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    Default Boom or bubble?

    http://www.straitstimes.com/Saturday...ry_419916.html

    August 22, 2009 Saturday

    Boom or bubble?

    Property prices appear to be on the rise again, but is the rebound sustainable?

    By Joyce Teo, Property Correspondent


    ON A Monday night in the last week of July, commuters taking the train home to the eastern part of Singapore may have witnessed a small commotion at the Tanah Merah MRT station.

    It was about 10pm, and a group of about 40 people who had formed a queue beside the station since late afternoon was being told to go home.

    Apparently, they were queuing to be first in line when a new condominium - [email protected] Merah - opened its doors for bookings. Except that it was not being launched the morning after, but on Friday morning. They were prepared to stand in line for three whole days to get first dibs.

    Representatives from the developer TID, a tie-up between Hong Leong Group and Japan's Mitsui Fudosan, implored the crowd to go home.

    'The queue will not be recognised. We will not sell anything until Friday morning,' they said.

    The crowd dispersed. But their desperation quickly became the talk of the town, and the clearest symbol yet of how unexpectedly hot the local property market has become.

    Elsewhere around the world, many property markets are locked into a downward spiral. But the story is startlingly different in Singapore.

    Last month, developers like TID sold a whopping 2,767 units of new private homes, smashing the record of 1,825 units set only in June.

    These are numbers that have never been seen in Singapore - not even during the stratospheric heights of the 2007 property boom. In just two months this year, developers have sold 328 more homes than in the whole of last year.

    In the midst of this buying frenzy, developers have begun raising their prices. Some have even dared to launch new units at record-high per sq ft (psf) prices.

    Indeed, the classic signs of a boom are in place: weekend crowds at showflats, blank cheques handed to agents to secure prime units, and flyers flooding the mailbox of every home.

    But this boom is different from the last one because of one very important reason: The 2006-07 boom coincided with a period of rapid economic expansion. Today, house prices are rising in the wake of Singapore's deepest-ever recession, and at a time when the entire global economy is only just starting to recover from the shock of a financial crisis.

    This has sparked a debate over whether the property boom is hopelessly out of sync with economic fundamentals.

    The Government seems worried, and National Development Minister Mah Bow Tan has already suggested that an element of speculation may be involved in the current boom.

    Politically, market watchers say the stakes are higher this time around for the Government, because it is the more accessible suburban projects rather than the posh condominiums that are breaking the records.

    With the prospect of ordinary folk potentially getting burnt in a price crash, the million-dollar question is whether the current rebound in the market is a genuine recovery.

    Or is it just another unsustainable bubble pumped up by hype?

    The answer varies, depending on whom you talk to, of course.

    Veteran property developer Kwek Leng Beng, chairman of real estate giant City Developments, thinks the market is not getting too frothy.

    'It should not be viewed as over-exuberant or extraordinary, bearing in mind that developers had put on hold many of their launches in 2008,' he said at a recent press conference.

    In other words, people could have wanted to buy new homes last year, but there was no supply in view of 2008's lacklustre conditions.

    Now that there are more launches in 2009, this pent-up demand for homes is being satisfied all at once, accounting partly for the record sales volume in recent months.

    Prices are not unreasonably high, Mr Kwek added, noting that the low- and mid-tier markets have yet to recover since their peaks in 1996.

    CBRE Research data shows that me-dian prices of new non-landed homes reached $690 psf in the second quarter, compared with $749 psf at the 1996 peak, though the level surged to $800 psf last month.

    Analysts also say that the demand is real, driven by buyers awash with liquidity.

    People still have money saved from the bonuses of the boom years, and some may have profited from the stock market rally in April and May.

    But investment options are few and far between, with savings interest rates near zero and the stock market now losing some steam.

    'After the Lehman Brothers structured products failure, property is also increasingly viewed as a safe investment alternative as its value will not drop to zero,' says Ms Chua Chor Hoon, head of South-east Asia research at property consultancy DTZ.

    At the same time, labour market resilience is helping. The job market gloom and doom prevalent at the start of the year has been replaced by guarded optimism as government stimulus spending has halted a large upswing in the number of jobless people.

    'No matter how much cash you have, if you think you're going to lose your job in the next six months, you're not going to invest in property,' says Citigroup economist Kit Wei Zheng.

    But with the economy looking up and the spectre of job losses fading, many feel there is no better time than now or place to park their money than in bricks and mortar.

    After all, some see a bet on the property market as a bet on the long-term growth of Singapore as a global city.

    Mr Leong Sze Hian, president of the Society of Financial Service Professionals, points out that 79,000 permanent residents and 21,000 citizens were added to the population last year.

    And more will be added in the future as Singapore heads towards its target population of 6.5 million.

    The buzz generated by the completion of the integrated resorts could hasten foreigner arrivals, say optimists.

    Finally, some analysts note that this buying power in the market is being supported by younger home buyers who are coming up against a tight supply of Housing Board flats. This has the effect of hiking HDB prices and narrowing the price gap between public and private homes.

    With home loan rates also near historic lows, cheap funding is another key factor driving the demand - combining with the other factors to make private property a very attractive and affordable proposition.

    It is primarily because of these factors that most experts agree there is some real demand that justifies the higher prices and sales volumes in the market.

