Private property prices... Up or Down?

[Wt_know]

no leh ... just now i tried to put "this" into a matchbox ...

fit nicely with dam pok extra space nia ... sounds about right

 

Edited August 19, 2016 by Wt_know

[Ktglfc]

The government introduced cooling measures (CM), including ABSD, to prevent the runaway prices of private properties.  These CM dampen demand and cause a healthy price correction from the peak of prices in 2013.  

 

It looks like Singapore is heading for a recession in later 2016 / early 2017.  This will cause a drop in demand, and the private property market might collapse i.e. undergoes a major price correction - this is not good, due to possible bank loans default.  The government will then remove the CM, to stimulate demand.  The removal of CM is not meant to improve the economy, but to prevent a major price correction of the private market from happening.

 

For those of us who are waiting at the sidelines to buy private properties at reasonable prices, I have been recommending all this while to build a 'war-chest', so that when there are possible bargains to be had, you are ready to do so. 

 

 

Not only having a money chest around, but also have to go shop around ... see see look look....

Go visit the landed properties or condos around Singapore

And maybe also go attend the auctions at Amara Hotel to see the distress sales ...

[Victor68]

Every country faces the same problem but ours is bigger since our country is small. Cooling Measure was introduced because property gets too hot and if they don't do anything, the people affected will do something. Although it somewhat halt the increase, the problem is still there.

 

I am no expert but I feel there are few things the government need to do.

 

1) Don't treat HDB as an investment tool. The only reason to have HDB is to ensure citizens will have shelter over their heads. You can buy and sell only to citizen and nothing else. If got money, invest in private and give up your HDB for those who need it more.

 

2) Private properties are for those with more money and wishes to do some investments. Like someone mentioned here, the rich has advantage. Rich always have advantage anywhere. So we need to ensure we also take care of citizens that have such aspirations and prevent a situation we are chased out of our own country.

 

Zone areas where non citizens can purchase or even set the limit in percentage in each development they are allowed to purchase. By citizen, I would exclude PR.

 

The more the government plays the role of a developer, the worse will be the situation. With vested interest, policies will be lopsided and kills off investment.

 

We need trades and people to come and invest. I am not sure how long we could hold. By forcing down property prices, we are also chasing away investors. Let the rich play with their properties as long as they stayed within the controlled limit.

 

My 2-cent.

 

 

[Mercs]

http://business.asiaone.com/property/news/oue-buys-2-land-parcels-nassim-road-566m

OUE buys 2 land parcels in Nassim Road for $56.6m

Aug 19, 2016

[Mercs]

Thats why people always say

 

The Rich always get Richer Lor

 

For most of us 9 miilion means we have to be reincarnated 9 times to even smell this amount at a distance

 

https://sg.finance.yahoo.com/news/singapore-billionaires-amassed-wealth-040338057.html

How Singapore’s Billionaires Amassed Their Wealth

Aug 18, 2016

 

How Did They Do It?

 

The pace at which family fortunes were able to outgrow earning levels of self-made entrepreneurs in Singapore is an oddity, with only two entries, both from the same company, making it to the list in the global rankings. Another anomaly is that the real estate sector contributes four entries in Singapore while on the global stage, innovation and craft are more highly valued with the real estate sector not represented at all in the top 10 richest. This could be down to the fact that the rich in Singapore have traditionally kept their money in real estate. Over the years, this has not only helped preserve its value but also exponentially grew it.

 

These factors could be down to the fact that property prices in Singapore have risen at astounding levels compared to other regions in the recent decades, enabling both family fortunes and established businesses within the sector to thrive beyond normal levels associated with delivering value. A threat to mirroring that the rich did traditionally, the Singapore government has taken a stance, via policy shifts, to limit residential property prices while global economic forces continue to depress commercial and industrial property prices. Despite this, companies in the sector remain in good stead to weather the storm and they seem unlikely to buckle to selling pressure. For now, their places in the top 10 remain resilient. Further shifts in government policies will be required to place more value on innovation and entrepreneurship rather than real estate ownership.

