View Full Version : Expect 5-15% drop in home prices by 2015: Barclays
On back of higher interest rates.
According to Barclays, it expects prices to fall by an average of 5% in 2014 and by a further 5-15% in 2015 as interest rates rise, and Barclays estimates the vacancy rate could reach an unprecedented 9.9% by 2016.
Here's more:
Secondary transactions declined 51% y/y in 2013 to 7,680 units compared with 15,676 units for 2012, down 70% from the peak of 25,843 units in 2007.
We believe the fine-tuning of the TDSR measures last week should bring some relief to marginal homeowners, but the measures do not change our view that fundamentals are likely to remain weak for the next 2-3 years. We continue to expect developer volumes to fall 20% y/y to 12,000 units in 2014 from 14,980 units in 2013.*
- See more at: http://sbr.com.sg/residential-property/news/expect-5-15-drop-in-home-prices-2015-barclays#sthash.2lqoHiKI.dpuf
If this happens the 2013 midyear carrotheads who never listen to Khaw's warnings are going to have a miserable few years.
then again, seen these kind of predictions before, but I think the difference this time is the extraordinary amount of cooling measures in place seems to be really biting.
If this happens the 2013 midyear carrotheads who never listen to Khaw's warnings are going to have a miserable few years.
then again, seen these kind of predictions before, but I think the difference this time is the extraordinary amount of cooling measures in place seems to be really biting.
Hi..I am visiting riverbank/rivertrees to do window shopping, and have a good look at the walking carrotheads.
Again, they may prove to be winner if situation goes favorable for next few years.
If this happens the 2013 midyear carrotheads who never listen to Khaw's warnings are going to have a miserable few years.
then again, seen these kind of predictions before, but I think the difference this time is the extraordinary amount of cooling measures in place seems to be really biting.
5-10% very small correction, considered very healthy if it happens.
general market can correct X%, but the individual place/unit one desires may not esp in good/hot location
CMs are within internal control and not external factors or crisis, may lead to pent-up demand later
5-10% very small correction, considered very healthy if it happens.
general market can correct X%, but the individual place/unit one desires may not esp in good/hot location
CMs are within internal control and not external factors or crisis, may lead to pent-up demand later
Very well said, especially the last part.
princess_morbucks
18-02-14, 13:00
5-10% very small correction, considered very healthy if it happens.
general market can correct X%, but the individual place/unit one desires may not esp in good/hot location
CMs are within internal control and not external factors or crisis, may lead to pent-up demand later
Yes, spoken like an expert!
Correction is always healthy because it will generate buying interest and set the market on course to achieve the next high.
Personally I am not so concern about 10 or 15%, its more of how long this decline will last before the bull comes back again.
Knowing Singapore, I think any crash will be very short live. And if you are seriously in the market for property now, better start shopping before you missed the boat again.
walkthetiger
18-02-14, 18:32
Correction is always healthy because it will generate buying interest and set the market on course to achieve the next high.
Personally I am not so concern about 10 or 15%, its more of how long this decline will last before the bull comes back again.
Knowing Singapore, I think any crash will be very short live. And if you are seriously in the market for property now, better start shopping before you missed the boat again.
Believe Mr KBW. The market will not crash....but will remain miserable for years....
Believe Mr KBW. The market will not crash....but will remain miserable for years....
Thats perhaps the worst nightmare of the industry.
so man experts, gurus and analysts expects and predicts drop drop drop with their super tok kong crystal ball ... where is the drop :beats-me-man:
as far as i see, $psf is still very high from $950-$1000psf for OCR which is 40% jump (at least) compare to 3 years ago
Only the CCR never goes up at $2xxx psf, OCR all run up like mad!
That about $1000 psf for OCR is not comparable to older launches because now they come with porecelain tiles (the cheapest tiles they can get), laminates for bedrooms (cheapest form of flooring for bedrooms they can get), and many other costs are cut + 20% useless space that sold to you! If they provide same old materials and quality and usable space, OCR condos will need to sell at $1400-1500 psf, all these courtesy of ABSD where foreigners flocking to buy OCR condos to save on ABSD! :doh:
so man experts, gurus and analysts expects and predicts drop drop drop with their super tok kong crystal ball ... where is the drop :beats-me-man:
as far as i see, $psf is still very high from $950-$1000psf for OCR which is 40% jump (at least) compare to 3 years ago
so man experts, gurus and analysts expects and predicts drop drop drop with their super tok kong crystal ball ... where is the drop :beats-me-man:
as far as i see, $psf is still very high from $950-$1000psf for OCR which is 40% jump (at least) compare to 3 years ago
Agree totally. Around 800psf for OCR condo is about right.