    They say the current market should be seen against the backdrop of a market that was stuck in the doldrums only four or five months ago.

    With buyers reluctant to commit, some developers had to slash prices by as much as 30 to 35 per cent early this year to generate interest in their projects.

    Still, despite the resale and sub-sale markets moving ahead, experts say there remain a lot more over-optimistic sellers than there are buyers.

    A collective sale frenzy, like the one that gripped the property market in 2006 and 2007, is also nowhere in sight.

    'What we are seeing is recovery phase activity,' says Associate Professor Sing Tien Foo from the National University of Singapore's real estate department. 'It takes a while for a bubble to build up.'

    DTZ's Ms Chua notes: 'A bubble means that prices are rising way too fast relative to GDP (gross domestic product) growth. So far, we have seen only one quarter of rising prices in the property market.'

    But while many experts don't see a bubble yet, it doesn't mean that one won't form, and what happens next will be very important.

    Property consultant Nicholas Mak expects home prices to reach a plateau, with the lows seen earlier this year unlikely to be repeated.

    'Right now, prices may continue to run for a few months before stabilising. Ultimately, the market has to return to market fundamentals,' he says.

    The problem is that prices may not take that rational trajectory if buyers get carried away. Property consultants and developers have warned that demand is coming from those who missed out on the 2007 high-end boom.

    Eyebrows have already been raised at the sort of prices buyers have been willing to pay for suburban properties.

    Units at Centro Residences, which is next to Ang Mo Kio MRT station, sold for between $1,117 psf and $1,228 psf last month, a record for suburban homes in Singapore.

    'When there is fear or belief that prices are going to keep rising, and many speculators jump in in the hope of making capital gains over the next few years, prices could be driven up beyond fundamental levels like in 1996 and 2000,' says Ms Chua.

    'The future's a sure bet but what's happening right now is beyond our wildest dreams. No one would have predicted the July sales figure,' says Cushman & Wakefield managing director Donald Han.

    'We've seen price increases of 15 per cent on average since April. It seems too short, too fast a time... At some stage, prices should stabilise.'

    One property expert, who declines to be named, thinks that for this to happen, buyers must do a serious reality check: 'Every round of recovery, we see people getting carried away by the herd instinct. There's a total disconnect with reality. It's momentary madness.'

    That is why economists and analysts recommend that home buyers sober up by reminding themselves of some hard economic truths before signing on the dotted line.

    One such truth is that how the economy fares over the coming months will be a key indicator of the future of property prices. And on that, the jury is still out.

    Although the economy surged 20.7 per cent between April and June compared to the first quarter, Trade and Industry Minister Lim Hng Kiang says it is too early to cheer.

    Key markets like the United States and Europe have pulled out of recession but growth is likely to be anaemic for the next few years.

    CIMB-GK economist Song Seng Wun says: 'The global slowdown does seem to have stabilised, but a recovery could still be far away.

    'And while Asian growth may be holding steady, it may not be as strong as we are used to, as developed economies are not seeing the strong recovery.'

    HSR Property Group executive director Eric Cheng points to another cold, hard truth: ample property supply.

    There are still 62,350 uncompleted homes in the pipeline, according to Urban Redevelopment Authority data. Slightly less than half have been sold.

    In particular, major developers are still holding back their large luxury launches because the foreign funds and investors who bought into the posh homes in districts 9, 10 and 11 have not returned in significant numbers.

    'The key is whether the price growth at this recovery stage can be sustained. It remains unclear who will pick up the prime homes,' says Prof Sing.

    Many buyers also seem to have ignored the fact that residential rents are still falling.

    'But Singapore has never been a yield-driven market like mature markets like Australia and the UK,' concedes Credo Real Estate managing director Karamjit Singh. 'The two key drivers here are owner-occupier demand and sentiment.'

    Looking ahead, property commentators forecast a variety of outcomes for the months to come - from another slump to continued buoyancy.

    Credo's Mr Singh is looking at the recovery lasting up to 12 months before prices start to moderate as more launch-ready projects come onstream.

    More bearish analysts like RBS' Fera Wirawan say a mass market bubble has already formed. In an Aug 13 report, she predicted that the bubble will burst, sending residential prices plummeting by 10 to 20 per cent over the next 12 months.

    Then, there is the wild card factor of the Government.

    'If queues continue to form and people continue to flip, then we may see some (government) intervention,' says Mr Song.

    Property experts say this could mean the re-introduction of outright land sales to boost supply, or the abolishment of the interest absorption scheme that allows buyers to defer paying the bulk of the purchase price until the development is completed.

    But they also believe the Government will exercise extreme caution. Mr Song believes policymakers won't want to prick the bubble too early as that may deflate the economy.

    But he adds: 'But if you let it simmer and build up, it will also be troublesome when it bursts.'

    One expert, who does not wish to be identified, warns that if a crash were to come, 'it may take us all by surprise', just as the recovery did.

    The best thing to do, advises Mr Song, is to exercise the same type of 'extreme caution' over the coming 12 months.

    He says: 'My take is that this recovery's not going to be simple. Global growth is not going to rebound to the previous pace. We can show a couple of quarters of sharp rebound, but it is likely to slow after that...

    'Any bubble could well deflate on its own.'