[Wt_know]

hdb no $1m no sell ...

upgrade EC ... pay toyota get lexus ... hui ge says one

everyone huat ah!

Edited August 19, 2016 by Wt_know

[Mercs]

hdb no $1m no sell ...

upgrade EC ... pay toyota get lexus ... hui ge says one

everyone huat ah!

Would you pay 1.1 mil for this view?

 

http://business.asiaone.com/property/news/boon-keng-dbss-flat-fetched-11-million-most-expensive-sold-year

Boon Keng DBSS flat that fetched $1.1 million is most expensive sold this year

 

This is the view that fetched $1.1 million.

Edited August 19, 2016 by Mercs

[Mercs]

But this got my attention, property agents make good money wor

 

http://www.srx.com.sg/singapore-property-news/22782/at-just-28-property-agent-has-just-transacted-a-record-breaking-11m-dbss-deal

At just 28, Property agent has just transacted a record-breaking $1.1m DBSS deal

19 Aug 2016

 

"Not even 30, Mr Kuah has already earned a median MONTHLY gross commission of $119,873."

[Wt_know]

compare to MCF resident million dollar table property agent ... sup sup water la

[Pinobii]

But this got my attention, property agents make good money wor

 

http://www.srx.com.sg/singapore-property-news/22782/at-just-28-property-agent-has-just-transacted-a-record-breaking-11m-dbss-deal

At just 28, Property agent has just transacted a record-breaking $1.1m DBSS deal

19 Aug 2016

 

"Not even 30, Mr Kuah has already earned a median MONTHLY gross commission of $119,873."

Thats pretty attractive

[Wind30]

Every country faces the same problem but ours is bigger since our country is small. Cooling Measure was introduced because property gets too hot and if they don't do anything, the people affected will do something. Although it somewhat halt the increase, the problem is still there.

 

I am no expert but I feel there are few things the government need to do.

 

1) Don't treat HDB as an investment tool. The only reason to have HDB is to ensure citizens will have shelter over their heads. You can buy and sell only to citizen and nothing else. If got money, invest in private and give up your HDB for those who need it more.

 

2) Private properties are for those with more money and wishes to do some investments. Like someone mentioned here, the rich has advantage. Rich always have advantage anywhere. So we need to ensure we also take care of citizens that have such aspirations and prevent a situation we are chased out of our own country.

 

Zone areas where non citizens can purchase or even set the limit in percentage in each development they are allowed to purchase. By citizen, I would exclude PR.

 

The more the government plays the role of a developer, the worse will be the situation. With vested interest, policies will be lopsided and kills off investment.

 

We need trades and people to come and invest. I am not sure how long we could hold. By forcing down property prices, we are also chasing away investors. Let the rich play with their properties as long as they stayed within the controlled limit.

 

My 2-cent.

 

I am sure the 99 999 hdb owners will disagree with you. Imagine the government took this path 20 years ago. Family A who bought a HDB 20 years ago will regret it bitterly vs family B for stretched a little and got a private apartment. Basically, it makes it impossible for Family A to upgrade to a condo....

[Victor68]

I am sure the 99 999 hdb owners will disagree with you. Imagine the government took this path 20 years ago. Family A who bought a HDB 20 years ago will regret it bitterly vs family B for stretched a little and got a private apartment. Basically, it makes it impossible for Family A to upgrade to a condo....

 

Ask yourself, is the current HDB inflation good for the citizens and are they benefiting from it? Think of the majority that are not upgrading to condo.

 

Of course what was done cannot now be undone. Prices of HDB has to maintain or adjust downward moderately. Keep it basic and affordable. You will still be able to sell but not at kind of profit seen previously. You can sell and upgrade to the various types of HDB. Isn't the idea of HDB is to provide an affordable roof over your head?

