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Thread: Luxury home prices to fall 32% by 2010: Nomura

  1. #1
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    Default Luxury home prices to fall 32% by 2010: Nomura

    Published March 27, 2008

    Luxury home prices to fall 32% by 2010: Nomura

    It says sector has risen too fast relative to rental expectations

    By UMA SHANKARI


    TAKING a bearish stance on Singapore's residential sector, Nomura Research expects luxury home prices to slide a staggering 32.3 per cent from their 2007 peak between now and 2010.

    Average prices in the luxury segment will fall 16.9 per cent in 2008, 10.3 per cent in 2009 and 9.3 per cent in 2010 as rental growth slows and yields are reappraised, Nomura says in a report.

    Luxury residential prices have risen too fast relative to rental expectations, the report says.

    'Sentiment in the market has deteriorated rapidly - asset prices look to have fallen by about 5 per cent over the first two months of the year, with falls of up to 15 per cent in some non-prime locations,' Nomura analysts Tony Darwell and Daniel Raats say.

    'We see asset prices being driven lower by marginal speculative sellers amid low transaction volumes and higher unsold pre-sale inventories.'

    These factors will add up to a major correction - but not a crash - with a 2010 average price of $1,847 per square foot, marginally higher than $1,811 psf in the 1996 peak and 22.4 per cent above the 2001 peak of $1,508 psf. The mass market will not be immune from falling prices amid rising new supply, Nomura believes. 'Mass residential prices appear on a firmer footing, supported by rental growth and prevailing yields,' its analysts say.

    'However, the advent of new supply and the resultant increase in rental availability in prime locations is likely to see demand that was once displaced to 'non-core mass market' locations returning to prime districts, hurting non-core rents and ultimately mass market prices.'

    As a result, mass residential prices will remain flat in 2008, climbing just 0.5 per cent, Nomura believes. And as new supply is completed in the prime districts, it expects prices to fall 10.3 per cent in 2009 and 10.1 per cent in 2010 - a total fall of some 19.4 per cent from the 2008 peak.

    In view of this, the firm is maintaining its bearish stance on Singapore residential property and says the market will move swiftly from a 'state of denial' to the realities on the ground.

    Residential rents are likely to remain firm in the short term, given the low vacancy rate, Nomura reckons. But rising new supply is likely to cap rental gains from the second half of this year. Nomura forecasts that the vacancy rate will rise from 5.7 per cent at end-2007 to 8.2 per cent at end-2010.

    Average rents are expected to peak in 2008, rising five per cent year-on-year to $3.64 psf per month, after rises of 14.1 per cent year-on-year in 2006 and 41.2 per cent year-on-year in 2007, Nomura says. But with supply on the rise, rents will ease 10.3 per cent year-on-year in 2009 and 15.7 per cent year-on-year in 2010.


  2. #2
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Absolutely agree with both hands up!

    Any detractors out there?

    Maybe they are all busy looking for property agents now to rid off their speculative property investments.

  3. #3
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Quote Originally Posted by Unregistered
    Absolutely agree with both hands up!

    Any detractors out there?

    Maybe they are all busy looking for property agents now to rid off their speculative property investments.
    Absolutely agree with the report below with both hands up!

    Any detractors out there?

    Maybe they are all busy looking to buy something fast.
    Quote Originally Posted by mr funny
    Published March 27, 2008

    Home prices surpass 1996 levels

    Even if the US sub-prime problem drags on, mid and mass market homes would still see price increases this year, says HAN HUAN MEI


    RESIDENTIAL property prices in Singapore saw phenomenal growth in 2006-7. Robust economic growth of about 7-8 per cent in the past three years, a growing number of millionaires and anticipated spinoffs from the integrated resorts ignited the high-end segment before finally filtering down to the mid and mass markets in the second quarter of 2007.

    By the end of 2007, prices in dollar terms had surpassed the levels in 1996, although the Urban Redevelopment Authority (URA) private residential price index had yet to hit the peak of 181.4 points achieved in Q2 1996. This is especially the case for new projects. For example, units in luxury projects like Cliveden at Grange, Hilltops and The Orchard Residences were selling at above $3,500 per sq ft compared with those in Ardmore Park, which were selling above $1,800 psf in 1996.

    In the mid-tier segment, units in projects like Aalto, Jardin and Zenith were selling above $1,600 psf in 2007, compared to 1 King Albert Park and Trellis Tower, which were sold at $900-$1,100 psf in 1996. As for mass market projects, 2007 saw units in projects like Fontaine Parry, Hillvista and Oasis Garden being sold at $850-$1,000 psf while in 1996, units in Hazel Park, Ballota Park and Sherwood Condominium were sold at $680 psf-$850 psf.

    In the last two years, the URA price index showed that prices of landed homes rose by 32 per cent while those of non-landed homes (apartments and condominiums) rose by 47 per cent. Furthermore, within the non-landed segment, prices of uncompleted homes (mostly new launches and developers' sales) grew by 53 per cent whereas those of completed homes (existing stock, resale transactions) rose 45 per cent.

