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Thread: Singapore property prices have peaked - govt

  1. #1
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    Default Singapore property prices have peaked - govt

    Singapore property prices have peaked - govt
    Singapore property prices have peaked - govt

    SINGAPORE, May 23 (Reuters) - Singapore's booming property market has peaked and will continue to moderate over the next two years, the country's trade ministry said on Friday.

    Singapore's central bank said that while the financial services industry could face some slowdown there was no evidence of a large job cuts.

    "There could be some slowdown, but not major slowdown.

    Anecdotal evidence shows that while financial institutions are reviewing headcounts and business lines, they are also looking at several areas of growth," Monetary Authority of Singapore Deputy Managing Director Ong Chon Tee told a news conference.

    (Reporting by Jan Dahinten & Saeed Azhar) (([email protected]; +65 6403 5659

  2. #2
    a plateau, not a drop
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    Default Re: Singapore property prices have peaked - govt

    I think in the long term, the property sector will continue to grow although i do agree that prices have peaked at this juncture and the property market is currently slowing down. However it is still sustained by the influx of people wanting to rent. I am currently renting my private condo and when i put it up for rent 2 mths ago, i was pleasantly surprised by the number that was interested. And my condo was in Hougang,not exactly a prefered location but thankfully i got the KPE. Whew. Highest offer was 3.4k per mth and i was also surprised when the rentor said that was reasonable. In the end, i settled for 3.2k as i felt the couple would take better care of the house. But a tip, just spend some money to spruce up your hse, throw a fresh coat of paint, get some on sale furniture from established companies like Picket and Rail, Barang Barang and you will be surprised how potential rentors are willing to pay a slightly higher premium.

    I do not believe the IRs, F1 Race, Spore Flyer etc etc will push up property prices in line with popular sentiments. What i am confident in is Singapore's position as a Hub, be it finance, high tech, shipping, entertainment, sporting etc etc. Post 911, many were concerned with a drop in the economy but surprisingly, Singapore experienced a growth. Its simple deductions really. 911 or not, there is money to be made in the growing Asia Pacific Region and foreign companies or funds will continue to park their money here in the near future. However, they will need a regional HQ to manage their operations. If you are the CEO, where would you choose? In the current socio-political climate where stability is craved for, Singapore is the natural choice, thats why we see all the international meetings being held in Singapore post 911. The foreigners also want to have fun while they are here so that is when the IRs, Spore Flyer, St James, Clarke Quay and F1 Race falls into place to entice them. We are just darn lucky we are located in a darn solid geographical location free of natural disasters.

    Office rent is expensive but compared to HK or Japan, Singapore is still cheaper. And Singaporeans are generally billingual in English and Chinese so the communication aspect is settled. Ever tried asking for directions in Japan and HK? Think of it. Singapore has a good transport network, good sporting and entertainment facilities, wide choice of metropolitan cusines and most importantly, a safe and conducive environment. Our Sg ladies not that bad too. This is is comparison to our ASEAN neighbours. Try the peak hr jam in Bangkok. They say smoking is bad for health but try the air in Bangkok. Maybe the ladies' part is subjective.

    Imagine i am a foreigner in Sg in 2012. The choice of cusines is 2nd to none, i can sample all sorts of food, from Turkish Novelty Ice Cream to Mediterranean Vegetarian to even top rated char kuay tiao add lots of see hum. I can watch world class theatre shows like Phantom of the Opera at the Esplanade, i can catch all my fav concerts acts, black eye pea, Andy Lau etc at the Expo or Indoor Stadium, i can choose to try my luck at the IR Casino, i can bring my kids to the IR theme park, i can catch all the major sporting events esp when the sporting hub is up, my work place is at most 30 - 45 mins to my home, i do not have to spend 12hrs travelling from one place of attraction to another, i can merry the night away at St James etc etc. I have the F1 race to look forward to. This will entice people to set up homes in Sg. I just need 0.001% of the super rich in China or India to come and set up base here and imagine the property prices then. Still $500 psf for condos?

