Singapore Eases Property Curbs After Housing Prices Decline

[BlueKelah]

Yes will depend a lot on economy. Right now is on downtrend, we are past the peak for this year i reckon as china party congress is over and they are closing factories. Check out the pmi and other numbers showing that their economy has started cooling. China sneeze we catch a cold. Tide has turned i reckon, and gov has the heads up.

Sent from my SM-T800 using Tapatalk

[specuvestor]

http://www.businesstimes.com.sg/real-est...rty-market

I hope we don't follow HK's recent cycle. From a long tail policy perspective, slow and steady will win the race. That is China's 2X5 years objective as well.

[CY09]

Using 2020 as a deadline, another 35,000 private units planned (EC+private) have gotten URA planning approval and will be built and another expected 20,000 units from enbloc, this means the govt has to ensure about 55,000 units are filled up by 2020. These numbers exclude any new GLS which will be released.

Let's view from HDB's angle now. HDB has been building about 18,000 units annually over the past 3 years and let's now taper it down to 16,000 annually over the next few years. Looking at current marriage stats and divorce rates, we have about 27,000 marriages (from all resident types - SC/PR/LTP/Others). Assuming an optimistic divorce number of 7,000 yearly, we have a net 20,000 family formation who needs new homes.

Subtracting HDB's BTOs, only about 4,000 new couples demand have to be met annually by the private. However over the next few years, 55,000 more private units are coming online! This means 43,000 spare units capacity coming up. Assuming each brand new private unit demand is met by 5 residents, this means the need of searching for another 215,000 more immigrants to fill up the slack. This means Singapore has to grow about 1.2% worth of immigrants annually to match to housing stock.

All along, I have been ignoring the unsold private units of 16,031 which already points to a 8.3% vacancy rate as well as the approximately 3,000 vacant HDB flats. It is also worth noting that in my above projection, I have overlooked death rates and the rising trend of sending your aged parents to spanking new nursing homes which will reduce housing demand

To summarize, a 1.2% growth to 2020 which is Singapore's current population growth trajectory will leave us in the same bad situation as where we are now at 2020. A faster growth in population is required to get us out of this housing mess.

Question now is will the govt bow to i) economic housing pressure or to ii) populist stance of anti immigration

[brattzz]

I say sg gov will increase population to 6.9milo, this is critical to keep our economy going! :O

[Bibi]

Let me add on. The reason our populatn growth rate is now slow is because our infrastructure cannot handle faster growth rate. When infra is done up, the popn growth rates will increase. 6.9mil. When our gov say it they mean it.

[CY09]

Judging from MOM labor statistics released this week, there was a fall in foreigners getting employed in Singapore this year. It signals the possibility of many of them having to move back to their home country upon the lapse of their work permits (approx 3 months after end of work); in turn, a fall in housing demand.

Should labour trends of lower foreign employment persist in Singapore, it will not be a surprise to see rising vacancy rates among the private housing market. I wonder how much warchest do our locals have to support the financing of their second home should vacancy rates continue their ascend from 8.3%.

MOM's labour stats will be a very good indicator of the short term outlook of our housing market.

In addition, I have noticed a delinking of home interest rates from SIBOR/SOR (which the latter 2 are rising in line with rising fed rates). It is indeed innovative for banks to peg rates to 9 month FD rates. Hence, the risk of global rising interest rates has been negated and is more reliant on the factor of "amount of liquidity present in Singapore's monetary system".

[vingaard]

The fall in foreigners may not necessarily mean that housing demand will fall. Many foreign workers, especially work permit holders, stay in dormitories so they would not be a factor in the housing demand picture. The impact would be more on companies providing worker dormitories, e.g. Centurion.

However, if there is a fall in the S pass and EP holders, this would affect the rental market.

[CY09]

http://www.tnp.sg/news/singapore/weak-de...ing-market

It's interesting to note we have property investors shelling out mortgage repayments from their pay pockets. The employment figures (for both local and S and Epass holders as pointed out by Vingaard) will be the key determinant if Singapore hits a property downcycle or otherwise

[Porkbelly]

I wonder how many property investors have over extended or are
facing yield issues, to warrant the MAS to make such statements.

The Oil & Gas industry's borrowings are probably larger and default
would cause more damage than individuals involved in property.

[choya]

http://www.tnp.sg/news/singapore/weak-de...ing-market

It's interesting to note we have property investors shelling out mortgage repayments from their pay pockets. The employment figures (for both local and S and Epass holders as  pointed out by Vingaard) will be the key determinant if Singapore hits a property downcycle or otherwise

From 2009 to 2013, she bought four apartments and two retail shop spaces.

The Total Debt Servicing Ratio (TDSR) is a framework established by the Monetary Authority of Singapore (MAS) in 2013 

She probably got all the 6 before TDSR put in place.  Wonder how many others are in the same boat.