    Based on URA price indices by region for uncompleted non-landed properties, the Core Central Region (CCR, districts 9, 10, 11 and Downtown Core and Sentosa) took the lead with a 67 per cent growth followed by the Rest of Central Region (RCR, Central Region outside the core region) with a 41 per cent growth and the Outside Central Region (OCR), with a 35 per cent growth.

    For non-landed homes in the resale market, the price increase was 45 per cent over the last two years, driven mostly by transactions in the CCR. Prices there rose by 43 per cent, followed by 31 per cent for those in the RCR and 28 per cent for those in the OCR.

    A comparison of median prices in Q4 2007 showed an interesting geographical shift across the island from Q4 2006. For simplicity, we have confined our analysis to non-landed homes.

    For the new homes sold as at Q4 2006, the highest price band was $1,500-$2,000 psf for properties in districts 1, 2 and 4. Examples of new projects in these districts in 2006 would include Marina Bay Residences, Lumiere, and The Coast and The Oceanfront at Sentosa Cove.

    Properties in the lowest band - below $700 psf - were found in districts 5, 8, 12, 13, 14, 16, 17, 19, 22, 23, 6 and 27. Examples of new launches at that time included Ferraria Park, One St Michael's, The Infiniti, The Quartz and The Stellar. Most of these are 99-year leasehold projects catering to the mass market. However, by Q4 2007, the highest price band moved up to over $3,000 psf for properties in districts 9 and 10 for projects like 8 Napier, Cliveden At Grange, Scotts Square and The Orchard Residences. Similarly, the lowest band was raised to $700 psf to $1,000 psf for projects in districts 3, 5, 8, 12, 13, 17, 19 and 22, reflective of prices of Casa Fortuna, Fontaine Parry, Oasis Garden and The Lakeshore.

    As for properties in the popular East Coast area, their prices have moved up from $700-$1,000 psf to $1,000-$1,500 psf for district 15. In district 16, they moved from below $700 psf to $700-$1,000 psf over the same period.

    In the resale market, there was a lag in price growth because this sector involved basically older properties which lacked the aesthetic appeal and quality of new properties. As at Q4 2006, among the properties that were sold, only those in district 9 made it to the top of the range for the price band of $1,000-$1,500 psf. These included properties like Aspen Heights, Cairnhill Crest, The Claymore and The Pier At Robertson. However, a year on, the price band moved up to $1,500-$2,000 psf. Transactions in district 10 joined this category, involving units in Ardmore Park, Draycott Eight and The Tessarina.

    With the exception of districts 4, 9, 10 and 11, resale transactions in the rest of the island were largely below $700 psf in Q4 2006, the price band for mass market properties. Similarly, in Q4 2007, property prices in the more popular districts (1, 2, 3, 5, 7, 8, 12, 15, 16 and 21) moved up to the $700-$1,000 psf price band.

    Notably, prices of properties in districts 1 and 3 as well as 11 moved up to the $1,000-$1,500 psf band in Q4 2007 from previous price bands of below $700 psf and $700-$1,000 psf respectively.

    Last year ended on a cautious note as the sub-prime mortgage crisis in the US had a somewhat negative effect on global financial markets and the economy. Most home buyers have been infected by the current mood and have turned cautious. Should the US enter a mild recession in the first six months of 2008 and the sub-prime problems clear up so that sentiment improves after June this year, the private residential market should continue where it left off in the third quarter of 2007.

    Luxury prices would remain firm, mid-market homes would be expected to rise by 5 to 10 per cent while mass market home prices could grow by 10 to 15 per cent in 2008, once the situation becomes more positive.

    In the worst case scenario, where the US sub-prime problem drags on to the end of the year and beyond, prices of luxury properties may ease marginally, while mid- and mass market homes would still see price increases, albeit at one to 2 per cent and 3 to 5 per cent respectively.

    Han Huan Mei is an associate director, CBRE Research, CB Richard Ellis.

  4. #4
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Quote Originally Posted by Unregistered
    Absolutely agree with both hands up!

    Any detractors out there?

    Maybe they are all busy looking for property agents now to rid off their speculative property investments.
    So the sour grape has finally found one article to make him so happy.

    What about the others that appeared in the Business Times today? e.g.

    1. Home prices surpass 1996 levels

    2. Prices and rentals of landed homes set to rise

    3. Residential rents seen rising further

    4. HDB resale buzz set to continue

    5. Retail rents unlikely to soften

    6. Shophouses star at auctions

    Also, below is an excerpt from Business Times 29 Feb 2008 about Kwek Leng Beng's views:

    On the high-end residential sector, Mr Kwek noted that it is supported not only by wealthy local investors with holding power, but also by well-heeled foreigners. 'Super-rich investors from Russia, Middle East and even hedge-fund managers have yet to come into Singapore in a big way.

