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Thread: Speculators exiting private home market

  1. #1
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    Default Speculators exiting private home market

    SPECULATORS looking to make a quick buck from private homes have all but disappeared, spooked by the recent series of property cooling measures.

    Sub-sale transactions fell to 147 units in the fourth quarter last year, the lowest level in eight years, data out last Friday from the Urban Redevelopment Authority (URA) showed.

    The last time such dismal figures were logged was in the first quarter of 2006, when speculators flipped just 127 units.

    Sub-sales are when buyers resell a unit before it is completed. They are taken as measure of the level of property speculation in the market.

    Property analysts said the chief reason for the drop in speculative demand is the imposition of tough sellers' stamp duties in January 2011.

    Home owners face a duty of up to 16 per cent if they re-sell their property within four years.

    Mr Ong Teck Hui, national director of research and consultancy at Jones Lang LaSalle, said investors had to take a longer-term view on their asset if they wished to avoid the duty.

    He said: "The number of speculators would not be increasing with the duty in place - this group would have shrunk over the years as they gradually off-loaded their properties to take profit."

    Just 1,072 sub-sale transactions were recorded for the whole of last year, making up 4.7 per cent of all sales. It was the lowest level since 2005.

    Since the revised duty was put in place in 2011, the number of sub-sales has been on a downward trend.

    This is in stark contrast to the heady days of 2007, when sub-sales were rampant and speculators would queue overnight to buy a property and sell it almost within days, said SLP International research director Nicholas Mak.

    The resale market has also floundered in the past year, with just 6,608 transactions or 29.2 per cent of total sales, as buyers and sellers take account of tighter loan restrictions and a looming supply glut.

    About 66,100 private homes are expected to come on stream within the next three years.

    Mr Mak said: "There is growing realisation among buyers that many homes will be reaching completion within the next three years but with falling rentals and tougher loan requirements, investors may not want to get in."

    He added that the resale market has not been very active, reeling from a lack of demand due to a slower inflow of foreigners and fewer collective sales - two groups of home buyers who would need to look for completed homes.

    A mismatch of price expectations between sellers and buyers is also making it harder for resale transactions to go through, consultants said.

    Said Mr Ong: "When the market is upbeat, sellers of resale units tend to be optimistic in their asking prices and that has also affected the pace of resale transactions."

    Meanwhile, buyers have become more sensitive about how much they can fork out after the total debt servicing ratio (TDSR) was implemented in June last year.

    Instead of opting for second-hand properties, they are choosing new launches where some developers offer more palatable prices.

    Orange Tee head of research and consultancy Christine Li said: "Buyers are unable to take bigger loans because of the TDSR so they would turn to developers who can offer fairly attractive rates by forgoing some margins."

  2. #2
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    Now then report? Speculators have long been squeeze out few years ago with SSD, then ABSD and now TDSR.

    Its a good thing. They are also the first to dump property and cause panic. With them gone, our property market is more stable.

  3. #3
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    Good, the less speculation the better, no bubble forming

  4. #4
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    Thats why down trend has only just started.. Sit back for the long ride.

  5. #5
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    teddybear is offline Global recession is coming....
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    Have a good dream................

    Quote Originally Posted by oops View Post
    Thats why down trend has only just started.. Sit back for the long ride.

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    Quote Originally Posted by oops View Post
    Thats why down trend has only just started.. Sit back for the long ride.
    In your expert opinion, how much and how long will the property market drop

  7. #7
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    Property market will drop in 2014 until such time the government intervenes by removing some of the cooling measures.


    Buyers are likely to watch from the sidelines. Speculators are no longer interested in Singapore markets. Interest rates are set to rise with the tapering of the US QE program.

    The pain is starting to hit investors, agents and developers. Unlikely to see any government action before the second half of the year unless there is a black swan event happening.

  8. #8
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    Quote Originally Posted by Wunderkind View Post
    Property market will drop in 2014 until such time the government intervenes by removing some of the cooling measures.


    Buyers are likely to watch from the sidelines. Speculators are no longer interested in Singapore markets. Interest rates are set to rise with the tapering of the US QE program.

    The pain is starting to hit investors, agents and developers. Unlikely to see any government action before the second half of the year unless there is a black swan event happening.
    True thay buyers are on sidelines, speculators gone. No buying. But you think sellers desperate to sell? The cooling measures have made owners in a very strong position. It is common for rental property have rents twice the mortgage payment, with that positive cashflow, owners desperate to sell meh?

    Interest rate thing is very boring already. 1st DBS dare to offer 5 yrs fixed 1.88% , 2nd rental is double that of mortgage, interest has to rise to a high level to bring the positive cashflow to zero.

    No buying, no selling, will market drop or up or no movement? I also hoping price will drop so that I can buy somemore.

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