    [email protected]
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    Actually, most disappointed in the Optima queue issue were those who queued with the intention to sell their queue places.

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    Quote Originally Posted by WolleyDragon
    Actually, most disappointed in the Optima queue issue were those who queued with the intention to sell their queue places.


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    Quote Originally Posted by mr funny
    http://www.straitstimes.com/Saturday...ry_419916.html

    August 22, 2009 Saturday

    Boom or bubble?

    Property prices appear to be on the rise again, but is the rebound sustainable?

    By Joyce Teo, Property Correspondent


    ON A Monday night in the last week of July, commuters taking the train home to the eastern part of Singapore may have witnessed a small commotion at the Tanah Merah MRT station.

    It was about 10pm, and a group of about 40 people who had formed a queue beside the station since late afternoon was being told to go home.

    Apparently, they were queuing to be first in line when a new condominium - [email protected] Merah - opened its doors for bookings. Except that it was not being launched the morning after, but on Friday morning. They were prepared to stand in line for three whole days to get first dibs.

    Representatives from the developer TID, a tie-up between Hong Leong Group and Japan's Mitsui Fudosan, implored the crowd to go home.

    'The queue will not be recognised. We will not sell anything until Friday morning,' they said.

    The crowd dispersed. But their desperation quickly became the talk of the town, and the clearest symbol yet of how unexpectedly hot the local property market has become.

    Elsewhere around the world, many property markets are locked into a downward spiral. But the story is startlingly different in Singapore.

    Last month, developers like TID sold a whopping 2,767 units of new private homes, smashing the record of 1,825 units set only in June.

    These are numbers that have never been seen in Singapore - not even during the stratospheric heights of the 2007 property boom. In just two months this year, developers have sold 328 more homes than in the whole of last year.

    In the midst of this buying frenzy, developers have begun raising their prices. Some have even dared to launch new units at record-high per sq ft (psf) prices.

    Indeed, the classic signs of a boom are in place: weekend crowds at showflats, blank cheques handed to agents to secure prime units, and flyers flooding the mailbox of every home.

    But this boom is different from the last one because of one very important reason: The 2006-07 boom coincided with a period of rapid economic expansion. Today, house prices are rising in the wake of Singapore's deepest-ever recession, and at a time when the entire global economy is only just starting to recover from the shock of a financial crisis.

    This has sparked a debate over whether the property boom is hopelessly out of sync with economic fundamentals.

    The Government seems worried, and National Development Minister Mah Bow Tan has already suggested that an element of speculation may be involved in the current boom.

    Politically, market watchers say the stakes are higher this time around for the Government, because it is the more accessible suburban projects rather than the posh condominiums that are breaking the records.

    With the prospect of ordinary folk potentially getting burnt in a price crash, the million-dollar question is whether the current rebound in the market is a genuine recovery.

    Or is it just another unsustainable bubble pumped up by hype?

    The answer varies, depending on whom you talk to, of course.

    Veteran property developer Kwek Leng Beng, chairman of real estate giant City Developments, thinks the market is not getting too frothy.

    'It should not be viewed as over-exuberant or extraordinary, bearing in mind that developers had put on hold many of their launches in 2008,' he said at a recent press conference.

    In other words, people could have wanted to buy new homes last year, but there was no supply in view of 2008's lacklustre conditions.

    Now that there are more launches in 2009, this pent-up demand for homes is being satisfied all at once, accounting partly for the record sales volume in recent months.

    Prices are not unreasonably high, Mr Kwek added, noting that the low- and mid-tier markets have yet to recover since their peaks in 1996.

    CBRE Research data shows that me-dian prices of new non-landed homes reached $690 psf in the second quarter, compared with $749 psf at the 1996 peak, though the level surged to $800 psf last month.

    Analysts also say that the demand is real, driven by buyers awash with liquidity.

    People still have money saved from the bonuses of the boom years, and some may have profited from the stock market rally in April and May.

    But investment options are few and far between, with savings interest rates near zero and the stock market now losing some steam.

    'After the Lehman Brothers structured products failure, property is also increasingly viewed as a safe investment alternative as its value will not drop to zero,' says Ms Chua Chor Hoon, head of South-east Asia research at property consultancy DTZ.

    At the same time, labour market resilience is helping. The job market gloom and doom prevalent at the start of the year has been replaced by guarded optimism as government stimulus spending has halted a large upswing in the number of jobless people.

    'No matter how much cash you have, if you think you're going to lose your job in the next six months, you're not going to invest in property,' says Citigroup economist Kit Wei Zheng.

    But with the economy looking up and the spectre of job losses fading, many feel there is no better time than now or place to park their money than in bricks and mortar.

    After all, some see a bet on the property market as a bet on the long-term growth of Singapore as a global city.

    Mr Leong Sze Hian, president of the Society of Financial Service Professionals, points out that 79,000 permanent residents and 21,000 citizens were added to the population last year.

    And more will be added in the future as Singapore heads towards its target population of 6.5 million.

    The buzz generated by the completion of the integrated resorts could hasten foreigner arrivals, say optimists.

    Finally, some analysts note that this buying power in the market is being supported by younger home buyers who are coming up against a tight supply of Housing Board flats. This has the effect of hiking HDB prices and narrowing the price gap between public and private homes.

