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Thread: This is scary !! You should read !!!

  1. #1
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    Unhappy This is scary !! You should read !!!

    One of the Bank's CEO and developer got together to analise the current property market and do some calculation and short term forecast. This is what they have got :

    - 40,000 units coming into the market in year 2009
    - for the whole month of December only 300+ units sold for entire Singapore
    - Banks are not landing , only ppl with over 30% cash deposits and over 200k annual wages now have the chance to get a mortgage providing the property below valuation.
    - Rental plummeting and expats downgrading or running away from Singapore
    - towards the mid 09' default's rate to reach almost 50% for those who bought on DPS
    - prime areas are 30 to 70% down for the last 6 month

    their summarised and got extreme competition among those 40,000 units owners and very limited numbers of tenants will lead to massive freefall of property prices after March-April bottoming in June-August

    Government has to intervent the market or it will be the whole nation going into bankrupcy.

    Average prices to be expected in May - June by Condos according to their calculations:

    Ardmore 2 - $1300 psf
    St. Regis - $1,200 psf
    Cosmopolitan - $900 psf
    Rivergate - $800 psf
    MBR - $1,000 psf
    Oceanfront and The Coasts $700 psf ( this one one of the worth hit , with no tenants willing to stay that far away and crazy high maintenance of excess of $1000 per month, hours of morning traffic jams and no shops and facilities apart from overpriced One 15 no fools want to buy these units and their on DPS , most owners have less then a year to settle and ma ny of them have 0 liquidity in the bank where banks valuation on those going down everyday so there will be very limited financing)

    It could be a good time to short sell to buy again at much lower price towards the end of the year in around August to recoup some losses.

    This is about time for the Government to entervene but there is no sign of them doing that on the horizon..

  2. #2
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    where you got this info?
    is there a link or something?

  3. #3
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    Consistent with what i heard from my banker friend today as well, esp the sentosa cove bit - they are already asking for top-ups

    http://forums.condosingapore.com/sho...ed=1#post42326

  4. #4
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    There are many factor dertermine the market price, I don't believe any human being can predict the market price , except God. However , we can dertermine the trend. The good news is the market trend is going down and is not going to recover anytime soon.

    Quote Originally Posted by J-Dog
    One of the Bank's CEO and developer got together to analise the current property market and do some calculation and short term forecast. This is what they have got :

    - 40,000 units coming into the market in year 2009
    - for the whole month of December only 300+ units sold for entire Singapore
    - Banks are not landing , only ppl with over 30% cash deposits and over 200k annual wages now have the chance to get a mortgage providing the property below valuation.
    - Rental plummeting and expats downgrading or running away from Singapore
    - towards the mid 09' default's rate to reach almost 50% for those who bought on DPS
    - prime areas are 30 to 70% down for the last 6 month

    their summarised and got extreme competition among those 40,000 units owners and very limited numbers of tenants will lead to massive freefall of property prices after March-April bottoming in June-August

    Government has to intervent the market or it will be the whole nation going into bankrupcy.

    Average prices to be expected in May - June by Condos according to their calculations:

    Ardmore 2 - $1300 psf
    St. Regis - $1,200 psf
    Cosmopolitan - $900 psf
    Rivergate - $800 psf
    MBR - $1,000 psf
    Oceanfront and The Coasts $700 psf ( this one one of the worth hit , with no tenants willing to stay that far away and crazy high maintenance of excess of $1000 per month, hours of morning traffic jams and no shops and facilities apart from overpriced One 15 no fools want to buy these units and their on DPS , most owners have less then a year to settle and ma ny of them have 0 liquidity in the bank where banks valuation on those going down everyday so there will be very limited financing)

    It could be a good time to short sell to buy again at much lower price towards the end of the year in around August to recoup some losses.

    This is about time for the Government to entervene but there is no sign of them doing that on the horizon..

  5. #5
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    I think that banker should have lost his axx from stocks market investment which cause him to make such a pessimistic prediction.

  6. #6
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    In fact, they is a problem in their analyst.
    Among 40k units, only 14k is going for TOP in this year. And only 10k units under DPS.

    The question is how many of the 10k units is not able to get loan and how many of the 4k is going to have a recall. Well nobody know.

