A few CCR transactions sold at a loss (reported in The Edge)

[Amber Woods]

If property prices will to drop 20%, it will only make those people who bought their properties between 2011 and 2013 unhappy. Assuming that on average 10,000 units were sold each year and 85% were local buyers, only 25,500 voters may not be happy. Compare this number with the voting population, I believe the vast majority will be happy to see prices drop more than 20%.

Those really cash rich multiple owners are just as happy to see prices drop so that they could add more to their portfolio. Of course existing multiple property owners who have no intention to buy more but hoping to offload their properties will be unhappy when prices drop. However, these are the minority.

I would say only those highly leveraged multiple property owners will be unhappy and the numbers are really very very small.

[stl67]

if drop 15% i will still vote for PAP, anything more, i will mobilise all my extend family and tell them gov really hai see lang ......trap people to buy and now come up with so many measures to 'play' us..

Btw, any gov people in this site or not, pls feedback leh.

[Amber Woods]

if drop 15% i will still vote for PAP, anything more, i will mobilise all my extend family and tell them gov really hai see lang ......trap people to buy and now come up with so many measures to 'play' us..

Btw, any gov people in this site or not, pls feedback leh.

I think it is not fair to say that the government trap people to buy their homes. In fact, since 2009, the government has introduced various cooling measures and telling everyone not to rush in and buy. People chose not listen to the government and continue to chase after all sort of properties leading to what it is today.

Now that the curve takes a turn and the same people who chase after properties should not blame the government for what they got themselves into. It is simply not fair to blame the government. However, I must agree that it was the government failure to build sufficient homes to house the additional foreign intake that caused the "mad rush" to buy. Then again the government did assure everyone that the government will build enough homes in due course to meet and even exceed demand going forward; hence there was no need to rush and buy. We just refuse to listen. Fortunately, the number of people who still made purchases over the last few years are not many.

[triproton]

If property prices will to drop 20%, it will only make those people who bought their properties between 2011 and 2013 unhappy. Assuming that on average 10,000 units were sold each year and 85% were local buyers, only 25,500 voters may not be happy. Compare this number with the voting population, I believe the vast majority will be happy to see prices drop more than 20%.

Those really cash rich multiple owners are just as happy to see prices drop so that they could add more to their portfolio. Of course existing multiple property owners who have no intention to buy more but hoping to offload their properties will be unhappy when prices drop. However, these are the minority.

I would say only those highly leveraged multiple property owners will be unhappy and the numbers are really very very small.

I agree with your assessment. Due to availability bias, property investors tend to think that the Govt will not allow the property market to crash because they will lose votes. However, since property investors tend to have circle of friends and relatives who are also property investors or at least in an equivalent income bracket, their thinking is biased towards the belief that there is a positive co-relation between property prices and number of votes since they are so many property investors or people who own more than 1 property.

But the fact of the matter is that vast majority of Singaporeans have one property and are worried how their children will ever step into the property ladder. Property investors are in the minority - a small minority. So, statistically, falling property prices will gain more votes than the lost of property investor's vote.

I am sure this equation is clearly in the Government's mind when they devised the CMs. So, my view is that the CMs will stay until the next GE is over.. The TDSR will be a permanent fixture though.

With the benefit of hindsight, it looks like those who bought in 2012/2013 bought into the peak of the property cycle. It is now beyond doubt, despite some arguments to the contrary in 2013, the property market is now trending downwards. When will it bottom out is now the $64,000 question. My view is will probably happen at or around or after the next GE

[economist]

How come the discussions seem to have the assumption that govt policy is of deciding influences? No, it does not, it only has partial influences (which helped cool down the market). Market fundamentals, interest rate, wealth of people will all come into the equation. Look at how much media household income have increased, and how much top 20% of household income have increased (this matters for condo segment), and look at the interest rate environment... let's see how the market will play out.

[bargain hunter]

selected CCR has already crashed 20%.

If OCR (read A LOT OF VOTERS) crashes 20%, it could affect votes, no? CMs could be removed if OCR drops around 15%?

It is becoming clearer and clearer that property market will drop more than 20% by end of 2016 and hence considered CRASHED (unless CMs have been relaxed).

