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Thread: Singapore home sales seen slumping to 5-year lows

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    Default Singapore home sales seen slumping to 5-year lows

    Singapore home sales seen slumping to 5-year lows

    Reuters

    Reuters - Tuesday, March 18


    SINGAPORE, March 17 - Singapore homes sales in February almost halved from the previous month, and could slump this quarter to the lowest since the SARS epidemic in 2003 as surging inflation and global economic fears keep buyers at bay.

    The government on Monday said 170 private homes were sold in February, less than a tenth of the homes sold last August when Singapore was still in the midst of a two-year property upswing.

    The abrupt slowdown this year is hitting shares for property developers but could take some pressure off inflation that is at the highest level in 25 years.

    Top property firm CapitaLand fell 3.7 percent on Monday to take losses for the year to 11 percent, while rivals' shares have fared even worse.

    City Developments lost 3.9 percent for 30 percent losses this year and Keppel Land slid 4.8 percent to take its drop since December to 31 percent.

    After January saw 316 homes sold, property analysts are predicting that total sales for the first three months of this year will be between 700-800 units, the weakest in five years.

    "The only two other periods when the Singapore residential market experienced such low sales volume were during the SARS period in the first quarter of 2003 when 427 new homes were sold, and during the Asian financial crisis in the fourth quarter of 1997 when 894 units were sold," said Li Hiaw Ho, research director of property consultancy CB Richard Ellis.

    So far the jury is out on how much the drop in demand has hit home prices. Private home prices in Singapore surged 31 percent last year to their highest in over ten years and near the peak of mid-1996 just before the Asian financial crisis.

    High-end homes, typically those priced at above S$1,800 per square foot, saw the greatest jump, while the increase was more moderate for homes in the mass market segment.

    But the price increase slowed in the fourth quarter as steps taken by the authorities to curb real estate market speculation took effect, including a move in October to bar developers from selling uncompleted homes on a deferred payment scheme.

    "The sales figures for February were stunningly low... Buyers are becoming very conservative, although prices seem to have held up," said Jones Lang LaSalle research head Chua Yang Liang.

    LAUNCH DELAYS

    Reflecting the cautious mood, some developers have delayed their property launches, evident in the 343 units put up for sale in February, against 410 units in January and 445 in December.

    KepLand, which is building the 221-unit Marina Bay Suites luxury apartments with Hong Kong Land and Cheung Kong , said in January that it would delay the project until the end of the Lunar New Year holiday in mid-February.

    "We're still waiting for instructions to launch," said Margaret Thean, executive director of property agency DTZ, which has been appointed to market the project.

    There have also been newspaper reports of property speculators who bought units last year with hopes of a speedy sale for a quick profit, but who are now being forced to sell at steep discounts due to the drop in demand.

    But it may not to be time to go bargain hunting just yet.

    "While anecdotal evidence of lower transacted prices from desperate speculators looking to liquidate their positions have yet to be fully recognised by the entire market, the risk of a downward spiral effect in residential prices remains," Morgan Stanley analyst Melissa Bon said in a report this month.

    "In addition, the bottoming out of private rental vacancies and likely peaking of rentals may put downward pressure on residential prices," she said.

    The U.S. brokerage has downgraded CityDev to "underweight" for its exposure to the Singapore home market, and expects prices in the mid to high-end sectors to drop 15 percent this year, compared to its previous expectations for a 15 percent rise.

    ABN AMRO analyst Fera Wirawan said homes catering to the mass market could still rise at least 5 percent as prices in this segment had not run up as much.

    "It's all about sentiments now. Buyers are holding off in anticipation of a price cut. Even if developers refuse to decrease the price, especially in the high end, they can't hold out for long if the volumes stagnant like this," she said.

