ST Forum: Beware Of Property Cycles

[Vulcann]

Two words:

 

Caveat emptor...

 

From ST Forum:

 

http://www.straitstimes.com/STForum/Story/...ory_815411.html

 

Beware of property cycles

Published on Jun 27, 2012

 

IT WORRIES me that home sales in the suburban sector, in particular, are continuing their run-up even now ('Home hunters still in buying mood'; yesterday).

 

My concern is that the average working middle-class buyer is jumping into the market now after missing out on the bull run that has been going on since 2006, with a brief respite in 2008.

 

Many cannot afford the full cost of the properties and therefore go for new launches, where they pay only a small deposit. Many are not trained in financial investment and economics, and their late entry may put their finances in peril.

 

Being from the capital management industry, I wish to point out to these late investors that much institutional (smart) money has long left the real estate markets in Singapore and Asia.

 

The price indices of real estate in Seoul, Hong Kong, Beijing and Shanghai have peaked simultaneously.

 

International capital has flowed out of the Bric (Brazil, Russia, India and China) emerging markets since early this year, causing their currencies to fall almost 12 per cent on average.

 

Market risks have been increasing since the beginning of the euro credit crunch late last year.

 

I hope those who are buying properties for speculative investments or for their own use will consider these developments. They should understand that markets rise and fall regardless of how benign interest rate cycles seem to be.

 

To safeguard genuine home buyers, the Government should implement more measures limiting foreigners to buying only new high-rise properties from developers that can be resold only to Singaporeans.

 

A similar policy has enabled Australia to escape most of the property bubbles affecting much of the world.

 

If bubbles are absent, Singaporeans will be less tempted to buy reactively and follow the undesirably hard-to-reverse boom-bust cycles.

 

Ed Cheong

[Hephaestus]

don't spread fear... wait alot people cry hor

[Evillusion]

i lagi worry if they jump!

[Vulcann]

Folks really have to open their eyes wide wide before plunging in...

 

Just don't KPKB go around screaming for jing hu intervention when things goes haywire.

 

Edited June 26, 2012 by Vulcann

[SimonTan]

The writer is talking about worldwide trends and institution pulling out.

But he forgot who is in charge of Singapore.

The housing control is so tight, there is no chance in hell that housing will collapse anytime soon.

The song about needing more n more foreigners is being sang just about everyday.

As long as we remain as citizens with no where else to go.

The housing issues now is Insufficient to meet demand. Not what the writer claims about the danger of prices softening.

HDB can block up completed units to control the market demand and supply without worry.

 

If population got no where else to go n times of crisis, then no one will be selling their units.

 

Honestly speaking, all my colleagues are waiting for the prices to soften to get a extra units for rental or for their kids. There is ample demand waiting at the sideline to soak up when the down cycle comes.

 

Simgapore is very very stable.

Citizens buy houses to stay and for kids.

Not what the writer talk about speculative institutional funds, etc who are out to exploit the properties market.

It's totally different objectives.

 

 

Edited June 27, 2012 by SimonTan

[Chrispie]

with recently released land prices at such level, how low can psf be in future ?

 

I dont expect developers to sell at a loss. Neither will the banks which lend money to them allow them to sell at a loss.

[Tayspiderx]

Yup source expensive wat can end user say

[Yardo]

crash crash lor. Don't fret, I will buy.

[Ticklish8]

Wow you speak like a property agent...

 

Heard similar noise before the Asian Financial Crisis....

 

The facts is, economy, property, share prices ALL move in a cycle...

 

No such things as it won't collapse....

 

 

The writer is talking about worldwide trends and institution pulling out.

But he forgot who is in charge of Singapore.

The housing control is so tight, there is no chance in hell that housing will collapse anytime soon.

The song about needing more n more foreigners is being sang just about everyday.

As long as we remain as citizens with no where else to go.

The housing issues now is Insufficient to meet demand. Not what the writer claims about the danger of prices softening.

HDB can block up completed units to control the market demand and supply without worry.

 

If population got no where else to go n times of crisis, then no one will be selling their units.

 

Honestly speaking, all my colleagues are waiting for the prices to soften to get a extra units for rental or for their kids. There is ample demand waiting at the sideline to soak up when the down cycle comes.

 

Simgapore is very very stable.

Citizens buy houses to stay and for kids.

Not what the writer talk about speculative institutional funds, etc who are out to exploit the properties market.

It's totally different objectives.

 

[Civic6228]

This is a free world .... let the individual decide if he/she wants to buy or not ...... Why bother and be so kay poh for fark ?????

 

 

 

 

 

[Sp4wn]

Wow you speak like a property agent...

 

Heard similar noise before the Asian Financial Crisis....

 

The facts is, economy, property, share prices ALL move in a cycle...

 

No such things as it won't collapse....

 

actually, simon has a point. there's plenty of liquidity to snap up properties ... even some of my own tenants are calling me telling me they want to buy their own units ... look at the sale of bugis cube over the weekend ... it took all of saturday to sell 80% of the project ...