That is about right if developers don't provide built-in cabinets, air-cons, flooring, furnishing, and appliances (just like BTO flats)!
Agree totally. Around 800psf for OCR condo is about right.
if you have a steady job/ business and has no money emergency.
would you sell your unit?
let me give you an example, try going to sg rolex and offer any of the sellers, selling a 2014 solid gold rolex but at 1990s pricing. see how they fuc k you up:jackass:
I saw some D9 properties at low prices but these units, you wont like to stay in them
Agree totally. Around 800psf for OCR condo is about right.
When ECs already hitting 750-800psf, it maybe difficult for OCR private condo to go down to 800psf.
Agree totally. Around 800psf for OCR condo is about right.
If you want to talk about PSF, please also include unit size please. else its misleading and meaningless.
The best glimpse of the future is to look at past trends....
1. Consecutive crisis after crisis= 5 - 7 years in the doldrums.... Asian financial crisis followed by dot com burst, 911 and lastly sars = 50% drop.... sars is the worst coz the world population might be wiped out that's why the last keg is worst
2. Single global Crisis! GLOBAL Ah! = 1 year in the doldrums = 25% drop
3. Cooling measures only and slowly increasing interest rates = max 1-2 years drop = 10% Drop. In 2006 2007, interest rates go up every quarter, did prices Drop? No! It was Lehman Brothers that cause prices to plunge.
Prices started dropping Qi 2013. Max 1 years 9 months to go before prices pick up again....
For those who missed the boat please start looking now and buy in the next 1 year if price and unit is right for you....
the current OCR 2B (750-850sqft) and 3B (900-1000sqft) is priced at $900k-$1.05M ... this is so called cheap units liao
is this considered drop already?
In addition with more positive news from US market and consumption that helps to move Singapore market too.
The best glimpse of the future is to look at past trends....
1. Consecutive crisis after crisis= 5 - 7 years in the doldrums.... Asian financial crisis followed by dot com burst, 911 and lastly sars = 50% drop.... sars is the worst coz the world population might be wiped out that's why the last keg is worst
2. Single global Crisis! GLOBAL Ah! = 1 year in the doldrums = 25% drop
3. Cooling measures only and slowly increasing interest rates = max 1-2 years drop = 10% Drop. In 2006 2007, interest rates go up every quarter, did prices Drop? No! It was Lehman Brothers that cause prices to plunge.
Prices started dropping Qi 2013. Max 1 years 9 months to go before prices pick up again....
For those who missed the boat please start looking now and buy in the next 1 year if price and unit is right for you....
I feel the market will remain flat...
Why should anybody sell their property for a lower price, when they are getting positive rental yield?? Most will just hold..
Only developers will try to be creative by offering smaller units at ulu -er locations...Even they cant play around too much, having bid a high price for the land plus faced with a shortage of workers and higher operating cost....
So how can prices go down??
Prices will only go down in the following scenarios
1) Ppl lose jobs
2) Foreigners leave (no rental income)
3) Global market crash...
All three above are unlikely in the next 3 years...
There will always be owners who are struggling to find tenant for their property and eventually when they get worried and sell even if they make losses.
When buying investment property for rental, always go for good unit, good layout, good facing because good property will attract good tenant and it will become even more important when there is an over supply in the market.
Yes, but you pay for what you get...
Good layout, good location, good everything= high price tag
There's no free lunch...
If this happens the 2013 midyear carrotheads who never listen to Khaw's warnings are going to have a miserable few years.
whether will be miserable onot oso nid to depends on which project one buy mah ....
walkthetiger
19-02-14, 10:51
I feel the market will remain flat...
Why should anybody sell their property for a lower price, when they are getting positive rental yield?? Most will just hold..
Only developers will try to be creative by offering smaller units at ulu -er locations...Even they cant play around too much, having bid a high price for the land plus faced with a shortage of workers and higher operating cost....
So how can prices go down??
Prices will only go down in the following scenarios
1) Ppl lose jobs
2) Foreigners leave (no rental income)
3) Global market crash...
All three above are unlikely in the next 3 years...
Essential positive thinking for people who choose to keep holding.
But, the usually herd's worry "If I choose to hold, what if the rest doesn't follow, then will it left me with just some fellows holding onto something(doesn't appreciate or may even depreciate) for years?" is always there.
Singapore property is unique.
There's clearly huge demand for rental by foreigners especially in the mass market sector. Even if the rent is slightly lowered, there will be hoards of rent -hungry foreigners knocking at your door. I truly believe that as long as the foreigner surplus is maintained, renting out mass market properties should not be an issue. This in turn means owners are able to cover their mortgage.
