Is this reasoning flawed?

[Nestor]

Hi,

I was having a conversation with an agent recently and the following example came up and after some reasoning, I had a conclusion but I think it's fundamentally flawed somewhere... hopefully someone can point out what's missing.

Assuming a property of 1.2 mil. This place is tenanted at 3.2k monthly for 2 years and the property is over 10 years old freehold. I did some simple calculation and thought that it's a bad buy due to the following reasons.

At 80% loan, this place will be 960k and monthly will be at about 2.8k for the current low interest rate. With property tax of 10%, assuming at $3000, that make it $36k annual, or $300 per month. If the maintenance fee goes at $300 monthly, it will mean that the owner needs to pay 2.8+300+300= 3.4k. In other words, the owner is making negative yield and needs to pay $200 every month out of his own pocket for that unit.

Take a few possible scenarios in terms of capital appreciation gains, like if property price goes upwards and they place is now worth 1.5mil. The rental rate needs to go up more in order to attract future buyers at about $4300 if interest rates remain constant, or else no one should be interested in the place just like how it's a bad buy now (and that's not considering the age of the property yet).

If property price dip below 1.2 then the buyer is bleeding on both capital gain and rental.

More scenarios:
Property up/rental up more/IR same = can possibly sell with some interested buyers
Property up/rental up but not enough/IR same = can't sell because probably no one will buy
Property up/rental up more/IR increase = cannot sell because loan is too expensive
etc

If I try all the possible permutations for property price + rental + IR, it will seem quite foolish to make the purchase.

Now apply the the same logic across all properties, For another property at 2.9 mil, it would seem reasonable for the rent to be at 8.2k minimum to cover cost, even though it's still a bad buy because of poor rental yield. Yet I'm seeing properties at this price range renting out at 8k (Levelz) in propertyguru. Am I missing something or are these units just not "buy-able" ones?

I'm under the impression that this reasoning might be fundamentally flawed, or I'm missing something altogether. What if someone loan at 50-70%? In that case the yield will seem better but he would have paid more upfront in the first place, in which case he can possibly sell later for capital appreciation, but he will still be 'trapped' with the possibility of not finding buyers for the place due to low rental rate and high property price later, or any of the scenarios described above.

Can someone point out if this is flawed to being with and where are the holes?

[teddybear]

Things you didn't consider:
(1) length of mortgage (you take too short period).
(2) When Interest rate is higher, rental yield also higher.
(3) Capital appreciation due to inflation (assume average 3% p.a. for developed countries, 5% for Singapore?).
(4) Interest is deductable from rental income for income tax purposes.
(5) property tax is based on Annual value (AV) and not on price of property and not on actual rental value (which may be 1.5-2x that of AV).
(6) ??? :D


Hi,

I was having a conversation with an agent recently and the following example came up and after some reasoning, I had a conclusion but I think it's fundamentally flawed somewhere... hopefully someone can point out what's missing.

Assuming a property of 1.2 mil. This place is tenanted at 3.2k monthly for 2 years and the property is over 10 years old freehold. I did some simple calculation and thought that it's a bad buy due to the following reasons.

At 80% loan, this place will be 960k and monthly will be at about 2.8k for the current low interest rate. With property tax of 10%, assuming at $3000, that make it $36k annual, or $300 per month. If the maintenance fee goes at $300 monthly, it will mean that the owner needs to pay 2.8+300+300= 3.4k. In other words, the owner is making negative yield and needs to pay $200 every month out of his own pocket for that unit.

Take a few possible scenarios in terms of capital appreciation gains, like if property price goes upwards and they place is now worth 1.5mil. The rental rate needs to go up more in order to attract future buyers at about $4300 if interest rates remain constant, or else no one should be interested in the place just like how it's a bad buy now (and that's not considering the age of the property yet).

If property price dip below 1.2 then the buyer is bleeding on both capital gain and rental.

More scenarios:
Property up/rental up more/IR same = can possibly sell with some interested buyers
Property up/rental up but not enough/IR same = can't sell because probably no one will buy
Property up/rental up more/IR increase = cannot sell because loan is too expensive
etc

If I try all the possible permutations for property price + rental + IR, it will seem quite foolish to make the purchase.

Now apply the the same logic across all properties, For another property at 2.9 mil, it would seem reasonable for the rent to be at 8.2k minimum to cover cost, even though it's still a bad buy because of poor rental yield. Yet I'm seeing properties at this price range renting out at 8k (Levelz) in propertyguru. Am I missing something or are these units just not "buy-able" ones?

I'm under the impression that this reasoning might be fundamentally flawed, or I'm missing something altogether. What if someone loan at 50-70%? In that case the yield will seem better but he would have paid more upfront in the first place, in which case he can possibly sell later for capital appreciation, but he will still be 'trapped' with the possibility of not finding buyers for the place due to low rental rate and high property price later, or any of the scenarios described above.

Can someone point out if this is flawed to being with and where are the holes?

[Localite]

allow me to explain....

$1.2 mil at 80% loan, this place will be $960k and monthly will be at about $2.8k for the current low interest rate. But of the $2.8k only $800 will be interest cost. You want to calculate ROI you cannot take the full repayment cashflow as cost.

Also remember that if you had $1.2 mil as cash and you kept it in bank you will get (at 0.1%) or $100 per month as returns.....:doh:

[devilplate]

if u want positive cashflow+FH status....only MM is possible....tats y MM still sellable despite the criticism:p

[kingkong1984]

Long story, same conclusion. :)

[Wild Falcon]

I think the key is to get a decent spread on your yield. One cannot expect the tenant to pay the entire "capital" or "equity" of your property. Say if one takes 80% loan and 20% equity, one must be prepared to slowly top up the equity value of the property over time. After all, when you sell, your loan will be paid down as well. But you can still achieve postive cash flows in some projects e.g. Geylang, some suburbs near MRT and someone mention above MM (I'm not sure though).

If you compute the way above, very few properties will meet your criteria, esp when interest rate increase in the future. The key is to compare the interest that you pay vs the rental that we receive net of expenses. Remember you only pay up 20% equity upfront. If your loan gets fully paid, you get 100% equity. If your tenant pays for both your interest and your principle repayment - he is effectively paying for the house for you. It's not easy to find tenants that are that stupid.

[sh]

if one can assume that property prices and rentals will trend upwards over time. It is possible that the rentals can cover the installments completely. (assuming that rentals will rise over time). I am not saying it will happen immediately, but very possible in a few years times if you've timed the market properly.

Having said that, it also important to have spare cash, just in case u can't find a tenant....

[DC33_2008]

I do not see rental going up much given the flooding of existing and TOP unit in the pipeline. Tenants rae spoilt for choice.
if one can assume that property prices and rentals will trend upwards over time. It is possible that the rentals can cover the installments completely. (assuming that rentals will rise over time). I am not saying it will happen immediately, but very possible in a few years times if you've timed the market properly.

Having said that, it also important to have spare cash, just in case u can't find a tenant....

[kane]

Low end of the rental market rising, top end of the rental market coming off. At some point, these 2 will converge at an equilibrium point.

[hyenergix]

Hi,

I was having a conversation with an agent recently and the following example came up and after some reasoning, I had a conclusion but I think it's fundamentally flawed somewhere... hopefully someone can point out what's missing.

Assuming a property of 1.2 mil. This place is tenanted at 3.2k monthly for 2 years and the property is over 10 years old freehold. I did some simple calculation and thought that it's a bad buy due to the following reasons.

At 80% loan, this place will be 960k and monthly will be at about 2.8k for the current low interest rate. With property tax of 10%, assuming at $3000, that make it $36k annual, or $300 per month. If the maintenance fee goes at $300 monthly, it will mean that the owner needs to pay 2.8+300+300= 3.4k. In other words, the owner is making negative yield and needs to pay $200 every month out of his own pocket for that unit.

Take a few possible scenarios in terms of capital appreciation gains, like if property price goes upwards and they place is now worth 1.5mil. The rental rate needs to go up more in order to attract future buyers at about $4300 if interest rates remain constant, or else no one should be interested in the place just like how it's a bad buy now (and that's not considering the age of the property yet).

If property price dip below 1.2 then the buyer is bleeding on both capital gain and rental.

More scenarios:
Property up/rental up more/IR same = can possibly sell with some interested buyers
Property up/rental up but not enough/IR same = can't sell because probably no one will buy
Property up/rental up more/IR increase = cannot sell because loan is too expensive
etc

If I try all the possible permutations for property price + rental + IR, it will seem quite foolish to make the purchase.

Now apply the the same logic across all properties, For another property at 2.9 mil, it would seem reasonable for the rent to be at 8.2k minimum to cover cost, even though it's still a bad buy because of poor rental yield. Yet I'm seeing properties at this price range renting out at 8k (Levelz) in propertyguru. Am I missing something or are these units just not "buy-able" ones?

I'm under the impression that this reasoning might be fundamentally flawed, or I'm missing something altogether. What if someone loan at 50-70%? In that case the yield will seem better but he would have paid more upfront in the first place, in which case he can possibly sell later for capital appreciation, but he will still be 'trapped' with the possibility of not finding buyers for the place due to low rental rate and high property price later, or any of the scenarios described above.

Can someone point out if this is flawed to being with and where are the holes?

I assume that you used less than 0.5% interest rate for 30 years to get $2,800 instalment. If you use 2.5% (which is still optimistic but more realistic), the instalment will be $3,800. So the top-up will be $1,200.

