Asian regulators step up efforts to rein in property prices

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28-10-09, 21:15
mr funny

Asian regulators step up efforts to rein in property prices

http://www.businesstimes.com.sg/sub/...56525,00.html?

Published October 28, 2009

Asian regulators step up efforts to rein in property prices

Policymakers fear asset bubbles could put at risk fledgling economic recovery

(SINGAPORE) Asian policymakers, confronted with rising real-estate values in the region that threaten to mimic the US mortgage bubble that roiled the global economy, are stepping up efforts to rein in prices.

Regulators in South Korea, Hong Kong and Singapore told banks in recent weeks they need to tighten lending standards. Central banks, including those of India and South Korea, have signalled a readiness to raise interest rates in the coming months.

Officials are trying to apply a lesson US Federal Reserve chairman Ben Bernanke identified from the financial crisis that erupted in 2007: constrain 'excessive' leverage before it destabilises the economy. At risk is sustaining the economic expansion of the region leading the world out of recession.

'Asset bubbles are something that authorities have to contend with quickly and not let run away,' said Tai Hui, head of South-east Asian economic research at Standard Chartered in Singapore. 'Central banks are ready to take some of the wind out of the sails whether through interest rates or administrative measures.'

In Hong Kong, where mortgage rates are the lowest in at least 19 years, home prices have climbed 26 per cent this year, spurring authorities to tighten down-payment requirements for luxury homes. A one-bedroom, 816 square foot apartment in the city's Kowloon district last month sold for HK$24.5 million (S$4.3 million).

Hong Kong's index of finance stocks jumped 60 per cent this year, and the measure for property shares is up 67 per cent.

Singapore's private-residential developers sold 10,000 units in the first seven months of 2009, more than the 4,300 sold the whole of last year. In South Korea, bank lending to households expanded for a seventh straight month in August as home prices rose.

Stocks are also surging in some markets. China's Shanghai Composite Index is up 71 per cent so far this year, compared with the 25 per cent gain in the MSCI World Index, and benchmarks from Hong Kong, South Korea, Singapore and Taiwan are all up more than 50 per cent. By comparison, the US Standard & Poor's 500 Index has advanced 20 per cent.

The advance in asset prices is also reprising debate over whether to respond with interest rates, or tighter rules for financial companies to restrain credit growth. Analysts said a combination of approaches is likely.

'The challenge for the central banks is whether you want to raise interest rates because asset prices could' cause a relapse of what befell advanced economies, said Robert Subbaraman, chief economist for non-Japan Asia at Nomura International Ltd in Hong Kong. 'We're starting to see kinds of quasi-type monetary policy through regulating prudential measures to try to lean against a rapid rise in asset prices.'

Fed policymakers, who had previously judged that asset-price swings weren't a province for the central bank, abandoned that orthodoxy as the US mortgage collapse triggered US$1.6 trillion of credit losses and writedowns to date.

In Singapore, the government barred interest-only loans for some housing projects last month. It also stopped allowing developers to absorb interest payments for apartments that are still being built.

Hong Kong authorities last week limited buyers of homes costing more than HK$20 million to borrowing 60 per cent of the property's value, down from 70 per cent before. The Hong Kong Mortgage Corp, a government-backed home- loan insurer, suspended insurance for homes that aren't owner-occupied.

South Korea's financial regulator said on Oct 8 it plans to tighten regulations on non-banking finance companies' lending to households, and authorities have cut loan-to-value ratios in mortgages to 50 per cent from 60 per cent in some Seoul areas.

In the past month, China's five largest banks were told to increase write-offs against bad loans and maintain their capital adequacy.

Besides such administrative measures, Asia's central banks will need to 'put a tight watch on monetary policies' to prevent asset bubbles, the Asian Development Bank said last month.

Australia acted early this month, with a quarter point hike in the benchmark rate. Bank of Korea governor Lee Seong Tae said this month that rate rises may be bigger than the 'usual baby step' of 25 basis points. -- Bloomberg, Reuters
28-10-09, 21:19
xebay11

Prepare for the plunge.
28-10-09, 23:30
Reporter

Quote:

Originally Posted by Bloomberg

http://cdn.images.bloomberg.com/r06/...on/bg_logo.png
China QDII Funds to Target Hong Kong Stocks, Wan Says
Chua KongHo
Bloomberg
Shanghai, China
Wednesday, 28 October 2009, 9:29 CCT

‘Cheap’ Hong Kong stocks will be targeted as China expands a program for local investors to buy equities and bonds overseas, according to Lewis Wan, chief investment officer of Pride Investment Group Ltd.

E Fund Management Co. said Oct. 26 it received a $1 billion quota to invest abroad under the qualified domestic institutional investor program, the first approval by the government in 17 months. QDII funds are the only route for Chinese investors to buy overseas stocks and bonds. Hong Kong- traded shares of Chinese companies typically trade at a discount to mainland listings.

