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Thread: RBS calls the top, as residential yields hit 'unsustainble' low

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    Default RBS calls the top, as residential yields hit 'unsustainble' low

    http://www.todayonline.com/Business/...sustainble-low

    RBS calls the top, as residential yields hit 'unsustainble' low

    by Tan Hui Leng

    05:55 AM Aug 15, 2009


    WHILE some industry watchers have said they feel the current exuberance in the residential property market is sustainable, RBS Singapore is offering the contrarian view that the peak of this cycle is nearing.

    In a report released on Thursday, RBS analyst Fera Wirawan noted that prices in the residential segment increased a rapid 16 to 26 per cent from March to July this year.

    Hence, prices now are just 22 per cent below the 2007 peak in the prime segment and 8 per cent below the 2007 peak in the mid segment, she said. Mass market property prices "have recovered fully to their 2007 level".

    But, Ms Wirawan added, as more property comes on stream next year and firms cut rental budgets, the resulting slide in rental yields "should drive down prices". RBS expects prices to fall by 10 to 20 per cent in the residential sector over the next year.

    It's precisely the fall in rental yields that gives the analyst further cause to believe that the peak is near. Rental yields in the luxury segment fell 0.7 percentage point in the second quarter from the first quarter to 2.4 per cent and 0.9 percentage point on-quarter in the overall residential segment to 4.1 per cent, RBS calculated.

    Yields of newly-launched projects are at an "unsustainable" 1.3 to 1.8 per cent, said Ms Wirawan. "We expect rents to slide further, given a full supply pipeline."

    Furthermore, new launches are at a 30- to 80-per-cent premium to current developments, versus the historical average of 20 per cent. Noted Ms Wirawan: "We believe the gap is unlikely to narrow because banks are reluctant to raise valuations of existing projects significantly."

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    Erm...this news is 2 weeks old. Even Mr Mah now acknowledge that HDB prices will go up, and with that private will too right?
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    Quote Originally Posted by sleek
    Erm...this news is 2 weeks old. Even Mr Mah now acknowledge that HDB prices will go up, and with that private will too right?

    Mah's speech is the prelude to land sale ..

    talk it up ..then sell land .. keep money ...happy happy ..most profitable minister ..bonus pah pah ...

    last time he transport minister ..also COE high high .. ERP ..everywhere .. his ministry highest revenue ..so would be his bonus ..


    remember our ministers' bonus depend on how profitable they are ..what govt said before ..we run this country like an enterprise ..give them commercial salary , commercial bonus ..so that they have no need to corrupt ..

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    teddybear is offline Global recession is coming....
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    Wah, all flippers must thank their lucky 'god' for helping them to talk up the price. But they don't only talk, they have the ability to take any action necessary to achieve the aim, don't piay piay.

    Quote Originally Posted by proud owner
    Mah's speech is the prelude to land sale ..

    talk it up ..then sell land .. keep money ...happy happy ..most profitable minister ..bonus pah pah ...

    last time he transport minister ..also COE high high .. ERP ..everywhere .. his ministry highest revenue ..so would be his bonus ..


    remember our ministers' bonus depend on how profitable they are ..what govt said before ..we run this country like an enterprise ..give them commercial salary , commercial bonus ..so that they have no need to corrupt ..

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