    'With Singapore developing into a global city and placed into the limelight, it can be a very attractive place to invest for these well-heeled clienteles, as seen in London,' CDL said in its results statement.

    The next big wave for the Singapore property market will come when the two integrated resorts are operating successfully. 'It will be a different Singapore altogether. Singapore is a hub. I've been harping on this. Nobody believed me until last year,' said Mr Kwek.

  5. #5
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Quote Originally Posted by mr funny
    Published March 27, 2008

    Luxury home prices to fall 32% by 2010: Nomura

    It says sector has risen too fast relative to rental expectations

    By UMA SHANKARI


    TAKING a bearish stance on Singapore's residential sector, Nomura Research expects luxury home prices to slide a staggering 32.3 per cent from their 2007 peak between now and 2010.

    Average prices in the luxury segment will fall 16.9 per cent in 2008, 10.3 per cent in 2009 and 9.3 per cent in 2010 as rental growth slows and yields are reappraised, Nomura says in a report.

    Luxury residential prices have risen too fast relative to rental expectations, the report says.

    'Sentiment in the market has deteriorated rapidly - asset prices look to have fallen by about 5 per cent over the first two months of the year, with falls of up to 15 per cent in some non-prime locations,' Nomura analysts Tony Darwell and Daniel Raats say.

    'We see asset prices being driven lower by marginal speculative sellers amid low transaction volumes and higher unsold pre-sale inventories.'

    These factors will add up to a major correction - but not a crash - with a 2010 average price of $1,847 per square foot, marginally higher than $1,811 psf in the 1996 peak and 22.4 per cent above the 2001 peak of $1,508 psf. The mass market will not be immune from falling prices amid rising new supply, Nomura believes. 'Mass residential prices appear on a firmer footing, supported by rental growth and prevailing yields,' its analysts say.

    'However, the advent of new supply and the resultant increase in rental availability in prime locations is likely to see demand that was once displaced to 'non-core mass market' locations returning to prime districts, hurting non-core rents and ultimately mass market prices.'

    As a result, mass residential prices will remain flat in 2008, climbing just 0.5 per cent, Nomura believes. And as new supply is completed in the prime districts, it expects prices to fall 10.3 per cent in 2009 and 10.1 per cent in 2010 - a total fall of some 19.4 per cent from the 2008 peak.

    In view of this, the firm is maintaining its bearish stance on Singapore residential property and says the market will move swiftly from a 'state of denial' to the realities on the ground.

    Residential rents are likely to remain firm in the short term, given the low vacancy rate, Nomura reckons. But rising new supply is likely to cap rental gains from the second half of this year. Nomura forecasts that the vacancy rate will rise from 5.7 per cent at end-2007 to 8.2 per cent at end-2010.

    Average rents are expected to peak in 2008, rising five per cent year-on-year to $3.64 psf per month, after rises of 14.1 per cent year-on-year in 2006 and 41.2 per cent year-on-year in 2007, Nomura says. But with supply on the rise, rents will ease 10.3 per cent year-on-year in 2009 and 15.7 per cent year-on-year in 2010.

    Well well well....whats so surprising? Any primary school student would have told this 6 months ago.
    The rest of the market to follow....watch out for the official news in 6 months. Only then do speculators wake up.

  6. #6
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Quote Originally Posted by Unregistered
    So the sour grape has finally found one article to make him so happy.

    What about the others that appeared in the Business Times today? e.g.

    1. Home prices surpass 1996 levels

    2. Prices and rentals of landed homes set to rise

    3. Residential rents seen rising further

    4. HDB resale buzz set to continue

    5. Retail rents unlikely to soften

    6. Shophouses star at auctions

    Also, below is an excerpt from Business Times 29 Feb 2008 about Kwek Leng Beng's views:

    On the high-end residential sector, Mr Kwek noted that it is supported not only by wealthy local investors with holding power, but also by well-heeled foreigners. 'Super-rich investors from Russia, Middle East and even hedge-fund managers have yet to come into Singapore in a big way.

    'With Singapore developing into a global city and placed into the limelight, it can be a very attractive place to invest for these well-heeled clienteles, as seen in London,' CDL said in its results statement.

    The next big wave for the Singapore property market will come when the two integrated resorts are operating successfully. 'It will be a different Singapore altogether. Singapore is a hub. I've been harping on this. Nobody believed me until last year,' said Mr Kwek.
    Please list more but fact is that property market is sinking. You can yell and scream over housetops but the big hasn't struck yet. These are just minor shocks but the tsunami is coming and the waves will sweep you away. We will miss all your postings then.

  7. #7
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Quote Originally Posted by Unregistered
    So the sour grape has finally found one article to make him so happy.

    What about the others that appeared in the Business Times today? e.g.

    1. Home prices surpass 1996 levels

    2. Prices and rentals of landed homes set to rise

    3. Residential rents seen rising further

    4. HDB resale buzz set to continue

    5. Retail rents unlikely to soften

    6. Shophouses star at auctions

    Also, below is an excerpt from Business Times 29 Feb 2008 about Kwek Leng Beng's views:

    On the high-end residential sector, Mr Kwek noted that it is supported not only by wealthy local investors with holding power, but also by well-heeled foreigners. 'Super-rich investors from Russia, Middle East and even hedge-fund managers have yet to come into Singapore in a big way.