  2. #2
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    Default Re: Singapore home sales seen slumping to 5-year lows

    Quote Originally Posted by mr funny
    Singapore home sales seen slumping to 5-year lows

    Reuters

    Reuters - Tuesday, March 18


    SINGAPORE, March 17 - Singapore homes sales in February almost halved from the previous month, and could slump this quarter to the lowest since the SARS epidemic in 2003 as surging inflation and global economic fears keep buyers at bay.

    The government on Monday said 170 private homes were sold in February, less than a tenth of the homes sold last August when Singapore was still in the midst of a two-year property upswing.

    The abrupt slowdown this year is hitting shares for property developers but could take some pressure off inflation that is at the highest level in 25 years.

    Top property firm CapitaLand fell 3.7 percent on Monday to take losses for the year to 11 percent, while rivals' shares have fared even worse.

    City Developments lost 3.9 percent for 30 percent losses this year and Keppel Land slid 4.8 percent to take its drop since December to 31 percent.

    After January saw 316 homes sold, property analysts are predicting that total sales for the first three months of this year will be between 700-800 units, the weakest in five years.

    "The only two other periods when the Singapore residential market experienced such low sales volume were during the SARS period in the first quarter of 2003 when 427 new homes were sold, and during the Asian financial crisis in the fourth quarter of 1997 when 894 units were sold," said Li Hiaw Ho, research director of property consultancy CB Richard Ellis.

    So far the jury is out on how much the drop in demand has hit home prices. Private home prices in Singapore surged 31 percent last year to their highest in over ten years and near the peak of mid-1996 just before the Asian financial crisis.

    High-end homes, typically those priced at above S$1,800 per square foot, saw the greatest jump, while the increase was more moderate for homes in the mass market segment.

    But the price increase slowed in the fourth quarter as steps taken by the authorities to curb real estate market speculation took effect, including a move in October to bar developers from selling uncompleted homes on a deferred payment scheme.

    "The sales figures for February were stunningly low... Buyers are becoming very conservative, although prices seem to have held up," said Jones Lang LaSalle research head Chua Yang Liang.

    LAUNCH DELAYS

    Reflecting the cautious mood, some developers have delayed their property launches, evident in the 343 units put up for sale in February, against 410 units in January and 445 in December.

    KepLand, which is building the 221-unit Marina Bay Suites luxury apartments with Hong Kong Land and Cheung Kong , said in January that it would delay the project until the end of the Lunar New Year holiday in mid-February.

    "We're still waiting for instructions to launch," said Margaret Thean, executive director of property agency DTZ, which has been appointed to market the project.

    There have also been newspaper reports of property speculators who bought units last year with hopes of a speedy sale for a quick profit, but who are now being forced to sell at steep discounts due to the drop in demand.

    But it may not to be time to go bargain hunting just yet.

    "While anecdotal evidence of lower transacted prices from desperate speculators looking to liquidate their positions have yet to be fully recognised by the entire market, the risk of a downward spiral effect in residential prices remains," Morgan Stanley analyst Melissa Bon said in a report this month.

    "In addition, the bottoming out of private rental vacancies and likely peaking of rentals may put downward pressure on residential prices," she said.

    The U.S. brokerage has downgraded CityDev to "underweight" for its exposure to the Singapore home market, and expects prices in the mid to high-end sectors to drop 15 percent this year, compared to its previous expectations for a 15 percent rise.

    ABN AMRO analyst Fera Wirawan said homes catering to the mass market could still rise at least 5 percent as prices in this segment had not run up as much.

    "It's all about sentiments now. Buyers are holding off in anticipation of a price cut. Even if developers refuse to decrease the price, especially in the high end, they can't hold out for long if the volumes stagnant like this," she said.
    Totally agree, let's see how long the developers can hold, it is a matter of time before prices start to come down...

  3. #3
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    Default Re: Singapore home sales seen slumping to 5-year lows

    Quote Originally Posted by Unregistered
    Totally agree, let's see how long the developers can hold, it is a matter of time before prices start to come down...
    Developers have made so much in the last few years. They can hold for at least 7-10 years. Why would the price come down?

