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Thread: Property market may stay quiet for up to a year

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    Default Property market may stay quiet for up to a year

    April 2, 2008

    Property market may stay quiet for up to a year

    Home prices, sales could remain weak as US sub-prime concerns linger

    By Fiona Chan, Property Reporter


    A MONTH ago, property consultants were predicting that the cooling market would pick up after June. That optimism has fast drained away.

    Consultants now expect home prices and sales to remain weak for up to a year from now, after official estimates yesterday confirmed that price growth was tapering off.

    'We can expect residential prices to continue weakening over the next 12 months', in the light of the United States sub-prime debacle and an expected US recession, said Jones Lang LaSalle (JLL).

    Other consultancies, such as CB Richard Ellis Research, believe price growth will slow further in the second quarter, to '1 per cent or 2 per cent'.

    Home sales are also plunging as buyers retreat - and they are expected to stay low as sellers dig in their heels to wait out the slowdown.

    New home sales were likely to have dropped in the first quarter to one of the lowest levels ever, second only to those recorded during the Sars period.

    In the secondary market, sales have fallen to 2005 levels, according to estimates from Savills Singapore.

    Mid-tier private properties on the city fringe, such as in Novena, Toa Payoh, Marine Parade and Queenstown, are likely to be hardest hit by falling buyer demand.

    These areas saw the biggest slowdown in price growth in the first 10 weeks of the year, suggesting that prices in these regions may be peaking, said JLL.

    Buyers in these areas have shallower pockets and are more sensitive to market sentiment, it added.

    In the HDB segment, prices have stabilised at about $50,000 cash over valuation or less, said Mr Eugene Lim, assistant vice-president at ERA Realty Network.

    'Resale flats priced higher than that take much longer to sell or may not sell at all.'

    Phillip Securities Research, meanwhile, aired concerns over the 'huge supply' of homes due to be completed in the next two years.

    Supply is 'expected to exceed the demand from buyers and result in a slide in local property prices from 2010', it said.

    HDB plans to release another 5,000 new build-to-order flats in the next six months. There are also 64,900 private homes in the pipeline, of which 90 per cent will be completed by 2011, while 60 per cent have yet to be sold.

    Most experts believe, however, that confidence and demand will return by year-end - as long as the Singapore economy stays robust.

    'Sellers now take a while to sell their homes, but there are still buyers,' said Mr Eric Cheng, the executive director of HSR property group.

    'Last year, it took maybe a month to sell a home. Now, it takes two months. But in 2000 or 2002, it took a year,' he said.

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  2. #2
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    Default Re: Property market may stay quiet for up to a year

    A year? A bit too long.

  3. #3
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    Default Re: Property market may stay quiet for up to a year

    Quote Originally Posted by Unregistered
    A year? A bit too long.
    You should say thanks it is only one year!! It could be worst.

    I even heard that end of year there will be a number of speculators selling off their units.

  4. #4
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    Default Re: Property market may stay quiet for up to a year

    Quote Originally Posted by Unregistered
    You should say thanks it is only one year!! It could be worst.

    I even heard that end of year there will be a number of speculators selling off their units.
    I agree.

    Price rise in property is normal with growth in economy. But the price rise should be at the same rate.

    In 2007, the rise was not justified by the rest of the economic growth. The price rise was much faster. This means that it was not real demand (people want to live in) but speculative demand (people only want to make money).

    If it was real demand, price rise would be slower in 2007, and would not drop so much in 2008.
    But because it was speculative, it was fast rise, and can be fast drop now.

    Why would I keep money in property when I can take it out by the middle of the year and buy stocks at good prices and make money faster?

  5. #5
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    Talking Re: Property market may stay quiet for up to a year

    Quote Originally Posted by Unregistered
    I agree.

    Price rise in property is normal with growth in economy. But the price rise should be at the same rate.

    In 2007, the rise was not justified by the rest of the economic growth. The price rise was much faster. This means that it was not real demand (people want to live in) but speculative demand (people only want to make money).

    If it was real demand, price rise would be slower in 2007, and would not drop so much in 2008.
    But because it was speculative, it was fast rise, and can be fast drop now.

    Why would I keep money in property when I can take it out by the middle of the year and buy stocks at good prices and make money faster?
    I beg to defer yr argument. R u aware that our property prices are actually much lower compared to other popular cities like Hong Kong and Tokyo. In fact, the big rise in 07 was actually a catching up scenario with the rest of the world and I can tell the current price compared to say HK is still much lower.

    Can't you noticed why there are so many foreign top talents flocking to Singapore to stay and work. Housing will be one of their top consideration when making their decision to come. And why so many of them are still coming? Its becos our prices are still low. I am of the opinion that we must always compare ourselves with 1st class cities like HK and Tokyo. That should be the benchmark. Singaporeans are always selfish in that they only want quality life but they are not prepared to pay which IMO it does'nt make any sense. But we must be mindful that a bowl of noodles will never be back to $1. We have to be realistic and inflation will be here to stay.

  6. #6
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    Default Re: Property market may stay quiet for up to a year

    Quote Originally Posted by Unregistered
    I beg to defer yr argument. R u aware that our property prices are actually much lower compared to other popular cities like Hong Kong and Tokyo. In fact, the big rise in 07 was actually a catching up scenario with the rest of the world and I can tell the current price compared to say HK is still much lower.

    Can't you noticed why there are so many foreign top talents flocking to Singapore to stay and work. Housing will be one of their top consideration when making their decision to come. And why so many of them are still coming? Its becos our prices are still low. I am of the opinion that we must always compare ourselves with 1st class cities like HK and Tokyo. That should be the benchmark. Singaporeans are always selfish in that they only want quality life but they are not prepared to pay which IMO it does'nt make any sense. But we must be mindful that a bowl of noodles will never be back to $1. We have to be realistic and inflation will be here to stay.
    another way to say it:
    people who enjoy wine elsewhere will pay to enjoy good wine, not always the cheap wine...

