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Thread: Bleak private home sales evoke memories of 2008

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    Default Bleak private home sales evoke memories of 2008

    http://www.straitstimes.com/archive/...-2008-20140918

    Bleak private home sales evoke memories of 2008

    Number of units unsold at 15.1% last month, worse than in August 2008

    Published on Sep 18, 2014 1:33 AM

    By Rennie Whang


    THE upscale Skyline @ Orchard Boulevard sums up the state of the private home market.

    In the first eight months of the year, the 40-unit condominium has sold just one unit, leaving 34 units unsold.

    The single sale in January was made at $3,362 per sq ft (psf) - far below the starting price of $3,900 psf at its June 2010 launch.

    When The Straits Times visited on Tuesday, its sales gallery was completely deserted. This underscores the fact that, by some indicators, the market is in worse shape than it was in the run-up to the 2008 global financial crisis which hit in October that year.

    The number of units launched but unsold rose to 15.1 per cent on Aug 31, worse than the 11.8 per cent in August 2008.

    Vacancy rates at completed private residential projects are also higher, at 7.1 per cent at the end of the second quarter versus 6.1 per cent in 2008 at the same time.

    Property consultants expect vacancy rates to rise, given a deluge of completed projects in the pipeline and the limited number of expats looking to rent.

    "Most expats are also no longer on expatriate packages... While on local packages, they are more budget conscious and may even combine with others to lease a unit. The demand dynamics for rentals have changed," said CBRE research head Desmond Sim.

    Some new completed projects may even see occupancy rates of just 60 per cent, versus the usual more than 90 per cent, said SLP International research head Nicholas Mak.

    The low point of the year has been last month's private home sales figures, released on Monday, with just 432 units moved.

    Buyer sentiment is bleak.

    In central Singapore, projects such as Ardmore 3, Devonshire 8, Ferra at Leonie Hill, One Balmoral and TwentyOne Angullia Park had each sold fewer than 10 units as at Aug 31 - despite being on the market for more than a year.

    Even in the suburbs, projects such as E Maison in Braddell Road and Singa Hills in Bedok had sold fewer than a quarter of their units at the end of last month.

    Still, monthly sales for the past six months are generally above the corresponding months in 2008, and better than the worst of the global financial crisis, when monthly sales were just 105 in January 2009.

    But underlying demand back then may still have been better than now, said Century 21 chief executive Ku Swee Yong.

    In 2008, demand came from people flush with cash from collective sales in 2007, who needed a new home; but that element is gone today.

    The market recovered fast as more foreigners started taking up permanent residency here, looking to Singapore as a safe haven. But cooling measures hit foreign buyers, Mr Ku said.

    The total value of sales today is also likely lower given the greater popularity of one-bedroom units, he added.

    "Moving into a time of high vacancies and uncertain yields, investors are expecting and will wait for lower prices."

    Said CBRE's Mr Sim: "It will take time for the market to reach equilibrium as well as let the long-term effects of cooling measures take over."

    [email protected]

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    teddybear is offline Global recession is coming....
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    Property market going to crash soon, wait for interest rate rise and it will!

    Quote Originally Posted by reporter2 View Post
    http://www.straitstimes.com/archive/...-2008-20140918

    Bleak private home sales evoke memories of 2008

    Number of units unsold at 15.1% last month, worse than in August 2008

    Published on Sep 18, 2014 1:33 AM

    By Rennie Whang


    THE upscale Skyline @ Orchard Boulevard sums up the state of the private home market.

    In the first eight months of the year, the 40-unit condominium has sold just one unit, leaving 34 units unsold.

    The single sale in January was made at $3,362 per sq ft (psf) - far below the starting price of $3,900 psf at its June 2010 launch.

    When The Straits Times visited on Tuesday, its sales gallery was completely deserted. This underscores the fact that, by some indicators, the market is in worse shape than it was in the run-up to the 2008 global financial crisis which hit in October that year.

    The number of units launched but unsold rose to 15.1 per cent on Aug 31, worse than the 11.8 per cent in August 2008.