    With home loan rates also near historic lows, cheap funding is another key factor driving the demand - combining with the other factors to make private property a very attractive and affordable proposition.

    It is primarily because of these factors that most experts agree there is some real demand that justifies the higher prices and sales volumes in the market.

    They say the current market should be seen against the backdrop of a market that was stuck in the doldrums only four or five months ago.

    With buyers reluctant to commit, some developers had to slash prices by as much as 30 to 35 per cent early this year to generate interest in their projects.

    Still, despite the resale and sub-sale markets moving ahead, experts say there remain a lot more over-optimistic sellers than there are buyers.

    A collective sale frenzy, like the one that gripped the property market in 2006 and 2007, is also nowhere in sight.

    'What we are seeing is recovery phase activity,' says Associate Professor Sing Tien Foo from the National University of Singapore's real estate department. 'It takes a while for a bubble to build up.'

    DTZ's Ms Chua notes: 'A bubble means that prices are rising way too fast relative to GDP (gross domestic product) growth. So far, we have seen only one quarter of rising prices in the property market.'

    But while many experts don't see a bubble yet, it doesn't mean that one won't form, and what happens next will be very important.

    Property consultant Nicholas Mak expects home prices to reach a plateau, with the lows seen earlier this year unlikely to be repeated.

    'Right now, prices may continue to run for a few months before stabilising. Ultimately, the market has to return to market fundamentals,' he says.

    The problem is that prices may not take that rational trajectory if buyers get carried away. Property consultants and developers have warned that demand is coming from those who missed out on the 2007 high-end boom.

    Eyebrows have already been raised at the sort of prices buyers have been willing to pay for suburban properties.

    Units at Centro Residences, which is next to Ang Mo Kio MRT station, sold for between $1,117 psf and $1,228 psf last month, a record for suburban homes in Singapore.

    'When there is fear or belief that prices are going to keep rising, and many speculators jump in in the hope of making capital gains over the next few years, prices could be driven up beyond fundamental levels like in 1996 and 2000,' says Ms Chua.

    'The future's a sure bet but what's happening right now is beyond our wildest dreams. No one would have predicted the July sales figure,' says Cushman & Wakefield managing director Donald Han.

    'We've seen price increases of 15 per cent on average since April. It seems too short, too fast a time... At some stage, prices should stabilise.'

    One property expert, who declines to be named, thinks that for this to happen, buyers must do a serious reality check: 'Every round of recovery, we see people getting carried away by the herd instinct. There's a total disconnect with reality. It's momentary madness.'

    That is why economists and analysts recommend that home buyers sober up by reminding themselves of some hard economic truths before signing on the dotted line.

    One such truth is that how the economy fares over the coming months will be a key indicator of the future of property prices. And on that, the jury is still out.

    Although the economy surged 20.7 per cent between April and June compared to the first quarter, Trade and Industry Minister Lim Hng Kiang says it is too early to cheer.

    Key markets like the United States and Europe have pulled out of recession but growth is likely to be anaemic for the next few years.

    CIMB-GK economist Song Seng Wun says: 'The global slowdown does seem to have stabilised, but a recovery could still be far away.

    'And while Asian growth may be holding steady, it may not be as strong as we are used to, as developed economies are not seeing the strong recovery.'

    HSR Property Group executive director Eric Cheng points to another cold, hard truth: ample property supply.

    There are still 62,350 uncompleted homes in the pipeline, according to Urban Redevelopment Authority data. Slightly less than half have been sold.

    In particular, major developers are still holding back their large luxury launches because the foreign funds and investors who bought into the posh homes in districts 9, 10 and 11 have not returned in significant numbers.

    'The key is whether the price growth at this recovery stage can be sustained. It remains unclear who will pick up the prime homes,' says Prof Sing.

    Many buyers also seem to have ignored the fact that residential rents are still falling.

    'But Singapore has never been a yield-driven market like mature markets like Australia and the UK,' concedes Credo Real Estate managing director Karamjit Singh. 'The two key drivers here are owner-occupier demand and sentiment.'

    Looking ahead, property commentators forecast a variety of outcomes for the months to come - from another slump to continued buoyancy.

    Credo's Mr Singh is looking at the recovery lasting up to 12 months before prices start to moderate as more launch-ready projects come onstream.

    More bearish analysts like RBS' Fera Wirawan say a mass market bubble has already formed. In an Aug 13 report, she predicted that the bubble will burst, sending residential prices plummeting by 10 to 20 per cent over the next 12 months.

    Then, there is the wild card factor of the Government.

    'If queues continue to form and people continue to flip, then we may see some (government) intervention,' says Mr Song.

    Property experts say this could mean the re-introduction of outright land sales to boost supply, or the abolishment of the interest absorption scheme that allows buyers to defer paying the bulk of the purchase price until the development is completed.

    But they also believe the Government will exercise extreme caution. Mr Song believes policymakers won't want to prick the bubble too early as that may deflate the economy.

    But he adds: 'But if you let it simmer and build up, it will also be troublesome when it bursts.'

    One expert, who does not wish to be identified, warns that if a crash were to come, 'it may take us all by surprise', just as the recovery did.

    The best thing to do, advises Mr Song, is to exercise the same type of 'extreme caution' over the coming 12 months.

