mr funny
21-10-10, 21:39
http://www.todayonline.com/Business/Property/EDC101015-0000046/How-Chinese-laws-will-affect-Singapore
How Chinese laws will affect Singapore
With Beijing acting to cool red-hot domestic market, sellers here could benefit from influx of Chinese buyers
by Colin Tan
Updated 02:31 PM Oct 15, 2010
Within days of Beijing announcing new measures to cool the overheated property market, thousands of people have been flocking to housing shows in big and small cities across China. Strong enthusiasm was seen in the property shows in Shenzhen, Shanghai and Nanning, though sales were lower compared with last year.
The Chinese authorities had ordered local banks to demand a downpayment of at least 30 per cent from all mortgage applicants and to suspend loans to buyers of third homes on Sept 29.
Following the move, Shanghai, one of the country's top-tier cities, issued new rules to limit home buyers to one new apartment and will impose a revised land appreciation tax soon.
While some analysts foresee a drop in prices in the coming months, property agents say initial signs suggest buyers are still not taking the measures seriously. Buyers react relatively calmly this time, compared with April when they disappeared in a flash.
Is this irrational behaviour or what?
'Noise' in the market
Economists have an explanation for this. Almost all of them agree that an excessively loose monetary policy - with interest rates kept low for too long invariably leads to asset inflation and this includes property.
At the micro level, individuals cannot comprehend this. It does not help that there is a lot of "noise" in the market. Instead they see rising asset prices - of houses, stocks, bonds - touted as a reflection of the real wealth being created.
At a seminar on Asia's property markets last month, a speaker said exuberance in the Asian property sector is hard to rein in once the market has accelerated. Despite government cooling measures, he said the inflow of money from the United States and Europe into Asia will continue.
On the local scene, we are seeing buyers slowly returning as developers push out more projects. In the aftermath of the latest cooling measures, the current market sentiment dictates that developers either go for sales or prices. The majority appear to go for prices. Not surprisingly, sales have slowed but are showing signs of improving.
Meanwhile, developers continue to bid for land and secure redevelopment plots from collective sales even as they know future supply is growing ever larger. When will it stop? I think not, if there continues to be reasonably healthy buying.
Although sales of HDB resale flats have cooled, I am still not sure whether prices have or will correct in the short-term. Looking at the statistics, the fresh supply of resale flats will get worse before it gets better.
This number is fixed by the number of flats the HDB has completed over the past five to seven years. They are available for resale once the minimum occupation period of five years have been fulfilled.
Is the clampdown on buying of resale flats for investment sufficient to turn the market? It depends on how big this component was before the measures were announced. Of late, we have seen some of these monies go into HUDC flats.
As for the upper end of the private housing market, the enthusiasm is still missing from this segment although there has been a number of high profile record-setting buys mostly by foreigners.
This is because there are currently two sets of sellers in this segment: The developers themselves, and investors who have bought in the run up in 2007. Then record sales of more than 14,000 units were sold mostly in this segment.
However, there may yet be a chance that this segment may see better days in the coming months as Chinese nationals appear to be slowly making their presence felt in this segment.
This is to be expected as the Chinese authorities introduced more and more cooling measures in their home country.
Official figures show that the number of caveats filed under Chinese nationals have been rising from 358 in 2008 to 1,052 in 2009 and to 1,127 from January to September this year. As a percentage, excluding corporate buyers, the corresponding percentages are 2.78 per cent (2008), 3.38 per cent (2009) and 4.51 per cent (January to September 2010).
Their presence in Singapore and property markets worldwide may rise as the appreciation of the Chinese yuan picks up pace.
As a rule, buyers buy in places where they are familiar with and at the moment, Hong Kong and Singapore figure very high on their buying list.
The writer is head of research and consultancy at Chesterton Suntec International.
How Chinese laws will affect Singapore
With Beijing acting to cool red-hot domestic market, sellers here could benefit from influx of Chinese buyers
by Colin Tan
Updated 02:31 PM Oct 15, 2010
Within days of Beijing announcing new measures to cool the overheated property market, thousands of people have been flocking to housing shows in big and small cities across China. Strong enthusiasm was seen in the property shows in Shenzhen, Shanghai and Nanning, though sales were lower compared with last year.
The Chinese authorities had ordered local banks to demand a downpayment of at least 30 per cent from all mortgage applicants and to suspend loans to buyers of third homes on Sept 29.
Following the move, Shanghai, one of the country's top-tier cities, issued new rules to limit home buyers to one new apartment and will impose a revised land appreciation tax soon.
While some analysts foresee a drop in prices in the coming months, property agents say initial signs suggest buyers are still not taking the measures seriously. Buyers react relatively calmly this time, compared with April when they disappeared in a flash.
Is this irrational behaviour or what?
'Noise' in the market
Economists have an explanation for this. Almost all of them agree that an excessively loose monetary policy - with interest rates kept low for too long invariably leads to asset inflation and this includes property.
At the micro level, individuals cannot comprehend this. It does not help that there is a lot of "noise" in the market. Instead they see rising asset prices - of houses, stocks, bonds - touted as a reflection of the real wealth being created.
At a seminar on Asia's property markets last month, a speaker said exuberance in the Asian property sector is hard to rein in once the market has accelerated. Despite government cooling measures, he said the inflow of money from the United States and Europe into Asia will continue.
On the local scene, we are seeing buyers slowly returning as developers push out more projects. In the aftermath of the latest cooling measures, the current market sentiment dictates that developers either go for sales or prices. The majority appear to go for prices. Not surprisingly, sales have slowed but are showing signs of improving.
Meanwhile, developers continue to bid for land and secure redevelopment plots from collective sales even as they know future supply is growing ever larger. When will it stop? I think not, if there continues to be reasonably healthy buying.
Although sales of HDB resale flats have cooled, I am still not sure whether prices have or will correct in the short-term. Looking at the statistics, the fresh supply of resale flats will get worse before it gets better.
This number is fixed by the number of flats the HDB has completed over the past five to seven years. They are available for resale once the minimum occupation period of five years have been fulfilled.
Is the clampdown on buying of resale flats for investment sufficient to turn the market? It depends on how big this component was before the measures were announced. Of late, we have seen some of these monies go into HUDC flats.
As for the upper end of the private housing market, the enthusiasm is still missing from this segment although there has been a number of high profile record-setting buys mostly by foreigners.
This is because there are currently two sets of sellers in this segment: The developers themselves, and investors who have bought in the run up in 2007. Then record sales of more than 14,000 units were sold mostly in this segment.
However, there may yet be a chance that this segment may see better days in the coming months as Chinese nationals appear to be slowly making their presence felt in this segment.
This is to be expected as the Chinese authorities introduced more and more cooling measures in their home country.
Official figures show that the number of caveats filed under Chinese nationals have been rising from 358 in 2008 to 1,052 in 2009 and to 1,127 from January to September this year. As a percentage, excluding corporate buyers, the corresponding percentages are 2.78 per cent (2008), 3.38 per cent (2009) and 4.51 per cent (January to September 2010).
Their presence in Singapore and property markets worldwide may rise as the appreciation of the Chinese yuan picks up pace.
As a rule, buyers buy in places where they are familiar with and at the moment, Hong Kong and Singapore figure very high on their buying list.
The writer is head of research and consultancy at Chesterton Suntec International.