I'm skeptical. I've lived in this area for over 2 years.
When I first rented a Casa Merah 2-bed (2 1/2 years ago) demand was higher than supplies. My landlord was smug about it.
6 months ago he asked for a rental increase and I refused. He marketed the property for 2 months but had no takers and agreed to freeze the rental. The shoe was on the foot.
Fast forward when Urban Vista, Eco and Glades are all TOP, do you think there is enough rental demand to fill all these units. I think landlords will be in a price war to secure tenants.
Also, I'm told, I think reliably, that the so called commercial development between Optima and Urban Vista has been changed from commercial to a mixed development. Meaning even more residential units.
Once everything is up there will be literally thousands of residential units within a short distance from the MRT.
On another note, boarding the MRT at Tanah Merah, heading West, on a morning between 8am and 9am is a nightmare - it's so crowded you often have to wait for 2 or 3 trains to go past before you can squeeze on. Some people first board the train heading East and take it all the way to Pasir Ris, when everyone alights they stay on the train and get a seat and wait for it to come back in the other direction. What the hell is it going to be like at Tanah Merah MRT station when all these new developments are complete - you will not be able to even get on the platform, you'll be queuing on the concourse
For those experience property gurus, if sales remain flat what is likely to happen?
1. The developer will delay construction?
2. The developer will discount more and more until buyers start to bite?
If the developer's profit margin is eroded significantly does it mean they are likely to cut corners on the build (damage limitation) and produce a really lousy end product?
Anybody have any idea?
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Well there is also the Changi Business park and of course the flight crew people.
From anecdotal evidence, the 1 and 2 bedroom units at Optima were easily rented out. I think you can't go very wrong with a 1 or 2 bedder next to a mrt station.
You know better than I do. But I was thinking, there isn't an endless supply of tenants, but there seems to be a total over supply of units around Tanah merah mrt - 100s if not 1000s of new units being built. Does the government plan the supply in an area versus potential demand? Or couldn't they care less, not their problem
Rental don't work this way. It is not area based but rather, spread across the island. Singapore is too small. Let's take a look at studio only. If I work in Paya Lebar, and there is no condo there, I will find Lavendar or Tanah Merah. But Lavendar 3.8k, Optima 3.2k, I will take Optima. But some have more housing allowance so they can afford Lavendar. Those who can only pay 2.5k, they will go for Pasir Ris studio.
Let's say there are 1,000 new units at tanah merah. Those who are staying at Pasir Ris will come over to tanah merah since rental there will probably drop to 2.5k. But no one will be interested in Pasir Ris anymore and Pasir Ris have to lower their rental to 2k because no MRT there. And since TM is 2.5k rental, Lavendar will face competition as well. They cannot hold on to 3.8k anymore since TM 2.5k. They will probably reduce their price to 3k. This will have ripple effect to D1, D2 as well.
This is the same for any district. Like D2 many condos coming up, rental will probably be around 3.5k. People will shift from D7/D8 to D2 since same rental. What happen to D7/D8? Rental will drop and will ripple across the island.
Singapore has high in-flows of FTs, and so I think demand is not really an issue when these units TOP.
To get out of price war, therefore it is important to select a REASONABLE unit that will easily secure a tenant over others first. A lot of investors make the mistake of buying the cheapest units (e.g. low floor, west facing, no view, bad feng shui etc) - they are the ones who probably will have to rent out their units last if there are many units for tenants to choose from the same project.
Hence if there are many similar units, one should pay attention to the unique selling points of an individual unit before signing the OTP. Sometimes, paying like $30,000 more for higher floors or unobstructed views is actually worth it vs paying for cheapest launch price and you get weird tenants who want it cheap and turn your unit into a cheapo place!
It is not a linear relationship as this is a complex problem and multifactorial in nature. It can be at macro and micro level. Imagine when hdb dwellers start to rent out their hdb flats and move to their condos as flats give better yield coupled with oversupply of condos in two years time.
Much worse!!
Kembangan there is rarely many people trying to board.
Bedok you are totally screwed. The platform is packed and seriously no one can even squeeze on board. I've seen people pushing and shoving each other and screaming at each other - I can't speak Chinese but I'm pretty sure they were not saying nice things to each other.
I have no idea how they eventually force their way on. Maybe leave house 8am arrive work 11am - 3 hours stood on the platform.
And as for the people in the red uniforms with the glow sticks who are meant to try to keep order on the platforms, all I can say is they are useless!!!
This makes sense. It's well described.
So my next question. For a pure investor, sharply falling rentals versus all time ridiculous condo selling prices makes SG property a bad proposition. Right or not?
Anyone think a 452 sqft studio at Tanah Merah is worth the 1,700+ psf? As an investment proposition?
What do you think? I mean, there is no right or wrong. There is always a cycle. Be it 4 years, 6 years or 8 years. Sometimes, shorter, sometimes longer. Some are luckier. Buy low, rent out 5 years, sell then prices drop. Some are unlucky. Buy high, rental drop then sell low.
But at its peak, there will always be people buying at ridiculous pricing and still think it is a good buy. 2 years later, they repent. Some weaker owners have to sell at a massive loss. So history will always repeat itself. 1.8k psf for Jurong or Tanah Merah, no thanks.
1997 - Drop
1999 - Recover
2001 - Drop
2003 - Drop
2006 - Recover
2008 - Drop
2009 - Recover
201? - Drop
Yes, there are cycles....but there is also the ongoing govt program to boost the population in SG to the 6.9 million figure meaning about 100,000 immigrants annually
2008 didn't really drop, is a short pull back....who waiting for big drop now will disappoint......as the holding power now is different....any big drop in 5 years time....alot sitting on the fence waiting
When crisis come, who want to come? This 6.9M is crap. It is just an excuse for people to sell you something. Don't be fooled.
Since 1990s, Singapore has been bringing in foreigners. In fact, from 2013 till 2030, if we take the 6.9M target, we are actually slowing down.
Anyway, if immigrants are so "powerful" that they can make property "invincible", then property will not drop > 30% in end 2008/ early 2009.