    But of course, the drawback is Born and Bred Singaporeans might not get to enjoy it. It is just like how when we go on holidays in Malaysia, Thailand or Indonesia, we feel like king and we spend money like nobody business and we whack seafood by the Kgs. And with $$$, all the hot girls throw themselves at you irregardless of whether you look if you are 7 mths pregnant. But look at the lifestyle of the locals, i am sure they are looking at you with envious eyes and sometimes this has led to jealousy among some of our immediate neighbours.

    Having said all, i am very interested in the verdict of the Pedra Blanca issue. The winner will have certain boasting rights.

  3. #3
    Leonhart
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    Default Re: Singapore property prices have peaked - govt

    I always believed the theory of the one holding onto the hot potato.

  4. #4
    peaking, pls dun duck
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    Default Re: Singapore property prices have peaked - govt

    Just to share, one retired broker, now living the high life, told me his secret and it is a simple "When people sell, you buy, when people buy, you sell" It is a simple sentence but not many got the foresight but more dominantly the guts, or put it crudely, the balls to put their money in. I am more of a moderate risk taker so i tend to go in earlier on sectors which i feel have potential. Like the stock market, it is too late to enter by the time the stock hit top volume, already rose by 40%, recent release of good news, etc etc. You will always be at the tail end if you enter late. So it is really about your appetite for risk.

    Take property for eg, i bought mine about 3 mths ago when there was a lot of apprehension and doubts. When i bought my 1300 sqft apartment, i got it at $470 psf from the sale price of $500 psf and i managed to negotiate down the price by just gently applying pressure on the "inner doubts and fears" in the owner. no doubt fuelled by all the hoo ha by all the banks, coffeeshop uncles, office "self proclaimed expert" colleagues, foreign banks who are struggling to keep afloat, expert analysis, housing agents etc. Now the last transacted price is $510 psf and based on my projections, it will rise further in the coming years. And i have a 2yr rental at 3.2k locked in, and my mthly repayment is 1.9k. I empty my CPF every mth but i would prefer extra cash in my bank acct anyday, esp now with the lock in amt at 130k which is projected to increase in future.

    So bro, it is really up to you to decide when to go in. Basically if demand exceeds supply, one will make money. I believe that there will be a demand for Singapore property for reasons stated in my previous post and that is why i chose to invest when the popular sentiments is to hold and wait. Now i am looking to invest in Australian properties which are located near the major Unis because the demand for them is evergreen and rental rates are always rising. Just saw one ad on a property in Surfers' Paradise which is really promising.

    And it brought me to another interesting debate which is the rage nowadays, the influx of PRs into our country. I got friends complaining that 1st class honours are always taken by the foreigners, etc etc. It was a similar scenario when i was studying in Australia. The Sporeans students mostly outscore the Australians (no sweat even in Arts courses)and sometimes i can sense a little bit of animosity during tutorials. But really we must look at it from an objective angle. The aussies have no idea what burning the midnight oil is and the only place to find them after 5pm is either at the Uni or Local Pubs. Try asking them to do project review at your house on Sat and see their response. If you see a room light on from 10pm onwards, bet your last dollar it must be an asian. It is the same here, i see those PRs working their socks off day and night and while our singaporean students are hitting at bikini clad babes at sentosa, they are hitting the books.

    Now eagerly awaiting the Pedra Blanca's verdict.

  5. #5
    Unregisteredxyz
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    Default Re: Singapore property prices have peaked - govt

    Hahaha...! Nice story, but there are more intelligent people out there than you think.

  6. #6
    Junior
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    Default Re: Singapore property prices have peaked - govt

    Quote Originally Posted by a plateau, not a drop
    But of course, the drawback is Born and Bred Singaporeans might not get to enjoy it. It is just like how when we go on holidays in Malaysia, Thailand or Indonesia, we feel like king and we spend money like nobody business and we whack seafood by the Kgs. And with $$$, all the hot girls throw themselves at you irregardless of whether you look if you are 7 mths pregnant. But look at the lifestyle of the locals, i am sure they are looking at you with envious eyes and sometimes this has led to jealousy among some of our immediate neighbours.
    Yes. This is what I am very afraid of.