    Personally, i don't believe it would be more then 30% for these two figures. Why? Because most of them are CHINESE! Not agree? Go ask your dad this question:

    "Dad, I managed to safe 200k within this few year. What do you think for buying a 1 mil condo?"

    You know what your dad will reply? "Siao are you!"

  7. #7
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    Unhappy

    This is not pessimistic my friend , this is reality . I personally think it will be far worth then this. Want proof ? Look at the Azure at Sentoza , TOPed 4 month ago and up till now it is a Ghost project , ppl unable to rent out even at 5k for 1700sft , how bad is this ??? Every window has signs "For rent/Sale" maintanance is crazy overpriced which even if the owner will rent at 5k will get only 4k on hands - property tax , agent commie so he gets next to nothing !
    This is reallity what do you think will happen to those 40,000 units when ppl can not rent them out ??? Do you really think the price will go up ??

    I wish as much the price to go up , but it will take 4 or 5 painful and slow years to recover at least. I have few units in Central area even I thought I bought them cheap , they are down from 25 to 60% already.

    The guy talks sence , the government has to do something , they are investing money in useless american T-Bills at lousy 3% where the Americans will print money like there is no tomorrow and devealue US currency by end of 09' .. and Singaporean government gets probably - 5-7% negative .. So I do not understand why dont intervene and boost Singaporean local economy using our tax payers money? They should at first abolish property taxes and stamp duty so buyers will get more confident and prices reverse. Also , lower more interest rate and start loaning the money to home buyers. It would make sence . But if not we all as a country on the verse of bunkrupcy .. We will all loose jobs , have no income to service loans e.t.c. Very sad indeed . This year going to be a year from hell for many of us.

  8. #8
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    Bankers are exaggerating for their own benefits. Asking for government to bail them out.

  9. #9
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    all the govt needs to do - and this is very plausible - is to introduce bankruptcy protection laws ala the US. Once this happens, just stand back and see the flood of flipvestors dumping units back into the market.

    40,000 new units entering the market + god knows how much more reintroduced into the pool with subsales. Disappearing foreign buyers - and they expect locals to soak up a potential 100,000 units over 2 years? wait long long.

    Based on organic appreciation without the crazy excesses of the past few year, property prices today should be 10% above 2006 levels in a normal/stable economy. Now that we are projecting a combine 08/09 recession of -8% combined, rational prices should be about -8% to -10% 2006 levels. We are hardly there yet.

  10. #10
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    I do agree that future does not right very bright. But if your reasoning is base on 40k units, then you are just not a genuine investor and just trying to talk down the market further such that you can benefit from it.

    Anyway market is not going to move up or down base on our discussion here. It all base on REAL facts.

  11. #11
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    It's true ..
    I asked a RM how much I can loan ..
    he told me only 70% LTV and he can see that what I have in the bank account is more than twice the amount I want to loan..

    Anyway, if Sentosa units are going down to 700psf .. I would buy one to stay ... But then..hmm... wouldn't those landed properties in non-prime estate be going down further till 300-400psf??

  12. #12
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    Quote Originally Posted by isaaclim
    I do agree that future does not right very bright. But if your reasoning is base on 40k units, then you are just not a genuine investor and just trying to talk down the market further such that you can benefit from it.

    Anyway market is not going to move up or down base on our discussion here. It all base on REAL facts.
    Respectfully, I think you're not getting the point. It's all about demand and supply. Let's look at simple statistics from MOM and URA. (3Q08)
    • There are 1.8m citizens and PRs gainfully employed in Singapore. There are another 1m foreigners employed in Singapore, incl your foreign construction and production line worker.
    • Excluding work-permit foreign workers there are approx 143,000 EP/S-Pass/others workers
    • There are a total of 260,000 private residential units in Singapore, out of which 14,000 are vacant
    • There are 66,000 new private residential units in the pipeline, bringing the total to 80,000
    • There are a total of 1.46m HDB flats as of March 2008
    • HDB estimates 82% of the population stays in flats, or about 1.5m resident employed. That leaves 300,000 resident employed to buy private residential
    • If we assume that in a typical family unit, there is 1 working husband and 1 working wife, that means there are 150,000 family units that demand private residential
    Thus at any one time:
    • 260,000 total private supply (current)
    • 322,000 total private supply (2009-2012)
    • 293,000 total local + foreign talent demand
      • 143,000 total foreign talent/corporate demand
      • 150,000 total local private demand
    • 30,000 minimum oversupply for local consumption (assuming that every available FT earning more than $2,500 buys 1 private unit per individual, which is not likely)
    These figures were primarily for the period ended 31 March 2008, which is still considered pre-recession times.