Due to our efficient banking system, the liquid injections at US came directly and immediately into economy via low interest rates at US banks and our banks. So we are experiencing a lot of inflation in our property now. The problem is what you have found discovered: the landlord ends up with a negative 'yield' (according to your definition). Hence we are in the bubble territory.

This warning sign was highlighted for US in an article below in 2006, 2 years before the bubble popped in 2008, and I think we are heading in that direction 2 years later: http://www.naturalnews.com/016241.html

[nobrainer32007]

My advice to you considering the way you calculate, invest in reit. No need bank borrowings positive cashflow right away and $5000 enough to start it off.




Hi,

I was having a conversation with an agent recently and the following example came up and after some reasoning, I had a conclusion but I think it's fundamentally flawed somewhere... hopefully someone can point out what's missing.

Assuming a property of 1.2 mil. This place is tenanted at 3.2k monthly for 2 years and the property is over 10 years old freehold. I did some simple calculation and thought that it's a bad buy due to the following reasons.

At 80% loan, this place will be 960k and monthly will be at about 2.8k for the current low interest rate. With property tax of 10%, assuming at $3000, that make it $36k annual, or $300 per month. If the maintenance fee goes at $300 monthly, it will mean that the owner needs to pay 2.8+300+300= 3.4k. In other words, the owner is making negative yield and needs to pay $200 every month out of his own pocket for that unit.

Take a few possible scenarios in terms of capital appreciation gains, like if property price goes upwards and they place is now worth 1.5mil. The rental rate needs to go up more in order to attract future buyers at about $4300 if interest rates remain constant, or else no one should be interested in the place just like how it's a bad buy now (and that's not considering the age of the property yet).

If property price dip below 1.2 then the buyer is bleeding on both capital gain and rental.

More scenarios:
Property up/rental up more/IR same = can possibly sell with some interested buyers
Property up/rental up but not enough/IR same = can't sell because probably no one will buy
Property up/rental up more/IR increase = cannot sell because loan is too expensive
etc

If I try all the possible permutations for property price + rental + IR, it will seem quite foolish to make the purchase.

Now apply the the same logic across all properties, For another property at 2.9 mil, it would seem reasonable for the rent to be at 8.2k minimum to cover cost, even though it's still a bad buy because of poor rental yield. Yet I'm seeing properties at this price range renting out at 8k (Levelz) in propertyguru. Am I missing something or are these units just not "buy-able" ones?

I'm under the impression that this reasoning might be fundamentally flawed, or I'm missing something altogether. What if someone loan at 50-70%? In that case the yield will seem better but he would have paid more upfront in the first place, in which case he can possibly sell later for capital appreciation, but he will still be 'trapped' with the possibility of not finding buyers for the place due to low rental rate and high property price later, or any of the scenarios described above.

Can someone point out if this is flawed to being with and where are the holes?

[teddybear]

REITs are 1 of the worst thing to invest in, other than ILPs. The only good thing is that you just need small figure of even just $1000 to start with. (that very much tells you who they are meant for. If you want to make money, follow the rich, don't invest in those designed for the poorer group).


My advice to you considering the way you calculate, invest in reit. No need bank borrowings positive cashflow right away and $5000 enough to start it off.

[kane]

Nestor, you're looking at the wrong figures. You should be looking at ROA, where R is the "EBIT".

[devilplate]

REITs are 1 of the worst thing to invest in, other than ILPs. The only good thing is that you just need small figure of even just $1000 to start with. (that very much tells you who they are meant for. If you want to make money, follow the rich, don't invest in those designed for the poorer group).

reits not so bad la...hehe....i tink better den UTs?:D

[ysyap]

Hi,

I was having a conversation with an agent recently and the following example came up and after some reasoning, I had a conclusion but I think it's fundamentally flawed somewhere... hopefully someone can point out what's missing.

Assuming a property of 1.2 mil. This place is tenanted at 3.2k monthly for 2 years and the property is over 10 years old freehold. I did some simple calculation and thought that it's a bad buy due to the following reasons.

At 80% loan, this place will be 960k and monthly will be at about 2.8k for the current low interest rate. With property tax of 10%, assuming at $3000, that make it $36k annual, or $300 per month. If the maintenance fee goes at $300 monthly, it will mean that the owner needs to pay 2.8+300+300= 3.4k. In other words, the owner is making negative yield and needs to pay $200 every month out of his own pocket for that unit.

Take a few possible scenarios in terms of capital appreciation gains, like if property price goes upwards and they place is now worth 1.5mil. The rental rate needs to go up more in order to attract future buyers at about $4300 if interest rates remain constant, or else no one should be interested in the place just like how it's a bad buy now (and that's not considering the age of the property yet).

If property price dip below 1.2 then the buyer is bleeding on both capital gain and rental.

More scenarios:
Property up/rental up more/IR same = can possibly sell with some interested buyers
Property up/rental up but not enough/IR same = can't sell because probably no one will buy
Property up/rental up more/IR increase = cannot sell because loan is too expensive
etc

If I try all the possible permutations for property price + rental + IR, it will seem quite foolish to make the purchase.

Now apply the the same logic across all properties, For another property at 2.9 mil, it would seem reasonable for the rent to be at 8.2k minimum to cover cost, even though it's still a bad buy because of poor rental yield. Yet I'm seeing properties at this price range renting out at 8k (Levelz) in propertyguru. Am I missing something or are these units just not "buy-able" ones?

I'm under the impression that this reasoning might be fundamentally flawed, or I'm missing something altogether. What if someone loan at 50-70%? In that case the yield will seem better but he would have paid more upfront in the first place, in which case he can possibly sell later for capital appreciation, but he will still be 'trapped' with the possibility of not finding buyers for the place due to low rental rate and high property price later, or any of the scenarios described above.

Can someone point out if this is flawed to being with and where are the holes?

What is fundementally flawed abt your calculation is that you considered only how much $ u need to service the mortgage plus maintenance fee plus property tax. Only the maintenance fee and property tax cannot be retrieve but the mortgage goes into the bank and u will get it back after u sell that investment property minus the bank interest for early settlement (assuming u didn't complete the loan term). U are too fixated about the current committment and not the long term.

The key question is how much do u intend to sell that property to ensure that u don't lose that $ that goes into servicing the loan. By selling it again at 1.2m, u already got $2.8k times 24 months - $10k bank penalty (assumed) = $57.2k investment returns. That is why pple don't sell when market is not doing well (provided u have the capital to continue financing the mortgage). If you sell higher, u make more returns. Just try not to sell lower.

Regarding no interest to buy your property when rental is so low but the cost of property is high, this is a genuine problem so sell when tenancy expires or terminate the lease but lose one month rental to penalty (small amt compared with the profit of selling the property).

Hope this clarifies.

[rattydrama]

thats why focus on property with upside potential be it OCR, CCR, RCR. Best is location x3 which is fairly easy to rent out in bad times.:spliff:

[teddybear]

No, worse than UTs. I would rather be REITs managers than UT managers because many expenses can be charged to company's account and can still have discretionary to use leverage to improve short-term performance etc and collect more bonuses. Don't understand why people like these middlemen so much when they hate insurance agents and property agents and other agents? They are no difference, except the former cream more from you than the latter and have better titles and some people like them even more (to get creamed by them!) :doh:


reits not so bad la...hehe....i tink better den UTs?:D

[Nestor]

Very interesting inputs, so it doesn't sound like it's not really flawed.


The key question is how much do u intend to sell that property to ensure that u don't lose that $ that goes into servicing the loan. By selling it again at 1.2m, u already got $2.8k times 24 months - $10k bank penalty (assumed) = $57.2k investment returns. That is why pple don't sell when market is not doing well (provided u have the capital to continue financing the mortgage). If you sell higher, u make more returns. Just try not to sell lower.

It never occurred to me that selling the unit back at the same purchased price actually still make you money, so this definitely is a plus point to me.


If you compute the way above, very few properties will meet your criteria, esp when interest rate increase in the future. The key is to compare the interest that you pay vs the rental that we receive net of expenses. Remember you only pay up 20% equity upfront. If your loan gets fully paid, you get 100% equity. If your tenant pays for both your interest and your principle repayment - he is effectively paying for the house for you. It's not easy to find tenants that are that stupid.

This is exactly why I was under the impression that something must be wrong. Very few properties seem to return a positive number from the calculation actually. I can understand that previous owners buy at a much lower price and is getting good rental now, but selling it higher than what the rental returns and yet still being able to attract buyers is what makes it confusing for me. This thread cleared it up a little for me though. It sounds like first owners are always the best in this case as well as MM units or small units!


I assume that you used less than 0.5% interest rate for 30 years to get $2,800 instalment. If you use 2.5% (which is still optimistic but more realistic), the instalment will be $3,800. So the top-up will be $1,200.

Due to our efficient banking system, the liquid injections at US came directly and immediately into economy via low interest rates at US banks and our banks. So we are experiencing a lot of inflation in our property now. The problem is what you have found discovered: the landlord ends up with a negative 'yield' (according to your definition). Hence we are in the bubble territory.

This warning sign was highlighted for US in an article below in 2006, 2 years before the bubble popped in 2008, and I think we are heading in that direction 2 years later: http://www.naturalnews.com/016241.html

It is actually computed at 0.8% spread across 35 years. Thanks for the link it's really informative but kinda weird to have a health researcher writing about real estate.. still it points out most of the stuff I noticed in the thread.