    'With Singapore developing into a global city and placed into the limelight, it can be a very attractive place to invest for these well-heeled clienteles, as seen in London,' CDL said in its results statement.

    The next big wave for the Singapore property market will come when the two integrated resorts are operating successfully. 'It will be a different Singapore altogether. Singapore is a hub. I've been harping on this. Nobody believed me until last year,' said Mr Kwek.


    KLB is definitely right here.
    He is rich, he knows how rich people think, they see the future of spore that is why they invest here, they will not sell in 2010 like nomura said.
    nobody bother about nomura report in spore as they are always on the wrong side. They are wrong again this time.

  8. #8
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Quote Originally Posted by Unregistered
    Well well well....whats so surprising? Any primary school student would have told this 6 months ago.
    The rest of the market to follow....watch out for the official news in 6 months. Only then do speculators wake up.

    Dear Uncle Sour Grapes,

    I am sorry to hear that you will be disappointed once again after waiting for a correction in the last 18 months

    yours truly,
    primary school kid of Mr. Tan Koo Koo

  9. #9
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Quote Originally Posted by Unregistered
    Dear Uncle Sour Grapes,

    I am sorry to hear that you will be disappointed once again after waiting for a correction in the last 18 months

    yours truly,
    primary school kid of Mr. Tan Koo Koo
    Oh so many names of people saying this and that. But everyone can see what is happening. Tell them all to get more vocal. People may start believing. Hahaha.

  10. #10
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Two groups of sour grapes. One missed the boat and one stuck and cannot get out. God save them both. Dont worry in 10 years the first group will be able to buy again. Dont miss the boat then. In 15 years the stuck ones would be able to sell. So just relax now and enjoy what you both are good at. Post Post Post!!!!!

  11. #11
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Quote Originally Posted by Unregistered
    So the sour grape has finally found one article to make him so happy.

    What about the others that appeared in the Business Times today? e.g.

    1. Home prices surpass 1996 levels

    2. Prices and rentals of landed homes set to rise

    3. Residential rents seen rising further

    4. HDB resale buzz set to continue

    5. Retail rents unlikely to soften

    6. Shophouses star at auctions

    Also, below is an excerpt from Business Times 29 Feb 2008 about Kwek Leng Beng's views:

    On the high-end residential sector, Mr Kwek noted that it is supported not only by wealthy local investors with holding power, but also by well-heeled foreigners. 'Super-rich investors from Russia, Middle East and even hedge-fund managers have yet to come into Singapore in a big way.

    'With Singapore developing into a global city and placed into the limelight, it can be a very attractive place to invest for these well-heeled clienteles, as seen in London,' CDL said in its results statement.

    The next big wave for the Singapore property market will come when the two integrated resorts are operating successfully. 'It will be a different Singapore altogether. Singapore is a hub. I've been harping on this. Nobody believed me until last year,' said Mr Kwek.
    Wealthy investors are not stupid and they are not only good at entering a rising markets before anyone else, an even more important skill is to exit the falling market before anyone else. Only fools like you are talking about holding power. It got nothing to do with it.

  12. #12
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Quote Originally Posted by Unregistered
    Wealthy investors are not stupid and they are not only good at entering a rising markets before anyone else, an even more important skill is to exit the falling market before anyone else. Only fools like you are talking about holding power. It got nothing to do with it.
    You are right. Fools keep holding to show their holding power and continue to hold even when market falls 50%. What a strategy. kikikikikiki...

  13. #13
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Quote Originally Posted by Unregistered
    KLB is definitely right here.
    He is rich, he knows how rich people think, they see the future of spore that is why they invest here, they will not sell in 2010 like nomura said.
    nobody bother about nomura report in spore as they are always on the wrong side. They are wrong again this time.
    Oh KLB isn't as stupid as you to keep holding in a falling market. Enter and Exit is a matter of timing and the timing to exit has arrived.

  14. #14
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    folks, the uber rich can take care of themself. the nomura analyst for all you know has never even step into a St. Regis apartment.

  15. #15
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Quote Originally Posted by Unregistered
    folks, the uber rich can take care of themself. the nomura analyst for all you know has never even step into a St. Regis apartment.
    You dont have to drown yourself to realise that someone else is drowning. You just stand on the shore and watch him go under.

  16. #16
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Quote Originally Posted by Unregistered
    folks, the uber rich can take care of themself. the nomura analyst for all you know has never even step into a St. Regis apartment.
    Statistically, the sour grapes are borderline condo owners who are absolute whiners. They see their dreams vaporise before their very eyes and they just can't stand it...so they make it a personal crusade to bring on bad news even though it is not relevant to their station in life. If you don't have networth of $15 million, what has top high end luxury condo got to do with you. I mean seriously, many can barely afford to own a small yard toilet/powder room in a St. Regis Condo.

