NOMU (D9, Freehold, Sin Heng Chan)

[ahlipp]

IMHO, Nomu is best bought as a 'collector's item' for long-term investors; with good rental yield regarded as a bonus.

that sums it up quite perfectly...

[ahlipp]

It is pretty amusing to read certain comments. Singapore is a fully developed economy competing with the top cities of the world since the last 10-15 years. So the potential for growth is lower than in an un-developed economy. Which means technically speaking in a developed economy, one should aim for good rental yield. If you aim for capital appreciation which outgrows interest rate, than you are aiming for another property bubble.
Capital apprecition was easy to achieve up until the mid 80s because Singapore was lagging behind developed economies. How ever now it reached a level where further growth is harder to come by.

Long term investor goes for rental yield, short term investor rides the bubble for capital appreciation, as rent cannot keep up with appreciation since rental contracts are fixed for a year or more. What you say makes no sense.

i agree that...

potential for capital growth in S'pore is not as high as developing countries
right now... which is why most developing cities have some form of restrictions in foreign investments in most properties except for designated zones.

What i do not agree...

is your assumption that rental yield will not be able to keep up with asset appreciation. Right now, you are definitely correct, however, i do not see this as the long term trend.

In the growth years right up to 2007, S'pore though a developed country was growing more than most developing countries in Asia, except for China & India. That you dont see in most other developed economies.

Therefore, i feel S'pore is in a unqiue position ... the only developed economy in SEA, close to developing China / India & with all the governmet support and information to go into the growth areas...

...the questions i have is this
1. will the younger generation of S'porean be able to tapped into the growth of the region and be able to do better than their predecesors, make more money, be better equipped and will they be hungry?

2. will S'pore be able to attract foreign investments ... to use us a platform & together with Singaporeans with the right expertise, tap into growth areas

3. will S'pore be able to attract foreign talents... will foreigners find S'pore an attractive place to live and work

i'm fairly confident about the 3 points above... though i do not see the return of confidence so soon.

[kalumder]

i agree that...

potential for capital growth in S'pore is not as high as developing countries
right now... which is why most developing cities have some form of restrictions in foreign investments in most properties except for designated zones.

What i do not agree...

is your assumption that rental yield will not be able to keep up with asset appreciation. Right now, you are definitely correct, however, i do not see this as the long term trend.

What I meant is that repricing of property or rent, lags. If we take current properties for rent than the prices to buy are too high. There are still some properties with rental contracts from 2007/ early 2008 which would justify current valuations. How ever when the rental contract ends, they would not be able to ask the same amount. This works both ways in bull or bear market. In 2007, I had some friends who complained as their 2 year lease contract was up for re-negotiation, the landlords asked for a rental increase between 60-100%. Now how can that be healthy when their salaries did not increase that much? This left a bitter taste, some moved to east/west coast, and some actually left Singapore as the living-expense had become so high, it did not justify the disadvantages of living in a foreign country. This type of price instability is absolutely unhealthy for the long-term prospects of Singapore, imo. Yet, if you look at current property prices in Singapore, you would think that people are expecting for rents to recover to those levels /2007) in the next 2 years. How can rental increase of 30-60% within a short time frame be a healthy expectation? The economy wont recover at those percentages.

I do agree with your other points you made (except for the current generation and future generation being as determined and diligent as the past generation), but that does not mean it will play out that way. The future is unpredictable, and Singapore is so small that it can be easily toppled by outside factors, like war, pandemics, terrorism, revolution, trade blockade, bullying by a bigger country, etc... So in that sense it is over exposed to those factors compared to other countries. If something happens in Berlin, than those people can branch out to other areas in Germany, and the other cities in Germany can absorb the Berliners. If something happens in Singapore, well there is no alternative. So while Singapore is better at controlling the factors it can, it is over-exposed to factors it cannot controll. Remember, historically city-states have a short shell-life.