    Nobody 50 years ago could have imagined the kind of salaries that we are earning today.

    At the same stages in our respective lives, my father was earning 10 times what my grandfather was earning; while I am earning 10 times what my father was earning. So I am earning 100 times what my grandfather was earning, yet he stayed in a bigger house in a more prime area than me.

    So what kind of salaries will people be earning in 50 years' time?

    What will happen to the value of money that we place in our banks, earning the paltry interest that is not enough to offset inflation?

    Now the foreigners are coming here to see doctors and stay in hospitals for their aesthetic medicine. Will they drive up medical costs to the extent that I cannot afford medical treatment and am left to die at the road side?

    I think Singapore should not try to develop into medical hub. I don't like the idea of all these foreigners coming here for medical treatment.

    I am very scared that next time when I'm old and sick, the doctors don't want to treat me but prefer to give Botox facial treatment to the Myanmar generals' wives who come here because they can pay higher.

    That's why I'm thinking what type of asset can offset inflation. Something that is rare, like Picasso's artwork, though that's too expensive and out of my budget. I'm looking at conservation shophouses. They're rare and their supply is limited.

    Do you think shophouses are good investments? Like those in Tanjong Pagar or Boat Quay areas?

    I need something to outbid those Myanmar generals' wives in the last days of my life. When the doctor starts to abandon me to give Botox treatment to the Myanmar generals' wife, at least I can wave my title deed at the doctor and shout "DOCTOR! if you insert this oxygen tube for me ... ah ... ah ... ah ... I'll give you this shophouse at Boat Quay worth $500 million!".

    Assuming it has gone up 100 times by then.

  7. #7
    Unregistered,
    Guest

    Default Re: Singapore property prices have peaked - govt

    wow ... what will happen to our dreams

    Yes. This is what I am very afraid of.

    Nobody 50 years ago could have imagined the kind of salaries that we are earning today.

    At the same stages in our respective lives, my father was earning 10 times what my grandfather was earning; while I am earning 10 times what my father was earning. So I am earning 100 times what my grandfather was earning, yet he stayed in a bigger house in a more prime area than me.

    So what kind of salaries will people be earning in 50 years' time?

    What will happen to the value of money that we place in our banks, earning the paltry interest that is not enough to offset inflation?

    Now the foreigners are coming here to see doctors and stay in hospitals for their aesthetic medicine. Will they drive up medical costs to the extent that I cannot afford medical treatment and am left to die at the road side?

    I think Singapore should not try to develop into medical hub. I don't like the idea of all these foreigners coming here for medical treatment.

    I am very scared that next time when I'm old and sick, the doctors don't want to treat me but prefer to give Botox facial treatment to the Myanmar generals' wives who come here because they can pay higher.

    That's why I'm thinking what type of asset can offset inflation. Something that is rare, like Picasso's artwork, though that's too expensive and out of my budget. I'm looking at conservation shophouses. They're rare and their supply is limited.

    Do you think shophouses are good investments? Like those in Tanjong Pagar or Boat Quay areas?

    I need something to outbid those Myanmar generals' wives in the last days of my life. When the doctor starts to abandon me to give Botox treatment to the Myanmar generals' wife, at least I can wave my title deed at the doctor and shout "DOCTOR! if you insert this oxygen tube for me ... ah ... ah ... ah ... I'll give you this shophouse at Boat Quay worth $500 million!".

    Assuming it has gone up 100 times by then.

  8. #8
    Unregistered8888
    Guest

    Default Re: Singapore property prices have peaked - govt

    From DMG!


