Will Rivergate hit 1k psf and below?

[august]

IR open means property prices will go up? Scarely a lot of these people gamble until bankcrupt and come out to sell their properties at fire-sale prices?

i wonder even under optimistic assumptions how much can the IRs contribute the to the economy?

did the govt say how much??

[bargain hunter]

I was looking to get a unit there as well but even at the lows of 1200, it would have been quite a stretch for me so i had no choice but to stay out. I guess owners are holding out at higher asking price because the sentiment had been strong given all the news about sold out projects, Ass censure Sai asking for 1350psf, One Devonshire and Residences @ Kiliney doing good sales at 1700 to 1900psf. However, the reality of transactions is different from plain raising of asking prices. These are prices that people are no longer willing to bite for Rivergate. Many Singaporeans have a wierd mentality. They would rather buy from developer at higher prices than buy resale/subsale, especially if the 1st owner is making a profit. Thus, if the owners are really keen to sell, they will realise that their asking price is not realistic and will start lowering their prices somewhat. However, the buyers could be quite comfortable buying at 13xxpsf to 15xxpsf at the moment.

Since Lippo's units were sold mainly to owner-occupiers, that might help the rental situation a bit for the rest of the Rivergate units. However, I am not sure what kind of yield they have been able to fetch but I believe the rental rates for many units are less than ideal. From what I know, the occupancy rate is not bad for Rivergate but my guess is it came at lowered rentals. Only selected units with really good views or the occasional high budget sucker tenant had been rented out at good rates and those are the rates you see quoted by agents or publications.

The sky high prices is unfortunate, particularly for myself whom have a vested interest in procuring a unit there.

This said, I personally believe the current stalemate is a result of demand-supply. Given the existing owners are asking for such prices and considering they have not been able to sell their units (I assumed this is the case) and there is no sign of reduction on owners part... could it also mean the owners are not keen to sell and prepare to hold. My view is that, in an efficient dynamic market, demand supply forces will always drive prices down, IF owners are looking to sell.

If my presumption of owners are indeed not looking to sell is correct, any views on why that might be so ?

1. They are looking for the upturn to happen for a high priced flip later?
2. Owners whom are asking for such prices are those whom have been extremely successful at the rental market and thus asking for a match sale price to match the high rental they managed to secure?

On a side note, does anyone know whats the occupancy level is like in Rivergate ? All non-homestay units are all successfully rented out at sustainable yield levels ?

[teddybear]

Heard that 3 bedders now only commanding $5k pm or even less! If the unit is 1500 sqft, then rental is only about $3.33 psf pm.
If buyer buys at $1300 psf, he will be staring at about 3% gross yield (GROSS YIELD ok, NET YIELD left about 2%!).
If buyer buys at $1500 psf, he will be staring at about 2.66% gross yield (NET YIELD about 1.66%! -> Even less than loan interest charges!)

I was looking to get a unit there as well but even at the lows of 1200, it would have been quite a stretch for me so i had no choice but to stay out. I guess owners are holding out at higher asking price because the sentiment had been strong given all the news about sold out projects, Ass censure Sai asking for 1350psf, One Devonshire and Residences @ Kiliney doing good sales at 1700 to 1900psf. However, the reality of transactions is different from plain raising of asking prices. These are prices that people are no longer willing to bite for Rivergate. Many Singaporeans have a wierd mentality. They would rather buy from developer at higher prices than buy resale/subsale, especially if the 1st owner is making a profit. Thus, if the owners are really keen to sell, they will realise that their asking price is not realistic and will start lowering their prices somewhat. However, the buyers could be quite comfortable buying at 13xxpsf to 15xxpsf at the moment.

Since Lippo's units were sold mainly to owner-occupiers, that might help the rental situation a bit for the rest of the Rivergate units. However, I am not sure what kind of yield they have been able to fetch but I believe the rental rates for many units are less than ideal. From what I know, the occupancy rate is not bad for Rivergate but my guess is it came at lowered rentals. Only selected units with really good views or the occasional high budget sucker tenant had been rented out at good rates and those are the rates you see quoted by agents or publications.

[bargain hunter]

yup, it really varies quite a bit. Better 3 bedders can be rented out at 6.5k but less desirable ones went for 5k and like you said now slightly below 5k. i guess this 1300 to 1500psf range is more or less the short term peak hit, that's why buyers unwilling to go up to 1600psf. in the meantime, less desirable units asking also raise to 1600psf hahaha.

