Property price is coming down fast

[basic]

MAS yesterday already said interest rate is on the way up now...probably they heard S&P going to downgrade many global banks, definitely all 3 local banks are in very bad position on interest spread of 1%, global standard is 4%, lost big big in last few yrs....
US FED at 0% rate, mortgage loan is 4.5%...HKD ties to US$, housing loan also at 4%....for Spore housing loan rate at 4% is norm, may not be profitable...
All the 3 banks should hike mortgage loan to 4% immediately....
for the past few yrs 1% loan...they have to find way fast before foreign fund whack them hard or downgrade them....package them & sell away....



資金貴渣打再加按息

繼九月底之後，渣打香港再度宣布調高按揭息率，下周一起銀行同業拆息（H） 按揭計劃息率，由H加2至2.5厘，調整為H加2.5至3厘，為現有提供H按銀行中最高，而該行最優惠利率（P）按揭計劃息率，則調整為P減2至2.4 厘。有銀行主管表示，至年底按息依然有上漲空間。

MAS said spore rate follow US at 0.25%...then US mortgage rate at 4.5%-5%, why not follow??...
anyway....rate is on the way up now....let say eventually same as HK & US at 4% NEXT YEAR to avoid S&P & BIS or .....investigation....for a hike of 3% for every $1mil loan is $2.5k/m extra on interest part only.....not bad....monthly payment around S$6k/m, rental can cover??.....haha....
more to come in 2013.....hope to see an explosive one...double digits....

[DC33_2008]

Old timers have gone through all this. Younger investors with no deep pockets have to be prepared for it if it comes. There are already vultures out there looking asking for discount. They must be crazy. Not time yet.

MAS said spore rate follow US at 0.25%...then US mortgage rate at 4.5%-5%, why not follow??...
anyway....rate is on the way up now....let say eventually same as HK & US at 4% NEXT YEAR to avoid S&P & BIS or .....investigation....for a hike of 3% for every $1mil loan is $2.5k/m extra on interest part only.....not bad....monthly payment around S$6k/m, rental can cover??.....haha....
more to come in 2013.....hope to see an explosive one...double digits....

[dmonddd]

sentiments now similar to pre 2008

[devilplate]

MAS said spore rate follow US at 0.25%...then US mortgage rate at 4.5%-5%, why not follow??...
anyway....rate is on the way up now....let say eventually same as HK & US at 4% NEXT YEAR to avoid S&P & BIS or .....investigation....for a hike of 3% for every $1mil loan is $2.5k/m extra on interest part only.....not bad....monthly payment around S$6k/m, rental can cover??.....haha....
more to come in 2013.....hope to see an explosive one...double digits....

so u r trying to say our banks cook their accounts isit?

u guys deposit $$ in banks and banks gives u how much int rate?? tink deeper....LOL

i can truly understand ur plight la......inflation 4-5% den ur poor little cash earning <0.5%......

[dmon]

If risks are higher this translates into higher lending rates
Deposit rates will go up mopping liquidity from market ?

So Monthly instalments will go up with pressure for higher rent? But if tenants are spolit with choices older projects will not allow for increase in rents but instead pressures rent to go down. Is that the case now? or coming soon ? Or will not happen?

[dmon]

If risks are higher this translates into higher lending rates
Deposit rates will go up mopping liquidity from market ?

So Monthly instalments will go up with pressure for higher rent? But if tenants are spolit with choices older projects will not allow for increase in rents but instead pressures rent to go down. Is that the case now? or coming soon ? Or will not happen?

[devilplate]

If risks are higher this translates into higher lending rates
Deposit rates will go up mopping liquidity from market ?

So Monthly instalments will go up with pressure for higher rent? But if tenants are spolit with choices older projects will not allow for increase in rents but instead pressures rent to go down. Is that the case now? or coming soon ? Or will not happen?

spreads shd go up.....'normal' spread shd be 1.25%+- and not the current ridiculously low 0.65-0.8%......

[devilplate]

can take a look at sgs bonds.....
http://www.fundsupermart.com/main/sgs/SGShome.tpl

0-5yrs maturity all gives less den 1%.....LOL....cheap $$$$$$$$

[dmon]

can take a look at sgs bonds.....
http://www.fundsupermart.com/main/sgs/SGShome.tpl

0-5yrs maturity all gives less den 1%.....LOL....cheap $$$$$$$$

Any new bonds issue of late?
Or corporates are getting financing through equity or loans?