    Vacancy rates at completed private residential projects are also higher, at 7.1 per cent at the end of the second quarter versus 6.1 per cent in 2008 at the same time.

    Property consultants expect vacancy rates to rise, given a deluge of completed projects in the pipeline and the limited number of expats looking to rent.

    "Most expats are also no longer on expatriate packages... While on local packages, they are more budget conscious and may even combine with others to lease a unit. The demand dynamics for rentals have changed," said CBRE research head Desmond Sim.

    Some new completed projects may even see occupancy rates of just 60 per cent, versus the usual more than 90 per cent, said SLP International research head Nicholas Mak.

    The low point of the year has been last month's private home sales figures, released on Monday, with just 432 units moved.

    Buyer sentiment is bleak.

    In central Singapore, projects such as Ardmore 3, Devonshire 8, Ferra at Leonie Hill, One Balmoral and TwentyOne Angullia Park had each sold fewer than 10 units as at Aug 31 - despite being on the market for more than a year.

    Even in the suburbs, projects such as E Maison in Braddell Road and Singa Hills in Bedok had sold fewer than a quarter of their units at the end of last month.

    Still, monthly sales for the past six months are generally above the corresponding months in 2008, and better than the worst of the global financial crisis, when monthly sales were just 105 in January 2009.

    But underlying demand back then may still have been better than now, said Century 21 chief executive Ku Swee Yong.

    In 2008, demand came from people flush with cash from collective sales in 2007, who needed a new home; but that element is gone today.

    The market recovered fast as more foreigners started taking up permanent residency here, looking to Singapore as a safe haven. But cooling measures hit foreign buyers, Mr Ku said.

    The total value of sales today is also likely lower given the greater popularity of one-bedroom units, he added.

    "Moving into a time of high vacancies and uncertain yields, investors are expecting and will wait for lower prices."

    Said CBRE's Mr Sim: "It will take time for the market to reach equilibrium as well as let the long-term effects of cooling measures take over."

    [email protected]

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    The rise in interest means US starts to gain traction and will go in tandem with better economy and job with more bonus. Most People will have better holding power except for those over-leverage ones. Banks earning will increase. Opportunity again for good buy from this group of people.
    Quote Originally Posted by teddybear View Post
    Property market going to crash soon, wait for interest rate rise and it will!

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    Quote Originally Posted by teddybear View Post
    Property market going to crash soon, wait for interest rate rise and it
    will!
    How soon?
    What is your definition of crash?
    "Never argue with an idiot, or he will drag you down to his level and beat you with experience."

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    Durian Durian when are you dropping......

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    Singapore luxury condos under pressure

    by yap leng kuen, September 22, 2014 MYT 7:37:55 AM


    THE observation that a higher percentage of luxury condos in the Singapore resale market is selling at a loss, points to the ancient truth that what goes up must come down.

    Describing these buyers as “swimming naked,” the Singapore Business Times (SBT) said they have to sell at a loss as they do not have holding power for their extravagant purchases.

    Quoting data compiled by STProperty.sg from URA Realis, SBT said 7% of transacted units in the prime districts 9, 10 and 11 sold at a loss in the first eight months of this year, up from 5.5% over the same year-ago period.

    Fewer people are profiting from their resale too; only 62.2% enjoyed any capital gains – a steep drop from 83.5% a year ago.

    And 4.5% sold without making a profit or a loss versus 0.4% a year ago.

    Yields are also under pressure. The low-rental environment is leaving more owners struggling to repay their mortgages, said SBT.

    Buyers bank on demand from expatriate lessees, most of whom enjoy staying near the city. But with corporate housing budgets having shrunk post-financial crisis, these foreign workers are moving instead to the city fringes and suburbs, with some even renting HDB flats, said SBT.

    Some are selling out not because they cannot afford the repayments; they are rebalancing their portfolios in view of the cooling measures imposed by the Government.

    Others have already made their money in property investments overseas.

    Bloated asset prices will have to come to a more sustainable level before the situation gets out of hand.

