Private Property prices......still up or down? Part II

[Wind30]

As I explained earlier, with current razor thin yield in the property market I think a 1% increase in rates will be enough to make the rental yield totally unattractive. This is just Maths.

 

Not 2.5%

[Showster]

If inflation finally rears its ugly head together with the increased interest rates, prices will spike up in everything we need to pay for, including rent and property prices.

 

Speculators from the world over including ourselves will again try to park/loan more money in Singapore just in anticipation of price growth. In that scenario, nobody would care about the rent growth or yield%, but the rent is likely to grow as well.

 

http://www.tradingeconomics.com/singapore/inflation-cpi

 

Switch to 10 year view. You will find that property price growth tracks inflation rates very closely, coinciding well with the peaks and bottoms of our property cycles.

 

 

  On 3/16/2017 at 7:31 AM, Wind30 said:

As I explained earlier, with current razor thin yield in the property market I think a 1% increase in rates will be enough to make the rental yield totally unattractive. This is just Maths.

Not 2.5%

 

Edited March 16, 2017 by Showster

[LPPL]

http://www.propertyguru.com.sg/property-management-news/2017/3/148566/fitch-looser-property-curbs-wont-stop-price-falls

16 Mar 2017

Housing prices in Singapore are likely to continue falling even as the government may gradually ease the property cooling measures, said Fitch Ratings on Wednesday (15 March).

The ratings agency noted that Singapore’s efforts to curb property speculation in an environment of low global interest rates were effective.

Speculative purchases fell from 2009 as the government introduced stricter restrictions on mortgage lending while increasing stamp duties.

With this, house prices have fallen over the last three years, while housing loan growth has slowed since 2011.

However, the government’s “first modest move” to “reversing macro-prudential tightening” – which was introduced on 10 March – is unlikely to have a significant impact on the housing market.

“Macro-prudential settings are still tight, while high vacancy ratios, a slower pace of immigration, subdued economic conditions and a weakening labour market are all likely to continue weighing on prices,” noted Fitch.

In addition, local interest rates are expected to increase from their current low levels, while house prices are still expected to fall by another two to five percent in the next two years.

Nonetheless, Fitch said banks are well-positioned to withstand a sharper drop in property prices, partly as a result of macro-prudential tightening.

This is because “average loan-to-value ratios are low, loan-loss coverage is adequate, and capital and liquidity buffers are strong”.

“Households also have healthy balance sheets and well-diversified assets,” it added.

[Showster]

  On 3/16/2017 at 10:44 AM, LPPL said:

http://www.propertyguru.com.sg/property-management-news/2017/3/148566/fitch-looser-property-curbs-wont-stop-price-falls

16 Mar 2017

Housing prices in Singapore are likely to continue falling even as the government may gradually ease the property cooling measures, said Fitch Ratings on Wednesday (15 March).

The ratings agency noted that Singaporeâs efforts to curb property speculation in an environment of low global interest rates were effective.

Speculative purchases fell from 2009 as the government introduced stricter restrictions on mortgage lending while increasing stamp duties.

With this, house prices have fallen over the last three years, while housing loan growth has slowed since 2011.

However, the governmentâs âfirst modest moveâ to âreversing macro-prudential tighteningâ â which was introduced on 10 March â is unlikely to have a significant impact on the housing market.

âMacro-prudential settings are still tight, while high vacancy ratios, a slower pace of immigration, subdued economic conditions and a weakening labour market are all likely to continue weighing on prices,â noted Fitch.

In addition, local interest rates are expected to increase from their current low levels, while house prices are still expected to fall by another two to five percent in the next two years.

Nonetheless, Fitch said banks are well-positioned to withstand a sharper drop in property prices, partly as a result of macro-prudential tightening.

This is because âaverage loan-to-value ratios are low, loan-loss coverage is adequate, and capital and liquidity buffers are strongâ.

