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Thread: Property curbs could be lifted this year: CDL's Kwek Leng Beng

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    Default Property curbs could be lifted this year: CDL's Kwek Leng Beng

    http://www.straitstimes.com/business...kwek-leng-beng

    Property curbs could be lifted this year: CDL's Kwek Leng Beng

    Feb 26, 2016

    Longest losing streak in 17 years suggests that Govt will act soon, says Kwek Leng Beng

    Jacqueline Woo


    The sustained decline in residential prices here - now mired in their longest losing streak in 17 years - may prompt the Government to lift some property curbs this year, said City Developments (CDL) executive chairman Kwek Leng Beng.

    "They will press the button at the right time, although developers are hoping they will do it sooner rather than later," Mr Kwek told Bloomberg after the company's earnings briefing yesterday.

    "I think they will do something this year, that's my speculation, as there are a lot of mid- and low-end homes coming up. I suspect it will be the abolishing of the buyer's stamp duties."

    Mr Kwek was likely referring to the additional buyer's stamp duty (ABSD), introduced in December 2011, requiring buyers who own more than one home to pay a levy.

    Developers who bought land to develop and who cannot sell all new units within five years must also pay a levy.

    Mr Kwek's comments follow hard on the heels of those by Mr Augustine Tan, president of the Real Estate Developers' Association of Singapore, who said last week that it would be timely for the Government to consider a calibration of the cooling measures.

    Home values have dropped 8.4 per cent since the third quarter of 2013, while sales have nearly halved from that year.

    Mr Kwek expects prices for both mid- and low-end homes to see further declines and that the high-end market will remain subdued.

    CDL, however, has held up well amid the challenging market conditions, thanks to the "strength of the diversification strategy" as it looks overseas, said chief executive Grant Kelley.

    The property and hotel heavyweight reported a 6.6 per cent rise in earnings to a record $410.5 million for the fourth quarter to Dec 31, boosted by gains from monetising three prime office assets. Revenue rose 1 per cent to $855 million.

    The assets monetised were 7 & 9 Tampines Grande, Manulife Centre and Central Mall (Office Tower) through a second Profit Participation Securities investment platform in December last year.

    Net profit for the full year inched up 0.5 per cent to $773.4 million despite a 12.2 per cent fall in revenue to $3.3 billion that was largely due to the absence of revenue recognition from executive condominium (EC) projects.

    Earnings per share for the quarter came in at 44.4 cents, up on the 41.6 cents previously. Net asset value per share rose to $9.89 as at Dec 31, from $9.25 a year earlier.

    The developer has proposed a final dividend of eight cents per share, together with a special final dividend of four cents per share.

    While CDL expects to see a challenging year ahead, amid the dim global growth outlook, Mr Kwek said that the group is "well-poised to deploy our strong balance sheet towards investments in a period of market dislocation... while maintaining discipline in our investments.

    "We remain focused on expanding our international property development footprint and growing our funds-management platform."

    CDL shares closed five cents or 0.7 per cent higher at $7.09 yesterday.

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    Newbie here. The decrease in home prices, how much of it is due to the luxury homes, e.g. 80% of the price drop due to 20% of the transactions which belong to the luxury homes like sentosa cove?

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    As far as I know, the decrease in property price index is mostly due to CCR properties..........

    OCR barely drop (because the newer ones are mostly in ulu locations and many come with cheap fittings (eg homogenous tiles, no more marbles & granites) and hence supposed to have lower price in $ PSF anyway)..............

    Quote Originally Posted by torsg View Post
    Newbie here. The decrease in home prices, how much of it is due to the luxury homes, e.g. 80% of the price drop due to 20% of the transactions which belong to the luxury homes like sentosa cove?

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    teddybear is offline Global recession is coming....
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    Even if Singapore government lift ABSD, it is not going to help Singapore property prices much anymore because sentiment has turned bad........

    There is only 1 way for the property price to go - DOWN DOWN DOWN.............
    Just drag longer and OCR private property price will drop faster.....................

