View Full Version : Home prices seen rising further this year
Published April 25, 2007
MAS MACROECONOMIC REVIEW
Home prices seen rising further this year
Building, financial services sectors to benefit as well
By UMA SHANKARI
THE Monetary Authority of Singapore (MAS) yesterday said home prices are expected to continue to grow this year - after climbing 4.6 per cent in the first quarter, the highest growth seen in seven years.
The gain, which has so far been greatest for the luxury market, could also filter down to other mid to high-end segments which could benefit from the steady stream of buyers who have sold their houses in en bloc sales, Singapore's central bank said in its latest Macroeconomic Review.
MAS expects the property upturn to spill over to the construction and financial services sectors.
'Contracts awarded have trended up steadily from 2003 to reach $16.1 billion last year, a level not seen since 2000. This is expected to translate into higher certified payments and value added for the sector in the near term,' says MAS. 'Indeed, the recovery of the construction sector continued in early 2007, underpinned by ongoing work in the residential segment.'
A number of ongoing major projects including the Marina Bay Financial and Business Centre, the integrated resorts and the downtown MRT extension, are also expected to further fuel the recovery in the construction sector.
The recent spike in raw material costs caused by disruptions to the supply of sand has not resulted in delays in building projects, MAS says. But the bank warns that in the future, new developments could be slowed or delayed if sand and concrete become more difficult to obtain.
The large number of upcoming new commercial developments should also see more credit being extended to the building and construction industry, MAS says. This is expected to benefit the financial services sector.
And on the consumer loans front, while mortgage loan growth has remained tepid in recent quarters, some upside could be seen in the months ahead as the residential property uptick at the luxury end begins to spread to the broader market.
MAS also says that the recent upswing in property prices will have only a small impact on inflation this year. This is mainly because substantial price increases in the near term should be largely confined to the upper and middle segments of the private residential market, MAS predicts.
'On balance, the impact of rising property prices on consumer price index (CPI) inflation is likely to be modest, with the direct impact contributing only 0.1 percentage point in 2007, compared with the average of negative 0.2 percentage points over the past three years,' says MAS.
Published April 25, 2007
MAS MACROECONOMIC REVIEW
Home prices seen rising further this year
Building, financial services sectors to benefit as well
By UMA SHANKARI
THE Monetary Authority of Singapore (MAS) yesterday said home prices are expected to continue to grow this year - after climbing 4.6 per cent in the first quarter, the highest growth seen in seven years.
The gain, which has so far been greatest for the luxury market, could also filter down to other mid to high-end segments which could benefit from the steady stream of buyers who have sold their houses in en bloc sales, Singapore's central bank said in its latest Macroeconomic Review.
MAS expects the property upturn to spill over to the construction and financial services sectors.
'Contracts awarded have trended up steadily from 2003 to reach $16.1 billion last year, a level not seen since 2000. This is expected to translate into higher certified payments and value added for the sector in the near term,' says MAS. 'Indeed, the recovery of the construction sector continued in early 2007, underpinned by ongoing work in the residential segment.'
A number of ongoing major projects including the Marina Bay Financial and Business Centre, the integrated resorts and the downtown MRT extension, are also expected to further fuel the recovery in the construction sector.
The recent spike in raw material costs caused by disruptions to the supply of sand has not resulted in delays in building projects, MAS says. But the bank warns that in the future, new developments could be slowed or delayed if sand and concrete become more difficult to obtain.
The large number of upcoming new commercial developments should also see more credit being extended to the building and construction industry, MAS says. This is expected to benefit the financial services sector.
And on the consumer loans front, while mortgage loan growth has remained tepid in recent quarters, some upside could be seen in the months ahead as the residential property uptick at the luxury end begins to spread to the broader market.
MAS also says that the recent upswing in property prices will have only a small impact on inflation this year. This is mainly because substantial price increases in the near term should be largely confined to the upper and middle segments of the private residential market, MAS predicts.