 

I bought my 4 room flat at $65K in 1988. Today you pay $300K, so this generation people needs to work longer to pay this mortgage. Just imagine your HDB is now $1 m and not $300K when you first bought it.  Who is buying from you for that $1m? The generation after you of course. When it comes to your children, aren't they paying $1m?  So how long does your child needs to pay for that $1m? Likely, you will help out using your balance of the $1m. So, it is your own artificial inflation that cause all these. That $1m would be useful if your whole family cash out and migrate.

 

[Wind30]

Ask yourself, is the current HDB inflation good for the citizens and are they benefiting from it? Think of the majority that are not upgrading to condo.

 

Of course what was done cannot now be undone. Prices of HDB has to maintain or adjust downward moderately. Keep it basic and affordable. You will still be able to sell but not at kind of profit seen previously. You can sell and upgrade to the various types of HDB. Isn't the idea of HDB is to provide an affordable roof over your head?

 

I bought my 4 room flat at $65K in 1988. Today you pay $300K, so this generation people needs to work longer to pay this mortgage. Just imagine your HDB is now $1 m and not $300K when you first bought it.  Who is buying from you for that $1m? The generation after you of course. When it comes to your children, aren't they paying $1m?  So how long does your child needs to pay for that $1m? Likely, you will help out using your balance of the $1m. So, it is your own artificial inflation that cause all these. That $1m would be useful if your whole family cash out and migrate.

 

 

I agree that HDB prices needs to be kept affordable. I think the government sees that. They already taken the drastic step to make the new HDB price decouple from private property price. Previously, new HDB price is pegged at the private prices making the HDB spike too high.

 

BUT that is not the only thing they need to do. Ultimately, they cannot allow the private price to be too different from HDB else you have a stratified society with the HDB owners never being able to upgrade. That is where the CM comes in. Unpegging the HDB gives the government some breathing room and time to rein in the private property prices.

 

Its all about interest rates. When interest rates is low, people are willing to live with low rental yields and borrow money to buy house. Since we are not trying to control our interest rates, CM is a good measure. 

 

The demand is based on two things only I think, yield and capital appreciation. If people think there is still a lot of upside, they will buy even if yield is low or negative. Yield is crap now as interest rates cannot fall much further. Personally, I think there is not much capital appreciation too.

Edited August 19, 2016 by Wind30

[Ktglfc]

Would you pay 1.1 mil for this view?

 

http://business.asiaone.com/property/news/boon-keng-dbss-flat-fetched-11-million-most-expensive-sold-year

Boon Keng DBSS flat that fetched $1.1 million is most expensive sold this year

 

This is the view that fetched $1.1 million.

 

 

Nice view ..... but to me, seaview would be nicer :)

 

Anyway, after a hard day work, I seldom go to balcony leh ... can't wait to touch sofa to watch TV to relax rather than viewing out at the balcony

And more importantly, too high a price to pay for HDB ...

[Showster]

Ask yourself, is the current HDB inflation good for the citizens and are they benefiting from it? Think of the majority that are not upgrading to condo.

 

Of course what was done cannot now be undone. Prices of HDB has to maintain or adjust downward moderately. Keep it basic and affordable. You will still be able to sell but not at kind of profit seen previously. You can sell and upgrade to the various types of HDB. Isn't the idea of HDB is to provide an affordable roof over your head?

 

I bought my 4 room flat at $65K in 1988. Today you pay $300K, so this generation people needs to work longer to pay this mortgage. Just imagine your HDB is now $1 m and not $300K when you first bought it. Who is buying from you for that $1m? The generation after you of course. When it comes to your children, aren't they paying $1m? So how long does your child needs to pay for that $1m? Likely, you will help out using your balance of the $1m. So, it is your own artificial inflation that cause all these. That $1m would be useful if your whole family cash out and migrate.

 

One century old solution is for starting and average pays go up in tandem. Many people focus on how current prices are still 50% higher than 2009 levels, or maybe 30% higher than 2008 levels, but ignore how starting and average pays have gone up by more than those levels. And then there is the issue of affluent foreigners earning more and looking for avenues to park cash.