  17. #17
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Nomura has done their homework. Along with prime, mass markets would also experience the same level of fall. All the Humpty Dumpty's sitting on the high wall, slide down and run before you experience the BIG fall. I am sliding down...see u all at the finish. Good luck to all and congratulations to all those who make it through the bloodshed...aaah!

  18. #18
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Quote Originally Posted by Unregistered
    Statistically, the sour grapes are borderline condo owners who are absolute whiners. They see their dreams vaporise before their very eyes and they just can't stand it...so they make it a personal crusade to bring on bad news even though it is not relevant to their station in life. If you don't have networth of $15 million, what has top high end luxury condo got to do with you. I mean seriously, many can barely afford to own a small yard toilet/powder room in a St. Regis Condo.
    Don't judge people by your standards...please!

  19. #19
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Quote Originally Posted by Unregistered
    Oh KLB isn't as stupid as you to keep holding in a falling market. Enter and Exit is a matter of timing and the timing to exit has arrived.
    Shame on you, I started selling in June, 2007 and sold last holding back in October 2007 already. If you want to sell now, my advise is don't be greedy and try to get real before the stampede starts

  20. #20
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Quote Originally Posted by Unregistered
    Shame on you, I started selling in June, 2007 and sold last holding back in October 2007 already. If you want to sell now, my advise is don't be greedy and try to get real before the stampede starts
    Oh my you started selling but haven't finished yet and it looks like thats why you know about the stampede. Well said my friend.
    It is a lesson to all those speculators holding. See our friend started selling but couldn't complete yet. So please dump and rush out before you get trampled in the stampede.

  21. #21
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Quote Originally Posted by Unregistered
    Oh my you started selling but haven't finished yet and it looks like thats why you know about the stampede. Well said my friend.
    It is a lesson to all those speculators holding. See our friend started selling but couldn't complete yet. So please dump and rush out before you get trampled in the stampede.
    He said he sold his "last holding" in October, 2007. Can't you read simple english?

  22. #22
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Quote Originally Posted by Unregistered
    He said he sold his "last holding" in October, 2007. Can't you read simple english?
    He or you?

  23. #23
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Japan Inflation Rate Climbs to Decade High; Unemployment Rises

    By Mayumi Otsuma and Toru Fujioka

    March 28 (Bloomberg) -- Japan's consumer prices rose at the fastest pace in a decade and the unemployment rate increased for the first time in five months, putting pressure on households already strapped by falling wages.

    Core prices, which exclude fruit, fish and vegetables, climbed 1 percent in February from a year earlier, the statistics bureau said today in Tokyo. The jobless rate unexpectedly climbed to 3.9 percent, the first increase since September, and job vacancies slid to a two-year low.

    A worsening job market is the latest evidence of economic deterioration that may force the Bank of Japan to reverse its policy and cut interest rates even as prices surge. Economic and Fiscal Policy Minister Hiroko Ota said faster inflation caused by higher energy and food costs may hurt consumers, whose spending accounts for more than half of the economy.

    ``All of today's numbers show that the Japanese economy is already in a mild recession,'' said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo. ``Naturally the policy board needs to discuss a rate cut.''

    Household spending stalled last month, the statistics bureau said. Economists estimated a 2.4 percent increase. The ratio of jobs to available to each applicant slid to 0.97, the lowest since September 2005.

    The yield on Japan's 10-year bond fell 2 basis points to 1.25 percent at 10:58 a.m. in Tokyo. The yen traded at 99.50 per dollar from 99.44 before the reports were published.

    `Flexible' Policy

    Three central bank policy makers -- acting Governor Masaaki Shirakawa, Deputy Governor Kiyohiko Nishimura and board member Miyako Suda -- have said since last week that the bank is ready to take ``flexible'' policy steps if needed.

    Traders see a 53 percent chance the central bank will lower the key overnight lending rate from 0.5 percent by December, JPMorgan Chase & Co. calculations show.

    Today's figures signal wages, which had the steepest drop in three years in 2007, are unlikely to pick up anytime soon as higher oil and raw-materials costs squeeze companies' profits.

    Pasona Group Inc., a temp agency, this week cut its profit forecast 36 percent for the year ending May 31, citing weaker- than-expected demand for temporary workers as the economy slows.

    ``Companies can't afford to hire employees and raise wages even if they want to,'' said Takehiro Sato, chief Japan economist at Morgan Stanley in Tokyo. ``Profits are under pressure from oil, the surging yen, the U.S. slowdown and more reasons I can't even count.''

    Production Slump

    Reports next week will probably provide more evidence of the economy's deterioration.

    Industrial production fell for a second month, economists expect the government to say on March 31. The Bank of Japan's Tankan survey, the nation's most closely watched gauge of business confidence, on April 1 is likely to show sentiment among large manufacturers fell to the lowest level in four years.

