Property Market Sentiments

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http://www.businesstimes.com.sg/real-est...it-depends

Renting beats buying a home? It depends
By
Lee Meixianleemx@sph.com.sg@LeeMeixianBT
bthdbflat1011.jpg In Singapore, home prices have fallen faster than rentals, since loan curbs (that is, the total debt servicing ratio, or TDSR) kicked in. PHOTO: SPH
10 Nov5:50 AM
Singapore

NEW research says it may be cheaper to rent than to buy a home in Singapore, if residential property prices here continue their current moribund trend. But does this necessarily mean homebuyers here are better off switching to this option? And is property now necessarily the
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http://www.businesstimes.com.sg/real-est...sing-rents

RENTAL HEADWINDS
Supply glut, tightening expat demand depressing rents
Yishun-Sembawang area the worst affected while Bishan-Ang Mo Kio bucks trend

By
Lee Meixianleemx@sph.com.sg@LeeMeixianBT
sembahwangpri1011.jpg The private residential leasing market has grown steadily weaker from the previous year in most districts of Singapore, with unpopular suburban locations the hardest hit. PHOTO: SPH
10 Nov5:50 AM
Singapore

THE private residential leasing market has grown steadily weaker from the previous year in most districts of Singapore, with unpopular suburban locations the hardest hit.

And no reprieve is in sight as latest Q3 figures show non-landed private home rentals sliding another
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http://www.businesstimes.com.sg/real-est...-scenarios

Rents squeezed by new demand-supply scenarios
By
Kalpana Rashiwalakalpana@sph.com.sg@KalpanaBT
hdbcondo12.jpg RENTALS for private condos/apartments as well as HDB flats continued to come under presure in October, latest SRX flash estimates show. PHOTO: ST
13 Nov5:50 AM
Singapore

RENTALS for private condos/apartments as well as HDB flats continued to come under presure in October, latest SRX flash estimates show.

Market watchers blame this on the tightened inflow of foreign talent crimping leasing demand on the one hand and a ramp-up in private home completions. Moreover, HDB upgraders are choosing to put their flats up for rent after they have moved into their new private condos given current weak buying demand for HDB resale flats due to the 30 per cent mortgage service ratio cap.

This scenario is expected to continue in the near future, with more than 20,000 private homes forecast to be completed for each of the next two years - mostly in the suburbs, note industry players. The nearly 18,000 private homes estimated for completion this year reflect a substantial increase from 13,150 units last year and 10,329 units in 2012.

Flash estimates for October 2014 released on Wednesday show that since December last year, SRX's overall rental index for non-landed private homes has eased 3.9 per cent, a bigger drop compared with the 2.5 per cent fall for the whole of last year.

In the suburbs or Outside Central Region (OCR), the rent drop so far this year has been 5.5 per cent, more than double the 2.5 per cent decline last year.

ERA Realty's key executive officer Eugene Lim noted that almost 60 per cent of the 18,000 private homes expected to be completed this year are in surburban areas.

Agreeing, R'ST Research director Ong Kah Seng added: "Expats, especially those from Western countries, have not massively decentralised to rent suburban condos. A typical mass-market project has at least 300 units and is crowded on weekends. These expats prefer city-fringe or smallish developments that offer a quieter environment; so tenant demand for suburban condos tends to be mainly from Asian professionals who are cost savvy and open to even renting rooms in a HDB flat."

Going by SRX's flash estimates, the rent deterioration has been even more pronounced in Core Central Region (CCR), the so-called high end segment; so far this year, the subindex for the region has shrunk 4.8 per cent - contrasting with an increase of 1.3 per cent in 2013.

In the city fringe, or Rest of Central Region (RCR), SRX's October 2014 flash estimate was 2.8 per cent lower than December 2013. Last year the subindex slipped 3.8 per cent.

For HDB rents, SRX's flash estimate for October was 1.7 per cent below last December. Full year 2013, the index declined 2 per cent.

R'ST Research's Mr Ong estimates that HDB rents will contract by up to 4 per cent for the whole of this year and weaken further by as much as 8 per cent in 2015. "Rents of HDB flats will better match tenants' affordability by the end of 2015," he argued.

For private condo and apartment rents, Mr Ong estimates a full-year 2014 drop of around 7 per cent, to be followed by a further decline of up to 10 per cent next year. "The fall will be most pronounced in Core Central Region as companies are cutting back on housing allowances. For Outside Central Region, the drop will be due to increased completions of sububurban condos," he said.