Heard that 3 bedders now only commanding $5k pm or even less! If the unit is 1500 sqft, then rental is only about $3.33 psf pm.
If buyer buys at $1300 psf, he will be staring at about 3% gross yield (GROSS YIELD ok, NET YIELD left about 2%!).
If buyer buys at $1500 psf, he will be staring at about 2.66% gross yield (NET YIELD about 1.66%! -> Even less than loan interest charges!)

[stalingrad]

Heard that 3 bedders now only commanding $5k pm or even less! If the unit is 1500 sqft, then rental is only about $3.33 psf pm.
If buyer buys at $1300 psf, he will be staring at about 3% gross yield (GROSS YIELD ok, NET YIELD left about 2%!).
If buyer buys at $1500 psf, he will be staring at about 2.66% gross yield (NET YIELD about 1.66%! -> Even less than loan interest charges!)

That just tells you how crazy the market is. those that are crazy enough to buy at these prices are doomed to lose a lot of money when the price crashes to 900 psf. Even at 900 psf, the gross yield is not really fantastic, only about 5%. but rental is going to continue to fall, driving the gross yield for the owners to levels lower than 5% even at 900 plus psf.

so, citing Mr. goh, caveat emptor.

[pweesng]

That just tells you how crazy the market is. those that are crazy enough to buy at these prices are doomed to lose a lot of money when the price crashes to 900 psf. Even at 900 psf, the gross yield is not really fantastic, only about 5%. but rental is going to continue to fall, driving the gross yield for the owners to levels lower than 5% even at 900 plus psf.

so, citing Mr. goh, caveat emptor.

Dear Stalingrad,

I notice that you have been having very very negative comments about RG. You also predicted on several occasion that the prices for RG will tumble down soon. In the last post, you use the number $900.

I am interested to know, why did you make such assumption, and why at $900 or $700?

I am interested to see how you look at things and what basis...

If you don't mind sharing. There is no right or wrong anyway. This is the future we are talking about. You and I are just making an educated guess. That's all.

[stalingrad]

Dear Stalingrad,

I notice that you have been having very very negative comments about RG. You also predicted on several occasion that the prices for RG will tumble down soon. In the last post, you use the number $900.

I am interested to know, why did you make such assumption, and why at $900 or $700?

I am interested to see how you look at things and what basis...

If you don't mind sharing. There is no right or wrong anyway. This is the future we are talking about. You and I are just making an educated guess. That's all.

RG appeals to mainly expats, so it is mostly owned by investors/speculators. My wife once said that she would not live there, as there are too many foreigners hanging around there drunk and looking for cheap thrills. And there are no good schools in the area. thus, it is reasonable to assume that the rental yield at RG is highly correlated with tourism and GDP growth, both of which are going to be below the trend line for several years. Tourism is going to be hit hard as the L-shaped recovery becomes apparent to all.

RG is going to get hit really hard for another reason. It is the target of speculators, those that buy but not wiling to live in the development. when a condo is targeted by the speculators, that means it does not have good fundamentals and its price is supported by something like a ponzi scheme. thus, the price is likely to over-shoot either on the upside or the down side. thus, I predict the price will go below 1000. 700 is not entirely out of the question, but that would become a reality only if economy really tanks, which is unlikely given that politicians are printing money like crazy to support the economy.

bottom line, this is no a develpment for family, and as a speculator-infested development, RG is going to have wild swing in price, so if you buy today, be prepared to take a rough ride.

listen to my wife, she said "even at 1000 psf, I wouldn't live there. I don't want to mingle with wild tourists in that area." that sums it up.

[Property_Owner]

RG appeals to mainly expats, so it is mostly owned by investors/speculators. My wife once said that she would not live there, as there are too many foreigners hanging around there drunk and looking for cheap thrills. And there are no good schools in the area. thus, it is reasonable to assume that the rental yield at RG is highly correlated with tourism and GDP growth, both of which are going to be below the trend line for several years. Tourism is going to be hit hard as the L-shaped recovery becomes apparent to all.

RG is going to get hit really hard for another reason. It is the target of speculators, those that buy but not wiling to live in the development. when a condo is targeted by the speculators, that means it does not have good fundamentals and its price is supported by something like a ponzi scheme. thus, the price is likely to over-shoot either on the upside or the down side. thus, I predict the price will go below 1000. 700 is not entirely out of the question, but that would become a reality only if economy really tanks, which is unlikely given that politicians are printing money like crazy to support the economy.

bottom line, this is no a develpment for family, and as a speculator-infested development, RG is going to have wild swing in price, so if you buy today, be prepared to take a rough ride.

listen to my wife, she said "even at 1000 psf, I wouldn't live there. I don't want to mingle with wild tourists in that area." that sums it up.