[Wild Falcon]

In short, you should be comparing the rental against the interest and see if the property still gives you a positive carry. In addition, some properties give you capital gains upside as well. Do not listen to all those rubbish about luxury fetching the best yields - it is the opposite. Just an indication from a recent CIMB report:-

Worst yielding properties in SG compiled:-

1. Ardmore Park - Rental PSF 6.15, Rental yield 2.2%
2. The Claymore - Rental PSF 5.13, Rental yield 2.0%
3. Four Seasons Park - Rental PSF - 5.31, Rental yield 2.2%
4. MBR - Rental PSF 5.46, Rental yield 2.3%

Best yielding
1. Lakeshore - 3.72, 4.9%

The rest OCR/RCR
Mostly range between 3.5% to 4.5%. Unlike the CCR properties, none hit below 3%.

What does this tell us, the tenants are not valuing the luxury segment as much as the buyers of these properties. The owners have no choice but to drop yields to 2% only. At 2% yields, it is no wonder that the price cannot move much higher anymore. One should look past all the BS in this forum about how "luxury" is undervalued (these people have no concept of yields - someone in the d'Leedon thread just mention Ardmore fetches the best rental yields - this person just has no brains) - it makes no sense. How can anything that can only fetch a 2% yields - a LEMON investment from a yield perspective - be undervalued? If these luxury property prices were to increase further, the yields will drop to 1%. There is a reason the prices are not moving - but no property experts will tell you - because they need to move the numerous empty units.

The other argument is that "PRC" rich men will come and snap up all the "luxury" properties even if they fetch lousy returns because of "prestige". Up till today, they haven't come in droves yet.

And even if Lakeshore increase to $1000psf, one will realise that it still fetch close to 4% yields - double that of Ardmore Park. If an investor/retiree is looking for blue chip stable monthly cash flows and returns, it definitely looks more promising that "iffy" ideals of PRC will anyhow snap up poor-yielding properties. I'm not invested in Lakeshore - it's just an example.

[stalingrad]

agree that owners of luxury condos in "prime" districts are just lambs waiting to be slaughtered. but they refuse to admit it and continue to dream. well, you can stop dreamers from being stupid.

[kingkong1984]

The minority will not admit it, majority wins in property or the minority? Its the majority.

[teddybear]

You just quote 1 example to make your case as though like real that OCR properties are easy to rent out and get high rental yields and criticised all CCR properties as shit by just showing a few examples with worst yields. Let me show you with hard fact that you are full of bullshit. :doh:
For 1 thing, CCR properties cannot be measured by yield at a point alone as your OCR properties could be without tenants for long time and not reflected in the URA data whereas the CCR properties will always be tenanted, just a matter of yield. Another thing, rich people looks for choice units and choice estate, not concerned about yield.

Ok never mind, you like to insist on yield shown on URA data, let me point an example to show others here that your mouth is full of rubbish (the rest for forumers to go dig for gold in CCR properties that is still seriously undervalued; The example below is 1 of the CCR property in lousier location but very good yield):

- The Pier at Robertson, median rental $7.01 psf pm, median yield now = 4.7% (note: this is "MEDIAN Yield" not max yield!). This probably also comes with excellent capital appreciation as well since it is FH vs Lakeshore 99LH! You can hold and earn rental for perpetual while the Lakeshore will be forced taken back in 99 years! :tongue3:

See, I just need to quote 1 example to show that you are all lies, where got all CCR properties poor yield and below 3%?
(Please go check and proof that what I said is lying otherwise if you can't prove that means you are lying!). :p:cheers1:


In short, you should be comparing the rental against the interest and see if the property still gives you a positive carry. In addition, some properties give you capital gains upside as well. Do not listen to all those rubbish about luxury fetching the best yields - it is the opposite. Just an indication from a recent CIMB report:-

Worst yielding properties in SG compiled:-

1. Ardmore Park - Rental PSF 6.15, Rental yield 2.2%
2. The Claymore - Rental PSF 5.13, Rental yield 2.0%
3. Four Seasons Park - Rental PSF - 5.31, Rental yield 2.2%
4. MBR - Rental PSF 5.46, Rental yield 2.3%

Best yielding
1. Lakeshore - 3.72, 4.9%

The rest OCR/RCR
Mostly range between 3.5% to 4.5%. Unlike the CCR properties, none hit below 3%.

What does this tell us, the tenants are not valuing the luxury segment as much as the buyers of these properties. The owners have no choice but to drop yields to 2% only. At 2% yields, it is no wonder that the price cannot move much higher anymore. One should look past all the BS in this forum about how "luxury" is undervalued (these people have no concept of yields - someone in the d'Leedon thread just mention Ardmore fetches the best rental yields - this person just has no brains) - it makes no sense. How can anything that can only fetch a 2% yields - a LEMON investment from a yield perspective - be undervalued? If these luxury property prices were to increase further, the yields will drop to 1%. There is a reason the prices are not moving - but no property experts will tell you - because they need to move the numerous empty units.

The other argument is that "PRC" rich men will come and snap up all the "luxury" properties even if they fetch lousy returns because of "prestige". Up till today, they haven't come in droves yet.

And even if Lakeshore increase to $1000psf, one will realise that it still fetch close to 4% yields - double that of Ardmore Park. If an investor/retiree is looking for blue chip stable monthly cash flows and returns, it definitely looks more promising that "iffy" ideals of PRC will anyhow snap up poor-yielding properties. I'm not invested in Lakeshore - it's just an example.

[Wild Falcon]

Still doesn't change the fact those 2% yields are all in CCR and that the AVERRAGE YIELDS is the lowest in CCR - dropping to 2% sure sounds desperate to me. For those properties that only fetch 2% yields, it probably means prices have close to plateaued, unless there is future development and new transportation links that may result in capital gains. So I'm just trying to say, do your own research and always remember to divide the rental by the cost of investment.

[Nestor]

In short, you should be comparing the rental against the interest and see if the property still gives you a positive carry.

Sorry Wild Falcon but I don't really understand that... are you able to give a simple example mathematically to illustrate the above?

Say if the 1.2 mil unit is rented out at 3.2k - 600 = 2.6k (tax+maintenance), and montage is 2.8k with 800 being interest, how do you do the comparison? 2.6k - 800? It's looks wrong since it still doesn't look like a good deal with the buyer...

[devilplate]

rental yield after factoring in overheads > mortgage int rates

means u borrow cheap and achieve higher yield

i tink we came up with a detailed ROI calculation b4....actual return can be alot higher den u tot as int rate is so so low now...hehe:D

[Nestor]

rental yield after factoring in overheads > mortgage int rates

means u borrow cheap and achieve higher yield

i tink we came up with a detailed ROI calculation b4....actual return can be alot higher den u tot as int rate is so so low now...hehe:D

So from the example I gave, 3200 monthly - 300 maintenance - 300 monthly tax = 2600 net rental

rental yield = [2600 * 12 / 1200000] * 100 = 2.6%
interest rate loan = 0.8% for the first year

so as long as the interest rate goes below 2.6% its positive returns

[devilplate]

So from the example I gave, 3200 monthly - 300 maintenance - 300 monthly tax = 2600 net rental

rental yield = [2600 * 12 / 1200000] * 100 = 2.6%
interest rate loan = 0.8% for the first year

so as long as the interest rate goes below 2.6% its positive returns

yes...u got it....3.5% nett yield is safer...2.6% abit low for comfy

[teddybear]

Stop beating around bush after your lies exposed! :tongue3: Many OCR projects only about 3%+/- yield but with disappointing price growth record and no investment value or long-term potential to speak of and can only be rented out to shady people who disappear after damaging lots of things in properties that needs lots more money to restore than what can be covered by even the security deposit. Many people have experienced this and you never experienced? You never rent out OCR properties before is it? :banghead:


Still doesn't change the fact those 2% yields are all in CCR and that the AVERRAGE YIELDS is the lowest in CCR - dropping to 2% sure sounds desperate to me. For those properties that only fetch 2% yields, it probably means prices have close to plateaued, unless there is future development and new transportation links that may result in capital gains. So I'm just trying to say, do your own research and always remember to divide the rental by the cost of investment.

[devilplate]

Stop beating around bush after your lies exposed! :tongue3: Many OCR projects only about 3%+/- yield but with disappointing price growth record and no investment value or long-term potential to speak of and can only be rented out to shady people who disappear after damaging lots of things in properties that needs lots more money to restore than what can be covered by even the security deposit. Many people have experienced this and you never experienced? You never rent out OCR properties before is it? :banghead:

err...nid to choose the right profile lor...so far, my worse restoration involved hacking concealed a/c pipes....tats in D11 and angmor family....heng suay one la....they on a/c almost 24hrs and nvr service the a/c:scared-3:

nowadays, i pay for a/c servicing....scared liao:ashamed1:

[Nestor]

yes...u got it....3.5% nett yield is safer...2.6% abit low for comfy

Hmmm but I still don't get this part... based on the calculation the yield is 2.6% vs first year interest rate of 0.85%.. so by right it's positive return since 2.6% > 0.85% for first year and maybe reduce drastically in the later years as IR increase to it's normal 2.5-3%

However based on the first year, if we calculate it in terms of cash, we have 2600k (after deducting $600 from tax and maintenance) vs a loan of approximately 3500k based on 0.85% loan at 32 years for 1.2 mil property.

In other words the owner need to pay up $900 monthly even though the first calculation proved that it's a positive carry.. that can't be good right?

[devilplate]

Hmmm but I still don't get this part... based on the calculation the yield is 2.6% vs first year interest rate of 0.85%.. so by right it's positive return since 2.6% > 0.85% for first year and maybe reduce drastically in the later years as IR increase to it's normal 2.5-3%

However based on the first year, if we calculate it in terms of cash, we have 2600k (after deducting $600 from tax and maintenance) vs a loan of approximately 3500k based on 0.85% loan at 32 years for 1.2 mil property.

