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Thread: Private property prices rising 2%, not falling as expected

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    Default Private property prices rising 2%, not falling as expected

    DESPITE expectations of more headwinds, developers are unlikely to lower prices, said Savills Singapore in a report yesterday.
    In fact, the global real estate services provider has forecast that overall prices could creep up by 2 per cent this year, contrary to market expectations of price falls.
    Alan Cheong, the senior director at Savills Research, Singapore, said: "Market expectations of sharp price declines are not supported by the facts."
    He noted that many mass-market and mid-tier projects are in the hands of financially strong developers, who are unlikely to lower prices below comparable benchmarks just to clear their stock.
    Indeed, despite weakening demand sentiment due to the credit crunch - with the Additional Buyer's Stamp Duty and total debt servicing ratio framework biting - developers had aggressively rolled out major projects islandwide last October and November.
    These include The Inflora and Duo Residences and the executive condominiums Sky Park Residences and Waterwoods, with the sale of units at Waterwoods driven by competitive pricing.
    Notably, three projects surprised the market with healthy sales. At The Inflora, 388 out of 396 units, or 98 per cent, were taken up; the figures for Duo Residences was 90.9 per cent (600 out of 660 units), and for Alex Residences, 85.5 per cent (171 out of 200 units).
    As the impact of the property measures sets in and trims buyers' purchasing power, affordability and the right pricing will become critical factors in the success of a project launch, said Savills in its report.
    It predicted that prices will likely continue to be supported by mass-market and mid-tier projects.
    Savills has also forecast that prices in the rest of central region (RCR) and outside central region (OCR) could go up by one to 3 per cent in the coming year, even as those for high-end homes in the core central region (CCR) dip.
    It noted that mid-tier projects in the city fringe may pull in greater interest from investors than mass-market projects in the OCR, even as homes in the RCR offer increasingly better value propositions to investors.
    This may result in mass-market projects losing their shine as market leaders in terms of sales volumes, ceding pole position to mid-tier projects in the city fringe.
    Over the next six months for instance, three projects highly anticipated by both home buyers and investors are in the city fringe - namely, in Commonwealth Avenue, Kim Tian Road and Prince Charles Crescent.
    The prices of homes in the CCR are expected to dip by up to 3 per cent, given the fair amount of inventory to clear this year.
    Upcoming projects to be launched in the CCR include Marina One, South Beach Residences and Pollen & Bleu.
    With the success of Duo Residences in the Rochor-Ophir area, prospective buyers are looking forward to the launches of South Beach Residences and Marina One, in the hope that the units will be similarly priced.
    "Never argue with an idiot, or he will drag you down to his level and beat you with experience."

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    There will be a bit more light after tharman's budget speech.

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    Absd maybe reduced.

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    property developers si bei kao bei. When property prices go up 30% i never see them make any noise. Happily sell sell keep quiet. Drop 1-2% only they talk like the sky is falling and judgement day is coming. In fact did the property markets drop? One month come down next month go up like no difference leh.

    If prices not moving much why should they remove ABSD etc? In fact we re at a steady state thats beneficial for everyone in the long run except developers (who ask them bid such high prices for land) and sellers with multiple properties who re trying to offload (who ask them buy so many properties). i.e the rich

    even people at sengkang, punggol hdb etc they re still making money, just less money whats the big deal. who ask them don t want to sell earlier (greed), who ask them go buy EC than have to dispose of hdb (greed again).
    Last edited by mosaic; 08-02-14 at 10:39.

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    teddybear is offline Global recession is coming....
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    Yes right!
    Stop making noise!
    I foresee that if no removal or loosening of the CMs, the property market will crash within this 2 years!
    So stop making noise because I am waiting for the property price crash!

    Quote Originally Posted by mosaic View Post
    property developers si bei kao bei. When property prices go up 30% i never see them make any noise. Happily sell sell keep quiet. Drop 1-2% only they talk like the sky is falling and judgement day is coming. In fact did the property markets drop? One month come down next month go up like no difference leh.

    If prices not moving much why should they remove ABSD etc? In fact we re at a steady state thats beneficial for everyone in the long run except developers (who ask them bid such high prices for land) and sellers with multiple properties who re trying to offload (who ask them buy so many properties). i.e the rich

    even people at sengkang, punggol hdb etc they re still making money, just less money whats the big deal. who ask them don t want to sell earlier (greed), who ask them go buy EC than have to dispose of hdb (greed again).

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    More ownership restrictions on the way.

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    Quote Originally Posted by teddybear View Post
    Yes right!
    Stop making noise!
    I foresee that if no removal or loosening of the CMs, the property market will crash within this 2 years!
    So stop making noise because I am waiting for the property price crash!
    I agree with you that it is unlikely that CMs will be removed or tweaked yet as the property market is responding to the effects of the CM which means it is achieving its aim.

    TDSR.....they already say they won't remove.
    The others will likely be tweaked only if there is an economic downturn and stimulus is needed.

    Whenever there is drop eg COV, there are so many prominent reports about them, signalling that all these CMs are effective and successful.

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    a slowdown in credit expansion is painful nonetheless

    u will be surprised how many families over leveraged to the max prior to TDSR ruling
    Ride at your own risk !!!