âHouseholds also have healthy balance sheets and well-diversified assets,â it added.

http://www.propertyguru.com.sg/property-management-news/2014/9/63241/home-prices-may-drop-20-by-2016-report

 

Home prices may drop 20% by 2016: report

Muneerah • September 10, 2014

 

Home prices may drop 20% by 2016: report

Home prices in Singapore could fall by 20 percent between 2014 and 2016 as economic restructuring, tighter population policies and property measures continue to weigh on the real estate market, according to a Bank of America Merrill Lynch (BOAML) report in the media.

 

“We believe the fate of the market will depend very much on the direction of policy, particularly on restructuring, immigration and foreign workers, as well as the timing of the relaxation of strict property measures,” wrote economist Chua Hak Bin in the report.

 

He noted overly tight population policies will limit the number of a younger foreign workforce, and affect property prices. Maintaining the cooling measures would also “imply a greater negative impact from rising mortgage rates and persistence of housing distortions”.

 

On the restructuring front, Chua believes Singapore’s move to a productivity-driven growth model, which is a long-term process, has produced mixed results. Notably, it has reduced the growth of Gross Domestic Product (GDP), while employment growth and total job creation is expected to moderate this year.

 

“We do not see the government reversing course, but a pause may be in order…as companies, particularly SMEs, are having trouble adjusting to the speed of the tightening,” said Chua.

 

Any potential relaxation of property cooling measures is likely to happen only in H2 2015, as cyclical property measures such as stamp duties and loan-to-value limits may be relaxed when US interest rates and Singapore mortgage rates start rising.

[Mercs]

  On 3/16/2017 at 3:00 AM, Showster said:

Likely real but the space computation may be different from expectations. 1+S unit for 1550 sqft?

 

 

From pics, should be loft unit, developer charging for double volume?

 

  On 3/16/2017 at 1:57 AM, Icedbs said:

Year on year for Feb had seen a 222% jump in private residential developer sales

 

 

You are right

 

http://www.propertyguru.com.sg/property-management-news/2017/3/148576/new-private-home-sales-up-155-8-in-feb

New private home sales up 155.8% in Feb

March 16, 2017

 

  Quote

Even with only one new project launch, the number of private residential units (excluding ECs) sold by developers rose 155.8 percent to 977 units in February 2017 from 382 in the previous month, according to data from the Urban Redevelopment Authority (URA).

 

On a yearly basis, private homes sales soared 222.4 percent from the 303 units sold in February 2016.

 

Sales of ECs also increased 78.8 percent to 329 units in February, despite the lack of new projects.

 

“There is a greater sense of confidence in both developers and buyers,”

 

“This tells us that with more positive sentiments, buyers are not just attracted by newly launched projects but also drawn to those launched previously, reflecting a more broad-based improvement in demand,”

 

“The recent easing of the Seller’s Stamp Duty and the Total Debt Servicing Ratio would be a favourable enhancement on a market that is already on a buying uptrend.”

[Mercs]

https://www.theedgeproperty.com.sg/content/ritz-carlton-residences-units-hit-3325-psf

Ritz-Carlton Residences units hit $3,325 psf

March 17, 2017

 

  Quote

Developer KOP Properties recently sold two adjacent three-bedroom units on the 10th floor of the 36-storey Ritz-Carlton Residences. The 2,831 sq ft units were sold for $9.41 million ($3,325 psf) each, according to caveats lodged on March 3. The buyer is believed to be a foreigner who plans to amalgamate the two units for his own use.

 

Another recent relaunch is CapitaLand’s high-end development Cairnhill Nine. It was relaunched at end-February. Of the 48 units available for sale, at least 10 units were snapped up in the first weekend alone, based on caveats lodged recently.

Most of the units sold were two-bedroom units. Prices achieved ranged from $2.47 million ($2,393 psf) for a 1,033 unit on the 11th floor to $2.8 million ($2,701 psf) for a similar- sized unit on the 14th floor.

 

Another development in the prime districts that saw a pickup in transactions in early March is the 106-unit Pollen & Bleu by Singapore Land. Units sold in the first week of March ranged from $1.77 million ($2,029 psf) for an 872 sq ft, two-bedroom loft to $2.59 million ($2,145 psf) for a 1,206 sq ft, three-bedroom unit, based on caveats lodged.