In other words the owner need to pay up $900 monthly even though the first calculation proved that it's a positive carry.. that can't be good right?

huh...mabe better for u to read up some investment books on yield calculation/ROI.....i duno how to xplain wor...:ashamed1:

[howgozit]

You got it and then you lost it.......


Hmmm but I still don't get this part... based on the calculation the yield is 2.6% vs first year interest rate of 0.85%.. so by right it's positive return since 2.6% > 0.85% for first year and maybe reduce drastically in the later years as IR increase to it's normal 2.5-3%

However based on the first year, if we calculate it in terms of cash, we have 2600k (after deducting $600 from tax and maintenance) vs a loan of approximately 3500k based on 0.85% loan at 32 years for 1.2 mil property.

In other words the owner need to pay up $900 monthly even though the first calculation proved that it's a positive carry.. that can't be good right?

[shauntanzs]

Look further n beyond the monthly cash-flow and u will get it.

[devilplate]

cashflow is quite misleading actually...last time banks r allow to offer interest only loan....confirm positive cash flow every mth...hehe

or u borrow 50% or less....cfm positive too...hehe....

[ysyap]

Hmmm but I still don't get this part... based on the calculation the yield is 2.6% vs first year interest rate of 0.85%.. so by right it's positive return since 2.6% > 0.85% for first year and maybe reduce drastically in the later years as IR increase to it's normal 2.5-3%

However based on the first year, if we calculate it in terms of cash, we have 2600k (after deducting $600 from tax and maintenance) vs a loan of approximately 3500k based on 0.85% loan at 32 years for 1.2 mil property.

In other words the owner need to pay up $900 monthly even though the first calculation proved that it's a positive carry.. that can't be good right?

Again u are looking at the immediate committment level of payment... must look at long term. Well you mentioned $3500 (not 3500k) of monthly loan payment. This naturally includes the principle loan amt plus the 0.85% interest, therefore the additional $900 u pay every month includes the principle so technically, I don't think it is considered a negative yield for you.

Rental yield essentially only looks at how much upfront u pay vs how much receipts u gain (based on the calculation model in your earlier insert). U mixed two diff way of calculations together therefore get confused. However, I must clarify that I'm not the expert in this area. I literally read off all the inputs from this thread and try to understand it like you too so please do not :tsk-tsk: quote me or shoot me. :scared-2:

[teddybear]

So what did you do to recover the costs of restoration/repair?


err...nid to choose the right profile lor...so far, my worse restoration involved hacking concealed a/c pipes....tats in D11 and angmor family....heng suay one la....they on a/c almost 24hrs and nvr service the a/c:scared-3:

nowadays, i pay for a/c servicing....scared liao:ashamed1:

[devilplate]

So what did you do to recover the costs of restoration/repair?

u can say i silly...i only makan the 1mth deposit:scared-3: :o

if i am a lawyer, i will try to sue back...lol

[teddybear]

Trust me, even if you sue, you incur lawyer fees and you will still get nothing more back as the person will have disappeared from Singapore and you have no way of getting the money back even if you have all the legal rights and able to proof his fault. That is why if the deposit is large enough (>$6k), that will be more than enough to cover back your restoration costs. But if <$6k, you have to foot the shortfalls yourself. That is what I called eating into your rental yield (but not captured in those rental yield data).


u can say i silly...i only makan the 1mth deposit:scared-3: :o

if i am a lawyer, i will try to sue back...lol

[devilplate]

Trust me, even if you sue, you incur lawyer fees and you will still get nothing more back as the person will have disappeared from Singapore and you have no way of getting the money back even if you have all the legal rights and able to proof his fault. That is why if the deposit is large enough (>$6k), that will be more than enough to cover back your restoration costs. But if <$6k, you have to foot the shortfalls yourself. That is what I called eating into your rental yield (but not captured in those rental yield data).

den die die find 2yrs rental with 2mths deposit

[stalingrad]

Stop beating around bush after your lies exposed! :tongue3: Many OCR projects only about 3%+/- yield but with disappointing price growth record and no investment value or long-term potential to speak of and can only be rented out to shady people who disappear after damaging lots of things in properties that needs lots more money to restore than what can be covered by even the security deposit. Many people have experienced this and you never experienced? You never rent out OCR properties before is it? :banghead:
what are you? lying too? condos in west coast have doubled in value since 2007 while condos in D10 has not moved, if not downward.

Also, you are wrong about the ease with which condos in OCR can be rented out. Carabelle has 338 units, but only less than 10 MM units for rent now. Go check how many units of rivergate are for rent. my friend's casabella condo has sat there yielding no rental for 3 months. cosmopolitan has 101 units for rent.

please don't make up stories to bolster your bogus claim. That is beneath you as an owner of multiple "luxury" condos in D10.

It is also silly to argue that CCR condos can always rented out, and it is just a matter of yield. if owners of OCR condos lower their rental yield to 2%, all the condos in OCR would have been snapped up. but we insist on 4 or even 5% yield.

[taggy]

u can say i silly...i only makan the 1mth deposit:scared-3: :o

if i am a lawyer, i will try to sue back...lol

sorry this may be a silly question...
but on the day of handling over key, how do u realise immediately aircon pipe need to hack ? the angmor didnt demand back the rental deposit on the day of handling over the key ?

[teddybear]

Ha ha ha, what a joke! If everything is about price, HDB flats are the cheapest, who want to buy private properties, not even your OCR condos? :doh:
Bring this further, if everything is about price, people here can exchange their 4 room flat for a bungalow in Johor Bahru Iskandar Zone, who want to live in Singapore? :tongue3:

That tells us that everything is not about price. Some people just don't care about the money spent on properties or look at the long-term investment value while others have to count every penny. So, the former group buy CCR, the latter group buy OCR. The worst are those who count the penny, buy OCR, and said their estates and properties are no different from those buying Orchard Residences or MarQ @Paterson at $4000 psf when they pay $700 psf and those CCR buyers are stupid, idiot, blah blah blah. :banghead:

And you already give us the BEST REASON NOT TO BUY OCR properties, particularly WEST COAST properties, because THEY ALREADY DOUBLED IN PRICE since 2007! (higher than 2007 peak!). Smart buyers will look for those properties which have not increased as much and they should then be able to see their price ultimately double in price! :cheers1: In fact, there are still a lot of bargains out there, but definitely not West Coast properties which have already doubled in price! :scared-1:


what are you? lying too? condos in west coast have doubled in value since 2007 while condos in D10 has not moved, if not downward.

Also, you are wrong about the ease with which condos in OCR can be rented out. Carabelle has 338 units, but only less than 10 MM units for rent now. Go check how many units of rivergate are for rent. my friend's casabella condo has sat there yielding no rental for 3 months. cosmopolitan has 101 units for rent.

please don't make up stories to bolster your bogus claim. That is beneath you as an owner of multiple "luxury" condos in D10.

It is also silly to argue that CCR condos can always rented out, and it is just a matter of yield. if owners of OCR condos lower their rental yield to 2%, all the condos in OCR would have been snapped up. but we insist on 4 or even 5% yield.

[stalingrad]

Ha ha ha, what a joke! If everything is about price, HDB flats are the cheapest, who want to buy private properties, not even your OCR condos? :doh:
Bring this further, if everything is about price, people here can exchange their 4 room flat for a bungalow in Johor Bahru Iskandar Zone, who want to live in Singapore? :tongue3:

That tells us that everything is not about price. Some people just don't care about the money spent on properties or look at the long-term investment value while others have to count every penny. So, the former group buy CCR, the latter group buy OCR. The worst are those who count the penny, buy OCR, and said their estates and properties are no different from those buying Orchard Residences or MarQ @Paterson at $4000 psf when they pay $700 psf and those CCR buyers are stupid, idiot, blah blah blah. :banghead:

And you already give us the BEST REASON NOT TO BUY OCR properties, particularly WEST COAST properties, because THEY ALREADY DOUBLED IN PRICE since 2007! (higher than 2007 peak!). Smart buyers will look for those properties which have not increased as much and they should then be able to see their price ultimately double in price! :cheers1: In fact, there are still a lot of bargains out there, but definitely not West Coast properties which have already doubled in price! :scared-1:

so, just because something has become more valuable, its price will not continue to go up? Have you heard of momentum strategy? Besides, the rise in the values of OCR condos is supported by fundamentals, demand by HDB upgraders. Demand for CCR condos is most driven by speculation,which depends entirely on liquidity.

Don't understand what you said about prices. but we are not comparing HDB with condos. We are comparing OCR condos with CCR condos. Condos are condos. Condos all have facilities, unlike HDB. so it is fair to compare condos in CCR and those in OCR. tell me one more time. what are the advantages of CCR condos, other than enrichment classes at novena squares? I really want to learn from you ocr gurus.

[patricia]

den die die find 2yrs rental with 2mths depositNext time, ask for 2 mths desposit even for 1 year contract.:2cents:

[Grimloq]

so, just because something has become more valuable, its price will not continue to go up? Have you heard of momentum strategy? Besides, the rise in the values of OCR condos is supported by fundamentals, demand by HDB upgraders. Demand for CCR condos is most driven by speculation,which depends entirely on liquidity.

Don't understand what you said about prices. but we are not comparing HDB with condos. We are comparing OCR condos with CCR condos. Condos are condos. Condos all have facilities, unlike HDB. so it is fair to compare condos in CCR and those in OCR. tell me one more time. what are the advantages of CCR condos, other than enrichment classes at novena squares? I really want to learn from you ocr gurus.

they have already said it many times, but you have refused to listen.