“We’ve seen a lot of Chinese money trying to invest overseas, especially in Hong Kong shares because of the cheap valuations and as a lot of the shares can’t be bought on the A- share market,” said Wan, whose Pride China Fund has gained 59% this year. “At the beginning, mostly they will invest in the big shares, for example China Mobile, Cnooc.”

Stocks on Hong Kong’s Hang Seng Index trade at 24.09 times reported earnings, less than the Shanghai Composite Index’s multiple of 34.18, weekly Bloomberg data show. China’s regulator may issue more than $4 billion of new quotas, Z-Ben Advisors estimates.

China Mobile Ltd., the world’s first phone company with more than half a billion subscribers, has declined 2.6% this year, compared with a 54 percent rally by Hong Kong’s benchmark gauge. Cnooc Ltd., the nation’s biggest offshore oil producer, has climbed 72% in 2009. Neither stocks are listed in mainland China markets.

Housing Rally

Wan also said Hong Kong’s government won’t take “aggressive” steps to curb gains in housing prices.

Developers dragged the Hang Seng down 1.9% yesterday, the most in three weeks, after the Hong Kong Monetary Authority tightened down-payment requirements for luxury homes for the first time since 1991 to curtail property speculation.

“The government is just sending some smoke to the market,” Wan said. “The government will not introduce some massive or aggressive program to cool down the property market.”

Maybe they are just smoking us with all these measures/steps?
28-10-09, 23:54
proud owner

Quote:

Originally Posted by xebay11

Prepare for the plunge.

plunge ?

as much as i wish for ... it will be negated by rich mainlander from china
29-10-09, 00:16
jwong71

Quote:

Originally Posted by proud owner

plunge ?

as much as i wish for ... it will be negated by rich mainlander from china

The rich benefit both way, up or down market!! :D

Most buyers are still waiting to see the Stock/property market to dip.
I think i just breakeven to sell the fh, and wait for the dip.
Dist 9 or 10, wait for me!! I wan dip in too.:D
29-10-09, 00:47
proud owner

Quote:

Originally Posted by jwong71

The rich benefit both way, up or down market!! :D

Most buyers are still waiting to see the Stock/property market to dip.
I think i just breakeven to sell the fh, and wait for the dip.
Dist 9 or 10, wait for me!! I wan dip in too.:D

SnP just fell again 4th straight session
29-10-09, 02:07
Regulators

how to plunge? with our efficient gov making singapore into a highly sought after place by immigrants, our property prices can only go upwards. the only way for property prices to stagnate or head south is to narrow the doors for foreigners to enter into our country. When our population reaches 7 mil one day, our property prices will be similar to that in hong kong and everyone will deem a 1k psf condo in the suburb cheap and prime area condos like st regis will hit 7kpsf at least. can't everyone see that singapore is vying to be a top financial centre in asia and when the time comes, it will be no surprise that property prices here will rival hongkong.

Quote:

Originally Posted by xebay11

Prepare for the plunge.
29-10-09, 06:57
echotrain

I hope it happens as well.

But...... When everybody including the mainstream newspapers predict a plunge, everyone will just be waiting to buy in when any correction occurs. This just helps to support the price levels.

I think a true plunge will come when no one expects one to happen.

I personally think the prices will plateau off for the next 6 months before rising again.

Perhaps it is time to move the money elsewhere?
29-10-09, 07:49
xebay11

I guess for many savy investors here, if market goes up, they will cash out, use the money and upgrade, if the market moves down they will look out for more investments.
29-10-09, 08:21
Reporter

Quote:

Originally Posted by Regulators

how to plunge? with our efficient gov making singapore into a highly sought after place by immigrants, our property prices can only go upwards. the only way for property prices to stagnate or head south is to narrow the doors for foreigners to enter into our country. When our population reaches 7 mil one day, our property prices will be similar to that in hong kong and everyone will deem a 1k psf condo in the suburb cheap and prime area condos like st regis will hit 7kpsf at least. can't everyone see that singapore is vying to be a top financial centre in asia and when the time comes, it will be no surprise that property prices here will rival hongkong.

Beside EDB, TDB, ..., the government also include STB?

Anyway, as stated, we no longer compete on price.

Quote:

Originally Posted by CNA

http://sg.yimg.com/i/sg/providers/cnalogo4.gif
STB hopes to attract more high net worth individuals to Singapore
Wong SiewYing
Channel NewsAsia
Wednesday, 21 October 2009, 2058 hrs

http://www.channelnewsasia.com/image.../phphlqbEA.jpg
Singapore's skyline

The tourism stakes are high and Singapore is trying to woo more visitors. It is betting on the two integrated resorts due to open next year, and also spinning for a more diverse crowd.

The Singapore Tourism Board (STB) said that it is on track to meeting its target of attracting 9 to 9.5 million visitors to the city this year. Despite the economic downturn, 6.2 million tourists visited Singapore in the first 8 months of this year.

STB's strategy ahead is to woo more high net worth individuals, or those with at least a million US dollars to invest.

"Singapore is limited by its size and capacity and therefore, in that case, we need to make sure that we attract the right kind of audience," said Chew Tiong Heng, director, Destination Marketing, Singapore Tourism Board.