[ahlipp]

What I meant is that repricing of property or rent, lags. If we take current properties for rent than the prices to buy are too high. There are still some properties with rental contracts from 2007/ early 2008 which would justify current valuations. How ever when the rental contract ends, they would not be able to ask the same amount. This works both ways in bull or bear market. In 2007, I had some friends who complained as their 2 year lease contract was up for re-negotiation, the landlords asked for a rental increase between 60-100%. Now how can that be healthy when their salaries did not increase that much? This left a bitter taste, some moved to east/west coast, and some actually left Singapore as the living-expense had become so high, it did not justify the disadvantages of living in a foreign country. This type of price instability is absolutely unhealthy for the long-term prospects of Singapore, imo. Yet, if you look at current property prices in Singapore, you would think that people are expecting for rents to recover to those levels /2007) in the next 2 years. How can rental increase of 30-60% within a short time frame be a healthy expectation? The economy wont recover at those percentages.

I do agree with your other points you made (except for the current generation and future generation being as determined and diligent as the past generation), but that does not mean it will play out that way. The future is unpredictable, and Singapore is so small that it can be easily toppled by outside factors, like war, pandemics, terrorism, revolution, trade blockade, bullying by a bigger country, etc... So in that sense it is over exposed to those factors compared to other countries. If something happens in Berlin, than those people can branch out to other areas in Germany, and the other cities in Germany can absorb the Berliners. If something happens in Singapore, well there is no alternative. So while Singapore is better at controlling the factors it can, it is over-exposed to factors it cannot controll. Remember, historically city-states have a short shell-life.

yes i agree on your rental arguement, i think esp the bigger units would be under much more pressure. The kind of money that use to float ard is just not coming back for a long time to come.

However that being said, i belief the prime locations suitable for families will still be sought after by locals and will be less susceptible to rental yield pressure in the long run, similar to logic of landed property, now it is a matter of an oversupply.

i'm little bit of a bull for longer term prospect in S'pore, some of the reasons
- governments effort to build S'pore into a lifestyle destination for work / live and play
- government investments in the various growth sectors within S'pore and outside
- her open policy towards professional expats
- the aggressive scholarship programs for bright students all over Asia with the main aim of offering them a citizenship
- But most importantly, we have two Asian giants growing robustly within our region and i see our rich Asian neighbours would be keen on priced assets either as investments or simply for their own use, making S'pore a second home.

We have all the platform laid out, the vision is there, so longer term, i'm positive.

I do agree that S'pore growth is very much exposed to external factors like whats happening now in this global eco. crisis, however, Asia being the locomotive of world's growth engine in time to come with the growing middle class in India & China will add stability to this region.

[jitkiat]

...the questions i have is this
1. will the younger generation of S'porean be able to tapped into the growth of the region and be able to do better than their predecesors, make more money, be better equipped and will they be hungry?

Just look at all the young people turning up at DBSS Simei Parc Lumiere launch recently to buy 5room HDB worth more than half a million dollars you get the idea. They are not just hungry, they are TOO HUNGRY (perhaps KIASU is a better word). Last year, one young couple bought a 675k Cityview@Boon Keng at a combined family income of 6k only.

[latour]

Just look at all the young people turning up at DBSS Simei Parc Lumiere launch recently to buy 5room HDB worth more than half a million dollars you get the idea. They are not just hungry, they are TOO HUNGRY (perhaps KIASU is a better word). Last year, one young couple bought a 675k Cityview@Boon Keng at a combined family income of 6k only.

Waw... 675k with 6k hh-income hero manz... I know of a friend whom with hh-income of 18K buy a 900k 99LH condo also think think think and think.

[proud owner]

Waw... 675k with 6k hh-income hero manz... I know of a friend whom with hh-income of 18K buy a 900k 99LH condo also think think think and think.

wow so garang ? whole family of Men ? all got balls

[jitkiat]

Waw... 675k with 6k hh-income hero manz... I know of a friend whom with hh-income of 18K buy a 900k 99LH condo also think think think and think.

AFTER several failed attempts to get a new HDB flat, he was ready to give up and pay more for a private property.

Then, home-buyer MR TAN had a stroke of luck - or so it seemed. He found a new five-room HDB flat at City View @ Boon Keng.