Just a few examples:

5 mins walk to Orchard vs 30mins on MRT
5 mins to office vs 40 mins on MRT squeezing with hundreds of people
after a night out, fast cab ride home
prestige
neighbors that have similar social standing and wealth
closer to all the places that people want to go, be it esplanade, orchard, vivocity, sentosa, raffles place, suntec etc.

if location is not important to you, you might as well stay in batam. bungalow very cheap, only 45 mins ferry to singapore!

[stalingrad]

5 mins walk to Orchard vs 30mins on MRT

who cares about mrt if you own a car? why go to orchard?

after a night out, fast cab ride home

who cares? we can arrive at home in 15-20 minutes in our car.

prestige

what is that? and who cares unless you are a snub.

neighbors that have similar social standing and wealth

indos and chinese as your neighbors? does that confer prestige?

closer to all the places that people want to go, be it esplanade, orchard, vivocity, sentosa, raffles place, suntec etc.

sentosa and vivo are in my backyard. we can get to raffles place in 20 minutes.

your list shows what kind of people live in ccr condos. no thanks, don't want to be your neighbors. bunch of boors and snubs.

by the way, I figure it would take 30 minutes to go from duchess residences or d'leedon in rush hours to anson road. but it takes less than 20 minutes from our ocr condo.

[Grimloq]

The number one reason to stay in CCR.

So that we don't have to stay next to you!

BAZINGA.

PS. it's spelled "snobs" not "snubs"


5 mins walk to Orchard vs 30mins on MRT

who cares about mrt if you own a car? why go to orchard?

after a night out, fast cab ride home

who cares? we can arrive at home in 15-20 minutes in our car.

prestige

what is that? and who cares unless you are a snub.

neighbors that have similar social standing and wealth

indos and chinese as your neighbors? does that confer prestige?

closer to all the places that people want to go, be it esplanade, orchard, vivocity, sentosa, raffles place, suntec etc.

sentosa and vivo are in my backyard. we can get to raffles place in 20 minutes.

your list shows what kind of people live in ccr condos. no thanks, don't want to be your neighbors. bunch of boors and snubs.

by the way, I figure it would take 30 minutes to go from duchess residences or d'leedon in rush hours to anson road. but it takes less than 20 minutes from our ocr condo.

[teddybear]

CCR advantages - Many here have mentioned so many times already. Are you blind to see or refuse to see, only want to see what you want to hear? :doh:
Fundamental? What fundamental are you talking about for OCR properties pass $1k psf? Pls go check up SG income statistics. Income for top 20%-10% earners cannot even catch up with inflation. If they cannot easily afford $1k psf condo price previously, what make you believe they can now easily afford the $1k psf condo (the so-called "fundamental" you perceive to be)? On the other hand, income of top 5%-1% earners are rapidly increasing! Out of total properties in Singapore, 20% are private properties, bought by top 20% earners. Income statistics shows that the affordability of top 20-10% earners for private properties are dropping with increasing prices from previous $600 psf! These are the majority buying OCR properties. Meanwhile, the top 5% earners (+ foreigners) are the ones buying CCR properties, and their affordability have increased with their sky-rocketed incomes! Previously CCR $2k psf they can afford, now they can easily afford >$3k psf! Is it any wonder that some CCR private properties shoot pass $5k psf based on income statistics? (Obviously No! In fact, OCR properties the one to worry, not supported by fundamentals since not supported by real-growth in income for this OCR property buyers! That is why the Govt's cooling policies are all aimed at HDB flats and OCR property buyers!).
With the cooling HDB flats prices, the upgraders will find it even more difficult to trade in their HDB flats at good price and upgrade to OCR private properties!


so, just because something has become more valuable, its price will not continue to go up? Have you heard of momentum strategy? Besides, the rise in the values of OCR condos is supported by fundamentals, demand by HDB upgraders. Demand for CCR condos is most driven by speculation,which depends entirely on liquidity.

Don't understand what you said about prices. but we are not comparing HDB with condos. We are comparing OCR condos with CCR condos. Condos are condos. Condos all have facilities, unlike HDB. so it is fair to compare condos in CCR and those in OCR. tell me one more time. what are the advantages of CCR condos, other than enrichment classes at novena squares? I really want to learn from you ocr gurus.

[teddybear]

UOB Kay Hian analyst report on Singapore property sector:

Essentials
• High/luxury-end shows steady signs of pick-up. The good response
to the launch of D’Leedon following the successful launch of other highend
projects like Allgreen’s Suites@Orchard (80% of 118 units sold at ASP
of S$2,150psf) and City Development’s The Glyndebourne (120 of the 150
units sold at ASP of S$2,100psf) indicates further momentum in the
segment. We estimate close to 750 units have been sold thus far in 4Q10
at prices above S$1,500psf, 17% higher than the 643 units sold in 3Q10.
We expect the high-end residential segment to gain further momentum in
1H11.
• Luxury segment prices 13% below previous peak. According to CBRE
Research, the median price of luxury condominium transactions for 3Q10
stood at S$3,265psf, 13% less than the previous peak of S$3,750psf
during 4Q07. However, the latest URA statistics suggests that the prices in
the mass-market and mid-tier segments are 18% and 10% above their
previous peaks. At this juncture, we see the high/luxury-end segment
offering relatively better value as the prices are still below its peak and it is
relatively less susceptible to possible government measures.


so, just because something has become more valuable, its price will not continue to go up? Have you heard of momentum strategy? Besides, the rise in the values of OCR condos is supported by fundamentals, demand by HDB upgraders. Demand for CCR condos is most driven by speculation,which depends entirely on liquidity.

Don't understand what you said about prices. but we are not comparing HDB with condos. We are comparing OCR condos with CCR condos. Condos are condos. Condos all have facilities, unlike HDB. so it is fair to compare condos in CCR and those in OCR. tell me one more time. what are the advantages of CCR condos, other than enrichment classes at novena squares? I really want to learn from you ocr gurus.

[stalingrad]

The number one reason to stay in CCR.

So that we don't have to stay next to you!

BAZINGA.

PS. it's spelled "snobs" not "snubs"

the feeling is mutual. :tongue3:

Let's never talk again.

[teddybear]

Statistics and conclusions from analysts report (attached below) inline with my analysis that OCR properties have more or less peaked going forward:
(to that stalinongrad - I am backing up what I put forward with more facts and statistics now. You talk so much cannot back up with facts and statistics to tell others you are not lying and cannot get others to back you? :tongue3:)

Mass-market segment to be most affected
Large supply of private mass-market homes is expected to flood the market
going forward (Exhibits 11-12). So far, all the land parcels released through the
government land sales programme in the past one year have been from the
mass-market segment. We estimate about 80% of the upcoming launches to be
mass-market homes (Exhibit 12). Our estimates are inclusive of the land parcels
that were purchased through Government Land Sales (GLS) in the past one year,
which we expect to be launched. Excluding those land parcels, we still can
expect some 41% of the launches to be in this segment (Exhibit 11). We expect
developers to price their launches competitively, as supply is rising, coupled with
slowing demand.
Speculative purchases look set to fall; prices may correct 10%
With the new measures, we believe speculative/investment purchases will reduce
significantly. Hence, we now expect new home sales to fall to 8,000-9,000/year from
14,851/year in 2009. Year-to-date, a total of 10,117 new homes have been sold.
Besides, property prices could correct up to 10% next year (2009: +1.8%; 2010 YTD:
+11%). The announced measures are likely to impact the upgraders’ segment (private
mass-market homes below SGD1,000 psf). In the near term, we expect the response to
new launches to be lacklustre, as home buyers hold back unless developers lower
prices. Appendix 2 shows the planned launches in the next 6 months.
Exhibit 11: Potential Launches With Sales Permits Exhibit 12:

Shift of HDB dwellers to private housing also slowing
Apart from population growth as the stimulus for private housing demand, the shifting of
population from public housing (HDB flats) to private housing forms the second source
of demand. The shifting trend has stagnated over the past year (Exhibit 5). Given the
rising supply from the new HDB flats release, we expect the shift to stay low in the
coming years (Exhibit 6). The government is releasing about 16,000 units of HDB flats
this year and promised to release 22,000 units next year to curb the rising prices.


CCR advantages - Many here have mentioned so many times already. Are you blind to see or refuse to see, only want to see what you want to hear? :doh:
Fundamental? What fundamental are you talking about for OCR properties pass $1k psf? Pls go check up SG income statistics. Income for top 20%-10% earners cannot even catch up with inflation. If they cannot easily afford $1k psf condo price previously, what make you believe they can now easily afford the $1k psf condo (the so-called "fundamental" you perceive to be)? On the other hand, income of top 5%-1% earners are rapidly increasing! Out of total properties in Singapore, 20% are private properties, bought by top 20% earners. Income statistics shows that the affordability of top 20-10% earners for private properties are dropping with increasing prices from previous $600 psf! These are the majority buying OCR properties. Meanwhile, the top 5% earners (+ foreigners) are the ones buying CCR properties, and their affordability have increased with their sky-rocketed incomes! Previously CCR $2k psf they can afford, now they can easily afford >$3k psf! Is it any wonder that some CCR private properties shoot pass $5k psf based on income statistics? (Obviously No! In fact, OCR properties the one to worry, not supported by fundamentals since not supported by real-growth in income for this OCR property buyers! That is why the Govt's cooling policies are all aimed at HDB flats and OCR property buyers!).
With the cooling HDB flats prices, the upgraders will find it even more difficult to trade in their HDB flats at good price and upgrade to OCR private properties!