[Mercs]

http://www.businesstimes.com.sg/real-estate/developers-sales-in-feb-signal-pick-up-in-momentum-say-analysts

Developers' sales in Feb signal pick-up in momentum, say analysts

Mar 16, 2017

 

  Quote

The top selling project in February was The Clement Canopy by UOL Group and Singapore Land.

 

The 505-unit development in Clementi, the first project to be launched this year, moved 207 units at a median pricing of S$1,343 per square foot (psf).

 

Parc Riviera, located in West Coast Road, emerged runner-up in February, selling 200 units at a median S$1,281 psf.

 

There was also strong pick-up in sales in the Sol Acres EC project by MCL Land, which sold 82 units in February at a median S$782 psf, and at The Santorini by MCC Land, which moved 51 units at a median pricing of S$1,041 psf in February.

 

CEL Development said it sold another 23 units at 720-unit Grandeur Park Residences in Tanah Merah last weekend, following the news on the cooling measures. This takes its total sales this month to 462.

 

Qingjian Realty also moved nearly 170 of the total 497 units in EC project iNz Residence on booking day this month.

 

Since the start of this year, developers have continued to move units in delicensed projects. These are completed projects that have received Certificate of Statutory Completion and individual strata titles issued to buyers, and are hence not included in the monthly compilation of licensed developers' new home sales. PropNex data indicates that, in the first 71 days of this year, about 50 units at The Peak @ Cairnhill II and 30 units at OUE Twin Peaks were sold.

[Mercs]

http://www.businesstimes.com.sg/opinion/property-dont-get-too-excited

Property: Don't get too excited

March 11, 2017

 

  Quote

3. Why is this a big deal?

 

Easing the SSD will aid speculative activity in the property market, giving a fillip to developers launching new projects this year, and helping liquidity three years down the road.

 

Arguably, the signalling of the move matters more than the substance. It shows the government has no intention to kill the property market altogether.

 

Authorities might even try to be ahead of the curve, given how a rising interest rate environment might draw funds away from Singapore and dampen sentiment excessively.

 

4. Should anyone be worried? Excited, maybe?

 

Don't get too excited. Here's why.

 

First, plenty of cooling measures are still in place. Nothing has changed significantly.

 

Second, nobody wants prices to overheat. Remember what happened in 2011? The ruling People's Action Party got hammered in the general election. If prices rise too fast before the young feel secure enough to settle down and buy a property, they will be unhappy.

 

Don't forget the populist wave sweeping through the world. The average Singaporean couple might be able to afford an HDB flat, but they don't want condo prices to be out of reach.

 

Third, a still-uncertain economy will weigh on prices. Unemployment is rising. The rental market is in the doldrums. Will there be enough good jobs for everybody, even as the numbers of university graduates continue to go up?

 

Fourth, interest rates are also due to rise, putting a major dampener on property prices.

 

The probability of a March interest rate hike by the US Federal Reserve, as deemed by interest rate futures, has risen to 100 per cent this week. After the Fed meets next week, overnight rates could rise from the 0.5 to 0.75 per cent range to the 0.75 per cent to 1 per cent range.

 

5. What happens now?

 

To read the tea leaves on property prices, watch the pace of interest rate hikes in the US, which Singapore rates will track.

 

Interest rates are a key financial indicator determining the cost of borrowing, driving investment decisions made by corporates and individuals. Rates rising too fast will constrain property prices, cooling measures or no.

 

Fund flows matter. Watch longer-term interest rates. US 10-year Treasury bond yields rose past 2.6 per cent this week for the first time in 2017. Higher yields in the US, the most advanced economy in the world, will attract capital back there. All things equal, the US dollar will strengthen. Singapore is a relatively stable place for investors to park their money, but it could also be affected should funds flee Asia.

 

Watch incomes. If Singaporeans get decent pay rises this year and the next, then property prices will have room to rise.

 

Watch immigration policy. For now, nobody likes having too many foreigners around. But if we ever move back to our 6.9 million population target, property prices will have room to move up.

