is to let people have a home. And is not meant to be passed from parent to a child to have 3 homes !

I personally feel is an Asian ills to pass home because it affects home prices to many family who just need a home they can call home. And here we are worry for people who have 3 homes. They are the last to think about.

[CY09]

Hi Cory, it may be a possible future of our country because we have a loop sided population structure.

Who is going to buy/take over the homes of our parents when they pass on esp when we have laws/limits on public housing.

The supply of house units will stay the same but the population/ aka demand for homes will fall. This is because the population may not be replenished if we keep to our trajectory of not wanting a lot of foreigners and rely on our core population for demand. Its like now there are 1000 households to 990 housing units; but if 10% of the elderly household passes on and is not replenished; it becomes 900 households to 990 housing units. One party has to pick the slack- either the govt dips into reserves to buy or market forces will force prices down

[corydorus]

Old people do not all die overnight. There will be a long run way to adjust as old buildings got torn down. Yes there is greying population of existing. And there is definitely migrant opportunities. Lastly, last i know, the plan is to have bigger population and not status quote. And there is hordes out there who like to get in. We are lucky to have the choice to pick what we want.

[thor666]

And not to forget, the government is the biggest landlord. We are but long term renters.

In a situation where supply outstrip demand, the government can easily change laws to suit the purpose (eg families can own 2 HDB).

Like corydorus mention, there's always people who are seeking a better living condition and Singapore is attractive to them even if it means it becomes less attractive to live in a crowded environment.

The private housing has more risks; but simply because owners have certain privileges over public housing owners.


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[jjlim84]

are we comparing apple to apple, if we are talking about cities like New York, Hong Kong, London...?

http://business.asiaone.com/news/singapo...uy-now-jll

Singapore prime homes a good buy now: JLLLee Meixian
The Business TimesWednesday, Mar 09, 2016

Singapore - A NEW JLL report is extolling the virtues of buying a prime residential property in Singapore now, given how "affordable" they have become compared to other global cities in the last four years. This is in spite of the loan curbs and tax burdens in place.
The real estate consultancy estimates that the average luxury prime residential price of S$1,991 per square foot (psf) in the fourth quarter of 2015 is about 20 per cent off the peak in 2011.
This is the biggest correction across domestic asset classes in the last four years. Office, retail and industrial property prices have fallen 4-6 per cent; suburban residential prices are down 12 per cent.
By various measures, Singapore ranks among the top global cities with London, New York, Paris, Tokyo and Hong Kong. Yet, prime residential prices here are significantly lower than other cities after the correction, the report finds.
This is because while its prices have fallen sharply, other cities' prices have continued to climb in the last four years. Prime home prices in Hong Kong are now 165 per cent higher than in Singapore.
Prime home prices in New York and London were 10-30 per cent higher than Singapore in 2010, but are 80-90 per cent higher in 2015, because they rose 20-25 per cent in the last five years, while prices in Singapore fell 20 per cent.
Back in 2010, the average home price to income ratio of 7.3 times in Singapore was on par with other cities except for Hong Kong, a traditional outlier for home prices.

But by 2015, Singapore's ratio had fallen to just 5.6 times, versus 8-9 times for other global cities. In the current climate, sentiment in Singapore's prime residential market has been very weak, with resale transactions falling to about 800 each year in 2014-2015, similar to recession levels in 1998, 2001 and 2008.

The Monetary Authority of Singapore, in its November 2015 Financial Stability Review, had assessed that Singapore residential prices could have been 17 per cent higher if the government had not introduced property cooling measures (such as lower loan-to-value limits, additional stamp duties and loan caps) since 2010.
The report's author, Regina Lim, JLL's national director, advisory & research, capital markets, says: "Despite the increase in buying and selling stamp duties, the cost of property ownership (including buying, holding and selling) in Singapore of 19 per cent is comparable to that of other global cities which range from 14 to 26 per cent."
That said, the average rental yield for Singapore prime residential properties now looks low at 1.8 per cent at the moment, close to the mortgage rate of 1.6-2 per cent.
Rentals have declined in prime districts after a 4.7 per cent compounded average growth in supply in 2010-2013. Many of these were en bloc redevelopment projects begun in 2006-2009, but these have fallen out of favour with developers since 2011.
Ms Lim expects rents to rise after 2016 as the supply in prime districts has become increasingly limited. Prime residential rents are now languishing at 40 per cent below 2008 levels, and just 8 per cent above 2000 levels.
In comparison, the median household income has risen 100 per cent since 2000. Rents have evidently not kept pace.
Ms Lim says: "We believe there will be more opportunities to buy residential units in bulk in 2016 . . . For prime residential units that were completed in 2012, several developers have transferred unsold units to 100 per cent Singapore-owned entities or sold them in bulk at lower prices in 2014-2015. This further suppresses prices in a challenging market."
She believes developers could seek to sell around 1,000 units in bulk in 2016-2018 if the market does not improve. So far, such distressed sales have mostly been picked up by private funds.