    He says: 'My take is that this recovery's not going to be simple. Global growth is not going to rebound to the previous pace. We can show a couple of quarters of sharp rebound, but it is likely to slow after that...

    'Any bubble could well deflate on its own.'

    [email protected]


    is this a boom ???

    if it is ... it would be damn easy to SELL ... but it is easier to sell nwe launch then resale ... i dont even dare to buy now becos
    firstly too expensive .. they say cheaper than 1990's ..once pass that they will say cheaper than HK ..etc etc
    secondly ... it is easier for developer to sell then for owner to sell ..strange market .. where buyer only keen new launch and not older projects

    i cant help but feel its so manipulated by developers ...

    if it really is a true Boom market .. ANY GOOD LOCATION WILL SELL .. not just new launch ...

    i would look elsewhere for sure

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    Quote Originally Posted by proud owner
    is this a boom ???

    if it is ... it would be damn easy to SELL ... but it is easier to sell nwe launch then resale ... i dont even dare to buy now becos
    firstly too expensive .. they say cheaper than 1990's ..once pass that they will say cheaper than HK ..etc etc
    secondly ... it is easier for developer to sell then for owner to sell ..strange market .. where buyer only keen new launch and not older projects

    i cant help but feel its so manipulated by developers ...

    if it really is a true Boom market .. ANY GOOD LOCATION WILL SELL .. not just new launch ...

    i would look elsewhere for sure
    i totally agree with you

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    Yes it is boom for 1m or up to 1.5m quantum market. If you have 200K cash not doing much in the bank it's a calculated risk to bet on the market inching higher anytime between now and 3 years later. Resale means you pay interest immediately upon completion.

    Also don't forget there were many who opted to wait for the 2007 peak to pass and waited more to see if it would go lower than March 2009. But no one expected the STI to come up 50% from March this year.

    However, new launches will soon lose steam once the landbank diminishes if the buying momemtum can be sustained.

    Quote Originally Posted by proud owner
    is this a boom ???

    if it is ... it would be damn easy to SELL ... but it is easier to sell nwe launch then resale ... i dont even dare to buy now becos
    firstly too expensive .. they say cheaper than 1990's ..once pass that they will say cheaper than HK ..etc etc
    secondly ... it is easier for developer to sell then for owner to sell ..strange market .. where buyer only keen new launch and not older projects

    i cant help but feel its so manipulated by developers ...

    if it really is a true Boom market .. ANY GOOD LOCATION WILL SELL .. not just new launch ...

    i would look elsewhere for sure

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    Quote Originally Posted by andy
    Yes it is boom for 1m or up to 1.5m quantum market. If you have 200K cash not doing much in the bank it's a calculated risk to bet on the market inching higher anytime between now and 3 years later. Resale means you pay interest immediately upon completion.

    Also don't forget there were many who opted to wait for the 2007 peak to pass and waited more to see if it would go lower than March 2009. But no one expected the STI to come up 50% from March this year.

    However, new launches will soon lose steam once the landbank diminishes if the buying momemtum can be sustained.
    very soon EVERY single Singporean will have more than one proerty .. assuming there are 1 mio true bread winner singaporean ..
    80 pct owns a HDB .. 50 pct of which owns another 1-1.5 mio condo ...

    not forgetting that expats who have bought, corporates who also own condos ..

    do we really have so many who needs to rent ?

    we may have achieved a population of 5 mio .. how many of this 5 mio are children, teenagers etc ? how many are home owners ?

    i fear this thoughts

    over supply already exist ..just that they are slowing the construction process to massage the supply .. .there will come a time when all projects will TOP .. who is going to be occupying in them ?

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    Risk return ratio now is very poor for property as an investment class. If you are lucky, maybe can get 10% gain in the next 12 months. If you are not so lucky, you can be down 30%.

    Property prices will always go up huh. People have such short term memory that its scary. What caused the subprime crisis one year ago? What brought Lehman Bros and AIG to its knees. Its the precise assumption that property prices in the US will go up indefinitely

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    If 3.5% return is considered low, what else can people invest to get much more than this 3.5% return at the same or even less risk than property investment? There is none that I can think of. There is no other investment that offers high leverage at low costs (very low interest rate now of 1.6% for housing loan). Stocks as an investment class is more risky than property and return is actually lower (since can't leverage at low costs). With property, people can live in it or rent out (easy to do so with so many foreigners still coming into Singapore despite the so-called worst recession since Singapore's independence). People can argue until the cows go home but the trend will still continue - i.e. property prices will probably continue to go up (until foreigners are sent packing home in droves).

    Quote Originally Posted by ulrich76
    Risk return ratio now is very poor for property as an investment class. If you are lucky, maybe can get 10% gain in the next 12 months. If you are not so lucky, you can be down 30%.