[devilplate]

Any new bonds issue of late?
Or corporates are getting financing through equity or loans?

remember recent hdb bonds? ridiculously low also all snapped up....LOL

too much liquidity in the market for now

i suspect banks got too much cash also......this whole yr haf been receiving calls asking me to take personal loan....LOL

[dmon]

remember recent hdb bonds? ridiculously low also all snapped up....LOL

Not hdb as those are sovereign risk rated

I m referring to corporates. Developers will be one good corporate example

[devilplate]

http://www.hdb.gov.sg/fi10/fi10296p....9?OpenDocument

The issuance comprises a S$600 million, 7-year Fixed Rate Notes issue with a coupon of 1.83% per annum payable semi-annually in arrear.

[devilplate]

Not hdb as those are sovereign risk rated

I m referring to corporates. Developers will be one good corporate example

i am toking abt how our local banks can borrow cheap $$$

banks can get from our govt

[devilplate]

Not hdb as those are sovereign risk rated

I m referring to corporates. Developers will be one good corporate example

tat day AMK mentioned on Olam bond mah....i tink got 7-9% rite......u can try and buy some....hehee

[dmon]

i am toking abt how our local banks can borrow cheap $$$

banks can get from our govt

Bonds indirectly funded by depositors. Bank trades in $$$
Get deposits from depositors individual or corporates and with a bit of capital, lend out $$$ to individual or corporate and also hold some corporate or gahmen bonds for trading

Gahmen fins banks? I don't see how. Probably I don't know banking business well enough. Pardon me

[dmon]

tat day AMK mentioned on Olam bond mah....i tink got 7-9% rite......u can try and buy some....hehee

Olam has trading mainly in agri products
There will be food shortage
Outlook should be better than developers
Developers if issue bonds - will it be priced higher than olam's?

[devilplate]

Bonds indirectly funded by depositors. Bank trades in $$$
Get deposits from depositors individual or corporates and with a bit of capital, lend out $$$ to individual or corporate and also hold some corporate or gahmen bonds for trading

Gahmen fins banks? I don't see how. Probably I don't know banking business well enough. Pardon me

indirectly bro.....

http://www.sgs.gov.sg/pub_guide/faqs...investors.html

[devilplate]

Olam has trading mainly in agri products
There will be food shortage
Outlook should be better than developers
Developers if issue bonds - will it be priced higher than olam's?

u better PM AMK

i nvr buy any bonds at all! LOL.....last time bot some fixed income UTs.....boliao one...LOL

[dmon]

Corporate can do fixed Rate bond or floating rate notes for fund raising.
Depend on their view of future interest rate
Or they can later do a derivative interest structure

Trend now - fixed or floating rate?
Why?

[dmon]

indirectly bro.....

http://www.sgs.gov.sg/pub_guide/faqs...investors.html

I don't understand how gahmen funds banks indirectly. Anyone can explain ?

[dmon]

http://www.hdb.gov.sg/fi10/fi10296p....9?OpenDocument

The issuance comprises a S$600 million, 7-year Fixed Rate Notes issue with a coupon of 1.83% per annum payable semi-annually in arrear.

$600 million out from system soon and will be with gahmen? Safe investment

[devilplate]

$600 million out from system soon and will be with gahmen? Safe investment

this shows too much liquidity out there still.....

[SpinCity]

Obviously with euro crisis, bankers are all worried. They are worried not because of SG fundamentals. But because of external factors, that will eventually hit SG hard. Among my expat friends who have bought SG pties, none is selling. But all expect price to stagnant or drop a bit, but not crash. One said would be 5%. And mortgage lending will be tightened, especially by foreign banks. That means spread will go up. SIBOR will stay low, but new loan spreads will move up. That's why it's good to secure throughout low spreads.

Bankers' real concern is Euro. SG property price level by itself reflects its status as 2nd HK. Rich chinese buying is real. The recent nassim trade was done by a Chinese. However if euro tanks, SG as a trading base will be hit hard. But this euro game has not been fully played out yet. Every one is betting ECB will do it at the very very last minute

Your friends' expectation of stagnant price or 5% drop is as good a guess as someone else's 50% crash, we will only know when it is behind us

Agree with you on the interest rate. SIBOR will somehow be contained but spread will definitely go up to reflect the changes in banks' risk appetite. I think some banks now still offer 70 to 100 bps spread for mortgage, it MAY be the last chance to lock in now, especially those who are on board rate.