If the falling price situation like now persisted, what will be the consequences on the GE results? It will be interesting to know because many people are saying people want lower property prices, so a property price drop of 20% or more let's see whether most people want or not and will still vote them?

[bargain hunter]

gahmen measures have a strong psychological effect in the current environment. removing the 7% ABSD for 2nd time home buyers will most certainly attract a significant amount of buyers.

How come the discussions seem to have the assumption that govt policy is of deciding influences? No, it does not, it only has partial influences (which helped cool down the market). Market fundamentals, interest rate, wealth of people will all come into the equation. Look at how much media household income have increased, and how much top 20% of household income have increased (this matters for condo segment), and look at the interest rate environment... let's see how the market will play out.

[Yuki]

I.will vote according to the capability of the candidates. N based on wrasse I see now... A lot of policies are hindsight n not foresight. Firefighting and not preemptive. Nuffield said.

[Amber Woods]

Since 2009, property prices has risen by about 60%. Mr Khaw had commented that prices at 2009 level was ideal as it was in line with income. I am not surprise if the government allows for a gradually decline (soft landing) in prices over the next 5 to 8 years. I will not put a number as to how much prices should decline but certainly 30% over an extended period of time is not unthinkable.

[Amber Woods]

I cannot see any logic for the government to induce demand again just because prices has fallen by 15% to 20% when it tried so hard to stop prices from rising after rising 60%. The government will need to reintroduce CMs again in no time if it allows prices to rise again after falling 15% to 20%. It just does not make any sense for the government to do that.

What we read from those so call analysts saying that government would relax some CMs if prices falls by 15% to 20% is basically to inject some confidence to the market as they are vested in the industry they work in.

[Allthepies]

Dont gamble! Threat properties as long term investments or homes.

Do not be upset if property prices go against you in the short term. The long term trend is the one that is critical.

If you want to speculate, go casino, win/lose instantly.

[bargain hunter]

but stopping the rise (60%) then was because prices had outddone wage growth by a mile. coupled with the fact that insufficient flats and pte ppties had been COMPLETED. if property prices drop 20% off the peak, then the 60% rise from that low base is now reduced to just a 28% gain off that low base. in the meantime, wages have continued to grow. also, supply has continued to grow and pending interest rate hikes now as well. so, in a couple of years time, maybe allowing 2nd home purchases will not cause another sharp spike in prices?

I cannot see any logic for the government to induce demand again just because prices has fallen by 15% to 20% when it tried so hard to stop prices from rising after rising 60%. The government will need to reintroduce CMs again in no time if it allows prices to rise again after falling 15% to 20%. It just does not make any sense for the government to do that.

What we read from those so call analysts saying that government would relax some CMs if prices falls by 15% to 20% is basically to inject some confidence to the market as they are vested in the industry they work in.

[bargain hunter]

i'm not bothered by the short term trend but i want to buy more properties without paying ABSD leh.

Dont gamble! Threat properties as long term investments or homes.

Do not be upset if property prices go against you in the short term. The long term trend is the one that is critical.

If you want to speculate, go casino, win/lose instantly.

[bargain hunter]

also, i feel that TDSR is a very powerful measure which they had hinted is here to stay. that should help to keep the market in check.

[Amber Woods]

i'm not bothered by the short term trend but i want to buy more properties without paying ABSD leh.

I believe you are exactly the type of investor the government's CMs were targeted at. Just a friendly comment; no offence please!

[bargain hunter]

i'm not! i'm a bargain hunter. i buy at lower prices. i do nothing to drive up prices. if anything, i'm a cooling measure.

I believe you are exactly the type of investor the government's CMs were targeted at. Just a friendly comment; no offence please!

[teddybear]

I am not sure when people say such thing, are they really ignorant or they are all out to mislead others..................

As of now, it has become clear that the CCR property prices have already crashed 20% or more, and they are back to about late 2009 prices! However, OCR property prices have gone up by >100% since 2009 and they have stayed at that prices as of now.

So question is: Is it govt intention to bring down the prices?
If it is, then the govt has failed in their attempt with ineffective and loop-sided policies as demonstrated by the OCR prices which has held on to the peak prices...
If it is not, then the govt has demonstrated incompetency as well because their policies are loop-sided which resulted in CCR prices crashing but no effect on OCR prices.
So, which is which then?