 

If prices continue to drop, a class of people can immediately stop work. That also has long term repercussions on productivity.

[tenyawph]

 

Despite the introduction of the harshest cooling measures (ABSD and TDSR) a few years back, private property prices in CCR and RCR are finally showing signs of recovery and are climbing slowly back up.  Will it be a matter of time before prices in OCR follow suit?

 

If that is the case, then the current cooling measures are now no longer as effective as before.  What the government had hoped to see was further meaningful correction to the prices of the private property market before removing the cooling measures.   

 

To quote Mr Tharman Shanmugaratnam back in Oct 2014

"there is some distance to go in achieving a meaningful correction."

 

And to quote Mr Heng Swee Keat in Mar 2016

"it is premature to remove the cooling measures given the price level and current market conditions"

 

Now that the meaningful correction (which started from 2013) is showing signs of coming to a halt, and likely reversing in direction, will the unthinkable happen?  

 

That is, will the government impose further cooling measures down the road?  

 

I think the government will look at the statistics for 3rd Qtr PPI very closely.  If they make a preemptive move to introduce more cooling measures, I think the developers will throw the towel! (sorry, a bit exaggeration here..heheheee!)

 

If this happens (wishful thinking?!), then we can look forward to purchasing of private properties at reduced and reasonable prices soon!! 

 

 

 

[Showster]

In case I am misunderstood, fast rising prices are also not ideal as it creates anxiety and distraction from employment, and encourages speculation.

 

So the market is desirable exactly where it is. Replenish stocks and slowly sell at fixed profits. Finish replenish some more.

[Invigorated]

Price Trends 2013 to 2016.jpg

 

Despite the introduction of the harshest cooling measures (ABSD and TDSR) a few years back, private property prices in CCR and RCR are finally showing signs of recovery and are climbing slowly back up. Will it be a matter of time before prices in OCR follow suit?

 

If that is the case, then the current cooling measures are now no longer as effective as before. What the government had hoped to see was further meaningful correction to the prices of the private property market before removing the cooling measures.

 

To quote Mr Tharman Shanmugaratnam back in Oct 2014

"there is some distance to go in achieving a meaningful correction."

 

And to quote Mr Heng Swee Keat in Mar 2016

"it is premature to remove the cooling measures given the price level and current market conditions"

 

Now that the meaningful correction (which started from 2013) is showing signs of coming to a halt, and likely reversing in direction, will the unthinkable happen?

 

That is, will the government impose further cooling measures down the road?

 

I think the government will look at the statistics for 3rd Qtr PPI very closely. If they make a preemptive move to introduce more cooling measures, I think the developers will throw the towel! (sorry, a bit exaggeration here..heheheee!)

 

If this happens (wishful thinking?!), then we can look forward to purchasing of private properties at reduced and reasonable prices soon!!

Just to add a little from an interview they had with Lawrence wong last year. He clarified that any changes in measures do not depend only on prices indexes.

 

Quoted: The easing of the cooling measures will also depend on several other indicators, Mr Wong said.

 

“We watch the situation very carefully, not just price indicators but a whole range of indicators – the economic situation, the situation overseas, whether the Fed (US Federal Reserve) is going to increase interest rates by how much, when, and our own domestic situation,” he added. (End quote)

 

 

He has reiterated a few times that it's too early to unwind in order not to result in price hikes as he acknowledged the strong and surpressed demand.

 

It is also possible that measures in future will be relaxed in smaller ways, eg relaxed tdsr or slight cuts to absd, as we can infer from his speech:

 

"We don't have to adjust by unwinding everything, we could adjust by unwinding some parts of the cooling measures, particularly those that may be more cyclical in nature. But it's premature to say what exactly we will unwind, what will happen. I think for now, we are not planning to unwind any of the cooling measures and we should let it continue," he said.

 

Source: http://www.channelnewsasia.com/news/business/not-time-yet-to-ease/2196920.html