    Property prices will always go up huh. People have such short term memory that its scary. What caused the subprime crisis one year ago? What brought Lehman Bros and AIG to its knees. Its the precise assumption that property prices in the US will go up indefinitely

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    Quote Originally Posted by teddybear
    If 3.5% return is considered low, what else can people invest to get much more than this 3.5% return at the same or even less risk than property investment? There is none that I can think of. There is no other investment that offers high leverage at low costs (very low interest rate now of 1.6% for housing loan). Stocks as an investment class is more risky than property and return is actually lower (since can't leverage at low costs). With property, people can live in it or rent out (easy to do so with so many foreigners still coming into Singapore despite the so-called worst recession since Singapore's independence). People can argue until the cows go home but the trend will still continue - i.e. property prices will probably continue to go up (until foreigners are sent packing home in droves).

    thats precisely the problem ..

    everyone is assuming foreigners will come .. in hordes ... so all buy buy buy

    all owning more than one property .. we are not the emperor of china ..where he had 3000 rooms ...

    if everyone has this thinking .. dont you think there will be a over supply ?

    thats scary if the whole nation has the same money making strategy ..

    when it falls the whole nation falls ..

    i rather not make this money than to be one of the eggs in this country's basket

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    It depends on how long you intend to hold the property for. For true owner-occupiers who typically have a 5 year or longer time horizon, buying now when you can still find a good deal is a good option.

    Most of the new units are going for roaring prices. Resale units are trying to catch up. You just have to find gems form these resale units.

    But if you are trying to flip a property within the next 6 months, That guess would be as good as anyone's whether you will profit. But with the rest of the world slowing pulling out of recession, you could place your bets, just make sure you can service the property for 1-2 years.

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    Quote Originally Posted by echotrain
    It depends on how long you intend to hold the property for. For true owner-occupiers who typically have a 5 year or longer time horizon, buying now when you can still find a good deal is a good option.

    Most of the new units are going for roaring prices. Resale units are trying to catch up. You just have to find gems form these resale units.

    But if you are trying to flip a property within the next 6 months, That guess would be as good as anyone's whether you will profit. But with the rest of the world slowing pulling out of recession, you could place your bets, just make sure you can service the property for 1-2 years.
    my point is that people alerady own one and buying another , and maybe another ... so it cant be owner occupied ..

    and they say can rent out .. spare cash in bank earns nothing ..etc etc
    problem is ..if all owns mroe than one .. are there so many foreginers who will come rent them ?

    they may end up keeping it empty

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    But is it possible, that even if it is kept empty and presumably the buyers have holding power eg 10yrs or more, that they will see a capital gain enough to cover the lack of rental? Of course dependent on the area as well, as some areas may not appreciate that much.

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    Not every one lah, judging from this forum, in fact there are many who don't believe foreigners will come. However, believing is 1 thing, fact is another. Fact is, foreigners and PRs have increased in 2008 despite the so-called worst recession in don't know how many decades. These people usually don't buy (as they don't know how long they will stay here), so there is always market for rental. If they buy, they soap up supply and will push up property price also. May be when the dis-believers become believers and when economy finally recover, expect more dis-believers (who wanted to buy but still waiting for cheaper price) to start buying and foreigners & PRs to also start buying (because renting become too expensive and not worth it vs buying).

    Quote Originally Posted by proud owner
    thats precisely the problem ..

    everyone is assuming foreigners will come .. in hordes ... so all buy buy buy

    all owning more than one property .. we are not the emperor of china ..where he had 3000 rooms ...

    if everyone has this thinking .. dont you think there will be a over supply ?

    thats scary if the whole nation has the same money making strategy ..

    when it falls the whole nation falls ..

    i rather not make this money than to be one of the eggs in this country's basket

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    Property prices will go up forever - In 2005 I was house hunting and came across this Glendale Park unit (Hillview freehold) 1200sqft selling at $650k, owner bot for $1.2m during mid 90s. It may have gone up to $900k now but owner is still bleeding. Will it ever go to $1.2m again?
    Many who bot during mid 90s boom (sounds familiar?) will probably never earn back their outlay. Think we are close to having another batch of suckers.

    Foreigners will come, but will they all be able to afford $3k plus rentals or $800k - $1m condos. Most FTs are the frugal Chinese and Indians using Sg as stepping stone. You will have the odd ang moh CEO or top management but how many of these will come to boring Sg?





    Quote Originally Posted by teddybear
    If 3.5% return is considered low, what else can people invest to get much more than this 3.5% return at the same or even less risk than property investment? There is none that I can think of. There is no other investment that offers high leverage at low costs (very low interest rate now of 1.6% for housing loan). Stocks as an investment class is more risky than property and return is actually lower (since can't leverage at low costs). With property, people can live in it or rent out (easy to do so with so many foreigners still coming into Singapore despite the so-called worst recession since Singapore's independence). People can argue until the cows go home but the trend will still continue - i.e. property prices will probably continue to go up (until foreigners are sent packing home in droves).

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    Any property owner/investor will know that if they want to buy to invest (even cum stay), the only place where property prices always go higher above previous peak is the CCR (District 9, 10, & 11). (Even foreigners also know that, can't see why Singaporeans don't?). For own stay in OCR, well, buyers just have to take care don't buy at peak price. If different between OCR and CCR is less than 35%, which to buy? The answer is obvious.
    Chinese and Indians foreigners? Many of these are actually much much richer than Ang Mos and just buy blindly! (and many of these type choose to buy than rent. Somehow, Ang Mos like to rent and Chinese like to buy (not rent)).