    Quote Originally Posted by reporter2 View Post
    http://www.straitstimes.com/business...kwek-leng-beng

    Property curbs could be lifted this year: CDL's Kwek Leng Beng

    Feb 26, 2016

    Longest losing streak in 17 years suggests that Govt will act soon, says Kwek Leng Beng

    Jacqueline Woo


    The sustained decline in residential prices here - now mired in their longest losing streak in 17 years - may prompt the Government to lift some property curbs this year, said City Developments (CDL) executive chairman Kwek Leng Beng.

    "They will press the button at the right time, although developers are hoping they will do it sooner rather than later," Mr Kwek told Bloomberg after the company's earnings briefing yesterday.

    "I think they will do something this year, that's my speculation, as there are a lot of mid- and low-end homes coming up. I suspect it will be the abolishing of the buyer's stamp duties."

    Mr Kwek was likely referring to the additional buyer's stamp duty (ABSD), introduced in December 2011, requiring buyers who own more than one home to pay a levy.

    Developers who bought land to develop and who cannot sell all new units within five years must also pay a levy.

    Mr Kwek's comments follow hard on the heels of those by Mr Augustine Tan, president of the Real Estate Developers' Association of Singapore, who said last week that it would be timely for the Government to consider a calibration of the cooling measures.

    Home values have dropped 8.4 per cent since the third quarter of 2013, while sales have nearly halved from that year.

    Mr Kwek expects prices for both mid- and low-end homes to see further declines and that the high-end market will remain subdued.

    CDL, however, has held up well amid the challenging market conditions, thanks to the "strength of the diversification strategy" as it looks overseas, said chief executive Grant Kelley.

    The property and hotel heavyweight reported a 6.6 per cent rise in earnings to a record $410.5 million for the fourth quarter to Dec 31, boosted by gains from monetising three prime office assets. Revenue rose 1 per cent to $855 million.

    The assets monetised were 7 & 9 Tampines Grande, Manulife Centre and Central Mall (Office Tower) through a second Profit Participation Securities investment platform in December last year.

    Net profit for the full year inched up 0.5 per cent to $773.4 million despite a 12.2 per cent fall in revenue to $3.3 billion that was largely due to the absence of revenue recognition from executive condominium (EC) projects.

    Earnings per share for the quarter came in at 44.4 cents, up on the 41.6 cents previously. Net asset value per share rose to $9.89 as at Dec 31, from $9.25 a year earlier.

    The developer has proposed a final dividend of eight cents per share, together with a special final dividend of four cents per share.

    While CDL expects to see a challenging year ahead, amid the dim global growth outlook, Mr Kwek said that the group is "well-poised to deploy our strong balance sheet towards investments in a period of market dislocation... while maintaining discipline in our investments.

    "We remain focused on expanding our international property development footprint and growing our funds-management platform."

    CDL shares closed five cents or 0.7 per cent higher at $7.09 yesterday.

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    We "dare" the Govt to lift it and see if it is really that bad.

    But the Govt does not dare to do so...

    Haha, what will be will be...

    Quote Originally Posted by teddybear View Post
    Even if Singapore government lift ABSD, it is not going to help Singapore property prices much anymore because sentiment has turned bad........

    There is only 1 way for the property price to go - DOWN DOWN DOWN.............
    Just drag longer and OCR private property price will drop faster.....................
    The three laws of Kelonguni:

    Where there is kelong, there is guni.
    No kelong no guni.
    More kelong = more guni.

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    I heard cairnhill nine new launch is doing very well. Any one knows why? 99 years still selling at $2500 psf...

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    Yah loh. Prices barely dropped 10% from the peak.

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    Quote Originally Posted by Kelonguni View Post
    We "dare" the Govt to lift it and see if it is really that bad.

    But the Govt does not dare to do so...

    Haha, what will be will be...
    According to 1 forumer property will crash if govt does something to the curbs now. Don't know mislead or ignorant? Sighs

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    Too early to lift property cooling measures: MND

    FEB 29, 20168:32 PM

    IT is still too soon to lift property curbs, the Ministry of National Development (MND) said in a written reply on Monday to a question posed in Parliament.