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    Let foreigners buy Central Area properties is the best way forward because this segment of the market is still predominantly occupied and bought by foreigners. And while government tries to develop the prime marina bay area, I think they should at least open up the floodgate for those hungry foreign investors to come pay $4000psf for LH99 development instead of relying on local investors. Without foreign funds coming into this segment of the market, it will take at a very long time for the Marina area to be develop.

    With this, it will also revive the en bloc activities and interest within the Central Area, hereby giving developers the option of replenishing their land bank through en bloc instead of GLS.
    "Never argue with an idiot, or he will drag you down to his level and beat you with experience."

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    Have to agree with Ringgo, we need more investment to develop the CBD... remove ABSD for CBD area but reduce LTV in CBD to 40% or lower to both protect our banks and develop CBD at the same time...

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    Need to continuously drop for 1-2% a month and reach 10 to 15% accumulative before they will do anything. Drop 3 months, go up 2 months, it is too inconsistent to make any decision.

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    slowdown in credit expansion already create havoc for STI, don't u see CDL crashed to 3y low of 8.60 ... a level unheard since the QE recovery??

    52wk Range: 8.60 - 11.70

    of course our Mr Kwek Leng Beng must say something lah
    Ride at your own risk !!!

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    Quote Originally Posted by phantom_opera View Post
    a slowdown in credit expansion is painful nonetheless

    u will be surprised how many families over leveraged to the max prior to TDSR ruling
    well! unfortunately if they take risk, they must know the end state if it turn to the direction that unfovour them!

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    Quote Originally Posted by 4wheels View Post
    well! unfortunately if they take risk, they must know the end state if it turn to the direction that unfovour them!
    this statement is not fair to CDL. When gov sells Sentosa land to CDL, it implies gov will encourage, or at least not restrict, foreign buying in Sentosa. CDL took the market risk (that involves of course, risk of funding, state of economy, labor, etc), yes, but not the policy risk. Now the CM on foreigner is like a U turn on the policy ("foreign buying is not welcome"). You may say "policy risk" is also part and parcel of the business. But SG is supposed to be free market. You cannot conduct a long term business knowing gov can do U turn anytime. Like that we become Malaysia.

    ABSD is draconian and direct intervention, should be removed.
    TDSR and LTV stuff are for safeguarding banks and borrowers, these are welcome, and can stay as long as the accomodative monetary policices are still in place.

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    Quote Originally Posted by amk View Post
    this statement is not fair to CDL. When gov sells Sentosa land to CDL, it implies gov will encourage, or at least not restrict, foreign buying in Sentosa. CDL took the market risk (that involves of course, risk of funding, state of economy, labor, etc), yes, but not the policy risk. Now the CM on foreigner is like a U turn on the policy ("foreign buying is not welcome"). You may say "policy risk" is also part and parcel of the business. But SG is supposed to be free market. You cannot conduct a long term business knowing gov can do U turn anytime. Like that we become Malaysia.

    ABSD is draconian and direct intervention, should be removed.
    TDSR and LTV stuff are for safeguarding banks and borrowers, these are welcome, and can stay as long as the accomodative monetary policices are still in place.
    Good point....

    Hence I agree with Ringo that Central Area should be exempted from the cooling measures..

    In this upcoming budget, the gahment should also start tapering the cooling measures.... if the prices continue to drop or flatten then taper more, if prices goes up stop the tapering, i think that is the best compromise...

    Start with ABSD: Remove it for locals and PR since there already is TDSR and set it at 10% for foreigners to get the ball rolling...

    SSD change to 3 years 8, 4, 0

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    Quote Originally Posted by amk View Post
    this statement is not fair to CDL. When gov sells Sentosa land to CDL, it implies gov will encourage, or at least not restrict, foreign buying in Sentosa. CDL took the market risk (that involves of course, risk of funding, state of economy, labor, etc), yes, but not the policy risk. Now the CM on foreigner is like a U turn on the policy ("foreign buying is not welcome"). You may say "policy risk" is also part and parcel of the business. But SG is supposed to be free market. You cannot conduct a long term business knowing gov can do U turn anytime. Like that we become Malaysia.

    ABSD is draconian and direct intervention, should be removed.
    TDSR and LTV stuff are for safeguarding banks and borrowers, these are welcome, and can stay as long as the accomodative monetary policices are still in place.

    ABSD served its purpose by stopping the tide of foreign money rushing to our shores that could potentially create a bubble. Unfortunately countries like the US, EU, Japan don t really give a damn whether their money printing flows out and creates bubbles elsewhere.

    All they care about about is that if they print enough money, eventually asset value (share, properties, etc) in their domestic economy will go up and the wealth effect will hopefully raise all boats. Thats why i say they re a bunch of idiots.

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    The title of this thread hit the target in Jan 2014.

    Prices did indeed go up by>2% as predicted even though volume dropped 70%.

    Why are there so many calling for removal of ABSD? Perhaps all on the sidelines ready to enter the market when that happens. So there may well be a huge pent up demand when that finally happens. Prices drop 10%, ABSD 10% removed, prices 20% cheaper, and overnight queues at ppty launches will happen again.

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