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

RadX

By RadX,
in Property Buzz

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Wt_know

Wt_know

Supersonic
(edited)

last time $800psf people shout cheap liao

then creep up to $1000psf as the new cheap

now $1200 consider cheap liao ... mai hiam la

coming soon is $1400psf ... [sweatdrop]

i am talking about mass market ulu condo hor

Edited by Wt_know
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Hypersonic

Huat ah!

 

[:p]

 

https://www.propertyinvestsg.com/3-highlights-singapore-property-wealth-report/

3 highlights about Singapore property from the wealth report

Nov 16, 2017

 

Singapore is a city that matters to the wealthy

 

The City Wealth Index uses four measures to identify the cities that matter to the wealthy

 

Current wealth – the current population of UHNWIs

Investment – the total amount of USD of private investment in proeprty during 2016, weighted in favour of those markets with a high proportion of cross-border inbound investment

Connectivity – the number of in-and-outbound first and business class flights in 2016

Future wealth – a forecast of each city’s UHNWI population in 2026, weighted in accordance with the findings of the Atittudes Survey.

Using the methodology, future wealth concentrations and investment firepower will be dominated by a tussle between Asian and North American Cities.

 

The third and fourth largest concentrations of wealth today, Hong Kong and San Francisco, are likely to be eclipsed by the rising fortunes of Singapore, Shanghai and Beijing.

 

These cities are expected to see their wealthy populations grow rapidly over the next decade.

 

 

Luxury residential market – Topping the pack

 

Presently, US$1m buys 43sqm of prime property in Singapore, less than 46sqm in Shanghai and 58sqm in Beijing.

 

On this measure, prices in Singapore are more expensive than these 2 key Chinese cities. That will be set to change over the next decade as China continues to post economic growth rates of more than 6% per year.

 

Compared to Monaco, Hong Kong and New York where US$1m buys 17, 20 and 26 sqm of prime property space, Singapore is still an attractive destination for prime property investors.

 

Looking ahead, Singapore’s prime residential property prices are expected to increase by 2% over the whole of 2017.

 

Given we are nearing the end of 2017, the forecast looks set to be about right, with a recovery in prices since the middle of the year.

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Hypersonic

Check out the experts views!

 

[:p]

 

https://www.propertyinvestsg.com/3-experts-view-singapores-residential-outlook-2018/

3 experts’ views on Singapore’s residential outlook in 2018

Oct 26, 2017

 

What does the year 2018 have in store for Singapore’s residential property market?

 

 

JLL: Residential market likely to recover by early 2018

 

According to Tay Huey Ying, JLL’s head of research for Singapore, luxury home prices have recovered by 1.1% in the early part of 2017. Signs of recovery are beginning to appear when prices bottomed out in 3Q2016.

 

The recovery in the luxury sector was due to various types of deferred payment schemes made available by developers such as OUE and Wheelock properties. Condominium developments where the scheme was available include OUE Twinpeaks and Ardmore III.

 

Even though prices for mass market homes have fallen 11% since their 2013 peak, Huey Ying sees a reversal soon, following a strong showing in developer sales volume in early 2017.

 

In the government land sales program, there are also signs that bidding is becoming more aggressive. Early in 2017, a Toh Tuck Road site attracted 24 bids.

 

 

Morgan Stanley: Home prices to rise by 8% in 2018

 

Morgan Stanley is one of the more bullish equity research houses to put out a 2018 forecast. They expect prices to rise by 8% in 2018, compared with DBS’s forecast of a 3 percent rise in the same year.

 

Early in 2017, Morgan Stanley’s analyst Wilson Ng expects prices to double by 2030.

 

In September, Wilson maintains his forecast, reiterating that he sees an inflection point in early 2018.

 

The optimistic outlook is precipitated by the rising number of en bloc deals which started in early 2017. Substantiating his view, Wilson sees that, with leverage, there could be a potential capital inflow of S$13 billion when the money received by displaced owners re-enters the market.

 

There are also many more en-bloc developments in the market, with some analysts saying there are up to 50 more in the pipeline.

 

 

Savills: Transaction volumes to rise substantially

 

Alan Cheong from Savills has a very bullish tone on the market in 2018, proposing that, “When a large batch of new projects is launched in 2018, it will come as a rude awakening to those who hold onto the belief that prices are languishing”.

 

This view is supported by brisk 2Q2017 sales in the residential market. Despite the June school holidays, buyers snapped up 3,077 units in total in the quarter. This is up 3.9% on a quarterly basis and 36.4% year-on-year.

 

Very clearly, 2016’s second quarter was not a strong one, leading to the sharp yearly rise in quarterly sales.

 

Given the numerous en-bloc deals that have occured in 2017, there exists the potential for a spike in migratory demand as displaced owners find alternative housing once they handover their units to the en-bloc buyer.

 

Some might buy a public flat to lock in the cash portion of their windfall, but there will still be a substantial number of displaced buyers who will be looking to maintain their exposure to the private residential market.

 

Some may even use the cash proceeds to buy two properties – One for their own stay and the other to be rented out.

 

While the real estate market engine is very complex, the build up of momentum since mid-2017 is likely to carry through to the remainder of the year and into 2019. If the government does not clamp down heavily on the property market with more punitive policy measures, the price rises may even spill over to 2019.