Of course if there is a policy change on foreign PMETs into Singapore, then you can say goodbye to the holding power of owners, and the panic sale will start.
walkthetiger
19-02-14, 22:07
Singapore property is unique.
There's clearly huge demand for rental by foreigners especially in the mass market sector. Even if the rent is slightly lowered, there will be hoards of rent -hungry foreigners knocking at your door. I truly believe that as long as the foreigner surplus is maintained, renting out mass market properties should not be an issue. This in turn means owners are able to cover their mortgage.
Of course if there is a policy change on foreign PMETs into Singapore, then you can say goodbye to the holding power of owners, and the panic sale will start.
Also factor in the coming huge supply of new houses, and so the competition of tenants.
Was looking at classified paper today, Beverly Hills used to ask for $9m few months back, today someone advertised for $6.2m... Dropped quite significant...:doh:What happened? If I have the money, I would definitely consider ..haha.
Singapore property is unique.
There's clearly huge demand for rental by foreigners especially in the mass market sector. Even if the rent is slightly lowered, there will be hoards of rent -hungry foreigners knocking at your door. I truly believe that as long as the foreigner surplus is maintained, renting out mass market properties should not be an issue. This in turn means owners are able to cover their mortgage.
Of course if there is a policy change on foreign PMETs into Singapore, then you can say goodbye to the holding power of owners, and the panic sale will start.
Singaporeans are unique, all want to retire as a landlord.
Singapore property is unique.
There's clearly huge demand for rental by foreigners especially in the mass market sector. Even if the rent is slightly lowered, there will be hoards of rent -hungry foreigners knocking at your door. I truly believe that as long as the foreigner surplus is maintained, renting out mass market properties should not be an issue. This in turn means owners are able to cover their mortgage.
Of course if there is a policy change on foreign PMETs into Singapore, then you can say goodbye to the holding power of owners, and the panic sale will start.
Hasn't there already been a change? Even high income PMETS (way above $12k) are having their EPs rejected..
thomastansb
20-02-14, 09:29
I think that is the wrong approach. You forget the most important factor - purchased price and rental.
When buying for rental, you only need calculation. If you are buying a studio, look around and see how much is a similar sized studio is worth.
Let's say if I buy Altez studio and Icon studio average 3.8k rental, then I would probably expect similar rental. Then I work out the bank installment + misc fees and see if I am comfortable enough with the amount. I will also factor in a 30% drop in rental and a 3.5% interest on a worst case scenario.
Your layout how good, also no use. The rental will be similar to nearby projects.
There will always be owners who are struggling to find tenant for their property and eventually when they get worried and sell even if they make losses.
When buying investment property for rental, always go for good unit, good layout, good facing because good property will attract good tenant and it will become even more important when there is an over supply in the market.
I think that is the wrong approach. You forget the most important factor - purchased price and rental.
When buying for rental, you only need calculation. If you are buying a studio, look around and see how much is a similar sized studio is worth.
Let's say if I buy Altez studio and Icon studio average 3.8k rental, then I would probably expect similar rental. Then I work out the bank installment + misc fees and see if I am comfortable enough with the amount. I will also factor in a 30% drop in rental and a 3.5% interest on a worst case scenario.
Your layout how good, also no use. The rental will be similar to nearby projects.
+1 . . . . .
walkthetiger
20-02-14, 10:23
I will also factor in a 30% drop in rental and a 3.5% interest on a worst case scenario.
Your layout how good, also no use. The rental will be similar to nearby projects.
3.5% does't seem like worst case scenario...
walkthetiger
20-02-14, 10:39
I will also factor in a 30% drop in rental and a 3.5% interest on a worst case scenario.
Your layout how good, also no use. The rental will be similar to nearby projects.
.....................
What is the point of good unit, good layout, good facing when your unit is facing the tall chimney spilling harzardous gases, smokes etc into the sky and into your unit nearby?
So, that is why LOCATION X3 is the most important BUT you never mentioned that! :rolleyes:
There will always be owners who are struggling to find tenant for their property and eventually when they get worried and sell even if they make losses.
When buying investment property for rental, always go for good unit, good layout, good facing because good property will attract good tenant and it will become even more important when there is an over supply in the market.
3.5% does't seem like worst case scenario...
Indeed. I remember paying 3.75% as recently as 2009.
https://www.youtube.com/watch?v=5CpaUBVSYO4
Cooling Measures - Why, What and What's Next?
https://www.youtube.com/watch?v=7kh8zy1dcLU
Cooling Measures - Why, What and What's Next? (Part 2)
https://www.youtube.com/watch?v=tBewtJfUnpI
Cooling Measures - Why, What and What's Next? (Part 3)
Indeed. I remember paying 3.75% as recently as 2009.