This is the second public housing project to be built and sold by private developers. Hoi Hup Sunway Development is the developer.

Even though it cost a whopping $675,000 - not cheap for a new HDB flat - Mr Tan was okay with the price.

But his happiness was short-lived.

The 30-year-old and his fiancee, who are getting married next year, found out that they may not be able to finance their new home.

PENALTY

They are having difficulties securing a home loan and may even have to pay a penalty to give up the flat.

The couple's combined income is about $6,000, said Mr Tan.

They put up an option fee of about $33,000 for the flat two months ago.

But the Housing Development Board (HDB) rejected their loan application for 90 per cent of the cost of the flat last month.

This is because Mr Tan's director's fee can't be used for credit assessment, and his fiancee didn't have the pre-requisite three months of continuous employment for the same company.

Mr Tan runs a serviced office business.

His fiancee quit her last job in February and started work as a personal assistant last month.

Upon appeal, HDB said they will be willing to give the couple a loan of about $150,000, but rest will have to be paid in cash and out of their CPF.

Mr Tan said: 'Where can I find so much money to pay for the flat?

'We were very happy when we managed to get the flat. But with this loan issue, I really doubt we can afford to get the place now.'

The 714-unit condo-like development will be ready only in2011.

Mr Tan said he and his fiancee had tried balloting for a new flat three times last year.

On two occasions, the flats they wanted were already taken up. On another occasion, they didn't get a chance to choose a unit because all were taken up.

Mr Tan said he had approached a few banks for loans, but the maximum they would lend was about $400,000, still about $270,000 shy of the purchase price.

To make matters worse, if he defaults on this flat purchase, he'll have to pay a penalty of about $8,000 to the developer. This is about 25 per cent of the option fee which he paid for the place.

'The developer said that since the sale didn't go through, we have to forfeit part of the option fee,' he said.

TEARS

'My girlfriend is so upset that she cried and lost so much sleep over the penalty. She said she has never lost so much money before in her life.'

The couple had borrowed the money to pay the option fee from their relatives.
=========================================================
The gal actually cried over 8k penalty but it may be a blessing in disguise that they can buy a cheaper HDB now .. somemore borrow to pay the option fee ...

[teddybear]

Very strange. What does this episode means?
(1) Firstly, if they have bought a private property at the same price, they would most likely be able to get 80% ($540k) financing from banks.
(2) Secondly, if they have bought a private property, they would have known that they need at least 20% downpayment and prepared for that.
(3) Thirdly, even $33k they need to borrow, doesn't seem like some household that really earns $6k per month - or they are big spenders and spend almost the $6k every month with no savings?

AFTER several failed attempts to get a new HDB flat, he was ready to give up and pay more for a private property.

Then, home-buyer MR TAN had a stroke of luck - or so it seemed. He found a new five-room HDB flat at City View @ Boon Keng.

This is the second public housing project to be built and sold by private developers. Hoi Hup Sunway Development is the developer.

Even though it cost a whopping $675,000 - not cheap for a new HDB flat - Mr Tan was okay with the price.

But his happiness was short-lived.

The 30-year-old and his fiancee, who are getting married next year, found out that they may not be able to finance their new home.

PENALTY

They are having difficulties securing a home loan and may even have to pay a penalty to give up the flat.

The couple's combined income is about $6,000, said Mr Tan.

They put up an option fee of about $33,000 for the flat two months ago.

But the Housing Development Board (HDB) rejected their loan application for 90 per cent of the cost of the flat last month.

This is because Mr Tan's director's fee can't be used for credit assessment, and his fiancee didn't have the pre-requisite three months of continuous employment for the same company.

Mr Tan runs a serviced office business.

His fiancee quit her last job in February and started work as a personal assistant last month.

Upon appeal, HDB said they will be willing to give the couple a loan of about $150,000, but rest will have to be paid in cash and out of their CPF.

Mr Tan said: 'Where can I find so much money to pay for the flat?

'We were very happy when we managed to get the flat. But with this loan issue, I really doubt we can afford to get the place now.'

The 714-unit condo-like development will be ready only in2011.

