Private property prices... Up or Down?

[Andyngps]

Wait until 2009. Things might get worse. Prices should be lower then. Property prices have not hit the lowest yet

[Sony]

Just my opinion, last year lots of en-bloc so this creates immediate demand as these pple need to buy replacement homes. As of now I think most of the en-bloc have already bought homes so demand is quite stagnant. Prices are at historical highs so there should be no rush. Buy high does not mean sell high......selling price is determined at time of sale.

 

 

some enbloc have developers doing rent back coz they hold the development

 

 

 

edit: didn't know this was a donkey one thread whereby situation have change beyond what a normal person will perceived it to be

Edited October 18, 2008 by Sony

[Chongster]

can't remember who in MCF offered to buy me a drink if it comes down when we had a discussion some time back....

anyway, it's not a period of 5 mth, it's a period of 3 weeks that changed the world.

 

but i have been bearish property for whole of 08, if property is not going to majorly correct, then property stocks must be the most attractive investments out there

this year, demand is actually tighter than a virgin, and the initial 07 projections were that prices were going up 35% based on supply. Now, if on such tight supply, prices are falling, what do you think will happen when the supply starts to flood the market come 09?

 

and dun look at the price statistics that is published, because that suffers from survivorship bias. basically, for countless of successful sales out there, there are loads of properties that cannot move even after seller bring down the price. and there will be more and more competition.

 

bring on a deep and long recession and falling rentals, and rising supply (which i think is the most impt factor short term), and it is going to be painful. and dun bank on the NRI or PRC to bail us out this time. their wealth have evaporated too.

[Modykoh]

i suppose if the property price move down trend even at current, u are still within the buffer of margin. u bough it low and a big plu of the yield of the return from rental.

 

as a whole..if econ is down. expratiate retreat...rental down and then u may need to folk out add $. to maintenance...tis is where those bought in early(04-06) will be affected...At current, it seem still stable(rental) dispite moving down..

 

Properly next year, very much depend on the servirity of the econ impact...we will see the so call 'bottom' As on now, investor and residental stayer alike..is still watching...

 

those oversea investors (middle east) are cancelling order...there are many project being affected by this...many developers will be hit. today report Guco..land)

 

As a whole...this look bad.

[Modykoh]

imo...next year will be worst...property down...next question is this..what will be your market confident be then?

As current, ou confident is still good...we yet to see our friend or ourselve been retrence ,,if next year turn very bad...u see ligh umemployment rate...comy closed out..do u still wan to commit??

[Throttle2]

If anyone cares to read, my advice in current conditions is this:-

 

Things are in a bad shape.

Physical property market does not react or move as quickly.

The lead time is probably 3 - 6 months

 

First tier residential property in D9 is down easily 25% from peak.

(If you want to buy, i can immediately connect you with sellers)

No, in general people are not desperate yet.

But yes, I foresee, within 3 months you will see the physical market start to really move downwards.

 

If you are young, with maybe current accumulated wealth of say $1mil upwards and earning say $30k easily per month in a rock solid company (if there is such a thing). Go ahead, take another bite. Hopefully you can earn back even if you lose. All is not lost.

 

However, if you are just one of those tan chiat tan chiat earning only $10k - $20k per mth and not even close to half a million dollars cash unencumbered, then better come down to earth. Or risk losing more than you can afford.

 

Understand that Leverage is your best friend in an up market

Understand also that it is your worst enemy in a down market.

 

Dont play play.

[Leepee]

1) Many who missed out on the 2007 boom are now waiting for the 2009 crash. Many of my relatives and friends are ALL saying that they will surely buy another property(read second prop) when the price down by 30% or more.

 

2) Those speculators who are lucky to buy in 2004/5 are not going to panic when their TOP comes in end 2008 or beyond. These group of speculators already has a paper profit of at least 30-50%(or more) from their buying price! They will not have to panic even if they are boderline case. Even if the rental cannot cover their monthly installment, they are not worried as they can surely ride out the next 2 years of recession. Many I know are 99% holding back the rush to sell as they believe that in 2 years time when the economy recovers, their property will be in HOT demand.

 

3) Only a very small group of speculators will be forced to sell when they cannot get approval for bank loans when coming to TOP. In the WORST of the WORST case, these same group of people WILL NEVER lose money! Why? Because they are already sitting on paper profit of 30-50%. Even if they were so desperate and sell at the original buying price, there will be a SUPER long queue of people (aka those mentioned in point-1) waiting to GRAB it off these speculators hand.