Since 2009, property prices has risen by about 60%. Mr Khaw had commented that prices at 2009 level was ideal as it was in line with income. I am not surprise if the government allows for a gradually decline (soft landing) in prices over the next 5 to 8 years. I will not put a number as to how much prices should decline but certainly 30% over an extended period of time is not unthinkable.

[Amber Woods]

I am not sure when people say such thing, are they really ignorant or they are all out to mislead others..................

As of now, it has become clear that the CCR property prices have already crashed 20% or more, and they are back to about late 2009 prices! However, OCR property prices have gone up by >100% since 2009 and they have stayed at that prices as of now.

So question is: Is it govt intention to bring down the prices?
If it is, then the govt has failed in their attempt with ineffective and loop-sided policies as demonstrated by the OCR prices which has held on to the peak prices...
If it is not, then the govt has demonstrated incompetency as well because their policies are loop-sided which resulted in CCR prices crashing but no effect on OCR prices.
So, which is which then?

There is no need to be offensive if you do not agree with the numbers. Please refer to URA Private Residential Price Index.

URA Private Residential Price Index 2009Q1 was about 135 and Q12013 was about 215, increased by 60%. These numbers were published by URA on a quarterly basis. Please go to www.ura.gov.sg for details.

[Amber Woods]

To explain why the price movement for the different market segments differ, one has to examine the profile of buyers for the different segments. For CCR, buyers are likely to be savvy investors while for OCR, buyers are likely to be owner occupiers and less savvy. Savvy investors know better when to stop buying and when to take profits or cut losses. Hence that largely explained why CCR, RCR and OCR price movements differ. Unless there is a crisis, price movement for these different segments will response at different pace. RCR is now facing price pressure from CCR. It will filter down to OCR when RCR experiences price declined.

[teddybear]

I questioned the agenda of people who quote such number without telling the fact is that there is now a 2-tier property market price trend happening now - those of CCR having crashed 20% or more and is close to 2009 lows and those of OCR still maintaining the price well at something like >100% above 2009 lows.........
To quote an analogy: It is like telling everybody that AVERAGE INCOME of Singaporean has increased by >100% over BUT the real raw figure is that bottom 20% income has dropped while top 1% income gone up by >200%....................

Those people at URA, they don't know there is 2-tier property market price trend happening now???
They don't know their URA PRPI is seriously loop-sided and doesn't tell the whole story about property market prices and trends??? They are ignorant about it or they don't want people to know that their MND and MAS policies have failed???

There is no need to be offensive if you do not agree with the numbers. Please refer to URA Private Residential Price Index.

URA Private Residential Price Index 2009Q1 was about 135 and Q12013 was about 215, increased by 60%. These numbers were published by URA on a quarterly basis. Please go to www.ura.gov.sg for details.

[Amber Woods]

I questioned the agenda of people who quote such number without telling the fact is that there is now a 2-tier property market price trend happening now - those of CCR having crashed 20% or more and is close to 2009 lows and those of OCR still maintaining the price well at something like >100% above 2009 lows.........

Those people at URA, they don't know there is 2-tier property market price trend happening now???
They don't know their URA PRPI is seriously loop-sided and doesn't tell the whole story about property market prices and trends??? They not going to do anything about it or they don't want people to know that their policy has failed???

Please do not make assumption about other people without first making clarifications. Below are my observations of the different market segments (or tiers in your language) and I do not also make assumption about people working at URA.

To explain why the price movement for the different market segments differ, one has to examine the profile of buyers for the different segments. For CCR, buyers are likely to be savvy investors while for OCR, buyers are likely to be owner occupiers and less savvy. Savvy investors know better when to stop buying and when to take profits or cut losses. Hence that largely explained why CCR, RCR and OCR price movements differ. Unless there is a crisis, price movement for these different segments will response at different pace. RCR is now facing price pressure from CCR. It will filter down to OCR when RCR experiences price declined.

[teddybear]

My comments is in response to your earlier misleading statement (highlighted in RED)..........................

What gradual decline you are talking about when CCR has already crashed >20% in many transactions and close to 2009 lows within this 1.5 years?
On the other hand, OCR property prices has not moved much, after rising >100% vs 2009 lows.
If 2009 lows is what MND is looking at, then their policy implemented has failed miserably to do anything to OCR property prices while having already crashed CCR prices. So what's next? They not going to implement more targeted approach to cure OCR property prices to 2009 lows?