    ``A stalled job market and weakening consumer spending are evidence that Japan's economy is already in a recession,'' said Seiji Shiraishi, chief economist at HSBC Securities Japan Ltd. in Tokyo. ``The Bank of Japan will have to cut interest rates between April and June.''

    BOJ policy maker Suda said yesterday that growth in the year starting April 1 will probably fall short of the bank's 2.1 percent projection made last October. The central bank will release its next forecasts on April 30.

    Core consumer prices started rising in October after declining for eight months. They either hovered near zero or fell since March 1998, when an increase in the country's sales tax pushed gains to 1.8 percent.

    Inflation May Wane

    Some analysts say inflation may wane later this year as oil and commodities costs ease and consumer demand fails to pick up.

    ``With growth slowing and demand weakening in coming months, oil prices will probably fall and companies will continue to struggle to raise prices beyond oil and food,'' said Azusa Kato, an economist at BNP Paribas in Tokyo. ``Core-price inflation may slump to almost zero in the first quarter of 2009.''

    Excluding energy as well as food, Japan's consumer prices fell 0.1 percent in February. By that measure, prices have failed to rise for more than nine years.

    Parliament's decision on whether to extend a higher tax on gasoline may also affect inflation. The tax is set to expire on March 31 after the opposition Democratic Party of Japan refused to discuss a bill to extend it.

    The tax may be renewed in a month or disappear indefinitely. An end to the levy would lower core prices by 0.4 percentage point and warrant a change in the inflation outlook, said Chiwoong Lee, an associate economist at Goldman Sachs Group Inc. in Tokyo.

  24. #24
    mr funny. Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Published March 28, 2008

    Low point of crisis may be over, feels Temasek unit

    Investors have reached the point of maximum fear, says Fullerton CEO


    (SINGAPORE) Temasek Holdings' fund management unit says investors have passed 'the point of maximum fear' amid the global credit squeeze. Fullerton Fund Management sees the US Federal Reserve's decision to rescue Bear Stearns as a turning point in the crisis.

    'The Fed coming in to facilitate JPMorgan Chase & Co's purchase of Bear Stearns is a watershed event, and most bottoms are found during watershed events,' Fullerton CEO Gerard Lee said in an interview here yesterday. 'From that perspective, we could have already crossed the point of maximum fear.'

    The Fed stepped in with JPMorgan on March 14 to provide emergency funding to Bear Stearns in the biggest government bailout of a US securities firm. The move is now being probed by the Senate.

    Before the announcement, Bear Stearns' clients withdrew US$17 billion in two days amid speculation that the firm was running short of cash.

    Templeton Asset Management's Mark Mobius said he 'generally' agrees with Temasek's assessment that the markets have reached a bottom.

    'If we haven't achieved it, we're damn close,' Mr Mobius, who oversees US$47 billion in emerging- market equities, said in a phone interview from Hong Kong yesterday.

    'With the kind of liquidity that's pouring into the system, with the Fed, and now the European Central Bank and others putting more money into the system, we think stock prices are not going to remain down. We think there's a good chance of growth going forward.'

    Some funds are already planning to buy shares in Asia, where stocks have tumbled this year even as economies in China and India continue to grow. The MSCI Asia Pacific Index trades at 14 times estimated earnings, after slumping 13 per cent the past six months as fallout from the US sub-prime crisis spread through Asia, making stocks in the benchmark 36 per cent cheaper than the five-year average.

    Value Partners Group, Asia's second-largest hedge fund manager, is buying stocks in the region that were battered by the collapse of the US sub-prime mortgage market, chief investment officer Cheah Cheng Hye said this week. The Hong Kong-based asset manager aims to start a new fund in the second quarter to invest in Greater China property stocks, Mr Cheah said.

    Funds such as Clariden Leu AG, which manages US$300 million, said the recovery from the US housing crisis may take 1-2 years.

    'What we have seen in the last couple of weeks culminating in the rescue of Bear Stearns by the Fed and a further pump of liquidity in the market may somewhat signal an inflexion point in the crisis - but this bottoming-out phase, we reckon, will take a long time,' Michael Foo, head of Asian portfolio management at Clariden, said in an interview yesterday.

    Fullerton, which oversees US$2.5 billion of third- party money, is still bullish on prospects in Asia, where it has most of its assets. It said the goal to manage US$3 billion excluding Temasek's funds by mid-year is achievable. Temasek manages a portfolio worth more than US$100 billion.

    'The fundamental reasons for this secular growth are all in place,' Mr Lee said. 'The few of the big economies are found in Asia. I'm talking about China, India, Vietnam and South Korea. So Asia, being a destination for investment money from the developed world, will continue to grow.'

    Fullerton's main customers are wealthy individuals in Japan, South Korea, Taiwan, Hong Kong and institutions in Singapore, where it became a separate unit of Temasek in 2003. It aims to expand in the US, Europe, Australia and the Middle East. -- Bloomberg

  25. #25
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Quote Originally Posted by Unregistered
    Japan Inflation Rate Climbs to Decade High; Unemployment Rises

    By Mayumi Otsuma and Toru Fujioka

    March 28 (Bloomberg) -- Japan's consumer prices rose at the fastest pace in a decade and the unemployment rate increased for the first time in five months, putting pressure on households already strapped by falling wages.