 

4) I don't think there are many speculators who are so stupid to buy the hyper expensive properties in mid2007 to mid2008 period. These group of speculators surely must be praying that the developer were to slowly built, and drag the TOP till 2012 or beyond, hopefuly by then the economy recover and then MORE GOOD YEARS to them!

 

So I can see that this time the Singapore properties price will not Crash like no tomorrow.

At most, it will go as low to the 2004/5 price, it will never be possible to reach the 1997 price anymore.

 

We can read in this post and many forums, there are MANY people voicing their desire to pick up cheap cheap properties when the speculators offload it cheaply. So there is a strong base of people waiting to pick up good properties in 2009/10/11!!

[Leepee]

1) Many who missed out on the 2007 boom are now waiting for the 2009 crash. Many of my relatives and friends are ALL saying that they will surely buy another property(read second prop) when the price down by 30% or more.

 

2) Those speculators who are lucky to buy in 2004/5/6 are not going to panic when their TOP comes in end 2008 or beyond. These group of speculators already has a paper profit of at least 30-50%(or more) from their buying price! They will not have to panic even if they are boderline case. Even if the rental cannot cover their monthly installment, they are not worried as they can surely ride out the next 2 years of recession. Many I know are 99% holding back the rush to sell as they believe that in 2 years time when the economy recovers, their property will be in HOT demand.

 

3) Only a very small group of speculators will be forced to sell when they cannot get approval for bank loans when coming to TOP. In the WORST of the WORST case, these same group of people WILL NEVER lose money! Why? Because they are already sitting on paper profit of 30-50%. Even if they were so desperate and sell at the original buying price, there will be a SUPER long queue of people (aka those mentioned in point-1) waiting to GRAB it off these speculators hand.

 

4) I don't think there are many speculators who are so stupid to buy the hyper expensive properties in mid2007 to mid2008 period. These group of speculators surely must be praying that the developer were to slowly built, and drag the TOP till 2012 or beyond, hopefuly by then the economy recover and then MORE GOOD YEARS to them!

 

So I can see that this time the Singapore properties price will not Crash like no tomorrow.

At most, it will go as low to the 2004/5 price, it will never be possible to reach the 1997 price anymore.

 

We can read in this post and many forums, there are MANY people voicing their desire to pick up cheap cheap properties when the speculators offload it cheaply. So there is a strong base of people waiting to pick up good properties in 2009/10/11!!

Edited October 18, 2008 by Leepee

[Throttle2]

I sincerely hope so although i know not.

 

Lets just discuss about those people who talk about buying.

Are they buying with cash or are they leveraging?

99.9% will leverage. Question is how much leverage.

If all these buyers are buying with cash more than 50% downpayment, I'll gladly step aside and shut up.

 

i think not.

 

Who in this thread or MCF for the matter, down >=50% for his private property, plse raise hands. I dare say, only a very small handful.

 

In other words, most people are spending future income.

Future income can become no income.

So, take heed, mind your leverage and mind it like you've never minded it before.

 

In current times, spending on future income is as good as sharpening the guillotine that is aimed at your own head.

 

 

 

Hhhmmm, wasnt it a Cayman, you were buying?

how come now only MX5 or RX8?

[Throttle2]

It depends.

 

- insist on corporate (MNC) tenant

- insist on nationality and race of tenant of your preference (sorry, but that is the reality)

- vet the prospective tenant (you must insist on meeting him)

- if you have legal access, get somebody to amend rental contract to be more fair. In my experience with corporate tenants, the contract is usually drafted by the MNC (where your tenant is an employee of) so it will favour them. You must amend it to be more balanced

- compensation for damages will be covered under the rental deposit (2 months of rental)

- stay away from those young and rowdy ang mor, even though they may be bankers, etc

- stay away from families, their kids will damage your place

- best is professional singles/couples from Western countries, Japan, and Korea.

 

My rental income now is covering the loan repayment for both my private properties plus $3.5k cash every month to spare. Basically I am living for free in addition to both properties being paid up automatically as long as rental is there. You say profitable or not leh? But I must caveat that my case was exceptional as I had bought cheap, taken moderate amount of loan, some of the loan amount being paid by CPF, and in the past few years rental has moved up significantly. So it depends on the individual.

 

Of course commercial property has higher yield but it ebbs and flows with the economy. Residential properties, people can actually stay in them whether good times or bad times - a roof over your head.

 

 

Yes your case is exceptional.

and thank goodness you are still in positive territory.

 

However, tides are changing be it commercial or residential, when it slumps, it slumps.