    Quote Originally Posted by ulrich76
    Property prices will go up forever - In 2005 I was house hunting and came across this Glendale Park unit (Hillview freehold) 1200sqft selling at $650k, owner bot for $1.2m during mid 90s. It may have gone up to $900k now but owner is still bleeding. Will it ever go to $1.2m again?
    Many who bot during mid 90s boom (sounds familiar?) will probably never earn back their outlay. Think we are close to having another batch of suckers.

    Foreigners will come, but will they all be able to afford $3k plus rentals or $800k - $1m condos. Most FTs are the frugal Chinese and Indians using Sg as stepping stone. You will have the odd ang moh CEO or top management but how many of these will come to boring Sg?

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    One key difference between now and then is how unethical developers are blurring the lines of what really constitutes CCR and the prime districts, and buyers are falling for it.

    Cairnhill (Newton) becomes Orchard. Thomson/Newton/Makepeace becomes Orchard. Alexandra becomes Tanglin. Tiong Bahru become River Valley. Whampoa becomes Balestier. Balestier becomes Novena. Bendemeer becomes Balestier becomes 'outer' Novena. Kallang Industrial Belt becomes prime RCR.

    Any everything is 'minutes' away from IR/Flyer, or IR/Flyer view, or Gardens, or Orchard etc.

    Brochure maps never drawn to scale, looks as if Bendemeer is right next to Orchard. Architects drawings never ever show HDB estate views, just fireworks and flyer in the background with some angmoh chick in D cups drinking champagne. MRT not announced, also put into brochure.

    The developers have been so successful in changing mindsets that truly, people in every day talk now refer to Balestier as Novena, Alexandra as Tanglin, etc etc. Even the places at Upp East Coast which we used to call Changi is now referred to as East Coast.

    Who won't be blur?

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    Quote Originally Posted by gfoo
    One key difference between now and then is how unethical developers are blurring the lines of what really constitutes CCR and the prime districts, and buyers are falling for it.

    Cairnhill (Newton) becomes Orchard. Thomson/Newton/Makepeace becomes Orchard. Alexandra becomes Tanglin. Tiong Bahru become River Valley. Whampoa becomes Balestier. Balestier becomes Novena. Bendemeer becomes Balestier becomes 'outer' Novena. Kallang Industrial Belt becomes prime RCR.

    Any everything is 'minutes' away from IR/Flyer, or IR/Flyer view, or Gardens, or Orchard etc.

    Brochure maps never drawn to scale, looks as if Bendemeer is right next to Orchard. Architects drawings never ever show HDB estate views, just fireworks and flyer in the background with some angmoh chick in D cups drinking champagne. MRT not announced, also put into brochure.

    The developers have been so successful in changing mindsets that truly, people in every day talk now refer to Balestier as Novena, Alexandra as Tanglin, etc etc. Even the places at Upp East Coast which we used to call Changi is now referred to as East Coast.

    Who won't be blur?
    Strongly agree with you on these points

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    Instead of those Centro, RCR, angsuah 99Y places at $1000psf, there are so many undervalued condos in better areas. My friend just got Costa Rhu at $800+psf, and there is 1 or two cock facing at $700+. True it's damn hard to get around without a car but go look at google maps then consider:
    -Stadium & Nicoll MRTs is a 8 min walk away
    -Gardens East has already begun constructed
    -MBGCC lease expires in 2-3 years, wanna bet they will do something with that piece of land?
    -True that Stadium delayed but that entire area is poised for development
    - How many localities in Singapore actually front waters? Silversea etc front ECP, not the sea lor.

    Take a walk on a weekend along the path behind costa by the waters, you'll see what i mean.

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    Quote Originally Posted by teddybear
    If 3.5% return is considered low, what else can people invest to get much more than this 3.5% return at the same or even less risk than property investment?
    Top up ur own CPF SA and get 4%?

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    Quote Originally Posted by jonleelk
    Top up ur own CPF SA and get 4%?
    Limit to 25k per year (including mandatory contribution from employment only)....

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    Quote Originally Posted by gfoo
    Instead of those Centro, RCR, angsuah 99Y places at $1000psf, there are so many undervalued condos in better areas. My friend just got Costa Rhu at $800+psf, and there is 1 or two cock facing at $700+. True it's damn hard to get around without a car but go look at google maps then consider:
    -Stadium & Nicoll MRTs is a 8 min walk away
    -Gardens East has already begun constructed
    -MBGCC lease expires in 2-3 years, wanna bet they will do something with that piece of land?
    -True that Stadium delayed but that entire area is poised for development
    - How many localities in Singapore actually front waters? Silversea etc front ECP, not the sea lor.

    Take a walk on a weekend along the path behind costa by the waters, you'll see what i mean.
    Wa.. BUY! BUY! BUY!

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    Quote Originally Posted by focus
    Wa.. BUY! BUY! BUY!
    lol: caveat emptor - it makes sense ONLY vs today's environment of $1200 for ang mor kio. Otherwise, it's still a little on the high side

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    Quote Originally Posted by gfoo
    Instead of those Centro, RCR, angsuah 99Y places at $1000psf, there are so many undervalued condos in better areas. My friend just got Costa Rhu at $800+psf, and there is 1 or two cock facing at $700+. True it's damn hard to get around without a car but go look at google maps then consider:
    -Stadium & Nicoll MRTs is a 8 min walk away
    -Gardens East has already begun constructed
    -MBGCC lease expires in 2-3 years, wanna bet they will do something with that piece of land?
    -True that Stadium delayed but that entire area is poised for development
    - How many localities in Singapore actually front waters? Silversea etc front ECP, not the sea lor.