    "The property market cooling measures are intended to keep the market stable and sustainable. It is too early to relax the measures now. Doing so could result in a market rebound," it said.

    "The additional buyer's stamp duty (ABSD) was introduced to moderate the demand for residential property from investors, non-citizens and corporate entities. Singapore citizens who do not own any residential property do not need to pay ABSD."

    The ministry was responding to a question from Christopher de Souza, MP for Holland-Bukit Timah GRC, who had asked the minister for national development whether he would "consider reviewing the property market cooling measures" by removing ABSD for Singaporeans but retaining ABSD for foreigners.

    As the Singapore property market continues to languish, real estate developers have been calling on the government to relax some of the property curbs in place.

    ABSD was introduced in 2011 to rein in surging home prices. Singaporeans do not have to pay ABSD on their first home purchase, but incur a 7 per cent ABSD when buying a second home.

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    Don't succumb to marketing mind games of property developers

    PUBLISHED 3 HOURS AGO - Straits Times Forum

    It is a known fact that property developers and their marketing agents are excellent marketers because they understand consumers' behaviour.

    During the bull market, these marketers are able to create a lot of value for their products with advertisements portraying a lifestyle associated with successful people buying into their developments.

    They are very good at playing into the minds and emotions of consumers, who are willing to pay a premium to buy into their story.

    They also create "fear" in the market that prices would increase for their next launch. Stoking the fear of buying at higher prices works, and consumers would queue overnight or days before the launch just to buy their prized assets at a "special price".

    Over the past two years, the property market has slowed, with sales volumes expected to decline further.

    Developers and marketers continue to "stay positive" with their outlooks, often making comments that the Government could be removing some curbs soon and the market could well take off from there.

    These statements are "powerful" because they play into the minds and emotions of consumers who may decide to buy now, for fear that prices will increase if the market takes off later.

    They also play into the minds of sellers who may decide to hold on to their apartments and wait for the market to take off instead of selling them at a lower price.

    The average Singaporean is mostly exposed to equity and property as a form of longer-term investment.

    Many people stay away from the more volatile stock market and, hence, property investment is probably the only form of investment they are comfortable with.

    Unlike the Singapore Savings Bonds (SSB), which limits the individual to $100,000 of investment, property investment allows buyers to leverage and, hence, the expected return is higher for the same amount they invest in SSB.

    Therefore, property investment will continue to be in demand, given the lack of alternative investment instruments.

    The Government has indicated that the Total Debt Servicing Ratio (TDSR) would be a permanent feature to protect the average Singaporean from over-leveraging.

    However, TDSR does not prevent parents from helping their children with the initial down payment on a property, to enable them to qualify for loans under the TDSR rule.

    This was the case, too, during the bull market (before the TDSR kicked in), when parents helped to pay the inflated prices of apartments, for fear that their children would not be able to afford one if they did not buy then.

    Given that property prices are highly inelastic and that the property market itself is highly inefficient, the Government must not cave in to external pressure from developers to relax property curbs.

    With the market still flooded with liquidity and low interest rates, prices will just shoot up when property developers and their marketing agents start to play mind games again.

    Patrick Tan Choon Hong

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    I fail to see how the CMs can prevent parents from forking out cash to support their children to buy any property. If their children are first time owners (for example 3 children each without properties) holding decent incomes, no measure is in their way.

    Quote Originally Posted by Amber Woods View Post

    This was the case, too, during the bull market (before the TDSR kicked in), when parents helped to pay the inflated prices of apartments, for fear that their children would not be able to afford one if they did not buy then.

    Patrick Tan Choon Hong
    The three laws of Kelonguni:

    Where there is kelong, there is guni.
    No kelong no guni.
    More kelong = more guni.

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    My OCR chart looks different from what you said (barely drop).




    Quote Originally Posted by teddybear View Post
    As far as I know, the decrease in property price index is mostly due to CCR properties..........

    OCR barely drop (because the newer ones are mostly in ulu locations and many come with cheap fittings (eg homogenous tiles, no more marbles & granites) and hence supposed to have lower price in $ PSF anyway)..............

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