 

For now, the government might aim to unwind cooling measures just enough to prevent a sharp decline in prices.

 

Amid a soft - but not crashing - economy, its priority is to put longer-term measures in place to ensure the competitiveness of Singapore's workforce.

 

But having engineered a remarkable soft landing in Singapore's property market in a low interest rate environment, when cities such as Vancouver, Shenzhen and Hong Kong are struggling, surely our authorities have no incentive to spark an unsustainable boom in asset prices.

[Mercs]

https://www.theedgeproperty.com.sg/content/35-mil-profit-ardmore-park

3.5 mil profit at Ardmore Park

March 18, 2017

 

  Quote

On Feb 28, a 2,885 sq ft unit at Ardmore Park in prime District 10 was sold at a $3.5 million profit. The seller bought the unit from the developer at $5.4 million, or $1,876 psf, in August 1996 and sold it at $8.9 million, or $3,085 psf.

 

Based on the matching of URA caveat data, both units sold at Ardmore Park so far this year have resulted in profits. On Feb 9, a 2,885 sq ft unit was sold at a $4.6 million profit. The seller bought the unit at $4.9 million, or $1,699 psf, in September 2002 and sold it at $9.5 million, or $3,293 psf.

 

For private non-landed homes sold in the week of Feb 28 to March 7, the second-biggest profit of $1.1 million accrued to a 2,110 sq ft unit at Rivergate in prime District 9. The seller bought the unit at $2.9 million, or $1,380 psf, in a sub-sale in June 2009 and sold it at $4 million, or $1,896 psf, on March 6.

[Mercs]

Huat-ers and non huat-ers Feb 28 to Mar 7

 

[Showster]

You must have caught this news about condo ledges and balcony.

 

It's possible there may be new rulings regarding space computation since ST starts to focus on it.

 

http://www.straitstimes.com/singapore/condo-buyers-lose-cool-over-massive-air-con-ledges

 

My question is, what happens to property prices and property designs if MND decides to take balcony and aircon ledges out of the space consideration for property?

 

In HK, they display both attributes when they buy / sell / rent property, the internal space and also the external space.

 

There may also be an impact on future designs if these additional spaces are not considered as part of the GFA (i.e. no more GFA bonus).

Edited March 18, 2017 by Showster

[Mercs]

Revenue up ... transaction volume up ... agent numbers up

 

Huat ah!

 

http://news.asiaone.com/news/business/luxury-home-sales-boost-propnexs-2016-revenue

Luxury home sales boost PropNex's 2016 revenue

Mar 15, 2017

 

  Quote

It recorded a 21.5 per cent year on year jump in gross revenue to $278.9 million, thanks partly to better sales performance in the luxury residential segment.

 

Overall transaction volume surged 10.4 per cent last year to 46,229, from 41,875 in 2015.

 

"The main driving force last year was the high-end market penetration which had substantial growth for us. We were also actively involved in new launches last year and did well in the HDB resale segment."

 

Since stepping up its focus on the luxury homes segment at the end of 2015, PropNex has marketed projects such as Gramercy Park, V on Shenton, Leedon Residence and OUE Twin Peaks.

 

Last year, its agents sold more than 250 luxury units from new launches, up from about 80 in 2015.

 

Recently, it helped shift 40 out of 50 units sold at The Peak @ Cairnhill II in prime District 9.

 

PropNex has 5,710 agents in Singapore, up from the 5,464 as at Jan 1 last year.

[Mercs]

https://www.theedgeproperty.com.sg/content/shot-arm-market-sentiment

A shot in the arm for market sentiment

March 17, 2017

 

  Quote

“While the adjustments to the SSD and TDSR may not have a significant impact on the market, it is the signal that they are sending that is expected to have a positive impact,” says Ong Teck Hui, JLL national director of research. He adds that the policy relaxation is likely to be viewed as “the beginning of the unwinding of cooling measures”. And this could lead to more buyers coming back to the market.

 

On the flip side, with the expectation that more measures could be unwound, some buyers may adopt a wait-and-see attitude.