[devilplate]

Your friends' expectation of stagnant price or 5% drop is as good a guess as someone else's 50% crash, we will only know when it is behind us

Agree with you on the interest rate. SIBOR will somehow be contained but spread will definitely go up to reflect the changes in banks' risk appetite. I think some banks now still offer 70 to 100 bps spread for mortgage, it MAY be the last chance to lock in now, especially those who are on board rate.

sianz....most of my loan deal done when spread was 1-1.25%

btw u got the idea liao which i highlighted in red? when we say expecting 5-10% correction and its no big deal if we guessed it rite......however, we can be famous overnite if market really crash >50% when we predicted it to be

[SpinCity]

MAS said spore rate follow US at 0.25%...then US mortgage rate at 4.5%-5%, why not follow??...
anyway....rate is on the way up now....let say eventually same as HK & US at 4% NEXT YEAR to avoid S&P & BIS or .....investigation....for a hike of 3% for every $1mil loan is $2.5k/m extra on interest part only.....not bad....monthly payment around S$6k/m, rental can cover??.....haha....
more to come in 2013.....hope to see an explosive one...double digits....

If you know really know US mortgage product, you shall know that the 4.5%-5% is most likely the FIXED RATE for the tenure of 15-30 years of the mortgage. You can't compare that with the mortgage products in Singapore

[dmon]

this shows too much liquidity out there still.....

Too much now or last month or last week
Liquidity may be tight next week

I am not privy to the level of liquidity frankly.
So these few words ' too much liquidity ' may not be true at different point in time
I for one am guilty of using these words when in tcs with buddies when I don't know is the market liquid or illiquid

Maybe after this issuance and few more, market dries up but thank god $$$ all with one spender ie gahmen who sees the big picture.

[dmon]

One banker buddy can't tell me the extent of impact
Even his seniors can't tell him. Everyone sees bit of the whole picture like a jigsaw puzzle. Only one knows well, has all industries numbers and one who can talk to anyone in the country and others in foreign countries. Guess who?
Everyone's else guess is as good as yours and mine

Obviously with euro crisis, bankers are all worried. They are worried not because of SG fundamentals. But because of external factors, that will eventually hit SG hard. Among my expat friends who have bought SG pties, none is selling. But all expect price to stagnant or drop a bit, but not crash. One said would be 5%. And mortgage lending will be tightened, especially by foreign banks. That means spread will go up. SIBOR will stay low, but new loan spreads will move up. That's why it's good to secure throughout low spreads.

Bankers' real concern is Euro. SG property price level by itself reflects its status as 2nd HK. Rich chinese buying is real. The recent nassim trade was done by a Chinese. However if euro tanks, SG as a trading base will be hit hard. But this euro game has not been fully played out yet. Every one is betting ECB will do it at the very very last minute

[devilplate]

Too much now or last month or last week
Liquidity may be tight next week

I am not privy to the level of liquidity frankly.
So these few words ' too much liquidity ' may not be true at different point in time
I for one am guilty of using these words when in tcs with buddies when I don't know is the market liquid or illiquid

Maybe after this issuance and few more, market dries up but thank god $$$ all with one spender ie gahmen who sees the big picture.

govt also duno how how liquid the market is now.....only way is to test it by issuing bonds......

just like how to measure whether CM is too little or too harsh? only way is to test it....LOL....

[devilplate]

btw u got the idea liao which i highlighted in red? when we say expecting 5-10% correction and its no big deal if we guessed it rite......however, we can be famous overnite if market really crash >50% when we predicted it to be

internet TOK is CHEAP!!!

almost everyone over here feels tat ppty px will either drop or stays flat rite?

i predict >50% increase within 2-3yrs!!!! time will tell....LOL

[SpinCity]

remember recent hdb bonds? ridiculously low also all snapped up....LOL

too much liquidity in the market for now

i suspect banks got too much cash also......this whole yr haf been receiving calls asking me to take personal loan....LOL

Liquidity is definitely out there, but why it prefer the HDB 1.83% MTN to investing in properties?
Before the 2008 financial crisis there were institutional investors snapping up developments by blocks, but you don't see much institutional investors participate in the property boom post financial crisis. It is driven by local retail investors, and many rich Chinese from China. It will be interesting to see if another recession does come, how these investors react to it