    Core prices, which exclude fruit, fish and vegetables, climbed 1 percent in February from a year earlier, the statistics bureau said today in Tokyo. The jobless rate unexpectedly climbed to 3.9 percent, the first increase since September, and job vacancies slid to a two-year low.

    A worsening job market is the latest evidence of economic deterioration that may force the Bank of Japan to reverse its policy and cut interest rates even as prices surge. Economic and Fiscal Policy Minister Hiroko Ota said faster inflation caused by higher energy and food costs may hurt consumers, whose spending accounts for more than half of the economy.

    ``All of today's numbers show that the Japanese economy is already in a mild recession,'' said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo. ``Naturally the policy board needs to discuss a rate cut.''

    Household spending stalled last month, the statistics bureau said. Economists estimated a 2.4 percent increase. The ratio of jobs to available to each applicant slid to 0.97, the lowest since September 2005.

    The yield on Japan's 10-year bond fell 2 basis points to 1.25 percent at 10:58 a.m. in Tokyo. The yen traded at 99.50 per dollar from 99.44 before the reports were published.

    `Flexible' Policy

    Three central bank policy makers -- acting Governor Masaaki Shirakawa, Deputy Governor Kiyohiko Nishimura and board member Miyako Suda -- have said since last week that the bank is ready to take ``flexible'' policy steps if needed.

    Traders see a 53 percent chance the central bank will lower the key overnight lending rate from 0.5 percent by December, JPMorgan Chase & Co. calculations show.

    Today's figures signal wages, which had the steepest drop in three years in 2007, are unlikely to pick up anytime soon as higher oil and raw-materials costs squeeze companies' profits.

    Pasona Group Inc., a temp agency, this week cut its profit forecast 36 percent for the year ending May 31, citing weaker- than-expected demand for temporary workers as the economy slows.

    ``Companies can't afford to hire employees and raise wages even if they want to,'' said Takehiro Sato, chief Japan economist at Morgan Stanley in Tokyo. ``Profits are under pressure from oil, the surging yen, the U.S. slowdown and more reasons I can't even count.''

    Production Slump

    Reports next week will probably provide more evidence of the economy's deterioration.

    Industrial production fell for a second month, economists expect the government to say on March 31. The Bank of Japan's Tankan survey, the nation's most closely watched gauge of business confidence, on April 1 is likely to show sentiment among large manufacturers fell to the lowest level in four years.

    ``A stalled job market and weakening consumer spending are evidence that Japan's economy is already in a recession,'' said Seiji Shiraishi, chief economist at HSBC Securities Japan Ltd. in Tokyo. ``The Bank of Japan will have to cut interest rates between April and June.''

    BOJ policy maker Suda said yesterday that growth in the year starting April 1 will probably fall short of the bank's 2.1 percent projection made last October. The central bank will release its next forecasts on April 30.

    Core consumer prices started rising in October after declining for eight months. They either hovered near zero or fell since March 1998, when an increase in the country's sales tax pushed gains to 1.8 percent.

    Inflation May Wane

    Some analysts say inflation may wane later this year as oil and commodities costs ease and consumer demand fails to pick up.

    ``With growth slowing and demand weakening in coming months, oil prices will probably fall and companies will continue to struggle to raise prices beyond oil and food,'' said Azusa Kato, an economist at BNP Paribas in Tokyo. ``Core-price inflation may slump to almost zero in the first quarter of 2009.''

    Excluding energy as well as food, Japan's consumer prices fell 0.1 percent in February. By that measure, prices have failed to rise for more than nine years.

    Parliament's decision on whether to extend a higher tax on gasoline may also affect inflation. The tax is set to expire on March 31 after the opposition Democratic Party of Japan refused to discuss a bill to extend it.

    The tax may be renewed in a month or disappear indefinitely. An end to the levy would lower core prices by 0.4 percentage point and warrant a change in the inflation outlook, said Chiwoong Lee, an associate economist at Goldman Sachs Group Inc. in Tokyo.
    Oh its coming closer to home. Japan going to be hit soon. Oh domino effect.

  26. #26
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Quote Originally Posted by mr funny.
    Published March 28, 2008

    Low point of crisis may be over, feels Temasek unit

    Investors have reached the point of maximum fear, says Fullerton CEO


    (SINGAPORE) Temasek Holdings' fund management unit says investors have passed 'the point of maximum fear' amid the global credit squeeze. Fullerton Fund Management sees the US Federal Reserve's decision to rescue Bear Stearns as a turning point in the crisis.

    'The Fed coming in to facilitate JPMorgan Chase & Co's purchase of Bear Stearns is a watershed event, and most bottoms are found during watershed events,' Fullerton CEO Gerard Lee said in an interview here yesterday. 'From that perspective, we could have already crossed the point of maximum fear.'