"While we will not neglect people with smaller budgets, we want to make sure there are options to attract people in the high net worth category," Mr Chew added.

STB told a media conference that Singapore can no longer compete on price, as operating cost is higher here compared with its neighbours. What it can offer is more value and activities for visitors, on top of high profile events like the Youth Olympic Games, the F1 race and F1 Rocks concerts in 2010.

Mr Chew said: "2010 is going to be an exciting year. It is going to be a year where we are going to present a transformed Singapore to the world, so that if they find it a bit more costly to come to Singapore, they understand that there is a reason why that is so.

"So in terms of the value proposition that we are giving to consumers henceforth, it will be something of a very first world experience that they get in this part of the world."

Singapore is also working with its neighbours to boost the cruise industry and attract long-haul visitors to the region. The Pacific Asia Travel Association said that Asia Pacific is a top choice for over two-thirds of travellers from the UK and US.

STB is also looking at promoting Singapore more aggressively at emerging markets like the Middle East, and it expects to launch a branding campaign there over the next one to two years. However, STB noted that competition is heating up.

"Seoul is very aggressive in positioning itself as a convention city. Thailand is also very aggressively positioning itself as an exhibition city," said Jacqueline Ng, director, Industry Development Division, Singapore Exhibition & Convention Bureau.

STB hopes to build on 2008, a record year for Singapore's business travel industry with 3 million business visitors - garnering S$6 billion in tourism receipts.
29-10-09, 10:55
Property_Owner

Quote:

Originally Posted by jwong71

The rich benefit both way, up or down market!! :D

Most buyers are still waiting to see the Stock/property market to dip.
I think i just breakeven to sell the fh, and wait for the dip.
Dist 9 or 10, wait for me!! I wan dip in too.:D

D9/10 still has a lot of room to move up.
30-10-09, 01:11
Regulators

if mkt goes up, how to upgrade when everything and everywhere else is expensive (unless you change location to a less prime spot). If you sell ur pty in singapore, take the money and move to a cheaper developing country to buy a pty there, it is a different matter.

Quote:

Originally Posted by xebay11

I guess for many savy investors here, if market goes up, they will cash out, use the money and upgrade, if the market moves down they will look out for more investments.
30-10-09, 07:52
xebay11

Quote:

Originally Posted by Regulators

if mkt goes up, how to upgrade when everything and everywhere else is expensive (unless you change location to a less prime spot). If you sell ur pty in singapore, take the money and move to a cheaper developing country to buy a pty there, it is a different matter.

Easy but you must have at least 20% cash holding power for next property, so in the very beginning of the upmarket, upgrade by buying somewhere better, preferably with tenancy, this will help pay your monthly installments immediately, sell your current property at the rising boom market price.
30-10-09, 08:55
mcmlxxvi

Quote:

Originally Posted by Property_Owner

D9/10 still has a lot of room to move up.

Especially the MacKenzie part of D9 now still only 1150psf-1200psf..... when River Valley part (Martin Place) already 1700-1800psf...
30-10-09, 09:12
mcmlxxvi

Quote:

Originally Posted by mcmlxxvi

Especially the MacKenzie part of D9 now still only 1150psf-1200psf..... when River Valley part (Martin Place) already 1700-1800psf...

It's also like D11... the part nearer Balestier (The Axis) is around 1158psf where Novelis side hit 1570psf.
30-10-09, 09:32
xebay11

Quote:

Originally Posted by mcmlxxvi

Especially the MacKenzie part of D9 now still only 1150psf-1200psf..... when River Valley part (Martin Place) already 1700-1800psf...

Mackenzie area surroundings not very good, no short to immediate upside, maybe very long term.
30-10-09, 09:41
Property_Owner

Quote:

Originally Posted by xebay11

Mackenzie area surroundings not very good, no short to immediate upside, maybe very long term.

This area is to hold long to see the returns. Also to hope for any new plans.
30-10-09, 11:46
proud owner

Quote:

Originally Posted by Property_Owner

This area is to hold long to see the returns. Also to hope for any new plans.

agree

and by the way your inbox super full
30-10-09, 11:47
Property_Owner

Quote:

Originally Posted by proud owner

agree

and by the way your inbox super full

I know. Still clearing
30-10-09, 11:51
xebay11

Quote:

Originally Posted by Property_Owner

This area is to hold long to see the returns. Also to hope for any new plans.

By the time any new plans or decent returns start, the development would be very old already.
30-10-09, 12:59
Regulators

look at the number of parapundeks congregating around that area everyday and u understand why it is not moving much. LI is also just across the road. :doh:

Quote:

Originally Posted by mcmlxxvi

Especially the MacKenzie part of D9 now still only 1150psf-1200psf..... when River Valley part (Martin Place) already 1700-1800psf...
30-10-09, 13:03
xebay11

Quote:

Originally Posted by Regulators

look at the number of parapundeks congregating around that area everyday and u understand why it is not moving much. LI is also just across the road. :doh:

My thoughts exactly......though not in such crude terms.