Many years back (probably in the 80s), fixed deposit was 8%. Thus housing loan was higher than that.
Many years back (probably in the 80s), fixed deposit was 8%. Thus housing loan was higher than that.
Many years back nobody believe you can just type in the computer system and you get money into the system.
What is the point of good unit, good layout, good facing when your unit is facing the tall chimney spilling harzardous gases, smokes etc into the sky and into your unit nearby?
So, that is why LOCATION X3 is the most important BUT you never mentioned that! :rolleyes:
Rental yield for property in OCR places like Jurong is higher than those in CCR, thats a facts that I am sure even the most bullish CCR owner who bought at the wrong side of CCR also cannot dispute.
Location x 3 is correct, and good location property is not limited to CCR, because plenty of CCR property are crap, suitable for those wannabe.
Hasn't there already been a change? Even high income PMETS (way above $12k) are having their EPs rejected..
No real change...Companies are now just required to post their job ads for a couple of weeks to give time for locals to apply. The hiring decision still lies with the company... I don't see anything happening...
walkthetiger
20-02-14, 21:13
Singaporeans are unique, all want to retire as a landlord.
Can't blame them too much, rental was too good to believe in recent years.
Many of my coffeeshop friends were worry about retirement, most of their kids only earn enough to support themselves, and some even worry becoming a burden to their kids. Property did a good job, helping them to believe that rental will secure comfort retirement.... No matter how hard I explant to them not to jump in at the peak, they did not listen and took a bet buying, spent their cpf and huge retirement saving in some "half bake" properties...
How much can you rent your <500 sqft unit in J Gateway purchased at $1700 psf? What high yield are you talking about when there is ZERO capital appreciation potential?? :rolleyes:
You are real naive wannabe!
When buying properties, we look at total return, not just rental yield! Only stupid idiot will buy property with ZERO potential capital appreciation and keep EMPHASIZING that he is just looking at gross rental yield without taking into consideration wear and tear by tenants, hidden repair costs after tenants left, and your tenants running road without paying rent!
I rather buy and keep them vacant in that case! :tsk-tsk:
Rental yield for property in OCR places like Jurong is higher than those in CCR, thats a facts that I am sure even the most bullish CCR owner who bought at the wrong side of CCR also cannot dispute.
Location x 3 is correct, and good location property is not limited to CCR, because plenty of CCR property are crap, suitable for those wannabe.
thomastansb
20-02-14, 22:02
Not really. It depends on your purchase price. Let's say you buy J Gateway studio at 800k. Nearby studio average 2.5k nia. Based on 30 years loan, 80% @ 1.5% interest, you are already paying 2.2k to the bank. Still have maintenance and taxes to pay. If rental drop 30% and interest go up to 3.5%, you are in serious trouble.
Rental yield for property in OCR places like Jurong is higher than those in CCR, thats a facts that I am sure even the most bullish CCR owner who bought at the wrong side of CCR also cannot dispute.
Location x 3 is correct, and good location property is not limited to CCR, because plenty of CCR property are crap, suitable for those wannabe.
How much can you rent your <500 sqft unit in J Gateway purchased at $1700 psf? What high yield are you talking about when there is ZERO capital appreciation potential?? :rolleyes:
You are real naive wannabe!
When buying properties, we look at total return, not just rental yield! Only stupid idiot will buy property with ZERO potential capital appreciation and keep EMPHASIZING that he is just looking at gross rental yield without taking into consideration wear and tear by tenants, hidden repair costs after tenants left, and your tenants running road without paying rent!
I rather buy and keep them vacant in that case! :tsk-tsk:
Why waste time speculating about the future when there are actual URA rental records of similar property in poorer location to compare?
Again, please dont waste time running around the bush because eventually you will realize you are chasing after your own tail.
thomastansb
20-02-14, 22:06
I think can go up to 800+k la. But I think rental will sucks there. Probably 2.5k to 2.8k at most.
I never like OCR studio. I prefer those studio in CCR to rent out. There is a lesser chance that an expat will destroy your house or fail to pay you rental. If your tiny studio is in some ulu place, who are you going to rent to?
How much can you rent your <500 sqft unit in J Gateway purchased at $1700 psf? What high yield are you talking about when there is ZERO capital appreciation potential?? :rolleyes:
You are real naive wannabe!
When buying properties, we look at total return, not just rental yield! Only stupid idiot will buy property with ZERO potential capital appreciation and keep EMPHASIZING that he is just looking at gross rental yield without taking into consideration wear and tear by tenants, hidden repair costs after tenants left, and your tenants running road without paying rent!