Your wife writes for HER WORLD?

[stalingrad]

Your wife writes for HER WORLD?

my wife is not a genius, and think like an average singaporean. That makes her sentiments a reliable barometer for where the market is going to go.

by the way, to predict where the price for RG will go, just keep you eyes on STI. When the STI goes below 1600, it is time for RG to go below 1000 psf again. gentlemen, that is the signal to guy.

[pweesng]

RG appeals to mainly expats, so it is mostly owned by investors/speculators. My wife once said that she would not live there, as there are too many foreigners hanging around there drunk and looking for cheap thrills. And there are no good schools in the area. thus, it is reasonable to assume that the rental yield at RG is highly correlated with tourism and GDP growth, both of which are going to be below the trend line for several years. Tourism is going to be hit hard as the L-shaped recovery becomes apparent to all.

RG is going to get hit really hard for another reason. It is the target of speculators, those that buy but not wiling to live in the development. when a condo is targeted by the speculators, that means it does not have good fundamentals and its price is supported by something like a ponzi scheme. thus, the price is likely to over-shoot either on the upside or the down side. thus, I predict the price will go below 1000. 700 is not entirely out of the question, but that would become a reality only if economy really tanks, which is unlikely given that politicians are printing money like crazy to support the economy.

bottom line, this is no a develpment for family, and as a speculator-infested development, RG is going to have wild swing in price, so if you buy today, be prepared to take a rough ride.

listen to my wife, she said "even at 1000 psf, I wouldn't live there. I don't want to mingle with wild tourists in that area." that sums it up.

Thanks for sharing,

A few things that i agree and there are some i don't.

1) I woudl not stay there myself as well. It is too "posh" for me. I got nothing against Ang Moh, but i like to be able to pop downstairs in my singlet and shorts. I will look really out of place doing that in that area.

2) $700 is not entirely possible. Agree too. nothing is entirely impossible. however, if you believe in resistent and support, you will know that it will take a lot for RG to go to $700. Agree?

3) RG and for that matter, the whole Mohd Sultan area are really pretty much an expat area. Just like mid Levels in Hong Kong, or Hong Qiao in Shanghai. That doesn't seem to have any effect on the investment value of these area. Lack of local residential demand may not necessarily be a bad thing. It may be also worthy to note that in a slum period, both investment properties and residential properties suffer a reduction.

4) At current price. Nowadays, for me to buy a place, i would check with the bank to ensure that i am able to get a bank loan prior to handing over the 1% check. ie. most of the owner in RG, would already have a bank loan in place or paid cash for the apartment. Interest rate is at record low anyway, If i take a 80% loan of a 1.5 million property, my loan amount is 1.2 million thereabout. factoring in a 2% interest (there are banks offering lower) essentially i can rent out at $3.5k and still covers my interest portion. i don't know about others, but if i can cover my interest, there is no real incentive for me to reduce my selling price.

5) Rental squeeze is always present in any economy in a lull period. from Botsuna to New York. What is worth noting is also, D9,10 and 11. Have and probably always will have an advantage over the rest of singapore. Given that rental drop, there will always be others who could not afford the rental in D9 10 and 11 with their previous allowance, now can move here. Of course the opposit happens as well. I have been thru enough cycles in my life so far, my apartment in D9 has never been empty... othskirts always have empty periods inbetween. Of course having said that, we have to be realistic in terms of rental price.

[pweesng]

my wife is not a genius, and think like an average singaporean. That makes her sentiments a reliable barometer for where the market is going to go.

by the way, to predict where the price for RG will go, just keep you eyes on STI. When the STI goes below 1600, it is time for RG to go below 1000 psf again. gentlemen, that is the signal to guy.

Would you mind sharing also, why do you think that STI will go to 1600? and why not 1400 or 1800? similarly, why is 1600 a good time to buy?

don't get me wrong, i just want some flavour on how you arrive at those numbers.

I do agree with your wife, when it comes to staying and making it a HOME, it is very personal... it is not something that i would do, just because it is cheap...

[stalingrad]

Thanks for sharing your thoughts from a local perspective. I look at things mainly from a expat perspective, although my wife is a singaporean.

I predicted many things correctly before. I predicted that Tamasek holdings and GIC would lose a lot of money on their investments in Citibank, UBS and Merill lynch, and I made the predictions before Jim Rogers did. I make the predictions because I knew that this recession is different from all others and will not blow over very soon. It turned out that I was right.

I still believe that there will be no recovery in the traditional sense untill 2011 or 2012, and thus have not commit new money at all to investments of any kind. I am waiting for S&P to hit 650 before investing again.