    The Fed stepped in with JPMorgan on March 14 to provide emergency funding to Bear Stearns in the biggest government bailout of a US securities firm. The move is now being probed by the Senate.

    Before the announcement, Bear Stearns' clients withdrew US$17 billion in two days amid speculation that the firm was running short of cash.

    Templeton Asset Management's Mark Mobius said he 'generally' agrees with Temasek's assessment that the markets have reached a bottom.

    'If we haven't achieved it, we're damn close,' Mr Mobius, who oversees US$47 billion in emerging- market equities, said in a phone interview from Hong Kong yesterday.

    'With the kind of liquidity that's pouring into the system, with the Fed, and now the European Central Bank and others putting more money into the system, we think stock prices are not going to remain down. We think there's a good chance of growth going forward.'

    Some funds are already planning to buy shares in Asia, where stocks have tumbled this year even as economies in China and India continue to grow. The MSCI Asia Pacific Index trades at 14 times estimated earnings, after slumping 13 per cent the past six months as fallout from the US sub-prime crisis spread through Asia, making stocks in the benchmark 36 per cent cheaper than the five-year average.

    Value Partners Group, Asia's second-largest hedge fund manager, is buying stocks in the region that were battered by the collapse of the US sub-prime mortgage market, chief investment officer Cheah Cheng Hye said this week. The Hong Kong-based asset manager aims to start a new fund in the second quarter to invest in Greater China property stocks, Mr Cheah said.

    Funds such as Clariden Leu AG, which manages US$300 million, said the recovery from the US housing crisis may take 1-2 years.

    'What we have seen in the last couple of weeks culminating in the rescue of Bear Stearns by the Fed and a further pump of liquidity in the market may somewhat signal an inflexion point in the crisis - but this bottoming-out phase, we reckon, will take a long time,' Michael Foo, head of Asian portfolio management at Clariden, said in an interview yesterday.

    Fullerton, which oversees US$2.5 billion of third- party money, is still bullish on prospects in Asia, where it has most of its assets. It said the goal to manage US$3 billion excluding Temasek's funds by mid-year is achievable. Temasek manages a portfolio worth more than US$100 billion.

    'The fundamental reasons for this secular growth are all in place,' Mr Lee said. 'The few of the big economies are found in Asia. I'm talking about China, India, Vietnam and South Korea. So Asia, being a destination for investment money from the developed world, will continue to grow.'

    Fullerton's main customers are wealthy individuals in Japan, South Korea, Taiwan, Hong Kong and institutions in Singapore, where it became a separate unit of Temasek in 2003. It aims to expand in the US, Europe, Australia and the Middle East. -- Bloomberg


    Temasek is right here!
    The worse is over for now on subprime & credit issues. As long as we can see recovery is coming, there may be some more dip in front but people had enough of it, they will discount & already factor in, so market will go for a quick rebound, follow by gradual recovery.
    So what MM & MBT said, due to concern on US situation, our property market is quiet. But once this is resolved, you can see the action in stock market, buyers will flock in like last year, another wave of rise will be in.
    Be patient, time will come in less than 3 months time.

  27. #27
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Quote Originally Posted by Unregistered
    Temasek is right here!
    The worse is over for now on subprime & credit issues. As long as we can see recovery is coming, there may be some more dip in front but people had enough of it, they will discount & already factor in, so market will go for a quick rebound, follow by gradual recovery.
    So what MM & MBT said, due to concern on US situation, our property market is quiet. But once this is resolved, you can see the action in stock market, buyers will flock in like last year, another wave of rise will be in.
    Be patient, time will come in less than 3 months time.
    The worse is just beginning not only for US but for ROW. Buyers will be chasing food and buying fields to cultivate. Big wave of fall coming.

  28. #28
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Quote Originally Posted by Unregistered
    The worse is just beginning not only for US but for ROW. Buyers will be chasing food and buying fields to cultivate. Big wave of fall coming.

    chasing food? are you crazy?
    chap-chai png is still $3-3.5, chase what?
    If go up to $10, then property will up 5x=500% from here.
    The best way to hedge inflation is to buy property.

  29. #29
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Quote Originally Posted by Unregistered
    chasing food? are you crazy?
    chap-chai png is still $3-3.5, chase what?
    If go up to $10, then property will up 5x=500% from here.
    The best way to hedge inflation is to buy property.
    Sour grape finding it difficult to sell brother. Dreaming of it going up. wooohahahahaha.

  30. #30
    Unregistered Guest

    Default Re: Luxury home prices to fall 32% by 2010: Nomura

    Quote Originally Posted by Unregistered
    Sour grape finding it difficult to sell brother. Dreaming of it going up. wooohahahahaha.
    Exactly!
    How to sell food, metal, etc. commodity? The prices are dropping.

    Singapore property prices are still firm and growing. So the best bet is Singapore property.

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