I rather buy and keep them vacant in that case! :tsk-tsk:
Not really. It depends on your purchase price. Let's say you buy J Gateway studio at 800k. Nearby studio average 2.5k nia. Based on 30 years loan, 80% @ 1.5% interest, you are already paying 2.2k to the bank. Still have maintenance and taxes to pay. If rental drop 30% and interest go up to 3.5%, you are in serious trouble.
Whats the point of massaging numbers for the sake of argument when we have actual rental record on URA website for reference?
MM at Caspian are going at 2700-2800 per month and you expect J Gateway located at the heart of Jurong Gateway to be 2.5k nia??
thomastansb
23-02-14, 14:31
Rental is dropping. Your J gateway will TOP in 3 years time.
Whats the point of massaging numbers for the sake of argument when we have actual rental record on URA website for reference?
MM at Caspian are going at 2700-2800 per month and you expect J Gateway located at the heart of Jurong Gateway to be 2.5k nia??
Let's be realistic: People rent MM in CCR is because they like the CCR location, but cannot afford big unit in CCR, so rent CCR small unit. Also, there is NO HDB flats in those prime locations to rent...
People would want to pay so much rent in an OCR location for just an MM? What for if they can rent a HDB at >2x the size and cheaper rent? As we all know, when people rent in OCR, "CHEAP" is the NO 1 consideration........... :doh:
I think can go up to 800+k la. But I think rental will sucks there. Probably 2.5k to 2.8k at most.
I never like OCR studio. I prefer those studio in CCR to rent out. There is a lesser chance that an expat will destroy your house or fail to pay you rental. If your tiny studio is in some ulu place, who are you going to rent to?
Rental is dropping. Your J gateway will TOP in 3 years time.
Rental is dropping in Jurong? There are actually more jobs coming into Jurong than housing
Hospital alone will be 3000 jobs, thats excluding BCA, AVA and the future tenants that are going to occupy Westgate tower. In 3 years time, there will also be a new hotel and new office block at Venture ave.
Then there is the Dulwich College Singapore at Bukit Batok which is opening maybe by end of 2014, and this is just a couple of KM away from JLD. With so much happening in around JLD, owner will have very little concern about finding tenants.
Let's be realistic: People rent MM in CCR is because they like the CCR location, but cannot afford big unit in CCR, so rent CCR small unit. Also, there is NO HDB flats in those prime locations to rent...
People would want to pay so much rent in an OCR location for just an MM? What for if they can rent a HDB at >2x the size and cheaper rent? As we all know, when people rent in OCR, "CHEAP" is the NO 1 consideration........... :doh:
Lets be realistic, people who have done their homework and research will use facts and data to back up what they said instead of telling fairytale stories.
As for CCR, people who bought at the wrong side of CCR are still talking about $1800 - 1900psf, whereas those in the better side area already selling at >$4000psf.
So I hope now you know why Teddybear is so sour about the success of JLD.
:dstill rentableoh:
I think can go up to 800+k la. But I think rental will sucks there. Probably 2.5k to 2.8k at most.
I never like OCR studio. I prefer those studio in CCR to rent out. There is a lesser chance that an expat will destroy your house or fail to pay you rental. If your tiny studio is in some ulu place, who are you going to rent to?
still rentable la.
can always rent to blue collar FT mah
nowadays, their std oso risen.
normal dorm they now hiam ... tink they oso wanna live in pc lah :D
Not really. It depends on your purchase price. Let's say you buy J Gateway studio at 800k. Nearby studio average 2.5k nia. Based on 30 years loan, 80% @ 1.5% interest, you are already paying 2.2k to the bank. Still have maintenance and taxes to pay. If rental drop 30% and interest go up to 3.5%, you are in serious trouble.
if rental drop 30%, and interest hit 3.5%
those who bgt very late etc after 2012-2013 will be badly hit.
almost alot pple kena.
Not really. It depends on your purchase price. Let's say you buy J Gateway studio at 800k. Nearby studio average 2.5k nia. Based on 30 years loan, 80% @ 1.5% interest, you are already paying 2.2k to the bank. Still have maintenance and taxes to pay. If rental drop 30% and interest go up to 3.5%, you are in serious trouble.
If interest rate up 3.5%, mortgage is $2.87k. If rent drop 30%, that would be $1.75k. So net is about $1.1k cash topup.
But most studio buyers are using it as a second or above property. Meaning when they loan, say 60%, $480k, at 3.5%, mortgage is $2.15k. So not too bad. Not forgetting, out of the monthly mortgage to bank some money goes towards capital repayment too.
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