    Rosy markets do not last forever and especially the non-owner occupied property sector falls under one of those fickle cycles.

    The stepping up in rhetoric on rising home prices and warning against debt in Australia shows that the authorities are keeping watch on potential asset bubbles.

    “For investors in housing, the pick-up in housing credit growth had been more pronounced than for owner-occupiers, with investor demand particularly strong in Sydney and to a less extent, in Melbourne,” said Reuters, citing minutes of the Reserve Bank of Australia (RBA) board meeting on Sept 2.

    Additional speculative demand could amplify the property price cycle and increase the potential for property prices to fall later.

    Home prices grew by almost 11% in the year to August, driven in large part by demand for investment properties, said Reuters.

    Quoting assistant governor Christopher Kent, Reuters said low interest rates and robust population growth were underpinning demand in the housing market.

    This note of caution from the RBA follows an earlier observation by the International Monetary Fund on the need for controls on risky bank lending and high property prices in Australia.

    It signals that the RBA is potentially joining the regional watch on rising property prices.

    Lawsuits related to losses incurred as far back as 2008 are appearing in the east following massive penalties and claims imposed by the regulators in the west.

    Hong Kong’s securities regulator is suing Chinese conglomerate CITIC Ltd and five former directors, seeking HK$1.9bil (US$245mil) in compensation for investors over alleged misconduct linked to losses on the Australian dollar in 2008, said Reuters.

    The Securities and Futures Commission (SFC) wants to compensate up to 4,500 investors who purportedly lost money as a result of wrong-way bets CITIC made on the Aussie dollar at a time it was investing heavily in the US$9.6bil Sino Iron project in Western Australia.

    The regulator had alleged that CITIC issued a circular on Sept 12, 2008, that contained a false or misleading statement about its financial position, said Reuters.

    CITIC, then known as CITIC Pacific, said in the circular that its directors “were not aware of any adverse material change” in the group’s financial position.

    But five weeks later, it disclosed a loss on a number of leveraged foreign exchange contracts, causing its share price to plummet.

    The mark-to-market losses of around US$2bil came as a result of the foreign exchange position that the company had taken out to hedge currency exposure resulting from its Australian iron ore mining project, said Reuters.

    CITIC, in a statement, said it was seeking legal advice.

    Although it has not been as active as its Western counterparts in doling out penalties and lawsuits, the Hong Kong regulator is keeping watch over investor complaints.

    Being a major financial centre, Hong Kong would have its fair share of similar investor issues and companies with such investor exposure should brace themselves for any potential investigation.


    Columnist Yap Leng Kuen notes the quick adjustment to property asset bubbles in the region


    http://www.thestar.com.my/Business/B...resale-of-the/

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    Now already RCR under pressure...
    Within 12 months, OCR will start to drop..................
    Property market crash coming your way!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


    Quote Originally Posted by maisonjai View Post
    Singapore luxury condos under pressure

    by yap leng kuen, September 22, 2014 MYT 7:37:55 AM


    THE observation that a higher percentage of luxury condos in the Singapore resale market is selling at a loss, points to the ancient truth that what goes up must come down.

    Describing these buyers as “swimming naked,” the Singapore Business Times (SBT) said they have to sell at a loss as they do not have holding power for their extravagant purchases.

    Quoting data compiled by STProperty.sg from URA Realis, SBT said 7% of transacted units in the prime districts 9, 10 and 11 sold at a loss in the first eight months of this year, up from 5.5% over the same year-ago period.

    Fewer people are profiting from their resale too; only 62.2% enjoyed any capital gains – a steep drop from 83.5% a year ago.

    And 4.5% sold without making a profit or a loss versus 0.4% a year ago.

    Yields are also under pressure. The low-rental environment is leaving more owners struggling to repay their mortgages, said SBT.

    Buyers bank on demand from expatriate lessees, most of whom enjoy staying near the city. But with corporate housing budgets having shrunk post-financial crisis, these foreign workers are moving instead to the city fringes and suburbs, with some even renting HDB flats, said SBT.

