Noob questions on property

[Contrarian]

With technology advancement, the building of new BTOs nowadays is primarily based on actual subscription.

 

Gone are the days of queuing up physically for a chance to subscribe, and Govt build ahead of demand by anticipating demand, then release it for people to queue up for the slots to buy.

 

Nowadays, all checks (eligibility, finances) are done before one subscribes to a unit, and one suffers penalty of some form if the subscription is subsequently withdrawn. 

 

Selling of balance flats are also much more hassle free than in the past, depending on online subscription to register. In the past, one had to make a trip to HDB, collect a stack of the list of balance flats and their prices, then figure out where they are, before booking through HDB.

 

The building of new units is now tailormade to the actual demand. Reduction in BTO supply has already begun, although there are still basic numbers to be supplied.

 

Yes HDB is now stuck in a mode where they're afraid of the past and resulted in undersupply after that.

 

The original point was: even when incomes grew, when there are more homes than there are occupiers, rentals drop, valuations drop, loan limits drop and home prices drop. Too much of this leads the whole market to negative equity and a high risk of a systemic problem.

 

My message to those who have never seen sustained price falls before: It has happened several times and will happen again.

Edited December 2, 2018 by Contrarian

[Showster]

HDB had been building 15,000 units of BTOs per year for the last 8 years or so to meet the gap in demand.

 

Rentals drop: Definitely across all sectors

 

Valuations drop: HDB yes, especially from 2013-2017. Private not really, in fact some actually continued to increase.

 

Loan limits drop: Mainly due to Govt regulations.

 

Home prices drop: Only from 2013-2017. 

 

The four years of adjustments between supply and demand has allowed both sides to equilibrate. The current situation is one of matching. Where supply cannot increase further (out of land for private residential properties for the time being), more regulations will kick in to regulate demand to prevent massive runaway of prices as it did the last round (from 2007 to 2013).

 

If demand had not matched supply, Govt would not have kicked in the last round of regulations. Re-read that full statement again by MAS to note the targeted future price increase matching income.

 

As for HDB, if it lowers in price, somebody who contributes to Singapore will get to benefit. No issues.

 

Yes HDB is now stuck in a mode where they're afraid of the past and resulted in undersupply after that.

 

The original point was: even when incomes grew, when there are more homes than there are occupiers, rentals drop, valuations drop, loan limits drop and home prices drop. Too much of this leads the whole market to negative equity and a high risk of a systemic problem.

 

My message to those who have never seen sustained price falls before: It has happened several times and will happen again.

 

[Wt_know]

With technology advancement, the building of new BTOs nowadays is primarily based on actual subscription.

 

Gone are the days of queuing up physically for a chance to subscribe, and Govt build ahead of demand by anticipating demand, then release it for people to queue up for the slots to buy.

 

Nowadays, all checks (eligibility, finances) are done before one subscribes to a unit, and one suffers penalty of some form if the subscription is subsequently withdrawn.

 

Selling of balance flats are also much more hassle free than in the past, depending on online subscription to register. In the past, one had to make a trip to HDB, collect a stack of the list of balance flats and their prices, then figure out where they are, before booking through HDB.

 

The building of new units is now tailormade to the actual demand. Reduction in BTO supply has already begun, although there are still basic numbers to be supplied.

ah gong control demand

ah gong control supply

ah gong control size

ah gong control when to release

ah gong control eligibility

ah gong is the best ... muahahaha

[Jamesc]

Starting a thread for noob questions you always wanted to ask, but didn't dare to or didn't know how to. Let me start the ball rolling.

 

Why does property appreciate? Does it not experience wear and tear like any other material possession? Is it because of demand vs supply and inflation?

 

This is very simple to explain.

 

Property is made of 2 very different parts.

 

The land and the building.

 

The building will always depreciate because it experience wear and tear.

 

The land will appreciate if there is demand and depreciate if there is no demand.

 

 

20 years ago I went to a bank and in a meeting

 

with 4 men who worked for the bank for 30 years each.

 

They ask me how to depreciate the building.

 

They depreciate their building (not land) over 20 years at straight line 5% a year.

 

After 5 years they added an extension so they asked me should they depreciate

 

the extension over 20 years as is their policy or 15 years?

Edited December 2, 2018 by Jamesc

[Victor68]

This is very simple to explain.

 

Property is made of 2 very different parts.

 

The land and the building.

 

The building will always depreciate because it experience wear and tear.

 

The land will appreciate if there is demand and depreciate if there is no demand.

 

 

20 years ago I went to a bank and in a meeting

 

with 4 men who worked for the bank for 30 years each.

 

They ask me how to depreciate the building.

 

They depreciate their building (not land) over 20 years at straight line 5% a year.

 

After 5 years they added an extension so they asked me should they depreciate

 

the extension over 20 years as is their policy or 15 years?

This is true when there is always demand and sustainable pricing. The same may not be true when there is no more demand or reach a stage the general masses cannot supplrt it.