    Assuming that EVERY SINGLE foreign talent and 2pax local family unit buys a private, we STILL have an oversupply of 30,000 - and that is in good times. Imagine what happens in bad times.

    If we assume that at least 2 FTs stay in 1 private unit on average, our oversupply goes up 100,000.

    This means that a lot of Singaporeans have bought over and above their own stay needs for investment, flipping etc. And that means a lot of people will start dumping soon else they will be stuck, esp with the exodus of foreign talent.

  13. #13
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    Some of the numbers maay not correlate to me.
    Quote Originally Posted by gfoo
    Respectfully, I think you're not getting the point. It's all about demand and supply. Let's look at simple statistics from MOM and URA. (3Q08)
    • There are 1.8m citizens and PRs gainfully employed in Singapore. There are another 1m foreigners employed in Singapore, incl your foreign construction and production line worker.
    • Excluding work-permit foreign workers there are approx 143,000 EP/S-Pass/others workers
    • There are a total of 260,000 private residential units in Singapore, out of which 14,000 are vacant
    • There are 66,000 new private residential units in the pipeline, bringing the total to 80,000
    • There are a total of 1.46m HDB flats as of March 2008
    • HDB estimates 82% of the population stays in flats, or about 1.5m resident employed. That leaves 300,000 resident employed to buy private residential
    • If we assume that in a typical family unit, there is 1 working husband and 1 working wife, that means there are 150,000 family units that demand private residential
    Thus at any one time:
    • 260,000 total private supply (current)
    • 322,000 total private supply (2009-2012)
    • 293,000 total local + foreign talent demand
      • 143,000 total foreign talent/corporate demand
      • 150,000 total local private demand
    • 30,000 minimum oversupply for local consumption (assuming that every available FT earning more than $2,500 buys 1 private unit per individual, which is not likely)
    Number of gainfully employed citizens and PRs should be at least 2.2m.

    Number of residents that can buy private residential is more than 300,000 because HDB owners can buy private residences and vice versa.

    Otherwise the other numbers are pretty solid.

  14. #14
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    My figures are already rather generous. According to MOM, in 2007, the percentage of our PMETs to total resident workforce is 49% - these are the folks that can afford private. The 300000 can potentially be lower and i suspect it is

  15. #15
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    Angry

    Oh heck, we are all screwed (((


  16. #16
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    Quote Originally Posted by J-Dog
    Oh heck, we are all screwed (((

    I'm scared shitless too. I'm not even making any qualitative assumptions or predictions. This is pure stats and E-Maths

  17. #17
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    Default This is scary

    Seriously, despite whether the above property numbers are correct or not, if bank are so strict on loan, then many people are not able to buy property. And will hurt the property prices

  18. #18
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    Quote Originally Posted by focus
    It's true ..
    I asked a RM how much I can loan ..
    he told me only 70% LTV and he can see that what I have in the bank account is more than twice the amount I want to loan..

    Anyway, if Sentosa units are going down to 700psf .. I would buy one to stay ... But then..hmm... wouldn't those landed properties in non-prime estate be going down further till 300-400psf??
    This is how rumour starts.

    Banks generally do scenario planning for various purpose - business forcast, downturn preparation and stress test.

    The scenario described above are most probably stress test with highly overblown gloom and doom conditions. I believe this stress is required by MAS to test local bank's ability to handle a crisis.

    If a family with ~10k monthly income and perhaps only ~1-2k current loan obligation (probably a car), this family could get easily get a 30yr $500k loan at 80% LTV.

    regards

  19. #19
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    For me, after setting foot to take a walk around the vacinity that I want, discover that the supply coming onstream is massive.