'On balance, the impact of rising property prices on consumer price index (CPI) inflation is likely to be modest, with the direct impact contributing only 0.1 percentage point in 2007, compared with the average of negative 0.2 percentage points over the past three years,' says MAS.
This is good!
Can MAS also recommend some properties for us to buy?
Credit Suisse
08-05-07, 15:43
"The rate of [property] appreciation in Singapore looks extremely compelling. Places like Tokyo, London, Hong Kong and cities in the US are already up on the curve and quite mature. In Singapore, it looks like the beginning of a multiyear boom."
- Arjuna Mahendran, Chief Investment Strategist
Credit Suisse Private Banking
Singapore
CityDev chairman plans to keep some units in new residentialprojects
Kalpana Rashiwala
Business Times
10 May 2007
Kwek Leng Beng is so confident about the ongoing property bull market that he's considering retaining a portion in some new residential developments for rental income and capital appreciation.
'We'll do this selectively and it will help us even out earnings fluctuations from our core property development/ trading business,' says Mr Kwek, who is executive chairman of Hong Leong Group and its listed property unit City Developments.
This new business model is no different from keeping office buildings for rental income, he explains in a recent interview with BT.
'Residential also has a lot of potential. Let's say, I had two towers in a residential project. I could sell one, and keep the other - and maybe sell later when prices are higher, keep for rental income, or even go for an en bloc sale one day, when I will be entitled to a windfall,' he said.
The issue in today's hot property market is that 'the selling price of your current project becomes the break-even cost for your next project' because of the ever-increasing cost of buying replacement land. 'You might as well not sell your residential development, ' Mr Kwek argues.
He says that retaining a portion of units in residential developments makes sense also because residential rentals are set to appreciate further on the back of leasing demand created by the influx of foreign talent into Singapore.
....................
Another compelling reason to include real estate as part of one's investment portfolio: 'If you look at Forbes' list of the world's richest persons, many of them have their wealth backed by real estate.'
Now Mr Kwek is also buying. How not to go up further?
Unregistered
10-05-07, 11:35
Now Mr Kwek is also buying. How not to go up further?
Mr Kwek is one the biggest property seller in Asia by profession. Are you having a Bird flu and you can't even think straight?
"You should quickly re-invest your windfall in another property, to continue riding on the current buoyant property market."
- 10 May 2007
"You should quickly re-invest your windfall in another property, to continue riding on the current buoyant property market."
- 10 May 2007
[QUOTE=CB Crack]"You should quickly refill your toilet paper in another
toilet, to continue shitting on the current overflowing toilet bowl."
[QUOTE=CB Crack]"You should quickly refill your toilet paper in another
toilet, to continue shitting on the current overflowing toilet bowl."
Cheong ah!
If toilet cleaner can buy, you can also buy!
Buy buy buy!
Huat ah!
Unregistered
15-05-07, 19:12
Yah rise by negative 150% next year.
Hope you all go bankrupt
Yah rise by negative 150% next year.
Hope you all go bankrupt
Don't be sad. Just imagine all of us go bankrupt.
This should make you happy right? Just imagine!
We hope you are happy now!
Break! Break! Break all the reocrd psf!
150% ROI on our investment soon.
We are happy too!
You are happy. We are happy. We all are happy!
What a happy family!
Yes!
Unregistered
16-05-07, 11:55
Rise somemore? might as well say orchard command $10,000psf.
the sail $9,000psf.
Mbr $10,000psf.
rubbish and super bubble.
when burst, the banks also will go bankrupt.
Rise somemore? might as well say orchard command $10,000psf.
the sail $9,000psf.
Mbr $10,000psf.
rubbish and super bubble.
when burst, the banks also will go bankrupt.
$10,000 psf?
Wow! You sure or not? You got inside news?
Now only $4xxx psf going $5,000 psf.
$10,000 psf means 100% gain, you know?
Wow! Better buy now before it go up.
Unregistered
16-05-07, 12:14
**** you lah, you stupid in the brain or just purely retarded?
agents suck
16-05-07, 12:24
no man, he is neither of the above.