 

In our case, it is the HDB. Meant for its citizens to live, now it turns i to an investment that trap them into debts. The faster they separate HDB from private the better. Those who wish to speculate in private, it is their choice.

[Jamesc]

In 2002 and 2003 during sars and no increase in population property prices came down due to over supply.

 

Around 2006 and 2007 started the increase in population and that's when prices started really climbing until we had all the cooling measures.

 

[Kusje]

This is very simple to explain.

 

Property is made of 2 very different parts.

 

The land and the building.

 

The building will always depreciate because it experience wear and tear.

 

The land will appreciate if there is demand and depreciate if there is no demand.

 

 

20 years ago I went to a bank and in a meeting

 

with 4 men who worked for the bank for 30 years each.

 

They ask me how to depreciate the building.

 

They depreciate their building (not land) over 20 years at straight line 5% a year.

 

After 5 years they added an extension so they asked me should they depreciate

 

the extension over 20 years as is their policy or 15 years?

 

You work in audit?

[Jamesc]

You work in audit?

No I work in Human Relations.

 

Human Sensual Relations.

 

[Dafansu]

In 2002 and 2003 during sars and no increase in population property prices came down due to over supply.

 

Around 2006 and 2007 started the increase in population and that's when prices started really climbing until we had all the cooling measures.

 

 

moving forward I won't expect much increase in population at least not as fast as previous years, especially incoming foreigners

[Jamesc]

moving forward I won't expect much increase in population at least not as fast as previous years, especially incoming foreigners

When the increase in supply matches the increase in population and there is no large increase in population property prices will not rise very fast after that.

 

[Invigorated]

When the increase in supply matches the increase in population and there is no large increase in population property prices will not rise very fast after that.

 

this is true.

 

but we will also have to look at income growth, which is pretty uneven across different segments.

 

when the govt says increases based on income growth, do they meet an average income growth or income growth of the middle and high income for private properties?

[Jamesc]

this is true.

 

but we will also have to look at income growth, which is pretty uneven across different segments.

 

when the govt says increases based on income growth, do they meet an average income growth or income growth of the middle and high income for private properties?

My personal view without any hard data is the rich are getting richer while the poor like me are getting poorer.

 

Maybe Gini can confirm.

 

So high end property will do very well as we can attract billionaires for our safe and secure environment.

 

So if you have a very high end condo or good class bungalow don't sell too soon or too cheap hor.

Edited December 6, 2018 by Jamesc

[Victor68]

My personal view without any hard data is the rich are getting richer while the poor like me are getting poorer.

 

Maybe Gini can confirm.

 

So high end property will do very well as we can attract billionaires for our safe and secure environment.

 

So if you have a very high end condo or good class bungalow don't sell too soon or too cheap hor. ð

 

All we need is hard data to show who buy these high end properties. Even if citizen, what kind of citizen. Jack Mah also can be Singaporean. Haha

[YeZhanrui]

SLA website can see the details of caveats lodged, but need to pay money to see name of buyer 

[HenryMagma]

Yes you can as long as you have used cpf for the private property and it has a charge on the property if not you have to rerank the charge, and you can only use cpf for the 2nd property provided you have set aside half of the prevailing mimimum sum in your SA/OA

 

Sorry, but what is meaning of charge? What is rerank the charge? I am noob.

[Albeniz]

Recently, I keep seeing online video advertisements of Grab drivers, housewives thanking Marko & Friends for teaching them how to own multiple properties with little or no captital, and yet able to generate close to $10k per month.

 

Of couse in the advertisement, the means and methods were not explained.

 

Am I missing something?

Edited March 30, 2019 by Albeniz

[Albeniz]

This is very simple to explain.

 

Property is made of 2 very different parts.

 

The land and the building.

 

The building will always depreciate because it experience wear and tear.

 

The land will appreciate if there is demand and depreciate if there is no demand.

 

 

20 years ago I went to a bank and in a meeting

 

with 4 men who worked for the bank for 30 years each.

 

They ask me how to depreciate the building.

 

They depreciate their building (not land) over 20 years at straight line 5% a year.

 

After 5 years they added an extension so they asked me should they depreciate

 

the extension over 20 years as is their policy or 15 years?

Hey Jamesec, looks like you are quite a veteran with more than 20 years of working experience.

 

And yet you can't handle your MIL?

Edited March 30, 2019 by Albeniz

[GEBuyingAgent]

Starting a thread for noob questions you always wanted to ask, but didn't dare to or didn't know how to. Let me start the ball rolling.

 

Why does property appreciate? Does it not experience wear and tear like any other material possession? Is it because of demand vs supply and inflation?

 

Property appreciate depends on my factors both micro- and macro- economics, including demand, supply and inflation as you mentioned.

 

I would give you some examples which are key factors for the appreciation as below:

 

1. Unemployment rate

2. GDP

3. Construction or Material costs

4. Future public infrastructure

 

Hope this helps.