Are they trying to crash property prices to close to 2009 lows or are they not?

If they are not, then they failed miserably because CCR property prices has already crashed within 1.5 years after their cooling measure implemented!
If they are, then they also failed miserably because OCR property prices is still >100% vs 2009 lows despite their cooling measures being >1.5 years old!

Please do not make assumption about other people without first making clarifications. Below are my observations of the different market segments (or tiers in your language) and I do not also make assumption about people working at URA.

Since 2009, property prices has risen by about 60%. Mr Khaw had commented that prices at 2009 level was ideal as it was in line with income. I am not surprise if the government allows for a gradually decline (soft landing) in prices over the next 5 to 8 years. I will not put a number as to how much prices should decline but certainly 30% over an extended period of time is not unthinkable.

[august]

There is no need to be offensive if you do not agree with the numbers. Please refer to URA Private Residential Price Index.

URA Private Residential Price Index 2009Q1 was about 135 and Q12013 was about 215, increased by 60%. These numbers were published by URA on a quarterly basis. Please go to www.ura.gov.sg for details.

You are mistaken if you just look at index. Indeed quite a number of projects in CCR have come down to 09-10 price level.

[Amber Woods]

You are mistaken if you just look at index. Indeed quite a number of projects in CCR have come down to 09-10 price level.

You sounded more polite and hence my response.

I did not go into the price indexes for the different market segments. I merely look at the overall property index which is the main index people in the industry referred to when commenting on the health of Singapore's property market.

I did not at any time dispute that prices in CCR has not already crashed. The fact remains that property prices as a whole is still high and I believe the government will not likely to relax any CMs to help lift any particular segments because these different market segments affect the other as we witnessed now. RCR is currently experience price pressure from CCR and if the environment remains as it is, the price pressure will filter down to OCR in a matter of time.

I am just making my observations and only time will tell if my observations of the market is correct.

I have never in my thread disputed that prices in CCR has not crashed. Wonder why people chose to make it that way.

[Amber Woods]

You are mistaken if you just look at index. Indeed quite a number of projects in CCR have come down to 09-10 price level.

You mentioned that quite a number of projects in CCR have come down to 09/10 price level.

I think this price falls in CCR has not been fully reflected in the price index for CCR even though price index for CCR has indeed fallen the greatest among the 3 segments. I believe one of the reason was that the caveat lodged for some of the sell down projects still reflect the listed price instead of the discounted price. My understanding is that developers will only give the discount after sale completion, hence the sale prices reflect the the non discounted price. The reason for developers doing so is to help lift the CCR market and to protect the earlier buyers. If this practice is true, this could well be one of the reason why price index for CCR is not reflective of the actual and hence affect the main index as well.

While the developers try their best to "maintain" price level artificially, it remains to be seen is their doings causes more harm than good. This is because government and the people basing on the price indexes believe that prices have not come down and hence wait for the market to correct further.

[amk]

... Actually what is your point then ? Since now you agree this statement "pty has increased 60%" is not true.
Do you have the position that all CMs are good and should stay ?
Or do you have the position that some, like ABSD for 2nd for citizen, should be removed ?

[Amber Woods]

... Actually what is your point then ? Since now you agree this statement "pty has increased 60%" is not true.
Do you have the position that all CMs are good and should stay ?
Or do you have the position that some, like ABSD for 2nd for citizen, should be removed ?

My point of contention is that property prices has risen by some 60% since 2009 and hence the government is not likely to relax some cooling measures. While the prices might have been artificially inflated by developers in one segment, the overall price level is still very high for the government to relief the market.

According to URA's response to the artificially inflated prices in CCR, the effect to the main price index was not significant. I agree with URA even though the artificially inflated prices does in some small way affect the price index. However, it does give the wrong impression that prices are actually rising for some projects in CCR.

My contention was never about which CMs are good and which are not hence no comment on this.

However, if I am in the government, I will not likely to temper with the previous CMs be it effective or not as long as the price level is still not in line with income. By tempering with the CMs may send the wrong signal to the market that the government is caving in to pressure by developers or that our economy is in dire and need the real estate market to reignite the economy.