  7. #7
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    Default Re: Property market may stay quiet for up to a year

    Quote Originally Posted by Unregistered
    I beg to defer yr argument. R u aware that our property prices are actually much lower compared to other popular cities like Hong Kong and Tokyo. In fact, the big rise in 07 was actually a catching up scenario with the rest of the world and I can tell the current price compared to say HK is still much lower.

    Can't you noticed why there are so many foreign top talents flocking to Singapore to stay and work. Housing will be one of their top consideration when making their decision to come. And why so many of them are still coming? Its becos our prices are still low. I am of the opinion that we must always compare ourselves with 1st class cities like HK and Tokyo. That should be the benchmark. Singaporeans are always selfish in that they only want quality life but they are not prepared to pay which IMO it does'nt make any sense. But we must be mindful that a bowl of noodles will never be back to $1. We have to be realistic and inflation will be here to stay.
    This brave Developer think like u. Read,

    A SMALL property firm that snapped up enough sites to place it among the top en bloc players last year has put off completing two deals while it ties up funding.
    Because of the delays, owners at one condo are still waiting to pick up cheques for well over $1 million each. They expected payment in late February but an extension put this back to March and now the due date is late this month.

    The payments are pending from Bravo Building Construction, a relatively new firm on the property scene. It bought freehold Pender Court condominium in the Telok Blangah area for $80 million last July and soon after purchased Tulip Garden near Holland Road - also freehold - for $516 million.

    But completion of both deals seems to have stalled.

    Completion is at the final stage of the sale process and triggers the final payment - usually around 95 per cent of the purchase price - to owners. The remaining 5 per cent is paid when the owner vacates.

    These headaches for the owners come amid a slowing market for collective sales. The first quarter this year saw just one relatively small deal, compared with some 25 notched up in the same period last year.

    The Tulip Garden transaction is expected to be completed late next month but Bravo has already asked for two postponements - first to July 23 and then Aug 7.

    It has also asked for extensions to pay an additional 5 per cent of the purchase price - $25.8 million.

    This is a routine payment required once the Strata Titles Board approves a sale. An initial 5 per cent deposit was paid when the sale was done.

    The deadline for the second 5 per cent payment was March 13 but Bravo won approval to move it to April 7. Then in mid-March, it again asked to move the date, this time to May 5.

    However, before the sale committee could respond to the request, it is understood that Bravo asked again to have the date moved even further back, to June 7.

    Tulip Garden sold for about $1,018 per sq ft. It has 164 units comprising 96 flats, 66 maisonettes and two shophouses. Flat owners stand to reap $2.5 million to $4.2 million while maisonette owners will receive about $3.4 million each. The shop units will get about $1.1 million each.

    The owners are meeting this weekend to consider Bravo's requests that the completion date be pushed back to Aug 7 and the deadline for the $25.8 million payment be extended to June 7.

    The Pender Court deal is even further behind schedule.

    Bravo was supposed to have completed the sale on Feb 25 but had it postponed, initially to around mid-March. It then asked for a further extension to April 24, which has apparently been granted.

    Pender Court's 48 owners should each get $1.6 million or so for their flats, which sold for about $872 psf.

    Sources have told The Straits Times that they understand Bravo is committed to completing the two purchases and just needs more time to arrange funding.

    Bravo, which was registered in 2002, reportedly picked up $824.5 million worth of en bloc sale deals last year, making it the fourth-largest buyer of en bloc sites.

    Bravo's directors could not be reached for comment, despite numerous telephone calls and a visit to its office in an industrial building in Geylang Road last Friday. A Bravo staff member said that the company directors were away on business.

  8. #8
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    Default Re: Property market may stay quiet for up to a year

    Quote Originally Posted by Unregistered
    You should say thanks it is only one year!! It could be worst.

    I even heard that end of year there will be a number of speculators selling off their units.
    "Heard" from who leh?

    Sour grapes are the lowest class citizens in society who probably holds a lowly position in a place like Pioneer Circle and mixes around with those of the same kind.

    Such people only talk about buying 4D or going to the Turf Club; visiting Geylang during weekdays and Batam during weekends.

    How can a sour grape ever come into contact with anyone who is knowledgeable about the property market.

    Why would an agent waste time talking to a sour grape who has no property to lease, no property to sell and no money to buy anything?

  9. #9
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    Default Re: Property market may stay quiet for up to a year

    Quote Originally Posted by Unregistered
    You should say thanks it is only one year!! It could be worst.

    I even heard that end of year there will be a number of speculators selling off their units.
    End of which year?

    You said the same thing last year, but it didn't happen.

    Sounds like those end-of-the-world Gurus predicting the end of the world ... forever postponing ...

  10. #10
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    Default Re: Property market may stay quiet for up to a year

    Really no class. Your post is totally unconstructive. Really reflects badly on your upbringing. I don't think you are the "high class" type. More like some agent or speculator who pooled your life savings with a few other greedy colleagues to buy a condo, and now becoming desparate.

    Quote Originally Posted by Unregistered
    "Heard" from who leh?

    Sour grapes are the lowest class citizens in society who probably holds a lowly position in a place like Pioneer Circle and mixes around with those of the same kind.

    Such people only talk about buying 4D or going to the Turf Club; visiting Geylang during weekdays and Batam during weekends.

    How can a sour grape ever come into contact with anyone who is knowledgeable about the property market.

    Why would an agent waste time talking to a sour grape who has no property to lease, no property to sell and no money to buy anything?

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