Private property prices... Up or Down?

[east41st]

 

 

As for the rental market....

 

Right now, the question is not, er sir, how much did u manage to rent out?

Its not about rental amount

Its more about whether your unit actually gets rented out or not

Thats already a big achievement

 

Not really lah. All depends on your unit attributes. Good view, high floor, quiet facing etc will always be in demand. I don't have trouble renting out mine. What is true is number of enquiries have gone down, which is due to lesser foreigners coming.

Edited May 19, 2016 by east41st

[Showster]

That's where the "multigenerational" comes in.

 

I think some may buy 3 units side by side, or tri-key or whatever.

 

Parents 1 unit, son plus wife 1 unit, daughter and son-in-law 1 unit.

 

A lot of room to navigate.

 

i think they will be buying 2 units each lah 

 

[Wyfitms]

That's where the "multigenerational" comes in.

 

I think some may buy 3 units side by side, or tri-key or whatever.

 

Parents 1 unit, son plus wife 1 unit, daughter and son-in-law 1 unit.

 

A lot of room to navigate.

 

well, i sure hope they enbloc, i am actually quite surprised that QJ is prepared to buy such a large site on its own.

 

my friend has been hoping for enbloc the longest time, so he can take the money and retire.

[Duckduck]

http://www.straitstimes.com/business/property/shunfu-ville-set-to-heat-up-collective-sale-market

Shunfu Ville set to heat up collective sale market

May 19, 2016

 

The collective sale committee earlier this month unanimously voted to accept a letter of intent from the interested purchaser, which is understood to be

Qingjian Realty.

 

 

garmen priest investigate where this PRC coy gets its $ from

Edited May 19, 2016 by Duckduck

[Showster]

Is it his primary home?

 

My friend was living with his parents-in-law and sister-in-law in such a place. I think they will be looking for alternative place to stay.

 

well, i sure hope they enbloc, i am actually quite surprised that QJ is prepared to buy such a large site on its own.

 

my friend has been hoping for enbloc the longest time, so he can take the money and retire.

 

[Showster]

https://en.wikipedia.org/wiki/Qingjian_realty

 

http://www.btinvest.com.sg/property/local/china-player-on-singapore-soil/

 

It's not hard to imagine if you read this as well:

 

http://www.straitstimes.com/business/property/china-home-prices-rise-62-in-april-marking-broadening-recovery-in-property-market

 

Singapore is too small and too connected to be unaffected by and isolated from global markets. It's a matter of time when the price fall due to taxes meets international benchmarks for global prices.

 

garmen priest investigate where this PRC coy gets its $ from

 

[Matrix0405]

Another Tale of 2 developments

 

Tonight, I briefly introduce to you two very expensive but iconic developments, by M+S, a 60/40% joint venture between Malaysia's Khazanah Nasional Berhad and Singapore's Temasek Holdings.

 

Duo Residences, is a part of a $4 billion integrated development situated at Ophir-Rochor area. Marina One Residences, a part of a $7 billion integrated development is situated at Marina South area).  Both developments sit on prime land. In my earlier post, I mentioned about the success sell-out of Duo Residences.  Now compare this to Marina One Residences.

 

Marina One Residences comprises of 1,042 units, of which 401 units were launched and 367 were sold, representing a 91.5% sold record.   Again (like Duo Residences), most of the transactions took place within a very short window period, in Oct to Nov 2014.  The transacted prices for Marina One Residences are even higher than Duo Residences, at an average of $2,332 psf, given  that the development is right in the heart of downtown area, re-defining the Singapore's city skyline.

 

Both land sites of these two developments are 99-year leasehold starting from 2011. Now what happens when the land tenure runs out a century later, does the land go back to Singapore government, or to Malaysia's?  Your guess is as good as mine.

 

Goes back to SIN after lease expire. 99 yr lease land FOC to Msia, joint developers SIN-MAL to built the condo. Traded for TgPg railway. They wanted a plot of land near Istena, but gov 'cannot' find one, so settle for these 2 super prime, super nice plots, nice like Badawi and Jib; with Mad, he would rather leave this rail there to rot, just to irritate Sin.