    Maryland (dun know how manay units originally) now become Esta and Amber which in total have around 900+ units. Believe Maryland have less than half (correct me if I am wrong though).

    St Patrick View (42 units) now become St Patrick Residences (142 units).

    A few years back, there's lots of empty spaces around United Square, now VIVA, Lucida and others development are moving full steam ahead. At the back there's Infinia, Lincoln Modern and many others.

    But demand is plunging fast at the same time. Those working in the finance industry should know when tons of your Ang Mo colleagues was given the boxes and gone before you can say bye bye.

    Thus decided to stop house hunting and wait patiently for Auction sales in 6 months time instead.

  20. #20
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    just got an email back from bankers whom i submitted a valuation list for property price indicators, even before i submit any of my income docs.

    Beacon Edge: $750psf must try, will be hard
    Ola: $850-900 fair price
    One Amber: $800 fair price
    The Rochester: bank will not consider $1000psf, far below that

    and this is just january

  21. #21
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    gfoo, any indication for condo at river vallye, eg. the cosmopolitan? Is $1200psf fair value for cosmopolitan?

  22. #22
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    i dunno, not looking at that area so never submit for valuation.

    wah i just checked REALIS - avg transaction of The Rochester is $1300psf, and the majority of them are DPS. 2 banks say cannot loan even $1000psf, no wonder got pple lelong now at $950psf in property guru.

    This is one property that will sure kena DPS problem - somemore they are still trying to tout the remaining loft units under DPS

  23. #23
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    Quote Originally Posted by gfoo
    i dunno, not looking at that area so never submit for valuation.

    wah i just checked REALIS - avg transaction of The Rochester is $1300psf, and the majority of them are DPS. 2 banks say cannot loan even $1000psf, no wonder got pple lelong now at $950psf in property guru.

    This is one property that will sure kena DPS problem - somemore they are still trying to tout the remaining loft units under DPS
    Thanks for the info.

  24. #24
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    Quote Originally Posted by repanse71
    This is how rumour starts.

    Banks generally do scenario planning for various purpose - business forcast, downturn preparation and stress test.

    The scenario described above are most probably stress test with highly overblown gloom and doom conditions. I believe this stress is required by MAS to test local bank's ability to handle a crisis.

    If a family with ~10k monthly income and perhaps only ~1-2k current loan obligation (probably a car), this family could get easily get a 30yr $500k loan at 80% LTV.

    regards
    So how about a family that only want a $1.5m property but with a bank account that can pay in full many times over? How come they give 70% LTV? My coupon/dividend payments yearly (if taxable as an individual) is in the highest income bracket. Even if they discount the coupon/dividend payments in half, it is still in the highest income bracket.

  25. #25
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    Thanks for providing those figures.

    Here are some of my personal interpretation of those figures:
    - 1.8mils working Singaporean + PR. 200k of foreigner with E-Pass
    - 1.5mils HDB flats. 260k private residential units. 66k in pipeline.

    That is 300k of working Singaporean + PR and 200k of foreigner needs private residential units.

    Among those 300k, 25% are occupied by top 5%. Do you think their housewives work? Easily 200k are well taken care.

    So the question is how many units required by foreigner? Some situation, among the 200k, there are at least 30% where their house wife does not work!

    Basically Singapore property is tightly link to the requirement from foreigner. Unless massive foreigner being asked to go back. Otherwise, yours 100k scenario will never happen.

  26. #26
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    read many times over but still dun understand....

    300k x 25% x 5% = 3.75k... how does this translate to 200k individuals being well taken care of? maybe i need a refresher in primary 6 math....


    Quote Originally Posted by isaaclim
    Thanks for providing those figures.

    Here are some of my personal interpretation of those figures:
    - 1.8mils working Singaporean + PR. 200k of foreigner with E-Pass
    - 1.5mils HDB flats. 260k private residential units. 66k in pipeline.

    That is 300k of working Singaporean + PR and 200k of foreigner needs private residential units.

    Among those 300k, 25% are occupied by top 5%. Do you think their housewives work? Easily 200k are well taken care.

    So the question is how many units required by foreigner? Some situation, among the 200k, there are at least 30% where their house wife does not work!

    Basically Singapore property is tightly link to the requirement from foreigner. Unless massive foreigner being asked to go back. Otherwise, yours 100k scenario will never happen.