Mr Tan said he and his fiancee had tried balloting for a new flat three times last year.

On two occasions, the flats they wanted were already taken up. On another occasion, they didn't get a chance to choose a unit because all were taken up.

Mr Tan said he had approached a few banks for loans, but the maximum they would lend was about $400,000, still about $270,000 shy of the purchase price.

To make matters worse, if he defaults on this flat purchase, he'll have to pay a penalty of about $8,000 to the developer. This is about 25 per cent of the option fee which he paid for the place.

'The developer said that since the sale didn't go through, we have to forfeit part of the option fee,' he said.

TEARS

'My girlfriend is so upset that she cried and lost so much sleep over the penalty. She said she has never lost so much money before in her life.'

The couple had borrowed the money to pay the option fee from their relatives.
=========================================================
The gal actually cried over 8k penalty but it may be a blessing in disguise that they can buy a cheaper HDB now .. somemore borrow to pay the option fee ...

[jitkiat]

Very strange. What does this episode means?
(1) Firstly, if they have bought a private property at the same price, they would most likely be able to get 80% ($540k) financing from banks.
(2) Secondly, if they have bought a private property, they would have known that they need at least 20% downpayment and prepared for that.
(3) Thirdly, even $33k they need to borrow, doesn't seem like some household that really earns $6k per month - or they are big spenders and spend almost the $6k every month with no savings?

1. At that time (2008), guess even a 2-bedroom mass market condo is above 700k. And they are first time buyers, may be they can get 30-40k CPF grant (675-40 = 625k). That's why they never consider mass market condo. Even minus off the grant, I guess even the bank thinks the CityView is overpriced.

2. This DBSS thingy just encourage young couple to take excessive amount of risk ... and guess what, bcos DBSS flat is already renovated, the buyers are so happy that they can get an HDB loan for 2.6% interest which includes the renovation. they dun mind borrowing huge loan from HDB. What I dun understand is why they never consider resale HDB flat.

3. For DBSS Simei Parc Lumiere where the price is > 500k, you can actually buy a smaller 10 year old Simei Green condo next door

[Allthepies]

1. At that time (2008), guess even a 2-bedroom mass market condo is above 700k. And they are first time buyers, may be they can get 30-40k CPF grant (675-40 = 625k). That's why they never consider mass market condo. Even minus off the grant, I guess even the bank thinks the CityView is overpriced.

2. This DBSS thingy just encourage young couple to take excessive amount of risk ... and guess what, bcos DBSS flat is already renovated, the buyers are so happy that they can get an HDB loan for 2.6% interest which includes the renovation. they dun mind borrowing huge loan from HDB. What I dun understand is why they never consider resale HDB flat.

3. For DBSS Simei Parc Lumiere where the price is > 500k, you can actually buy a smaller 10 year old Simei Green condo next door

I don't quite understand Point No 3. Why would you prefer to pay an equivalent amount to buy a 10 year old LEASE-HOLD condo, and somemore the size is smaller? Doesn't it seems like a worse deal compared to a brand new bigger renovated HDB (with new 99 years of lease) paying only 2.6% interest? Doesn't make much sense to me .

[jitkiat]

I don't quite understand Point No 3. Why would you prefer to pay an equivalent amount to buy a 10 year old LEASE-HOLD condo, and somemore the size is smaller? Doesn't it seems like a worse deal compared to a brand new bigger renovated HDB (with new 99 years of lease) paying only 2.6% interest? Doesn't make much sense to me .

Just an option especially if you dun get the grant. The condo does have some advantages e.g. condo can sell anytime, can oso sell to foreigner or rent out easily bcos of the facilities. And the 5room HDB at the DBSS is not really that big, the total balcony + planter area is already more than 10sqm, and then they have this stupid clothes drying area (which is enough probably to hang clothes for one person yet it takes out space)

[jitkiat]

107sqm 5 room HDB with 2 balconies and 1 planter selling for 520k up ?!

[teddybear]

Wah Balcony so big! "5-room" HDB? 107 sqm is really the size of an ordinary old 4-room HDB! A 107 sqm HDB flat with so big balcony have to pay more than $500k? Wah, inflation so high already?