  4. #4
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    Default Re: Singapore home sales seen slumping to 5-year lows

    Quote Originally Posted by Unregistered
    Totally agree, let's see how long the developers can hold, it is a matter of time before prices start to come down...

    aiyo, you did not read below, some developers are not interested to sell their units now. They prefer to keep for appreciation for long term, than selling cheap to you now. Good strategy, think out of box.
    CDL sold 'Sail' to you at $900 psf in yr 2005, in 2007 hits $2300 psf. Now they prefer to keep, rent out, own for long term than selling to spore cheapskate, everyday shout & complain like sour-grape.




    Some developers are in fact preparing to hold for 20 years.

    CDL/Hong Leong's Kwek Leng Beng recently made some remarks about regretting selling away all his developments and now have to buy them back from the en blockers.

    On 8 Mar 2007, CDL/Hong Leong bought back Hong Leong Garden at West Coast for many times the price they sold off to investors/speculators 25 years ago.

    Having learnt the lesson, a joint venture between City Developments Ltd and US-based Wachovia Development Corporation is buying two blocks at CDL's Cliveden at Grange condo for $432.4 million or an average price of about $3,750 per sq ft. CDL executive chairman Kwek Leng Beng said that the deal attests to the freehold project's 'high investment potential' and reflects CDL's 'business strategy of leveraging on the capital appreciation potential of our developments'.

    Do those words highlighted in red above show a tinge of "sour grapes" at the en bloc profits that investors/speculators made from his father when they bought into Hong Leong Garden 25 years ago?

    Developers are wising to the fact that they are giving money away to people who buy into their projects. So nowadays, they keep some units for themselves.

    Another tycoon who is keeping his property for posterity is UOL's Wee Cho Yaw. Last year, he redeveloped his flagship buidling at Somerset Road into serviced apartments to be rented out on a weekly to monthly basis, instead of luxury apartments to be sold at sky high prices. In this way, his family will continue to hold on to this piece of property so that 25 years from now, his children/grandchildren may benefit from revised plot ratios around Orchard Road MRT area, which will possibly rise from the current 4.2 to 5.6 range to more than 10+, in line with Shenton Way/Robinson Road areas.

  5. #5
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    Red face Re: Singapore home sales seen slumping to 5-year lows

    Maybe The US share market is just a cover up

    maybe US is planning something big...

    IT just dun make sense that US such a big country

    will dip into some Sub prime crisis due to freely of

    giving out housing loan easily

    I mean dun they have the best University producing

    world class students and so on

    ALl of u must rem

    When US went into some big mess , it always wake

    up and become much stronger then Ever!!!!

    Dont ever forget

    US is a Blessed nation~~

    If you ppl think that thats the end of US

    then might not be true after all

    hahaha

  6. #6
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    Default Re: Singapore home sales seen slumping to 5-year lows

    The greatest con artist comes from America.I hve warned you earlier.

  7. #7
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    Guest

    Default Re: Singapore home sales seen slumping to 5-year lows

    One thing for sure about

    human is that when they see something bad going around

    they very worry a lot ,as if end of world is coming one

    Thats how sillyporeans react, no wonder all need to work like

    crazy till death... still not that rich

    and being look down in foreign countries..

    O die die , market going down , i need to sell my house

    I am going to lose my job, please govt give me some help

    hahahaha

  8. #8
    Unregistered
    Guest

    Default Re: Singapore home sales seen slumping to 5-year lows

    Quote Originally Posted by Unregistered
    One thing for sure about

    human is that when they see something bad going around

    they very worry a lot ,as if end of world is coming one

    Thats how sillyporeans react, no wonder all need to work like

    crazy till death... still not that rich

    and being look down in foreign countries..

    O die die , market going down , i need to sell my house

    I am going to lose my job, please govt give me some help

    hahahaha

    we are spoilt, we have no guts, we only know how to blame & complain.

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