[stalingrad]

CCR advantages - Many here have mentioned so many times already. Are you blind to see or refuse to see, only want to see what you want to hear? :doh:
Fundamental? What fundamental are you talking about for OCR properties pass $1k psf? Pls go check up SG income statistics. Income for top 20%-10% earners cannot even catch up with inflation. If they cannot easily afford $1k psf condo price previously, what make you believe they can now easily afford the $1k psf condo (the so-called "fundamental" you perceive to be)? On the other hand, income of top 5%-1% earners are rapidly increasing! Out of total properties in Singapore, 20% are private properties, bought by top 20% earners. Income statistics shows that the affordability of top 20-10% earners for private properties are dropping with increasing prices from previous $600 psf! These are the majority buying OCR properties. Meanwhile, the top 5% earners (+ foreigners) are the ones buying CCR properties, and their affordability have increased with their sky-rocketed incomes! Previously CCR $2k psf they can afford, now they can easily afford >$3k psf! Is it any wonder that some CCR private properties shoot pass $5k psf based on income statistics? (Obviously No! In fact, OCR properties the one to worry, not supported by fundamentals since not supported by real-growth in income for this OCR property buyers! That is why the Govt's cooling policies are all aimed at HDB flats and OCR property buyers!).
With the cooling HDB flats prices, the upgraders will find it even more difficult to trade in their HDB flats at good price and upgrade to OCR private properties!
a bunch of gibberish. If what you said is true, why is it that condos in CCR have not moved from the pricing level in 2007. obviously, there are many more factors than just income levels of the super-rich. For example, speculation affected ccr condos more than ocr condos. also, the super-rich, arrogant as they are, have just discovered that there is no point living in ccr.

You know what went through my mind when I visited casabella and duchess residences? "hey, what is so big deal living in this neck of the woods other than the address." nothing. I would be much happier living at hume or west coast. when I visiting d'leedon, I said to my wife "crazy to pay an arm and a leg to live in a sea of HDB."

I guess we will never agree. that is fine. I am happy with my multiple ocr condos and spare cash in the bank. I hope you are happy with yours.

[stalingrad]

Statistics and conclusions from analysts report (attached below) inline with my analysis that OCR properties have more or less peaked going forward:
(to that stalinongrad - I am backing up what I put forward with more facts and statistics now. You talk so much cannot back up with facts and statistics to tell others you are not lying and cannot get others to back you? :tongue3:)

Mass-market segment to be most affected
Large supply of private mass-market homes is expected to flood the market
going forward (Exhibits 11-12). So far, all the land parcels released through the
government land sales programme in the past one year have been from the
mass-market segment. We estimate about 80% of the upcoming launches to be
mass-market homes (Exhibit 12). Our estimates are inclusive of the land parcels
that were purchased through Government Land Sales (GLS) in the past one year,
which we expect to be launched. Excluding those land parcels, we still can
expect some 41% of the launches to be in this segment (Exhibit 11). We expect
developers to price their launches competitively, as supply is rising, coupled with
slowing demand.
Speculative purchases look set to fall; prices may correct 10%
With the new measures, we believe speculative/investment purchases will reduce
significantly. Hence, we now expect new home sales to fall to 8,000-9,000/year from
14,851/year in 2009. Year-to-date, a total of 10,117 new homes have been sold.
Besides, property prices could correct up to 10% next year (2009: +1.8%; 2010 YTD:
+11%). The announced measures are likely to impact the upgraders’ segment (private
mass-market homes below SGD1,000 psf). In the near term, we expect the response to
new launches to be lacklustre, as home buyers hold back unless developers lower
prices. Appendix 2 shows the planned launches in the next 6 months.
Exhibit 11: Potential Launches With Sales Permits Exhibit 12:

Shift of HDB dwellers to private housing also slowing
Apart from population growth as the stimulus for private housing demand, the shifting of
population from public housing (HDB flats) to private housing forms the second source
of demand. The shifting trend has stagnated over the past year (Exhibit 5). Given the
rising supply from the new HDB flats release, we expect the shift to stay low in the
coming years (Exhibit 6). The government is releasing about 16,000 units of HDB flats
this year and promised to release 22,000 units next year to curb the rising prices.
I have learned to ignore so called expert analysts. they predicted that sti would hit 1000 before the crisis that culminated in the bankruptcy of lehman brothers would end. I lost a lot of money following those stupid recommendations. follow their predictions at your own peril.

by the way, experts also called for dow at 40,000. haha, you know how wrong they were.

[teddybear]

I have learnt to learn the right things from expert analysts, while being very very careful of those people like you who are not even experts proclaiming to be experts and boosting their capability to predict future property prices and trends without even considering real physical hard data (to the extend of saying those are bullshit)! If their prediction is not based on real hard data then based on what? Based on what they like and dislike (or their self-interest)? :doh:


I have learned to ignore so called expert analysts. they predicted that sti would hit 1000 before the crisis that culminated in the bankruptcy of lehman brothers would end. I lost a lot of money following those stupid recommendations. follow their predictions at your own peril.

by the way, experts also called for dow at 40,000. haha, you know how wrong they were.

[rattydrama]

nevermind lah, let it correct, more pple jump in and we go for another new heights!:spliff: All huat x3. I guess it wont effect u guys since u are not investing all yr ppty in 2010 only... some in 2009 or 2006..... so dont really impact u rite?:cheers6:

[Nestor]

yes...u got it....3.5% nett yield is safer...2.6% abit low for comfy

3.5% nett yield really hard for now right...

[devilplate]

3.5% nett yield really hard for now right...

cannot find den dun buy lor

[Wild Falcon]

Buy luxury and high-end lor, esp "high end" shoeboxes. See UOB Kay Hian report above :)


3.5% nett yield really hard for now right...

[Nestor]

So this is what I gathered from the thread thanks to all the inputs.

This is more a note to myself but it'll be good to share it if it's worthy or to have others criticize if it's rubbish. Properties purchase can be generalized into the follow types, prioritized from best to worst deal.

1. Positive Cash Flow + Higher chance of Capital Appreciation
Best deal of all, with rental yield high above I/R rate, gross positive after including payment of monthly montage, maintenance and tax. Long term prospect is good as well with capital appreciation. Easier to find buyers

2. Negative Cash Flow + Higher chance of Capital Appreciation
Not as good as (1) but still a good buy as long as rental yield > IR rate. Net should be still positive on long term as long as the value of the place doesn't fall. A little harder to find buyers but shouldn't be too hard.

3. Positive Cash Flow + Higher chance of Capital Depreciation
Still a possibly good buy if there's holding power conservatively speaking. Property might appreciate eventually. Monthly montage all covered including tax and maintenance. Hard to find buyers, okay for self stay.

4. Negative Cash Flow + Capital Depreciation
Bad purchase and should be avoided. Rental yield < I/R rate. High chance of capital depreciation. Strictly self stay only.

A few other pointers
1. Properties generally appreciate over time. When properties do depreciate in value, it's normally not isolated but affects all other properties. The "Capital Depreciation" on top can also mean appreciation at a significantly slower rate than the other properties, or depreciate at a significantly faster rate than others.

2. Some of the "types" above might be "impossible" to find under normal circumstances, like item 2.

3. Since positive/negative cash flow is highly dependent on the % loan here. I'm assuming 80% loan. More emphasis should be placed on capital appreciation rather than cash flow, but that's not to say that cash flow is not important since it has direct impart on your lifestyle.

4. There are variables that are generalized and/or dismissed, such as impact of increasing or decreasing interest rate, the general economy, en-bloc possibilities, WAR (I hope not but Wikileaks is not making things better together with South-North Korea tension), another economy crash, montage length, etc etc.

[Nestor]

So this is what I gathered from the thread thanks to all the inputs.

This is more a note to myself but it'll be good to share it if it's worthy or to have others criticize if it's rubbish. Properties purchase can be generalized into the follow types, prioritized from best to worst deal.

1. Positive Cash Flow + Higher chance of Capital Appreciation
Best deal of all, with rental yield high above I/R rate, gross positive after including payment of monthly montage, maintenance and tax. Long term prospect is good as well with capital appreciation. Easier to find buyers

2. Negative Cash Flow + Higher chance of Capital Appreciation
Not as good as (1) but still a good buy as long as rental yield > IR rate. Net should be still positive on long term as long as the value of the place doesn't fall. A little harder to find buyers but shouldn't be too hard.

3. Positive Cash Flow + Higher chance of Capital Depreciation
Still a possibly good buy if there's holding power conservatively speaking. Property might appreciate eventually. Monthly montage all covered including tax and maintenance. Hard to find buyers, okay for self stay.

4. Negative Cash Flow + Capital Depreciation
Bad purchase and should be avoided. Rental yield < I/R rate. High chance of capital depreciation. Strictly self stay only.

A few other pointers
1. Properties generally appreciate over time. When properties do depreciate in value, it's normally not isolated but affects all other properties. The "Capital Depreciation" on top can also mean appreciation at a significantly slower rate than the other properties, or depreciate at a significantly faster rate than others.

2. Some of the "types" above might be "impossible" to find under normal circumstances, like item 2.

3. Since positive/negative cash flow is highly dependent on the % loan here. I'm assuming 80% loan. More emphasis should be placed on capital appreciation rather than cash flow, but that's not to say that cash flow is not important since it has direct impart on your lifestyle.

4. There are variables that are generalized and/or dismissed, such as impact of increasing or decreasing interest rate, the general economy, en-bloc possibilities, WAR (I hope not but Wikileaks is not making things better together with South-North Korea tension), another economy crash, montage length, etc etc.