[walkthetiger]

While the developers try their best to "maintain" price level artificially, it remains to be seen is their doings causes more harm than good. This is because government and the people basing on the price indexes believe that prices have not come down and hence wait for the market to correct further.

Exactly... it is the developers who are always trying to "maintain" price level artificially. But it is hard to make people like Teddy happy, unless things are always going his way. He had blamed our gov for no control over developers, but if our gov control these and that, he will probably blame our gov the next time...

[teddybear]

My comments to your reply:

(1) "My point of contention is that property prices has risen by some 60% since 2009..."

Now, we know that if people insist that the above is true despite us pointing out the fact that this is not true for CCR properties, then I really wonder whether they are trying to mislead readers with such statement and to hide the fact that CCR property prices has crashed!...
The fact is, there is now 2-tier property price trends where in 1-tier the prices have crashed to close to 2009 lows,
while in another tier the price has stayed at >100% above 2009 lows...
So, the person who say this is ignorant of above fact or trying to mislead? Please be honest about this and acknowledge the fact that about the 2-tier pricing trend developing...

(2) "According to URA's response to the artificially inflated prices in CCR, the effect to the main price index was not significant..."

Did URA say that developers artificially inflat prices in CCR?
What developers did cannot artificially inflat prices in OCR?
It seem more like what developers did are artificially inflating prices in OCR instead because as we know, past many transactions already showed that CCR prices has crashed >20% and is now near to 2009 lows!
On the other hand, OCR has maintained at >100% above 2009 lows!
For past >1 year, developers are offering ABSD absorption for people who are subjected to ABSD! Developers are going exploiting loophole to go around govt cooling measures! URA not going to do anything about it? If so, why implement such laws? For show?

(3) "However, if I am in the government, I will not likely to temper with the previous CMs be it effective or not as long as the price level is still not in line with income..."

If I am the govt, I will be very ashamed because my policy has not achieved my aim after 1.5 years!!!!!!!!!!!!!!
What is their aim? It seem to be for property prices to be nearer 2009 lows (according to Mr Khaw).
However, while CCR property prices has crashed >20% and is now near 2009 low within 1.5 years,
OCR property prices has maintained at >100% above 2009 low after previous CM!
So, it is time for the govt to take further targeted action to cool CCR property prices to near 2009 low if that is their aim!!!!!!!!!!!!!!!!!!!!!!!!!!
If that is NOT their aim, then they must have failed terribly to have caused CCR property prices to crashed!
Whichever way, they seem to have failed because they are the one causing a 2-tier property price trends!!!!!!!!!!!!!!!

My point of contention is that property prices has risen by some 60% since 2009 and hence the government is not likely to relax some cooling measures. While the prices might have been artificially inflated by developers in one segment, the overall price level is still very high for the government to relief the market.

According to URA's response to the artificially inflated prices in CCR, the effect to the main price index was not significant. I agree with URA even though the artificially inflated prices does in some small way affect the price index. However, it does give the wrong impression that prices are actually rising for some projects in CCR.

My contention was never about which CMs are good and which are not hence no comment on this.

However, if I am in the government, I will not likely to temper with the previous CMs be it effective or not as long as the price level is still not in line with income. By tempering with the CMs may send the wrong signal to the market that the government is caving in to pressure by developers or that our economy is in dire and need the real estate market to reignite the economy.

[teddybear]

I am just pointing out the fact that CCR property prices has crashed >20% and near 2009 lows,
while OCR property prices has maintained at >100% above 2009 lows!
Did developers try to maintain price level artificially? If yes, how to explain CCR property transacted prices has crashed?

Talk about govt control over developers, it seem government has no control over developers developing commercial properties! No wonder there is under-supply of commercial properties! This resulted in developers and their REITs jacking up commercial properties rental costs! Then all these costs being passed down to general public like us!!!!!!!!!!!!!!

Strange indeed, yet they have so much control over residential property developers only thus causing CCR property prices to have crashed >20% ???????????????

Exactly... it is the developers who are always trying to "maintain" price level artificially. But it is hard to make people like Teddy happy, unless things are always going his way. He had blamed our gov for no control over developers, but if our gov control these and that, he will probably blame our gov the next time...