 

even if residential softens, most people are willing to jump in with a 5% price decrease ... personally - the project I'm eyeing .. if it falls 5-7%, I'm ready to pick up as well for my personal use ... it's just a waiting game and there should be a small correction since further cooling measures are anticipated ... (but i am biased here, as i'm looking for my own use as well ... haha ... to here's to hoping)

 

look at projects like Aalto in katong - the developer has half the bldg empty and refuses to sell unless targets are met, and the dev can afford to hold the price. most of the big developers are sitting on cash after all ...

 

 

 

 

[Soya]

with recently released land prices at such level, how low can psf be in future ?

 

I dont expect developers to sell at a loss. Neither will the banks which lend money to them allow them to sell at a loss.

 

 

Land cost has gone up significantly. It doesn't help that gahmen is continuing to launch sale sites at choice locations. Demand will chase supply. Construction costs has gone up quite a bit too as s'pore imports almost everything to do wif building. The 'new normal' breakeven price for mass-mkt, surburban condo is easily >$1k psf. Too much $$ has been invested in properties in the past few years. Gahmen can onli moderate residential price growth for political acceptance but that's simply artificially suppressing prices as money is now flowing into commercial and industrial instead. Yes, there may be a slight correction (healthy) but crash i dun think so if s'pore plays its cards right and dun scare foreign investment away. When that happens, even a $200k 5-rm hdb flat is deemed expensive to many as demonstrated not too long ago. As the saying goes, be careful of what you wish for.

[Hephaestus]

all the experts come in liao

[Hephaestus]

The Straits Times

www.straitstimes.com

Published on Jun 20, 2012

http://www.straitstimes.com/print/Breaking...ory_813010.html

 

Buyers return 150 private homes in May

By ESTHER TEO PROPERTY REPORTER

 

Private home buyers returned 150 units to developers last month at projects such as Sky Habitat, The Tampines Trilliant and Hillsta - the highest number in at least five years.

 

These units, bought in April, made up 5.7 per cent of the more than 2,600 non-landed homes, including executive condominiums (ECs), sold that month, analysis by property research firm Square Foot Research shows.

 

 

[Sp4wn]

The Straits Times

www.straitstimes.com

Published on Jun 20, 2012

http://www.straitstimes.com/print/Breaking...ory_813010.html

 

Buyers return 150 private homes in May

By ESTHER TEO PROPERTY REPORTER

 

Private home buyers returned 150 units to developers last month at projects such as Sky Habitat, The Tampines Trilliant and Hillsta - the highest number in at least five years.

 

These units, bought in April, made up 5.7 per cent of the more than 2,600 non-landed homes, including executive condominiums (ECs), sold that month, analysis by property research firm Square Foot Research shows.

 

food for though then - i did a search of all residential transactions (and note, these are only with caveats lodged - some people never bother lodging caveats or wait till the last minute)

 

Search Results: 2987 record(s) retrieved

Contract Date : MAY 2012 - MAY 2012

 

slightly less than 5% returned their units.

 

(edit: woops, did a search including landed. excluding landed - 2708 units .. so number jumps to about 5.24%)

Edited June 27, 2012 by Sp4wn

[Jpcc]

If the policies didn't pan out well, we could be like HK in 1998 - 2003 and we don't have a hinterland to fall back on..

HK has a higher gini coefficient and experienced deflation, negative equity during those time, until mainland china economic growth help HK via closer economic integration/policies.

Of course, HK was less diversified in its industries, focusing mainly on financial services and real estate.

 

The following is food for thought.

 

 

 

[Yoongf]

Fully agree with you.

Recently went to Sentosa Cove and observed the occupancy rate there.

Writer seems to be talking about the situation there and expolating it to the rest of Sg.

 

The writer is talking about worldwide trends and institution pulling out.

But he forgot who is in charge of Singapore.

The housing control is so tight, there is no chance in hell that housing will collapse anytime soon.

The song about needing more n more foreigners is being sang just about everyday.

As long as we remain as citizens with no where else to go.

The housing issues now is Insufficient to meet demand. Not what the writer claims about the danger of prices softening.

HDB can block up completed units to control the market demand and supply without worry.

 

If population got no where else to go n times of crisis, then no one will be selling their units.

 

Honestly speaking, all my colleagues are waiting for the prices to soften to get a extra units for rental or for their kids. There is ample demand waiting at the sideline to soak up when the down cycle comes.

 

Simgapore is very very stable.

Citizens buy houses to stay and for kids.

Not what the writer talk about speculative institutional funds, etc who are out to exploit the properties market.

It's totally different objectives.

 

[Jrage]

Foreign investment will pour in soon.. after SG's bank gets their AAa rating.

 

the 10% stamp fee is not going to deter the foreign investment, given that sg's policy to deal with inflation is by strenghtening SGD.

 

e.g. EURis at 1.60SGD now, if SGD rose and EUR continue drop to 1.4SGD . Effectively, that will reduce the effect of the 10% stamp fee.

Also given that high inflation rate in sg and relative healthy employment mkt, chances after minusing the 10% and ABSD, foreign investor still can make a neat profit or preserved their wealth, amist the crumbling US/EU mkt.