It will spare no one. Rental income is not guaranteed. you only started in 2004?

good start but long way more to learn so dont learn the hard way.

 

to TS:

Buy if you need to (for staying) and buy what you can afford.

Dont bite more than can chew. It'll choke you, i guarantee that.

Buying to invest? make sure you have the bag of cash ready.

Cannot rely simply on rental income.

[Chongster]

very good advice.

 

thing is, a lot of district 9 properties are already advertising at 25% off their peak. the river valley apts going for 2k plus are asking for 1400+. buyers have evaporated. more and more sellers are coming to the market.

[Kelpie]

Ya man, I'm lucky to have disposed all before the dive .

 

Regards,

[Throttle2]

I let go my properties too but bot one to live in as i prefer to own rather than rent.

 

I guess I might lose one or two BMWs on paper but i'll get to enjoy staying in it so i'm not bothered. It's very important to plan right and remain discipline to carry out the plan, whether in economic crisis or not.

 

Have a friend who was too bullish on the property market, now ridden in debt.

Despite my advice to reduce this exposure last year, he didnt listen yet jeered at me.

now. pretty sorry state...sigh....

 

Hope people think twice before committing. Same for buying cars with big loans.

[Hishercar]

this time round it may be different from SARs saga

 

 

house sellers are boleh tahan group after made a killing in enblock sale and are able to service loan without being high gear

 

learnt their lesson the previous time

 

there hold on to their price with a little downward adjustment

 

there will be a few % that are marginal player and got caught

 

these last group are perhaps small

 

 

singapore is a finite area and increase in the population and cash rich people around

 

property price has its cycle but each cycle it test a new high price

 

 

so next cycle high price sell

 

I was too late on this cycle

[Throttle2]

Understand what you mean but the Price itself does affect the sentiment, dude.

 

Thats especially so as property is generally different from stocks.

There is a real use for property, whereas for stocks there is no real use (unless you are a tycoon doing a takeover)

 

Even with this difference, if a stock is cheaper, say, after a split, it usually garners more buying due to price decrease factors. (many high price stocks like this strategy to increase Mkt Cap)

 

for me, the earliest i will jump in again is 2010 depending on the environment.

Edited October 19, 2008 by Throttle2

[Eacs]

Just to share my few cents about the property market.

 

When the buyers buy their unit in 2005/06 its at the rising state(eg $450psf) for the passed years it has rose any incresed of 40-60% (eg 650psf). The seller might be a ble to fetch about S$500psf now.Its slighly higher than breakeven point.Just the the "profit" its not there.Looking at the current suitation the property has dropped and it would not drop till the rock bottom prices. Its always like this, some seller's wants more & more when they wants to sell, and the buyers will wait for the price to drop and when its drops it will wait for the price to drop more.Never Ending.

 

As some of us know that most of the buyers now are not buyers of the passed (10-12 years ago). They would only invest certain percentage in property/stock/shares and have some spare with them.

 

The same old saying still stands "The first lost it's always the best lost". Till date it still stands.

 

Hope that the current suitation will be better.If not the poorer people will be more at the losing end.Things are getting more ex and demanding.

 

Just some thoughts.have a great weekend.

[Chongster]

Ya man, I'm lucky to have disposed all before the dive .

 

Regards,

 

well done, i am sure it's not luck but foresight and good judgment; for every seller like you, there must be a buyer who bought it from you; he might be sweating in the pants now and working hard to fund your retirement for you ... then again, if he can keep for 10 years, he can probably make his money back.

 

any thoughts of going back into the market soon? i assume you have the bullets now

[Chongster]

I let go my properties too but bot one to live in as i prefer to own rather than rent.

 

I guess I might lose one or two BMWs on paper but i'll get to enjoy staying in it so i'm not bothered. It's very important to plan right and remain discipline to carry out the plan, whether in economic crisis or not.

 

Have a friend who was too bullish on the property market, now ridden in debt.

Despite my advice to reduce this exposure last year, he didnt listen yet jeered at me.

now. pretty sorry state...sigh....

 

Hope people think twice before committing. Same for buying cars with big loans.

 

i too know of many with 4 properties. and like you say, they make about 20k a month. it really is down to jobs, rental income, and interest rates movement. we know jobs will be weak, rental is coming down, any thoughts abt the interest rates factor?

 

with the govt guarantee on bank deposits, and people's adversion on other products, US possibly cutting rates, need to keep S$ down, i think at the very least interest rates will remain super low.

 

i agree the earliest to start smelling around is 2010. in the meantime, stocks will start to look compelling first before property...

Edited October 19, 2008 by Chongster