[Wyfitms]

garmen priest investigate where this PRC coy gets its $ from

 

what does it matter? Need to stimulate economy ok 

[Wyfitms]

Is it his primary home?

 

My friend was living with his parents-in-law and sister-in-law in such a place. I think they will be looking for alternative place to stay.

 

i think my friend's plan was to buy a smaller resale flat, maybe 4rm or 3rm in the bishan area and keep the rest of the proceeds for retirement (he is already of retirement age but still working on part time basis for public sector)

[Mercury1]

garmen priest investigate where this PRC coy gets its $ from

Heh if govt was so concerned half the funds parked in sgp would be suspect

[tenyawph]

Today, let's take a snapshot of the pulse of the property market.

 

 

Here, we read the news (dtd 1 Apr 2016) of a forecast of two more years of downturn for the property market by UBS analyst Wen-Ching Lee.

 

1) http://sbr.com.sg/residential-property/in-focus/property-prices-slide-another-two-years-ubs

 

About a month later, we read the news (dtd 6 May 2016) that there is an uptick in the Core Central Region (CCR) private property price index.

 

2) http://sbr.com.sg/residential-property/in-focus/singapores-property-market-headed-faster-expected-recovery

 

 

Two seemingly conflicting reports.  What is the truth, and what is really happening on the ground?

 

First, we examine the statistics (presented in a table form) from the URA website, which reflects the facts as they are:

Negative % change over the previous quarter is highlighted in Yellow, while positive % change over the previous quarter is highlighted in Blue.

 

From the table, we can see that % change over the previous quarter shows that private property price index (all residential) went south from 3rd quarter of 2013 onwards, which should not surprise our bros in this thread, as it happened after the most punitive cooling measure was introduced on 28 Jun 2013 - Total Debt Servicing Ratio (TDSR) framework for all property loans.

 

Fact 1: What is interesting is that the decline for non-landed properties in CCR started 2 quarters before that - in 1st Qtr 2013. 

 

Fast forward to 1 Qtr 2016.  We see that the % change over the previous quarter for the non-landed properties in CCR is blue now, indicating an uptick.  This bears out what is stated  in the 2) news.

 

Fact 2: The non-landed properties in CCR has started to rise in prices.

 

The rest of the % change over the previous quarter for all residential, landed property, and non-land property (RCR and OCR) are still negative.  This indicates that the broader market is still in decline.

 

 

So what do we make of all this?

 

If I may make an analogy using the stock market, the properties in CCR are the blue chips in the stock market.  They are the first to do down in a stock market decline (Fact 1), and conversely, are also the first to pick up in a stock market upturn (Fact 2).  This is exactly what is happening to our local property market.  The blue chips' price movement is a leading indicator of the overall stock market's movement 1 to 2 quarters later.

 

Does this mean that we can conclusively say that the property market is starting to turn around? 

 

Unfortunately, we have an effect called the dead-cat bounce in the stock market.  Essentially what it means is that the stock market appears to revive in the short term, only to enter into a second phase of decline.  Is the property market having a false start?

 

 

Or has the ground turned sweeter?

CCR. We know for a fact that the recent sales for OUE Twin Peaks and the Cairnhill Nine have been very encouraging, to say the least.  It indicates that there is a pent-up demand, and units will start moving when the location, prices (and conditions) are right.

 

RCR.  Sturdee Residences is in District 8, and if its recent success in sales (achieving an average of $1,608 psf) can be used as an indication for the demand of the properties in the OCR, then the next quarterly release of the private property index should reflect an indication of a turn-around as well.

 

OCR.  Stars of Kovan.  This development, to be priced between an average of $1,550 to $1,600, caused a stir ( or should I say an uproar?) from some bros here, primarily because it is priced well above the completed neighbouring developments re-selling at an average of $1,100 psf, and its average price is even higher than the next door freehold under construction development, The Tembusu, selling at an average of $1,492 psf. 