Correction on "A few other pointers", on item 2... the harder to find type is actually item 3. Item 2 is actually quite common.

To add on, the layman explanation of rental yield is defined as how much of an annual return you're getting back on your investment. So if you're getting back 2.5% back annually, that's your return of investment (2.5% of the purchased price annually).

This is the reason why Net Yield must be > I/R. If it's below it means all your money earned from rental are used to pay the interest and you still need to top up.

It's obvious to the people here I know.. but it's not really to me so I'll have it jot down here for my own reference.

[amk]

so, just because something has become more valuable, its price will not continue to go up?

This argument is not wrong. However, we see a huge supply of OCR are coming on line. Plus the new measures especially the HDB ones are clearly affecting upgraders, the so-called real demand of your analysis. Do you really believe, at this moment, OCR has another 20 or 30% upside to go ? As u said, it's already doubled.

Btw your argument on OCR (i.e modern SG everywhere is kind of "CCR" already, there is no real ulu place here) is more logical than some others whose sole criterion is yield. Buying pty purely on yield is like buying shares purely on dividends. The primary investment objective of pty, at least in Asian context, is capital appreciation and wealth preservation. Yield, or even positive carry, is a plus. If you have to count that tiny 4% yield to support your purchase, well, u pick the wrong investment vehicle.

So Stalingrad what we really disagree is the demand of CCR ptys. You simply do not see any real demand. Everyone is speculating in CCR. You visited casabella and duchess residences, and dun understand why ppl stay there. But you do see lots of expat families staying there, do you ? The nearby duchess crest condo is full choke of expat families ! Rental there is abt 6k. And the houses right in front of these condos, many of them are rented out to expats at 10 to 20k. Why do these ppl stay there ? Are they simply stupid or snobbish or both ? Mind you these ang mos are usually the higher management staff, not your ordinary foreign talents.

[teddybear]

You are too diplomatic with your words? In the past, "foreign talents" are real "talents", those who draw high salaries and can afford rent of at least $6k per month. You won't see these foreigners living in mass market condos, let alone in HDB estates! If foreigners here cannot afford that type of rent because they are not well-paid enough &/or company not willing to pay such high rent for them, what sort of "talent" are they? :p


This argument is not wrong. However, we see a huge supply of OCR are coming on line. Plus the new measures especially the HDB ones are clearly affecting upgraders, the so-called real demand of your analysis. Do you really believe, at this moment, OCR has another 20 or 30% upside to go ? As u said, it's already doubled.

Btw your argument on OCR (i.e modern SG everywhere is kind of "CCR" already, there is no real ulu place here) is more logical than some others whose sole criterion is yield. Buying pty purely on yield is like buying shares purely on dividends. The primary investment objective of pty, at least in Asian context, is capital appreciation and wealth preservation. Yield, or even positive carry, is a plus. If you have to count that tiny 4% yield to support your purchase, well, u pick the wrong investment vehicle.

So Stalingrad what we really disagree is the demand of CCR ptys. You simply do not see any real demand. Everyone is speculating in CCR. You visited casabella and duchess residences, and dun understand why ppl stay there. But you do see lots of expat families staying there, do you ? The nearby duchess crest condo is full choke of expat families ! Rental there is abt 6k. And the houses right in front of these condos, many of them are rented out to expats at 10 to 20k. Why do these ppl stay there ? Are they simply stupid or snobbish or both ? Mind you these ang mos are usually the higher management staff, not your ordinary foreign talents.

[JuzMe]

The problem can also be compounded by owners forgetting about commission they need to pay to agent. Also most owners assume their properties will be rented 100% of the time. Quite often there might be 1-2 months vacancy when changing tenants or when market's a bit soft.

Overall it is a good discussion to caution others to do their maths properly before sinking $ in.

[kingkong1984]

Jurong boy play in jurong, bishan boy play in bishan, orchard boy play in orchard. Marina boy play in marina, buy what you can afford. Many rolex's in second hand shops as compared to seiko's.

[stalingrad]

This argument is not wrong. However, we see a huge supply of OCR are coming on line. Plus the new measures especially the HDB ones are clearly affecting upgraders, the so-called real demand of your analysis. Do you really believe, at this moment, OCR has another 20 or 30% upside to go ? As u said, it's already doubled.

Btw your argument on OCR (i.e modern SG everywhere is kind of "CCR" already, there is no real ulu place here) is more logical than some others whose sole criterion is yield. Buying pty purely on yield is like buying shares purely on dividends. The primary investment objective of pty, at least in Asian context, is capital appreciation and wealth preservation. Yield, or even positive carry, is a plus. If you have to count that tiny 4% yield to support your purchase, well, u pick the wrong investment vehicle.

So Stalingrad what we really disagree is the demand of CCR ptys. You simply do not see any real demand. Everyone is speculating in CCR. You visited casabella and duchess residences, and dun understand why ppl stay there. But you do see lots of expat families staying there, do you ? The nearby duchess crest condo is full choke of expat families ! Rental there is abt 6k. And the houses right in front of these condos, many of them are rented out to expats at 10 to 20k. Why do these ppl stay there ? Are they simply stupid or snobbish or both ? Mind you these ang mos are usually the higher management staff, not your ordinary foreign talents.
for every expat you saw in casabella or DR, you have one or more units at these condos that are begging for tenants and have been unoccupied for 3 or 4 months. my friend's casabella unit is one example, and many units in this project have been in the same boat.

when singagapore saw the worst of the recession in March 2009, what turned around the impression that properties are going to be nailed real bad? Not D10 condo, not a D9 condo. But a district 23 condo, i.e., Caspian. After the launch of this particular condo, condos in OCR have taken off and never looked back, while condos in CCR are languishing in obscurity. What does that tell you about what drives demand for each type of condos. As I said, from a microeconomic and macroeconomic viewpoints, the prices for CCr condos cannot be sustained. it is sustained so far mainly by holding power of the owners, not by fundamentals. If I live in casabella or DR, I have nothing to gain in proximity to work, access to amenities, access to good schools. CCR condos have no real advantages, except, haha, access to enrichment classes in novena square. give me a break.

[stalingrad]

You are too diplomatic with your words? In the past, "foreign talents" are real "talents", those who draw high salaries and can afford rent of at least $6k per month. You won't see these foreigners living in mass market condos, let alone in HDB estates! If foreigners here cannot afford that type of rent because they are not well-paid enough &/or company not willing to pay such high rent for them, what sort of "talent" are they? :p
we will not dignify your by answering your post. you have biases against certain groups of people, and you judge people by how much they make. you are just a typical boorish, snobbish, and materialist, shallow person that is not worth our time.

[teddybear]

There is nothing bias or not about this. The real "foreign talents" will get housing grant for their rents. If they are given up to a limit of $10k per month for housing, do you think they will rent a HDB flat at $1.5k and claim from their company just $1.5k instead of close to $10k (which will allow them to find a much more pleasant and convenient place to live in for themselves and their families)? It is very obvious that those so-called "foreign talents" living in HDB flats has no housing grant to claim while those living in OCR private properties have a very low housing grant limit of probably $3k or so. If the company thinks their staff is only worth this much for housing grant, it tells us very much about the importance and status of this staff in their companies. Simple as that!


we will not dignify your by answering your post. you have biases against certain groups of people, and you judge people by how much they make. you are just a typical boorish, snobbish, and materialist, shallow person that is not worth our time.

[teddybear]

OK, I will give you a break in my prediction:

- OCR private properties has more or less peaked for now. There will very little action and breakthrough in their price in 2011. If their price go up further, Govt will definitely take stronger actions to bring them down because OCR private properties and HDB flats makes up of almost 95% properties in Singapore and a bubble in this category will affect the stability of the whole banking system in Singapore and affect 95% of people (they don't want to see so many of them jumping down from the top of Pinnacle or MBS sands!). In other words, OCR private properties has "no future" from now onwards. :p

- On the other hand, CCR private properties are more connected to global economies. With US showing signs of economic recovery, and Europe on the mend, this sure will help in CCR private property prices. Year 2011 is the year of catch-up for CCR private properties and will surpass that amount of increase seen in OCR private properties in 2010! :cheers1:

Above are my predictions. If more people disagree (minus the experts), the better and more accurate it will become (by virtue of contrarian theory). :tongue3:


for every expat you saw in casabella or DR, you have one or more units at these condos that are begging for tenants and have been unoccupied for 3 or 4 months. my friend's casabella unit is one example, and many units in this project have been in the same boat.

when singagapore saw the worst of the recession in March 2009, what turned around the impression that properties are going to be nailed real bad? Not D10 condo, not a D9 condo. But a district 23 condo, i.e., Caspian. After the launch of this particular condo, condos in OCR have taken off and never looked back, while condos in CCR are languishing in obscurity. What does that tell you about what drives demand for each type of condos. As I said, from a microeconomic and macroeconomic viewpoints, the prices for CCr condos cannot be sustained. it is sustained so far mainly by holding power of the owners, not by fundamentals. If I live in casabella or DR, I have nothing to gain in proximity to work, access to amenities, access to good schools. CCR condos have no real advantages, except, haha, access to enrichment classes in novena square. give me a break.

[sh]

Now, now boys… let’s play nice.

I noted that some people tend to get too “passionate” in what they believe in… to the extent that it gets personal. That’s when I stop posting on that tread. We are all here to learn and listen to each other’s opinions, (no matter how skewed one may think it may be) and not to make enemies.

World Peace!!!! :)

I also noted that once a certain opinion is expressed, it is deeply ingrained that it will not be changed by talk alone. There’s no further point in arguing as there are always 2 sides to a coin. You can always find an expert bull countering another expert bear at any one time.