    Take a walk on a weekend along the path behind costa by the waters, you'll see what i mean.

    The stadium is really not that far away, though I won't say its very near too. But its definitely a very good walk from TR to the new station.

    Have recce that place on numerous occasion mostly by having some finger food at Brewerkz.......very very relax atmosphere (lots of hjoggers, dragonboaters), very very quite, hardly hear any vehicle noise, fantastic air, blue sky, great view, not that far from future MRT, and if driving, the TR Bridge is a god sent to avoid ECP in order to go to town.

    Most importantly, what price is the right price........for this LH area???

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    if you analyze this new launches craze logically, in 2011 and 2012, where all the mass market condo TOP, there will be at least 10000 HDB upgraders trying to sell their HDB .... what happens if there isnt 10000 HDB buyers ..... are we building our own mini-subprime .... we will know then ......

    Quote Originally Posted by proud owner
    thats precisely the problem ..

    everyone is assuming foreigners will come .. in hordes ... so all buy buy buy

    all owning more than one property .. we are not the emperor of china ..where he had 3000 rooms ...

    if everyone has this thinking .. dont you think there will be a over supply ?

    thats scary if the whole nation has the same money making strategy ..

    when it falls the whole nation falls ..

    i rather not make this money than to be one of the eggs in this country's basket

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    Quote Originally Posted by blackswan
    The stadium is really not that far away, though I won't say its very near too. But its definitely a very good walk from TR to the new station.

    Have recce that place on numerous occasion mostly by having some finger food at Brewerkz.......very very relax atmosphere (lots of hjoggers, dragonboaters), very very quite, hardly hear any vehicle noise, fantastic air, blue sky, great view, not that far from future MRT, and if driving, the TR Bridge is a god sent to avoid ECP in order to go to town.

    Most importantly, what price is the right price........for this LH area???
    Anyone with any news on the sports hub? The last I heard delays were due to the economic crisis and lack of funds by the Singapore Sports Hub Consortium..

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    Quote Originally Posted by gfoo
    Instead of those Centro, RCR, angsuah 99Y places at $1000psf, there are so many undervalued condos in better areas. My friend just got Costa Rhu at $800+psf, and there is 1 or two cock facing at $700+. True it's damn hard to get around without a car but go look at google maps then consider:
    -Stadium & Nicoll MRTs is a 8 min walk away
    -Gardens East has already begun constructed
    -MBGCC lease expires in 2-3 years, wanna bet they will do something with that piece of land?
    -True that Stadium delayed but that entire area is poised for development
    - How many localities in Singapore actually front waters? Silversea etc front ECP, not the sea lor.

    Take a walk on a weekend along the path behind costa by the waters, you'll see what i mean.

    BOSS! what are your views on river place?

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    Quote Originally Posted by Lord Anus
    BOSS! what are your views on river place?
    i not boss lah. River Place i dunno much leh, but i visited my friend there for bbq couple of months back - nice neighbours very cosmo, a lot of japs. however the whole place maciam falling apart, and in need of plastering/paintjob. typical FEO lah.

    Personally i think that whole area is a little overhyped. I really can't see how else there can be room for growth or the positioning of the area. i still remember when the developers were touting the 'happening' mohd sultan lifestyle culture as a more upscale holland village type of community. now mohd sultan is dead. The only thing keeping it going are the fast pace of new launches prev, now and in the future - this sets a kind of benchmark of price stability to the place. But it also means that in the future, there will be a lot of units in that area, and FH too.

    I go to the bak kut teh place to makan there 2x a month. it feels like a previously upscale area that is past its prime. Don't get good vibes, very sleepy place, even during weekdays.

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    Quote Originally Posted by gfoo
    -Stadium & Nicoll MRTs is a 8 min walk away
    Hi is there a direct path to Nicoll MRT from costa rhu? as in there's a walkpath to cut across the water?

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    Quote Originally Posted by gfoo
    i not boss lah. River Place i dunno much leh, but i visited my friend there for bbq couple of months back - nice neighbours very cosmo, a lot of japs. however the whole place maciam falling apart, and in need of plastering/paintjob. typical FEO lah.

    Personally i think that whole area is a little overhyped. I really can't see how else there can be room for growth or the positioning of the area. i still remember when the developers were touting the 'happening' mohd sultan lifestyle culture as a more upscale holland village type of community. now mohd sultan is dead. The only thing keeping it going are the fast pace of new launches prev, now and in the future - this sets a kind of benchmark of price stability to the place. But it also means that in the future, there will be a lot of units in that area, and FH too.

    I go to the bak kut teh place to makan there 2x a month. it feels like a previously upscale area that is past its prime. Don't get good vibes, very sleepy place, even during weekdays.
    but boss... Mohd Sultan has been transformed from ah beng pubs to sophisticated critically acclaimed restaurants now. they are packed with waiting lists.

    anyway, if buying for investment (ie renting out), is river place a better deal than mohd sultan? considering the 99 leasehold and hence lower pricing?

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