 

One sure way to filter out all the noises (possibly giving false indications) is to take a look at the offer sale prices of existing property units that are still unsold.  Are developers revising their prices upwards, holding them steady or dropping them?  We call this "SHOW HAND" time.

 

So far, it has been the last two. 

 

Edited May 19, 2016 by tenyawph

[Newbie26]

Would think that statistics on unsold and new launches while useful indicators cannot fully capture the state of property market, and hence it is difficult to predict at this point whether it has turned the corner.

 

This is because, the current property market is not in his "natural" state.

It is artificiailly controlled by the 8 CMs. 

Sudden removal of any of the CMs would change the dynamics

 

The so called "pent up" demand is also artificial bec of the CMs. 

The real pent up demand cannot be accurately determined with the CMs still on

 

The last, of course are external factors, the economy and interest rates

 

Despite the gloom painted by many in the past year, the market has been surprisingly resilient.

Have we seen the worst? 

 

Its anyone's guess in this "artificial" market modulated by voluntary measures and potential headwinds which have not fully materialised yet. 

 

 

Today, let's take a snapshot of the pulse of the property market.

 

 

Here, we read the news (dtd 1 Apr 2016) of a forecast of two more years of downturn for the property market by UBS analyst Wen-Ching Lee.

 

1) http://sbr.com.sg/residential-property/in-focus/property-prices-slide-another-two-years-ubs

 

About a month later, we read the news (dtd 6 May 2016) that there is an uptick in the Core Central Region (CCR) private property price index.

 

2) http://sbr.com.sg/residential-property/in-focus/singapores-property-market-headed-faster-expected-recovery

 

 

Two seemingly conflicting reports.  What is the truth, and what is really happening on the ground?

 

First, we examine the statistics (presented in a table form) from the URA website, which reflects the facts as they are:

Price Trends from 2013 to 2016.jpg

Negative % change over the previous quarter is highlighted in Yellow, while positive % change over the previous quarter is highlighted in Blue.

 

From the table, we can see that % change over the previous quarter shows that private property price index (all residential) went south from 3rd quarter of 2013 onwards, which should not surprise our bros in this thread, as it happened after the most punitive cooling measure was introduced on 28 Jun 2013 - Total Debt Servicing Ratio (TDSR) framework for all property loans.

 

Fact 1: What is interesting is that the decline for non-landed properties in CCR started 2 quarters before that - in 1st Qtr 2013. 

 

Fast forward to 1 Qtr 2016.  We see that the % change over the previous quarter for the non-landed properties in CCR is blue now, indicating an uptick.  This bears out what is stated  in the 2) news.

 

Fact 2: The non-landed properties in CCR has started to rise in prices.

 

The rest of the % change over the previous quarter for all residential, landed property, and non-land property (RCR and OCR) are still negative.  This indicates that the broader market is still in decline.

 

 

So what do we make of all this?

 

If I may make an analogy using the stock market, the properties in CCR are the blue chips in the stock market.  They are the first to do down in a stock market decline (Fact 1), and conversely, are also the first to pick up in a stock market upturn (Fact 2).  This is exactly what is happening to our local property market.  The blue chips' price movement is a leading indicator of the overall stock market's movement 1 to 2 quarters later.

 

Does this mean that we can conclusively say that the property market is starting to turn around? 

 

Unfortunately, we have an effect called the dead-cat bounce in the stock market.  Essentially what it means is that the stock market appears to revive in the short term, only to enter into a second phase of decline.  Is the property market having a false start?

 

 

Or has the ground turned sweeter?

CCR. We know for a fact that the recent sales for OUE Twin Peaks and the Cairnhill Nine have been very encouraging, to say the least.  It indicates that there is a pent-up demand, and units will start moving when the location, prices (and conditions) are right.

 

RCR.  Sturdee Residences is in District 8, and if its recent success in sales (achieving an average of $1,608 psf) can be used as an indication for the demand of the properties in the OCR, then the next quarterly release of the private property index should reflect an indication of a turn-around as well.

