S'pore home prices still falling

[funman168]

SG property market seems to be 2 tier nowadays.
Pte Property <$1.2M is increasing price. New BTO are getting more expensive. New launches are at least $1000psf. New land sales prices are also going up.

Only the luxury property market is dropping.

[ValueMushroom]

Hi Big Toe

1. My unit is in Tanjong Pagar area, ~200m from Tanjong Pagar MRT

2. With the near completion of Tanjong Pagar Center, adding to the vibrancy of the area, I hope to actually increase my rental at the next round. Keeping my finger cross.

3. My unit will continue to be highly rentable because of the following attributes:
i) windy unblock sea view in downtown
ii) well renovated, 200m to MRT
iii) >30 buses, get to anywhere in Singapore
iv) food/cafe/supermarket/hawker in abundance
v) the continue development of the area, namely:
- upcoming completion of Frasers Towers in 2018
- new CPF Building in 2020
- CCL Stage 6 in 2025
- Greater Southern Waterfeont, beyond 2025

4. For me, cashflow is the key consideration and getting a highly rentable unit will ensure this. A concrete committed long term development of the area is also important to ensure gradual price appreciation in the long term.

Thanks for reading my long writeup, just sharing my thoughts on property investment.

[tonylim]

One thing fairly sure is costs for borrowings will only be higher from now on , unless US reverses its interest rate policy .

[Scg8866t]

Another query why are cluster houses so much cheaper in terms of psf. For example watten residence cluster hosue can be bought at 900 psf whereas normal condos at that district is around 1.5k - 2k. Also the rentability for cluster is very good because expat loves "landed" living with amenities. Not sure if there is value in cluster housing.

[soros]

Does the psf in singapore refer to "internal floor area" or does it refer to "gross floor area" ?

[ValueMushroom]

Scg8866t: i'm a complete newbie in the cluster/landed house market segment, so I have no answer to your question. Hope one day I have the financial abilitiy to invest in this segment.

Soros: for condominium, the psf refers to the saleable area which includes balcony, air-con ledge, "double volume" area. The internal area is calculated up to the middle of the partition walls.

[specuvestor]

Canary in a coal mine.... on the flip side I am still thinking the US will hike only once in 2017. It was originally expected that the Fed will hike 4 times in 2016.

"[HONG KONG] Singapore's commodities-related defaults could turn out to be the canary in the mine.

Despite a modest rebound in resource prices, restructuring specialists including KPMG and Hogan Lovells Lee & Lee see more Asia-Pacific commodities and shipping companies being pushed into delinquency.

Law firm DLA Piper said there could be choppy waters ahead on rising interest rates and President-elect Donald Trump's overhaul of trade with China. Regional non-bank borrowers face US$76.4 billion of dollar bonds maturing in 2017, 24 per cent more than this year, Bloomberg-compiled data show."

http://www.businesstimes.com.sg/banking-...a-distress

Yes global economy is softening but don't see a major shock coming; not even the incoming interest rate increase which will be slow and mild in next few yrs. I think the only one to look out for is BREXIT if the Europeans are stupid enough to go on a feeding frenzy and shoot their own foot.

The obvious potential big external shocks are, IMO

- A hard Brexit opted in UK
- A "Trump" president in US
- A "hard-landing" in China

I agree, the US interest rate hike, will be slow and mild, hardly quality for a "shock".

What do you think? Anyone to add into the list?  

I'll add another black swan event:

War/Terrorism

Between.... I dunno. Seems like everyone has an axe to grind with everyone these days!

It's actually quite eerie that 2 of the unthinkable happened Will China also hard land?

Personally I don't see a sharp US i/r rate increase but at most once a year for next 4 years, and I think USD strength will be reversed but yield curve is probably right on ie I think negative US interest rate will continue next 4 years.

Watch Singapore the canary in the coal mine. I still think 2017 is a recession year

Personally I'm starting to think that US will be going into a stagflation stage. The yield curve will be steeper not because of much higher fed fund rates but much higher inflation, especially with Trump's expansionary policy and higher oil prices. That means I am thinking US will be at at 2-2.5% fed funds rate while inflation will be north of 3% by end of 4 years. The implication for borrowers will be significant

(Bloomberg) -- 
Jeffrey Gundlach, chief investment officer of DoubleLine Capital, said interest rates may climb to 3 percent on 10-year Treasuries by next year as deficits and inflation rise under a Donald Trump presidency, a move that would hurt markets.
Gundlach, who has called the president-elect’s policies bond unfriendly, said the effects would be felt across the U.S. economy. The benchmark Treasuries are currently trading at close to 2.5 percent.

“We’re getting to the point where further rises in Treasuries, certainly above 3 percent, would start to have a real impact on market liquidity in corporate bonds and junk bonds,” Gundlach said Tuesday during a webcast presentation on his DoubleLine Total Return Bond Fund. “Also, a 10-year Treasury above 3 percent in my view starts to bring into question some of the aspects of the stock market and of the housing market in particular.”

--snip--

Greenspan once famously say to the extent that nobody can identify a bubble. I disagree. At least both of us here and I'm sure many more don't see an equity bubble, except valuations are stretched due to low interest rate. In a bubble valuations usually doesn't matter

And we all know a bubble when we see it example property bubble in China. The problem with bubble is NOT that they are unidentifiable but that we don't know what is the tipping point of bursting. That creates a even greater hazard to policy makers who can be blamed.

We know there is a bubble in the bond market, where valuations or negative return didn't matter cause everyone chasing yield. Personally I thought it burst last year May. Maybe second time lucky for nov 2016 instead

[brattzz]

think sg gov better step in to remove the cooling measures...keep the property momentum going.

[soros]

For property in Singapore , the stamp duty is charged at 15% rate to foreigners and non-individuals .

For property in Hong Kong, the stamp duty is charged at 15% rate to non-first time buyers and foreigners.

For property in London, the "stamp duty" (called SDLT) is charged at 15% rate on property priced over £1.5 Mil .

[BlueKelah]

Private apartment rents fall again
Rents for condominiums and private apartments weakened for the sixth straight month, falling a sharper 1.3 per cent in December from the previous month, and 6.2 per cent for the whole of last year, according to flash estimates released by SRX Property yesterday.
Rents in December are now down 19.9 per cent compared with their peak in January 2013.
The HDB market saw rents edge up by 0.2 per cent from November, though they still lodged a 3.7 per cent fall for 2016. Compared with their peak in August 2013, HDB rents are now 12 per cent lower.