  27. #27
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    Quote Originally Posted by focus
    It's true ..
    I asked a RM how much I can loan ..
    he told me only 70% LTV and he can see that what I have in the bank account is more than twice the amount I want to loan..

    Anyway, if Sentosa units are going down to 700psf .. I would buy one to stay ... But then..hmm... wouldn't those landed properties in non-prime estate be going down further till 300-400psf??
    Tht's not what I know of.
    My brother recently took a 80% loan for a 800k property. Monthly payment is slightly under 30% of his gross income. He's a working professional, 7 years into his career, servicing one car, cash of less than 50k (after paying off the 20% downpayment).

    No problem at all at getting loan

  28. #28
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    Quote Originally Posted by al_ttk
    read many times over but still dun understand....

    300k x 25% x 5% = 3.75k... how does this translate to 200k individuals being well taken care of? maybe i need a refresher in primary 6 math....
    Oh... The 5% is the top 5% income tax contributors. 5% of 1.8mil = 90k

    300k-90k=210k. 210k/2 = 105k.

    105k+90k ~ 200k. Got it?

  29. #29
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    Angry

    Quote Originally Posted by J-Dog
    One of the Bank's CEO and developer got together to analise the current property market and do some calculation and short term forecast. This is what they have got :

    - 40,000 units coming into the market in year 2009
    - for the whole month of December only 300+ units sold for entire Singapore
    - Banks are not landing , only ppl with over 30% cash deposits and over 200k annual wages now have the chance to get a mortgage providing the property below valuation.
    - Rental plummeting and expats downgrading or running away from Singapore
    - towards the mid 09' default's rate to reach almost 50% for those who bought on DPS
    - prime areas are 30 to 70% down for the last 6 month

    their summarised and got extreme competition among those 40,000 units owners and very limited numbers of tenants will lead to massive freefall of property prices after March-April bottoming in June-August

    Government has to intervent the market or it will be the whole nation going into bankrupcy.

    Average prices to be expected in May - June by Condos according to their calculations:

    Ardmore 2 - $1300 psf
    St. Regis - $1,200 psf
    Cosmopolitan - $900 psf
    Rivergate - $800 psf
    MBR - $1,000 psf
    Oceanfront and The Coasts $700 psf ( this one one of the worth hit , with no tenants willing to stay that far away and crazy high maintenance of excess of $1000 per month, hours of morning traffic jams and no shops and facilities apart from overpriced One 15 no fools want to buy these units and their on DPS , most owners have less then a year to settle and ma ny of them have 0 liquidity in the bank where banks valuation on those going down everyday so there will be very limited financing)

    It could be a good time to short sell to buy again at much lower price towards the end of the year in around August to recoup some losses.

    This is about time for the Government to entervene but there is no sign of them doing that on the horizon..
    Quoted story about Sentosa Isand (Pulau Mati), no wonder so quiet n eerie in the night

    "I grew up in Singapore, and when I was young, my parents warned me about spiritual places. By that I mean that they warned me not to go to places haunted by ghosts. In Singapore, there were ghosts everywhere. Murdered lovers dwelled in banana trees. Pontianaks, the Malay called them blood-sucking women who raged in the bulging fruit, bursting out of the yellow skins at night. As a precaution, my parents placed eight-sided mirrors outside our door to deflect these tormented souls. Once, on the island of Sentosa, one of my classmates woke up with bruises around her neck. Nobody was surprised, as demonic assaults were a phenomenon common to camping trips, like mosquito bites. We knew we were sleeping on a sandy graveyard, for before it became a tourist resort, Sentosa was called 'Pulau Mati' Island of Death because Japanese soldiers had shot thousands of Chinese rebels and buried them there, under the shore where we slept. In August during the Festival of the Hungry Ghosts, a gray fog would fill Singapore the swirling ash from burnt money, food, and ghost BMWs, presents combusted to appease the wandering souls. We were taught not to walk in underground car parks or go to public toilets alone during that month."

  30. #30
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    "- 1.5mils HDB flats. 260k private residential units. 66k in pipeline."

    The blind leading the blind....The actual HDB flats is half of this number.

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