However, Ong reckons buyers perceive that the market is bottoming and are hopeful of a price recovery. “Transaction volume, which has been increasing in the last two years, is likely to pick up further and some upside to prices can be expected.”

 

Confidence has already returned

 

CBRE executive director Joseph Tan believes market confidence has already returned. “As long as the majority of the units are priced below $1.5 million — which is the affordability level of most people — and if the project is in a good location, with an MRT station at the doorstep, people will buy.”

 

Return of investors

 

Seasoned investors have started to re-enter the residential property market and have been making selective purchases since March last year. “Even foreign investors don’t mind paying the higher ABSD as they feel prices have fallen to an attractive level,” says Samuel Eyo, managing director of Singapore Christie’s International Real Estate.

 

One such buyer is a retired Singaporean businessman and avid property investor who declined to be named. He purchased two units at Amber Skye six months ago. Both are 1,335 sq ft, three-bedroom units. He paid $2.42 million ($1,813 psf) for a unit on the 11th floor and $2.49 million ($1,866 psf) for a unit on the 18th floor, according to two caveats lodged last Sept 19.

[Newbie26]

Wonder if seasoned investors in mcf have started reentering the market too 

ABSD still stiff. So it is still very much for the cash rich and first time buyers

 

Amber Skye in Katong is still very expensive. The studios and 2 roomers are all asking 2000-2300plus pfs

This is near orchard road pricing, it will be cheap if orchard starts at 3000pfs.

 

 

""Seasoned investors have started to re-enter the residential property market and have been making selective purchases since March last year. “Even foreign investors don’t mind paying the higher ABSD as they feel prices have fallen to an attractive level,” says Samuel Eyo, managing director of Singapore Christie’s International Real Estate.

One such buyer is a retired Singaporean businessman and avid property investor who declined to be named. He purchased two units at Amber Skye six months ago. Both are 1,335 sq ft, three-bedroom units. He paid $2.42 million ($1,813 psf) for a unit on the 11th floor and $2.49 million ($1,866 psf) for a unit on the 18th floor, according to two caveats lodged last Sept 19.""

 

 

  On 3/18/2017 at 11:30 PM, Mercs said:

https://www.theedgeproperty.com.sg/content/shot-arm-market-sentiment
A shot in the arm for market sentiment
March 17, 2017
 

 

[Wyfitms]

  On 3/18/2017 at 11:30 PM, Mercs said:

https://www.theedgeproperty.com.sg/content/shot-arm-market-sentiment

A shot in the arm for market sentiment

March 17, 2017

 

 

Lol this Teck Hui ah...

Relaxing of measures may entice more ppl to buy

And on the flip side more will wait at sidelines for measures to be lifted

Really cover rear gao gao

[Showster]

Just find it amusing that the discussion is always about buy, or not to buy. It's either up or no up.

 

If the discussion is always about buy or not to buy, the only thing we disagree on is timing of when to buy.

 

Nobody has been engaging to talk about whether it is the time to sell. If it is still going down, surely this is the time to sell?

[Icedbs]

  On 3/18/2017 at 8:29 AM, Showster said:

You must have caught this news about condo ledges and balcony.

 

It's possible there may be new rulings regarding space computation since ST starts to focus on it.

 

http://www.straitstimes.com/singapore/condo-buyers-lose-cool-over-massive-air-con-ledges

 

My question is, what happens to property prices and property designs if MND decides to take balcony and aircon ledges out of the space consideration for property?

 

In HK, they display both attributes when they buy / sell / rent property, the internal space and also the external space.

 

There may also be an impact on future designs if these additional spaces are not considered as part of the GFA (i.e. no more GFA bonus).

 

I believe that in 2012, I made some post in this forum about this issue.

[Showster]

  On 3/19/2017 at 2:14 AM, Icedbs said:

I believe that in 2012, I made some post in this forum about this issue.

Sometimes there are issues that may be important to be addressed but there were more pressing issues to settle first.

 

I think authorities might finally be in the position to consider this.