107sqm 5 room HDB with 2 balconies and 1 planter selling for 520k up ?!

[ahlipp]

1. At that time (2008), guess even a 2-bedroom mass market condo is above 700k. And they are first time buyers, may be they can get 30-40k CPF grant (675-40 = 625k). That's why they never consider mass market condo. Even minus off the grant, I guess even the bank thinks the CityView is overpriced.

2. This DBSS thingy just encourage young couple to take excessive amount of risk ... and guess what, bcos DBSS flat is already renovated, the buyers are so happy that they can get an HDB loan for 2.6% interest which includes the renovation. they dun mind borrowing huge loan from HDB. What I dun understand is why they never consider resale HDB flat.

3. For DBSS Simei Parc Lumiere where the price is > 500k, you can actually buy a smaller 10 year old Simei Green condo next door

well, like you said Jitkiat... "Young Couple"... lifestyle comes before practicality. Anyway, perhaps the concept of "Condo" style HDB is still new that ppl think it's worth to pay that much. Frankly those built-in fittings is not worth that much more premium!

i rather use 50K to do an A1 decor and pay 300-400K for a good 4rm flat, makes much more sense.

Imagine... 6k salary...will need how long to pay for 675K, basically will have little savings if got kids... got car... got to give parent's allowance, all the home bills etc... no logic...

[dmonddd]

there are genuine buyers around this price range.....$400k-700k looking at young couples' income nowadays and those who wish to upgrade.
demand will however be dripping soon once excess supply comes in by Q3 2009 with more projects TOP'd

3 months after TOP will see positive/negative effects kick in. let's use RG as case study....

[oxboy99]

The rule is simple: Don't buy what you can't pay for.

You should have enough money (savings or assets, etc) to pay for what you want to buy.

For instance, if you want to buy a $750K home, make sure you have that or more in your savings, assets, etc. Then go take out a loan for so that you don't lose that whole chunk in one go as well as fight inflation.

NEVER try to buy something that you can't pay off cause at any point in time the bank can callback the loan and ask you to pay $X amount to top up the loan for security especially in recession or bad times.

Just because you can get a loan due to your salary doesn't mean you should. What if you become jobless or hospitalized? How will you pay your loan then? If you follow this rule, you can still pay it off...

The rule is easier said than followed! Look at the people who have run up credit card debts.

[Allthepies]

107sqm 5 room HDB with 2 balconies and 1 planter selling for 520k up ?!

oh i see, really waste of space to have 2 big balconies

[Douk]

in this case, 80% of singaporean should be staying in 3rm hdb flat.

The rule is simple: Don't buy what you can't pay for.

You should have enough money (savings or assets, etc) to pay for what you want to buy.

For instance, if you want to buy a $750K home, make sure you have that or more in your savings, assets, etc. Then go take out a loan for so that you don't lose that whole chunk in one go as well as fight inflation.

NEVER try to buy something that you can't pay off cause at any point in time the bank can callback the loan and ask you to pay $X amount to top up the loan for security especially in recession or bad times.

Just because you can get a loan due to your salary doesn't mean you should. What if you become jobless or hospitalized? How will you pay your loan then? If you follow this rule, you can still pay it off...

The rule is easier said than followed! Look at the people who have run up credit card debts.

[pweesng]

I do not agree with this. Buying a property has a component of investments and leveraging...

give you an example... i was staying in a 4 room flat for many years of my life... we figured out we didn't have money to upgrade to a private property anyway... so we were quite contented. Of course even at that time i did not have enough to pay off my 4 room HDB, in my bank or CPF.

however, if i hadn't still go ahead and buy that 4 room HDB, i woudl never have enough for a private property.

It was because i took that bet and bought that HDB flat, which i later sold for and extra 100K+ profit, coupled with my savings that i could afford a private property.

Of course, i did not have enough to pay of that private property.

In 2007, i sold the private property and doubled my money.

Now i could use the profit and got another 4 room HDB flate without loan, and i luckily still can afford a small private apartment that we put out for rental and service the installment.