 

OCR.  Stars of Kovan.  This development, to be priced between an average of $1,550 to $1,600, caused a stir ( or should I say an uproar?) from some bros here, primarily because it is priced well above the completed neighbouring developments re-selling at an average of $1,100 psf, and its average price is even higher than the next door freehold under construction development, The Tembusu, selling at an average of $1,492 psf. 

 

One sure way to filter out all the noises (possibly giving false indications) is to take a look at the offer sale prices of existing property units that are still unsold.  Are developers revising their prices upwards, holding them steady or dropping them?  We call this "SHOW HAND" time.

 

So far, it has been the last two. 

 

[Duckduck]

Would think that statistics on unsold and new launches while useful indicators cannot fully capture the state of property market, and hence it is difficult to predict at this point whether it has turned the corner.

 

This is because, the current property market is not in his "natural" state.

 

a market is determined by a ton of factors, so theres no natural or unnatural IMO.

 

Wld u consider opening the population floodgates from 2004-2010 natural or unnatural?

 

D current market is what it is, a dead n stale POS which probably wont go anywhere as long as p8p remains in power. I wont go into detail how this will affect overall economy as our current GDP growth rate is self explanatory

Edited May 19, 2016 by Duckduck

[Lightbringer]

We are listed as one of the highest public debt country in the world. There is a danger of trigger down effects on our currency in longer term. Hence, this may affect property value and increase of repayment of interest. So far rating agencies still put us with high hopes. To me, it is something to concern about for longer term. 

 

Public debt as percentage of GDP: 97.77%

 

http://www.msn.com/en-sg/money/finance/the-20-countries-with-the-most-public-debt/ss-BBsYuLl?ocid=mailsignoutmd#image=2

 

Do you know what Singapore's public debt is made up of?

[Sabian]

We are listed as one of the highest public debt country in the world. There is a danger of trigger down effects on our currency in longer term. Hence, this may affect property value and increase of repayment of interest. So far rating agencies still put us with high hopes. To me, it is something to concern about for longer term.

 

Public debt as percentage of GDP: 97.77%

 

http://www.msn.com/en-sg/money/finance/the-20-countries-with-the-most-public-debt/ss-BBsYuLl?ocid=mailsignoutmd#image=2

Don't talk cock lah. See the words debt+public only assume negative.

 

Our debt is not borrowed money to finance govt expenditure...

 

Simi trigger down, simi increase repayment of interest...ksmlj?

[Newbie26]

Fully agree that there are many factors that can affect ppty market

The word "artificial" was meant to highlight the point that local market is heavily suppressed by 8 cooling measures and very different from the more "natural" supply demand, affordablity factors etc

Its "artificial" bec these measures are voluntarily controlled, can be reversed overnight that can impact the market almost immediately and can throw any predictions of prices out of the window

These "artificial" measures interfer with property cycles that make any analyses difficult

Maybe "artificial" is not the best word

For argument sake, if these measures are known to be permanent,, then "natural" supply demand and other factors will run their course

 

a market is determined by a ton of factors, so theres no natural or unnatural IMO.

 

Wld u consider opening the population floodgates from 2004-2010 natural or unnatural?

 

D current market is what it is, a dead n stale POS which probably wont go anywhere as long as p8p remains in power. I wont go into detail how this will affect overall economy as our current GDP growth rate is self explanatory

 

[Throttle2]

a market is determined by a ton of factors, so theres no natural or unnatural IMO.

 

Wld u consider opening the population floodgates from 2004-2010 natural or unnatural?

 

D current market is what it is, a dead n stale POS which probably wont go anywhere as long as p8p remains in power. I wont go into detail how this will affect overall economy as our current GDP growth rate is self explanatory

 

[Voodooman]

a market is determined by a ton of factors, so theres no natural or unnatural IMO.

 

Wld u consider opening the population floodgates from 2004-2010 natural or unnatural?

 

D current market is what it is, a dead n stale POS which probably wont go anywhere as long as p8p remains in power. I wont go into detail how this will affect overall economy as our current GDP growth rate is self explanatory

So is QE and current low interest rate natural or unnatural?