Only time will tell who’s right or wrong.

Which bring me this proposal:-

Let’s revisit this CCR versus OCR debate in a year’s time. Let’s use URA’s index as gauge. The current index for CCR 3rdQ 2010 is 198, for OCR 3rdQ 2010 is 174.6. Let’s see where the index stands for 4thQ 2011 (so it’s in more than 1 year’s time). Let’s see which region registers the greater percentage increment. (hopefully it’s an increment, otherwise we all cry together)

Personally, I see more upside in the CCR. That’s what I am betting on….

Game?:)

[DaytonaSS]

Hi Stalingrad,

i am confused on your sharing on nothing to gain portion.... dont pple buy D9/10/11 because it is near to town(orchard shopping belt)? in this case i quote D10 near farrer road area(case i got interested in that area)

Botantical Gardens is 5 mins drive, entire renovated orchard shopping belt(damn nice now) is 10mins away, the good school are within 1-2 km away and to add on the lastest advantage now got MRT line going thru the area(last time BO!) if pple dont wana pay 60K for a COE.

i thought pple pay more psf because of more convenience and nicer enviroment.( i personally like matured estate cos the trees are nicer ) Is casabella/ DR location that bad that pple not interested or because no MRT line running thru them now? i am confused by your sharing on CCR condo being disadvantaged and offering 0 advantage, yet market price it at a premium(present situation). in other thread someone ask me see DR...... so scary.

i quote an example if u allow. Is $1500+psf at d'leedon that bad a choice as compared to Lakefront residence $1050+ psf? Or for that matter Ascentia Sky $1400+ psf. Not comparing Admore park 2 or super prime prices of $3500+++ on orchard belt.(Think those pple got no time to come forum)

What price range do u consider a good buy in CCR , if OCR is now 1000- 1200 psf?

PS: the qns i post are for discussion, no firepowder added. i like to see different views


for every expat you saw in casabella or DR, you have one or more units at these condos that are begging for tenants and have been unoccupied for 3 or 4 months. my friend's casabella unit is one example, and many units in this project have been in the same boat.

As I said, from a microeconomic and macroeconomic viewpoints, the prices for CCr condos cannot be sustained. it is sustained so far mainly by holding power of the owners, not by fundamentals. If I live in casabella or DR, I have nothing to gain in proximity to work, access to amenities, access to good schools. CCR condos have no real advantages, except, haha, access to enrichment classes in novena square. give me a break.

[Wild Falcon]

OK. I shall not be the lone voice and follow the herd :) We all agree in this forum. Everyone is finally thinking the same. Hooray!

Read today's ST lah. Luxury properties will huat! All experts and everyone in this forum say so because foreign speculators are coming to town. Just follow expert opinion - no need to think. Yesterday's papers name the 10 best investments and d'Leedon, Starlight Suites, Robinson Suites etc have been named as the projects likely to give the best returns. just buy. The herd is always right.

[kingkong1984]

Different ball game, no right or wrong. Rich mens area has its own ups and down too. Poor chap has less to worry too. If ccr can double and ocr is only a quarter, i will bet on 4 ocr than 1 ccr. Afterall, the risk is smaller. However mm is the best in the city.

[stalingrad]

"Is $1500+psf at d'leedon that bad a choice as compared to Lakefront residence $1050+ psf?"

are units at d'leedon flying off the shelves?

Have units at LF flown off the shelves? yes, they have.

Living near botanic garden is nice, but you are willing to pay $450psf to get it? You must be a rich man. I am willing to drive from D5 to botanic garden and be there in 20 minutes, while I sleep soundly at night, with no debt and plenty of cash in the bank. that is what I mean by smart buys.

actually for me, driving is better. because we two sons would find it very boring to walk to botanic garden.

my job is in D5, and I walk to my office. If I live at Farrer, I would have to take MRT or bus before the station is completed. my wife works at Shenton way, she would take more time commuting from d'leedon, than from our condo at D5.

point is that we are a good example that living in prime districts means nothing. and there are a lot of examples that I know. singapore is becoming homogenized, and it doesn't make much difference where you live. it is not like london, which is very heterogeneous.

[stalingrad]

OK. I shall not be the lone voice and follow the herd :) We all agree in this forum. Everyone is finally thinking the same. Hooray!

Read today's ST lah. Luxury properties will huat! All experts and everyone in this forum say so because foreign speculators are coming to town. Just follow expert opinion - no need to think. Yesterday's papers name the 10 best investments and d'Leedon, Starlight Suites, Robinson Suites etc have been named as the projects likely to give the best returns. just buy. The herd is always right.

Yes, I also threw that report in the garbage.

[teddybear]

she would take more time commuting from d'leedon, than from our condo at D5.
Wah, I am really amused at this statement! :eek:Please go measure the distance from Carabelle vs d'leedon. Unless you can drive at >110 km/h on your West Coast Highway vs 50 km/h from d'Leedon, I see no way you can reach Shenton faster! :doh:

point is that we are a good example that living in prime districts means nothing.
This is just from your point. If this is true, based on your argument, all people living in CCR, including that many entrepreneurs and rich people especially those who start from a scratch through their own affort, and the many politicians are all stupid, dumb, no-brain to live in CCR! That makes me wonder, how these people who are deemed "stupid, dumb, no-brain" become so successful and can afford so much now in the first place BUT you can't? :tongue3:


"Is $1500+psf at d'leedon that bad a choice as compared to Lakefront residence $1050+ psf?"

are units at d'leedon flying off the shelves?

Have units at LF flown off the shelves? yes, they have.

Living near botanic garden is nice, but you are willing to pay $450psf to get it? You must be a rich man. I am willing to drive from D5 to botanic garden and be there in 20 minutes, while I sleep soundly at night, with no debt and plenty of cash in the bank. that is what I mean by smart buys.

actually for me, driving is better. because we two sons would find it very boring to walk to botanic garden.

my job is in D5, and I walk to my office. If I live at Farrer, I would have to take MRT or bus before the station is completed. my wife works at Shenton way, she would take more time commuting from d'leedon, than from our condo at D5.

point is that we are a good example that living in prime districts means nothing. and there are a lot of examples that I know. singapore is becoming homogenized, and it doesn't make much difference where you live. it is not like london, which is very heterogeneous.

[stalingrad]

has this barking dog above ever tried to enter AYE from farrer road? I suppose not.

besides, with 1700 families living in d'leedon, can that small road (king's road) handle the onslaught of traffic before sinking into the bottom of the pacific ocean?

[patricia]

OK. I shall not be the lone voice and follow the herd :) We all agree in this forum. Everyone is finally thinking the same. Hooray!

Read today's ST lah. Luxury properties will huat! All experts and everyone in this forum say so because foreign speculators are coming to town. Just follow expert opinion - no need to think. Yesterday's papers name the 10 best investments and d'Leedon, Starlight Suites, Robinson Suites etc have been named as the projects likely to give the best returns. just buy. The herd is always right.Herd is meant to be slaughtered. They are always wrong.Herd is always right -- strange reasoning.

[teddybear]

From d'Leedon to Orchard Road & Raffles Place take AYE? I fainted! :doh:
AYE is for people living in Clementi & West Coast areas like you to take, so you should be more familiar how long it takes to go to Orchard Road & Raffles Place? How about the West Coast Highway you boosting about? Can go Orchard Road in 20 mins? :tongue3:


has this barking dog above ever tried to enter AYE from farrer road? I suppose not.

besides, with 1700 families living in d'leedon, can that small road (king's road) handle the onslaught of traffic before sinking into the bottom of the pacific ocean?

[stalingrad]

haha, this barking dog is out of his mind. who told you we are going to raffles place or orchard road? you are seeing things and hearing things that don't exist. time to see a psychiatrist. what is the matter, your cash flow has turned negative and you are going out of your mind?

[amk]

I started a new spread for this wonderful CCR vs OCR story:

http://forums.condosingapore.com/showthread.php?t=10427

let's not hijack OP's thread for his yield/carry idea discussion... ;)

[ay123]

why many think that ocr has no potential? becos it has reached or above the last peak? why cant the next peak be higher than last peak?
and why ccr has potential becos it has not reach the last peak? why cant the last peak is already at the unsustainable level, which is why they cannot catch up to the last peak.
is it so simple to predict whether which segment has potential or no potential by just looking at the last peak level. then everyone can be expert liao. there are other factors to consider right. like future development, future mrt etc.

[stalingrad]

why many think that ocr has no potential? becos it has reached or above the last peak? why cant the next peak be higher than last peak?
and why ccr has potential becos it has not reach the last peak? why cant the last peak is already at the unsustainable level, which is why they cannot catch up to the last peak.
is it so simple to predict whether which segment has potential or no potential by just looking at the last peak level. then everyone can be expert liao. there are other factors to consider right. like future development, future mrt etc.

exactly. these guys have nothing to say, just repeating the same argument over and over again, like a broken record.

CCR condos have not kept pace with OCR condos for a simple reason, which is that singaporeans have suddenly discovered that they can easily save 50% by living in OCR and lose nothing in convenience. guess what, they are absolutely right.

Din Tai feng is one example. this restaurant chain used to be operating at Orchard only. now it is everywhere. Another is book stores. Harris is now at jurong point too. so exactly what can you get by living in CCR? please let us know. I cannot think of any.

[kingkong1984]

Anywhere in sin is ok. Drive, no need mrt, dun drive, take mrt. No mrt, take bus or taxi. So much convenience at a fraction of a savings. Sentosa is the real ulu area.