He is just a property agent.
**** you lah, you stupid in the brain or just purely retarded?
Why you care whether I am stupid or retarded?
As long as I can increase my wealth in this property boom, I am cupid!
"Black cat or white cat? Can catch mouse is good cat!"
Yes!
no man, he is neither of the above.
He is just a property agent.
If you dislike property agent, don't use their service lor!
Don't need to be dependent on them what!
Get yourself a good lawyer, you can make money in this property boom without agents!
"Good cat is a cat that make money!"
Yes!
It says this will fuel demand for its mass- to mid-market condominiums.
Reuters
Singapore
17 May 2007
Singapore's drive to attract more immigrants will lift the earnings of residential property developer MCL Land for years to come, the firm's finance chief said on Thursday.
The firm, 77% owned by Hongkong Land , expects demand for its mass- to mid-market condominiums will be fueled by the government's plan to woo more skilled foreign workers and boost the country's population to 6.5 million from 4.5 million.
"The long-term prospect for Singapore's property market is good. You need to house that additional two million," Steve Chu, MCL Land's Chief Financial Officer, told Reuters in an interview.
Singapore generated over 90% of MCL Land's earnings last year with the remainder coming from neighbouring Malaysia.
Though private home prices in Singapore are at their highest levels in seven years, many of MCL Land's rival developers such as CapitaLand and Keppel Land are diversifying out of the country by building apartments, malls and offices in markets such as China and India.
But Chu said the risk-returns of venturing beyond MCL Land's main markets of Singapore and Malaysia would not be attractive for a small firm that had a staff of about 30.
"The current boom in Singapore has two to three more years to go before it eases off," Chu said, adding that Singapore private home prices could rise a further 15-20% this year.
MCL Land has a market capitalisation of $654 million and is the 22nd-largest property firm among the 40 in Singapore's property index .
Landbank
Chu said MCL Land plans to spend up to S$600 million ($394 million) this year to grow its current landbank of about 1.6 million square feet of gross floor area.
"We are actively looking for sites, particularly along the fringes of the core central area," he said.
MCL Land's landbank acquisitions will be funded by cash from its home sales as well as bank financing.
"We are comfortable with keeping our current debt gearing of 60% to equity," Chu added.
MCL Land, which has tied up with rival developer Ho Bee Investment to develop two residential projects, has been approached by European and U.S. funds keen to invest in Singapore property.
"We are not actively considering their offers as we haven't come across any large sites available for development yet," Chu said.
Chu said MCL Land's 2007 net profit would easily exceed the US$30.5 million net profit it earned last year.
"It will definitely be a much better performance than 2006," he said.
Bucking the trend among Singapore property firms which reported strong first-quarter earnings growth, MCL Land posted a 75% fall in net profit for the three months ended March to US$1 million.
Kim Eng Research analyst Wilson Liew said MCL Land's net profit figure was "deceptively abysmal" because the developer's unique accounting treatment of recognising its home sale profits only upon the completion of its projects.
"MCL Land will reap the benefits of capital appreciation in the mass market," said Liew, who raised his target share price for the developer to S$3.23.
MCL Land shares, which rose 0.75% to close at S$2.69 on Thursday, have gained 24% in the last three months, outperforming the 17% average gain of Singapore real estate stocks but underperforming the 33% increase chalked up by Ho Bee Investment over the same period.
Wow! Good news indeed!
2 millions more people seeking houses.
2-3 more years for me to increase my wealth!
15-20% price hike this year!
What can I ask for! This is cool man!
Unregistered
18-05-07, 08:50
People like DAREDEVIL pretend to be a owner when he is a property agent.
This website really has a lot of play acting.
Really makes me sick in the stomach
People like DAREDEVIL pretend to be a owner when he is a property agent.
This website really has a lot of play acting.
Really makes me sick in the stomach
If you don't like DAREDEVIL, go scold him.
He is not in this thread.
You are disturbing us. Be considerate!
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