[CityFarmer]

Hi Cory, it may be a possible future of our country because we have a loop sided population structure.

Who is going to buy/take over the homes of our parents when they pass on esp when we have laws/limits on public housing.

The supply of house units will stay the same but the population/ aka demand for homes will fall. This is because the population may not be replenished if we keep to our trajectory of not wanting a lot of foreigners and rely on our core population for demand. Its like now there are 1000 households to 990 housing units; but if 10% of the elderly household passes on and is not replenished; it becomes 900 households to 990 housing units. One party has to pick the slack- either the govt dips into reserves to buy or market forces will force prices down

There is a good reason for 99-leased hold properties, vs the freehold one.  I reckon, most leased-hold property, will be reclaimed, and redeveloped, before the lease expire. The mean is one of the long-term adjustments to your "problem".

[BlueKelah]

Unlikely Singapore end up with too many empty homes due to land scarcity but Japan is a good example of what can happen to ageing population and its effects. I am surprised an hours drive only from tokyo and there are empty houses and land. perhaps poor city planning.

http://www.nytimes.com/2015/08/24/world/....html?_r=0

A Sprawl of Ghost Homes in Aging Tokyo Suburbs
YOKOSUKA, Japan — Ever since her elderly neighbor moved a decade ago, Yoriko Haneda has done what she can to keep the empty house she left behind from becoming an eyesore. Ms. Haneda regularly trims its shrubs and clips its narrow strip of grass, maintaining its perfect view of the sea.
The volunteer yard work has not extended to the house two doors down, however. That one is vacant, too, and overgrown with bamboo. In fact, dozens of houses in this hillside neighborhood about an hour’s drive from Tokyo are abandoned.
“There are empty houses everywhere, places where nobody’s lived for 20 years, and more are cropping up all the time,” said Ms. Haneda, 77, complaining that thieves had broken into her neighbor’s house twice and that a typhoon had damaged the roof of the one next to it.

Despite a deeply rooted national aversion to waste, discarded homes are spreading across Japan like a blight in a garden. Long-term vacancy rates have climbed significantly higher than in the United States or Europe, and some eight million dwellings are now unoccupied, according to a government count. Nearly half of them have been forsaken completely — neither for sale nor for rent, they simply sit there, in varying states of disrepair.

These ghost homes are the most visible sign of human retreat in a...............

[specuvestor]

Japan is always an extreme case in so many aspects.

At current trajectory Singapore will have more people than Japan before end of this century. Obviously their immigration policy and their homogenous identity have to change

[BlueKelah]

Japan is always an extreme case in so many aspects.

At current trajectory Singapore will have more people than Japan before end of this century. Obviously their immigration policy and their homogenous identity have to change

Did a quick google.

Japan has about 127.1m in 2014 (127.8 in 2004, projected to decrease 1m/year from 2014).
Singapore 5.47m as of June 2014 (up 1.3m from 4.167 in 2004 )

Don't see how Singapore will have more people in 84 years time..

perhaps you can share what trajectory u are using?

[specuvestor]

http://ourworld.unu.edu/en/toward-a-sust...population

I had impression reading an article last year that japan population will halve by 2050. Maybe it's working population.

Maths wise say Singapore adding 1.6m people to 7m in 16 years for 2030 white paper. In 86 years supposedly will have 14m population (if its even possible but it's a trajectory) and Japan losing 1m a year will have 41m. So yea not this century maybe 2125 then, and earlier in terms of working population. Point is the irreversible problem if they continue their current policies, even for a large country like Japan.

Corollary is that it is better to own property in Singapore than Japan in long term