[Property_Owner]

Thanks for sharing your thoughts from a local perspective. I look at things mainly from a expat perspective, although my wife is a singaporean.

I predicted many things correctly before. I predicted that Tamasek holdings and GIC would lose a lot of money on their investments in Citibank, UBS and Merill lynch, and I made the predictions before Jim Rogers did. I make the predictions because I knew that this recession is different from all others and will not blow over very soon. It turned out that I was right.

I still believe that there will be no recovery in the traditional sense untill 2011 or 2012, and thus have not commit new money at all to investments of any kind. I am waiting for S&P to hit 650 before investing again.

Charles W. Goodyear got a contender here.

[vin002]

my wife is not a genius, and think like an average singaporean. That makes her sentiments a reliable barometer for where the market is going to go.

You are lucky. My wife is also an average Singaporean which will buy regards on the price as long as she like it.

[jitkiat]

Charles W. Goodyear got a contender here.

I wonder how much short Mr Stalin has for S&P500, must be increasing his position on a daily basis While Jim Rogers shorted Citi/BAC, Mr Stalin must have even bigger positions then.

[stalingrad]

I wonder how much short Mr Stalin has for S&P500, must be increasing his position on a daily basis

I am not short anything. While I predict that S&P will test the low again this summer, I don't know when that will happen. I am just not adding new money to my existing positions.

basically, I have batten down the hatches and will remain immobile for a while. I already own a condo, and will not buy more until STI hits 1600.

[bargain hunter]

i share your sentiments on no recovery until 2011 or 2012 or even 2013?! but i do not understand why RG should hit 900psf "soon" as you mentioned. I would expect 900psf to be achieved in 2011 to 2013 if we are following your scenario for the economy, meaning later rather than sooner.

Thanks for sharing your thoughts from a local perspective. I look at things mainly from a expat perspective, although my wife is a singaporean.

I predicted many things correctly before. I predicted that Tamasek holdings and GIC would lose a lot of money on their investments in Citibank, UBS and Merill lynch, and I made the predictions before Jim Rogers did. I make the predictions because I knew that this recession is different from all others and will not blow over very soon. It turned out that I was right.

I still believe that there will be no recovery in the traditional sense untill 2011 or 2012, and thus have not commit new money at all to investments of any kind. I am waiting for S&P to hit 650 before investing again.

[stalingrad]

i share your sentiments on no recovery until 2011 or 2012 or even 2013?! but i do not understand why RG should hit 900psf "soon" as you mentioned. I would expect 900psf to be achieved in 2011 to 2013 if we are following your scenario for the economy, meaning later rather than sooner.

No, soon is not the right word. I predicted in another posting in this forum that RG will fall below 1000 by the end of 2010. you are more bullish than I am.

[stalingrad]

I wonder how much short Mr Stalin has for S&P500, must be increasing his position on a daily basis While Jim Rogers shorted Citi/BAC, Mr Stalin must have even bigger positions then.

you are wrong. Jim rogers is not short anything either. he said that with the politicians printing money furiously, dow may hit 20000 or even 30000. He is obviously joking. he worries that short positions may generate losses in the short term if people still hand on to the green shoot therory.

[bargain hunter]

err...i read somewhere that you said "soon", that's why i was surprised. end 2010 by your scenario is reasonable. I am more bullish? i am expecting 2011 to 2013 (when no one even wants to look at properties to buy just like in 2002 to 2004 hee). probably the signal will come when the number of postings in this forum decreases.

No, soon is not the right word. I predicted in another posting in this forum that RG will fall below 1000 by the end of 2010. you are more bullish than I am.

[blackswan]

When the correlation between commodities, EM and developed equities are so strong (even higher than pre-Lehman!!!)............

plus volatility so low (VIX lower than pre-Lehman!!!).............

and volume so low (S&P 500, STI, HSI)........

Not hard to imagine what's going to happen next...........

[jitkiat]

you are wrong. Jim rogers is not short anything either. he said that with the politicians printing money furiously, dow may hit 20000 or even 30000. He is obviously joking. he worries that short positions may generate losses in the short term if people still hand on to the green shoot therory.

Jim Rogers shorted Citi/BAC back in 2007 ... since u said you predicted b4 him, then why don't u shorted Citi/BAC back in 2007/early 2008?

[stalingrad]

Jim Rogers shorted Citi/BAC back in 2007 ... since u said you predicted b4 him, then why don't u shorted Citi/BAC back in 2007/early 2008?

I did not short Citi or Merill lynch as for the same reason. I did not know when the stocks would tank, although I knew they would tank eventually. this is the risk that all short investors have to bear.