Now look back... if i had only bought what i could afford when i was looking at my first HDB, i would only be able to afford a 1 bed room... after all the boom over the last few cycles... i would probably be still stuck in my one room flat....

I believe in life, we shoudl always leverage on meaningful things... like property... or stocks... jsut make sure it is not too big a bite... and don't leverage on stupid things like cars and KTVs...

The rule is simple: Don't buy what you can't pay for.

You should have enough money (savings or assets, etc) to pay for what you want to buy.

For instance, if you want to buy a $750K home, make sure you have that or more in your savings, assets, etc. Then go take out a loan for so that you don't lose that whole chunk in one go as well as fight inflation.

NEVER try to buy something that you can't pay off cause at any point in time the bank can callback the loan and ask you to pay $X amount to top up the loan for security especially in recession or bad times.

Just because you can get a loan due to your salary doesn't mean you should. What if you become jobless or hospitalized? How will you pay your loan then? If you follow this rule, you can still pay it off...

The rule is easier said than followed! Look at the people who have run up credit card debts.

[denverusa]

Property investment is a combination of leveraging, risk taking, prudence and luck. It can be a good hedge against inflation. there are many people who get mighty rich becos of property and there are people who lose their only home becos of poor luck/ poor advice/poor calculation.

The most important thing is to ask around more, know how to do your own calculation, dont borrow till u lose sleep and buy freehold and prime if u can !! u can start small when the time is right and then slowly build up, else inflation will one day make it even more out of reach.

[jitkiat]

I do not agree with this. Buying a property has a component of investments and leveraging...

give you an example... i was staying in a 4 room flat for many years of my life... we figured out we didn't have money to upgrade to a private property anyway... so we were quite contented. Of course even at that time i did not have enough to pay off my 4 room HDB, in my bank or CPF.

however, if i hadn't still go ahead and buy that 4 room HDB, i woudl never have enough for a private property.

It was because i took that bet and bought that HDB flat, which i later sold for and extra 100K+ profit, coupled with my savings that i could afford a private property.

Of course, i did not have enough to pay of that private property.

In 2007, i sold the private property and doubled my money.

Now i could use the profit and got another 4 room HDB flate without loan, and i luckily still can afford a small private apartment that we put out for rental and service the installment.

Now look back... if i had only bought what i could afford when i was looking at my first HDB, i would only be able to afford a 1 bed room... after all the boom over the last few cycles... i would probably be still stuck in my one room flat....

I believe in life, we shoudl always leverage on meaningful things... like property... or stocks... jsut make sure it is not too big a bite... and don't leverage on stupid things like cars and KTVs...

Wah, you buy/sell so frequently (> 6 times?), you must have contributed a lot of stamp fees to IRAS and commision to agent

[pweesng]

Wah, you buy/sell so frequently (> 6 times?), you must have contributed a lot of stamp fees to IRAS and commision to agent

i am a advocater for sharing profits .

as long as i am in the money, i don't mind letting others make some... what more, i have been taught since a young age, to pay to caesar what belongs to him.

haha haha

[strawberry]

Hi, is the Luxe service apts? Is it for sale? thank u

My guess is that till now, Handy Road has never, or very little, been on the radar as far as residential properties are concerned.

Not counting Luxe and Cathay Residences which are svc apts, Nomu is the first residential to be ready along this stretch, and I think 50 units are not big enough to make a big impact. So prices are more or less 'influenced' by Mt Sophia properties, albeit at a higher valuation.

I believe there are only 2 other URA plots along Handy Road. One is Allgreen's and the other yet to be released by URA. So we shall see how the market then determine their prices, which in effect will affect Nomu's. Cos the market is the market. And Mr Market determines the prices, not us.

Above are just my opinions, ok?

[strawberry]

It seems that this project is finally getting there despite all the delays and there s still lots to do but it s slowly appearing n looking good.
Anyone knows about The Luxe which is the project next door and also seems that Allgreen will be launching soon in front of 8@mount sophia.
What do u guys think of NOMU?

Is the Luxe residential or service apartment?