    Some are selling out not because they cannot afford the repayments; they are rebalancing their portfolios in view of the cooling measures imposed by the Government.

    Others have already made their money in property investments overseas.

    Bloated asset prices will have to come to a more sustainable level before the situation gets out of hand.

    Rosy markets do not last forever and especially the non-owner occupied property sector falls under one of those fickle cycles.

    The stepping up in rhetoric on rising home prices and warning against debt in Australia shows that the authorities are keeping watch on potential asset bubbles.

    “For investors in housing, the pick-up in housing credit growth had been more pronounced than for owner-occupiers, with investor demand particularly strong in Sydney and to a less extent, in Melbourne,” said Reuters, citing minutes of the Reserve Bank of Australia (RBA) board meeting on Sept 2.

    Additional speculative demand could amplify the property price cycle and increase the potential for property prices to fall later.

    Home prices grew by almost 11% in the year to August, driven in large part by demand for investment properties, said Reuters.

    Quoting assistant governor Christopher Kent, Reuters said low interest rates and robust population growth were underpinning demand in the housing market.

    This note of caution from the RBA follows an earlier observation by the International Monetary Fund on the need for controls on risky bank lending and high property prices in Australia.

    It signals that the RBA is potentially joining the regional watch on rising property prices.

    Lawsuits related to losses incurred as far back as 2008 are appearing in the east following massive penalties and claims imposed by the regulators in the west.

    Hong Kong’s securities regulator is suing Chinese conglomerate CITIC Ltd and five former directors, seeking HK$1.9bil (US$245mil) in compensation for investors over alleged misconduct linked to losses on the Australian dollar in 2008, said Reuters.

    The Securities and Futures Commission (SFC) wants to compensate up to 4,500 investors who purportedly lost money as a result of wrong-way bets CITIC made on the Aussie dollar at a time it was investing heavily in the US$9.6bil Sino Iron project in Western Australia.

    The regulator had alleged that CITIC issued a circular on Sept 12, 2008, that contained a false or misleading statement about its financial position, said Reuters.

    CITIC, then known as CITIC Pacific, said in the circular that its directors “were not aware of any adverse material change” in the group’s financial position.

    But five weeks later, it disclosed a loss on a number of leveraged foreign exchange contracts, causing its share price to plummet.

    The mark-to-market losses of around US$2bil came as a result of the foreign exchange position that the company had taken out to hedge currency exposure resulting from its Australian iron ore mining project, said Reuters.

    CITIC, in a statement, said it was seeking legal advice.

    Although it has not been as active as its Western counterparts in doling out penalties and lawsuits, the Hong Kong regulator is keeping watch over investor complaints.

    Being a major financial centre, Hong Kong would have its fair share of similar investor issues and companies with such investor exposure should brace themselves for any potential investigation.


    Columnist Yap Leng Kuen notes the quick adjustment to property asset bubbles in the region


    http://www.thestar.com.my/Business/B...resale-of-the/

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    when this happens, will these well heeled buyers turn their focus to CCR while OCR goes into its long awaited correction?

    Quote Originally Posted by DC33_2008 View Post
    The rise in interest means US starts to gain traction and will go in tandem with better economy and job with more bonus. Most People will have better holding power except for those over-leverage ones. Banks earning will increase. Opportunity again for good buy from this group of people.

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    Last edited by Arcachon; 24-09-14 at 19:34.

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    Quote Originally Posted by bargain hunter View Post
    when this happens, will these well heeled buyers turn their focus to CCR while OCR goes into its long awaited correction?
    Wrong lah! You forgot that US has nothing to do with the growth of SG nowadays. SG has became China's bootlicker. Now 60% on China and 25% on US, only 15% on Europe. Remember the good old days when HP and Seagate were based in SG? Those were the times when SG was reliant on the US, evident from an also weak SGD. Nowadays SGD is strong and the govt seems to be less bothered. Also, US has grown 3-4% last year, was SG performing better or worse? You tell me.

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