[stalingrad]

When the correlation between commodities, EM and developed equities are so strong (even higher than pre-Lehman!!!)............

plus volatility so low (VIX lower than pre-Lehman!!!).............

and volume so low (S&P 500, STI, HSI)........

Not hard to imagine what's going to happen next...........

Your are obviously not black swan. Black swan predicted that the march lows will be tested.

[vin002]

I still believe that there will be no recovery in the traditional sense untill 2011 or 2012, and thus have not commit new money at all to investments of any kind. I am waiting for S&P to hit 650 before investing again.

I beg to differ.

I agree that there is no recovery in 2009. However, 2010 will be different due to the ready of IR.

Tourist arrival will increase again generating new tourist dollars to a new high. Retail and hotel will benefits. With new inflow of foreigners, rental and property market should benefits as well. 2010 will be in recovery and by 2011 or 2012, the economy has already recovered.

[august]

Would you mind sharing also, why do you think that STI will go to 1600? and why not 1400 or 1800? similarly, why is 1600 a good time to buy?

don't get me wrong, i just want some flavour on how you arrive at those numbers.

I do agree with your wife, when it comes to staying and making it a HOME, it is very personal... it is not something that i would do, just because it is cheap...

when it comes to home, i like katong or bt timah.. familiarity i guess ~

[blackswan]

Your are obviously not black swan. Black swan predicted that the march lows will be tested.

Ha ha.......may I know what's the message that you decipher from my previous post???

Have a great weekend

[eng00701]

Straits Time July 4
Is property rally sustainable?

......
...... Analysts say a sustained increase in the price index that develops into a full-blown rally by end of the year is unlikely. A more probable scenario is a plateau: prices and sales stabilizing at their current levels for the next few months, with occasional moderate dips or increases, until there is more certainty about economic outlook next year.
Would-be buyers hoping for another crash in the market are likely to be disappointed unless a major shock takes place, such as a delayed economic recovery, a stock market collapse or H1N1 virus turning more deadly, analysts say.
In fact many dire predictions trumpeted by bears have failed to materialise. Fewer expatriates have left the country than expected. Unemployment is below the all time time in 2003.
Home owners and buyers are still able to afford their properties, especially as they have lowered their debt levels and increased their savings. The surprisingly low level of mortgagee sales so far this year - half that during Asian Financial Crisis -seems to bear this out.
Concern about oversupply of new homes crashing prices have abated in the light of the robust take-up of recent launches. Instead, low interest rates are encouraging buyers to take up mortgages.
The gravity defying rise in HDB resale flat prices, which hit an all time high in the second quarter, provides a firm floor for prices of mass market condos and helps support all the other price levels.
On the other hand, sellers who hope to hold out for a marked improvement in prices, could end up waiting a long time.
For one thing, the stock market resurgence appears to be tapering off as sentiments give way to the sobering fundamentals of an uncertain economic recovery, underscored by still rising unemployment in the United States.
Anecdotally, buyers are still price sensitive, a further sign of the fragility of their confidence, although more seem willing to jump on the bandwagon for fear if rising prices in future.
Demand may also be limited. Most buyers now are owner-occupiers who were shut out of the 2007 market surge and are unleashing their pent-up demand. When this runs out, sellers and developers will be relying on investors and foreigners to pick up the slack, which may not happen as rentals are expected to continue falling with more homes being completed.
.......
.......
So it ultimately comes down to which typical Singaporean home buyer behavior wins out: the panic of being left out of a property boom or the fear of being left high and dry if there is a slump.

________________________________________________________
The all time favourite question on everyone's mind.

I guess that's what many buyers who recently bought were thinking.
1) either better buy now before prices continue climbing
2) or more realistically "No need to rush but yet at the same point no point waiting if there is a dream home"

[august]

________________________________________________________
The all time favourite question on everyone's mind.

I guess that's what many buyers who recently bought were thinking.
1) either better buy now before prices continue climbing
2) or more realistically "No need to rush but yet at the same point no point waiting if there is a dream home"

if for own stay, faster buy already!

if for investment..................................... i dunno ........

[Honesty]

if for own stay, faster buy already!

if for investment..................................... i dunno ........

Why faster buy for home stay and not for investment???

What do you think the market will be heading for the next 6 months???

below are the analysts said :-

"Analysts say a sustained increase in the price index that develops into a full-blown rally by end of the year is unlikely. A more probable scenario is a plateau: prices and sales stabilizing at their current levels for the next few months, with occasional moderate dips or increases, until there is more certainty about economic outlook next year."