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Wt_know

Wt_know

Supersonic
(edited)

2018 ... 1000sqft ulu condo ... no $1500psf no talk ...

no $1.5M my way or highway

huat year to the max

Edited by Wt_know
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Sdf4786k

Sdf4786k

Twincharged

2018 ... 1000sqft ulu condo ... no $1500psf no talk ...

no $1.5M my way or highway

huat year to the max

I am quite happy if that's the case. But just in case only new developments have 1500 while resale unit still sideline. Then the state of economy will be a bit dicey
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therock

therock

Supersonic

As much as I worry that prices will spiral up, it will also be unwise of the government to bring in knee jerk type measures to suppress prices..

It should be well planned to allow buyers and sellers alike to adapt and understand..

Imagine someone who just paid up for his new home, only for the price to drop by ten percent in a week ..

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Sdf4786k

Sdf4786k

Twincharged

As much as I worry that prices will spiral up, it will also be unwise of the government to bring in knee jerk type measures to suppress prices..

It should be well planned to allow buyers and sellers alike to adapt and understand..

Imagine someone who just paid up for his new home, only for the price to drop by ten percent in a week ..

That is not too bad if u paid up. Major issue that many are unaware of. When prices plunge . The cost recovery for bank to reduced the risk means have to top up the loan . And if you started off with the view that Huat ahhhhh. Buy one ear 300k buy 5 .. settle for life. Looks like need to cough up a lot of money to continue with the loan. Else serious implication of bank asking for force sale. Of course this is unheard of. But when economy tank. Those that go all out are mostly at risk. Then again. No risk no gain. And no point in panic.
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http://www.businesstimes.com.sg/real-estate/another-warning-on-property-market-puts-developers-on-the-defensive

Another warning on property market puts developers on the defensive

Dec 1, 2017

 

Based on their reading of the market data, market watchers believe the government would not intervene in the market for now, until conditions prove to be unsustainable.

 

President of the Real Estate Developers' Association of Singapore (Redas) Augustine Tan noted that it would be "premature to come up with any measures" when the market has only started to recover.

 

"Now, we are only seeing volumes coming back and a 0.7 per cent price increase in the third quarter. This can hardly be called excessive exuberance where buyers are concerned."

 

Although the official private property price index has just started to turn, the market is already reading future price directions based on recent land bid prices.

 

"There is nothing wrong with rising land or property prices. The issue is whether the rate of increase will destabilise the real estate and financial markets."

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LPPL

LPPL

6th Gear

If rental stagnate and prices go up, we are potentially looking at a bubble. Current gross rental yields for most condos are around 2%, with further increases, yields could drop to 1+%, making condos crap investment. I always feel that capital gain has to be supported by rental yield. For investment, does it make sense to pay $1.4 million for a unit that can rent for only $2k+? Seeing a lot of such condos in upper bukit timah.

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Showster

Showster

Twincharged
(edited)

If rental stagnate and prices go up, we are potentially looking at a bubble. Current gross rental yields for most condos are around 2%, with further increases, yields could drop to 1+%, making condos crap investment. I always feel that capital gain has to be supported by rental yield. For investment, does it make sense to pay $1.4 million for a unit that can rent for only $2k+? Seeing a lot of such condos in upper bukit timah.

Nobody would buy those units to rent out. Unless a current owner who has bought it at below 1 million.

 

The current private homes are more for buying and living in. Unless MM units still viable.

 

The Paradigm shift is already very obvious.

Edited by Showster
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Volvobrick

Volvobrick

Supersonic

If rental stagnate and prices go up, we are potentially looking at a bubble. Current gross rental yields for most condos are around 2%, with further increases, yields could drop to 1+%, making condos crap investment. I always feel that capital gain has to be supported by rental yield. For investment, does it make sense to pay $1.4 million for a unit that can rent for only $2k+? Seeing a lot of such condos in upper bukit timah.

 

And that's even before factoring the BSD and ABSD.  If 2nd property total 10%, means the yield drop 10% too.  Net yield after Property Tax, MSCT charges, income tax is worse.

 

Buy to live in probably OK, buy to lease out makes little sense, except hoping prices will increase by at least 10% soon.

 

 

 

 

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Invigorated

Invigorated

Supercharged

Rental yield is truly weak as many have mentioned, especially after factoring possible incoming supply from en bloc in a couple of years.

 

Many who bought high have cut loss in the past years and hence there was a drop in prices.

 

The market has slowly been shifting from a landlord market to ownstay market and a new equilibrium with a different mix may be formed.

 

Joint couple cpf contribution can be pretty potent when getting a new condo and they actually Top up little to no cash if they are cpf rich. This explains the sweet spot of 1+- million for these working couples. The new resale levy condition has also pushed these couples to choose a new condo or resale instead.

 

Guess there will continue to be support for these ocr units as these buyers do not pay absd. There will probably be more action in 2018-2019 with en bloc buyers picking up more units. The Govt warns of a huge supply in coming years but there will only be oversupply if demand cannot catch up. What if it does? Especially from the foreign market?

 

On a different price segment, those 2 mil and above, we are probably seeing more exuberance from those who find hk too pricey or jb housing getting less stable with China restrictions.

 

The Chinese developers have strengthened their ventures here and we can only expect more Chinese buyers in time, esp as they diversify beyond hk. (https://sg.finance.yahoo.com/news/5-foreign-nationalities-snapping-singapore-010000588.html)

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