    The Storm before the Calm
    We recently presented our views on the property sector at the Asia Real Estate Fundamentals Conference 2008 held in Singapore. Over 100 fund managers, asset managers and senior management of property firms attended the conference. The following paper details our presentation.
    A stark contrast. This time last year, it was clear blue skies for the property sector, firing on practically all cylinders. But the sub-prime crisis in the US hit the stock and property markets hard. Sentiments and interest in property started to dive in Oct 07, with many launches being pushed back due to an expected lacklustre demand. It dealt a crushing blow to property buyers’ appetite and sentiments, as witnessed by the 730 new private residential units sold in 1Q08 - a 47.7% drop from 4Q07. Compared to the average quarterly transacted units of 3,537 in 2007, this number represented an even more significant plunge of 74.9%. En-bloc market practically capitulated.
    Some lingering concerns. There are some concerns which will affect property prices (both physical and capital markets) in the next 12 months. One important pressure point is the stock market. It has seen wild swings and has largely been on a downtrend since 4Q07. Given the tight correlation between equity and property, it is unsurprising that property market was also hard hit. As a result of the dampened sentiments, property developers are adopting a wait-and-see attitude and holding back the launches.
    Oversupply to pressure prices? There are 67,736 uncompleted units in the pipeline (excluding the Government Land Sales Programme), of which 63% has yet to be sold and 83.4% are expected to be come onstream between 2Q08 and 2011, it is not inconceivable that worries of a supply glut in the property sector have been mooted. We believe demand will be more than the past 10-year average, given an influx of foreigners in the coming few years. We estimate the vacancy rate to be 5.4% - 7.9% from 2008 – 2013, not too far away from the average annual vacancy rate of 7.7%. This gives us a good enough reason to conclude that the concerns of an over-supply have been overplayed.Run for cover with REIT in the near term. Given the near term uncertainties, we believe stock prices for properties will remain pressured. In the next 3-6 months, we favour REITs, which have good earnings visibility and high dividend yields. Their defensive nature should shield investors from the volatility in the stock market. We like CapitaMall Trust, Suntec REIT and Cambridge Industrial Trust.
    Developers present good value further out. There is a confluence of positive drivers, including population growth and the successful remaking of Singapore, which will likely drive property prices in the long-haul. When the property sector makes a comeback, the front-runners will once again be the large cap developers. We favour CapitaLand and Keppel Land.

  9. #9
    fundamentals
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    I think right now property prices are condo-specific. The rising tide floated all boats, but now that the tide is sinking, some boats are found to be better equipped than others.

    Condos that are in the same area, neighbouring condos even, can differ in price by up to $500 psf! Look at Robertson Quay condos, Newton condos, River Valley condos. The main reason for this phenomenon should rest solely on the attributes and quality of the condo, not just location and the usual property gimmicks. Now that the market is going down, condos that are crap have been exposed for what they are.

    I do not want to name any specific condo but if you looked at the caveats in those locations you should be able to find out which ones are good and which ones are crap.

    As always (but ignored during the frenzied buying of 2007), look deeper into the fundamentals of a property, not only surface attributes such as location. There are lots of other tangible/intangible variables that affect a buyer's decision on a property. That explains why some condo prices remain firm while others are being dumped at low prices.

  10. #10
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    Quote Originally Posted by fundamentals
    I think right now property prices are condo-specific. The rising tide floated all boats, but now that the tide is sinking, some boats are found to be better equipped than others.

    Condos that are in the same area, neighbouring condos even, can differ in price by up to $500 psf! Look at Robertson Quay condos, Newton condos, River Valley condos. The main reason for this phenomenon should rest solely on the attributes and quality of the condo, not just location and the usual property gimmicks. Now that the market is going down, condos that are crap have been exposed for what they are.

    I do not want to name any specific condo but if you looked at the caveats in those locations you should be able to find out which ones are good and which ones are crap.

    As always (but ignored during the frenzied buying of 2007), look deeper into the fundamentals of a property, not only surface attributes such as location. There are lots of other tangible/intangible variables that affect a buyer's decision on a property. That explains why some condo prices remain firm while others are being dumped at low prices.
    Just curious, are you a property agent? Which development do you reckon is the best buy now?

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