Nicholas Mak, executive director at SLP International, argues that the OCR may face the greatest downward pressure on rents given that this is the segment with the biggest private home completions over the next few years. On the whole, notes Mr Mak, "Without a substantial increase in the population of foreigners boosting leasing demand in both the private and HDB housing markets, rents (in the two segments) are likely to continue to slip gradually in 2015".

ERA's Mr Lim said that competition for tenants among suburban private property owners who are lowering their rents for family-sized units to S$2,500-3,500 a month are drawing tenants away from the HDB rental market.

While he expects this trend to continue given that the bulk of newly completed private homes are in suburban locations, Mr Lim reckons that the "HDB rental market will continue to have firm support from tenants with monthly rental budgets of S$2,500 or lower".

For October itself, the SRX overall non-landed private home rental index dipped 0.9 per cent compared to September, marking the ninth consecutive monthly fall. The October flash estimate reflects a year-on-year contraction of 5.3 per cent.

Month-on-month, the subindices for CCR, RCR and OCR slipped 0.7 per cent, 1.1 per cent and 1.5 per cent respectively.

Leasing deals were entered into for an estimated 3,208 non-landed private homes last month, a slight dip from 3,250 units in September. Year-on-year, the rental volume in October 2014 was up 11.8 per cent.

SRX's rental index for HDB flats shed 0.5 per cent month-on-month in October. Year-on-year, the drop was 2.1 per cent.

Rentals of four-room, five-room and executive flats registered respective month-on-month decreases of 0.8 per cent, 0.2 per cent and 1.4 per cent. On the other hand, three-room flat rentals inched up 0.2 per cent.

SRX estimates rental contracts were inked for 1,559 HDB flats last month, up 0.8 per cent from 1,546 units in September. Year-on-year rental volume in October 2014 was down 2 per cent.
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This guy seems to be a lousy loser. Sang the same song again.

http://www.stproperty.sg/articles-proper...t/a/188366
CDL warns of fire sales in high-end market

CITY Developments Ltd (CDL) executive chairman Kwek Leng Beng has warned that the current subdued state of the Singapore housing market particularly in the high-end segment, if it continues, could ignite fire sales.

Mr Kwek made this point in CDL's third quarter results statement. CDL posted net earnings of S$127.21 million for the third quarter ended Sept 30, 2014, up 4.7 per cent from the same year-ago period. Revenue rose 58.3 per cent to S$1.32 billion.
“risk comes from not knowing what you’re doing.”
I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.
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With so many people sitting about waiting for a bargain... think any fire will be out so quick it'll be classified as a spark
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(14-11-2014, 07:16 PM)cfa Wrote: This guy seems to be a lousy loser. Sang the same song again.

http://www.stproperty.sg/articles-proper...t/a/188366
CDL warns of fire sales in high-end market

CITY Developments Ltd (CDL) executive chairman Kwek Leng Beng has warned that the current subdued state of the Singapore housing market particularly in the high-end segment, if it continues, could ignite fire sales.

Mr Kwek made this point in CDL's third quarter results statement. CDL posted net earnings of S$127.21 million for the third quarter ended Sept 30, 2014, up 4.7 per cent from the same year-ago period. Revenue rose 58.3 per cent to S$1.32 billion.

Interestingly, CDL is one of the rare few developers with share price trading above its NAV. I still think it is too overvalued when comparing with many other property developers.
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Hi safetyfirst,

I can offer an explanation to why some developers trade above their book value; and that is because they hold valuable land bank bought in the years before the 90s property boom and recorded at such cost on their B/S. For CDL, it bought a large piece of land at pasir ris for a few tens of Mil around the early 90s. It was recently subdivided into 5 CDL projects and CDL is selling them off with the first two TOP. The revenue from these 5 condo projects are in the billion figures and probably half has been recognized. Bukit Sembawang is another example. It holds freehold land in the vicinity of AMK/YCK and I believe Bukit sembawang values them at the cost of the early years of Singapore when the family was still doing rubber plantation business. There are a lot of untapped valuable land banks in such companies unlike the sovereign linked developers who have to develop their land bank quickly due to reasons you and I can infer/aware of, but can't post here
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(14-11-2014, 09:21 PM)CY09 Wrote: Hi safetyfirst,

I can offer an explanation to why some developers trade above their book value; and that is because they hold valuable land bank bought in the years before the 90s property boom and recorded at such cost on their B/S. For CDL, it bought a large piece of land at pasir ris for a few tens of Mil around the early 90s. It was recently subdivided into 5 CDL projects and CDL is selling them off with the first two TOP. The revenue from these 5 condo projects are in the billion figures and probably half has been recognized. Bukit Sembawang is another example. It holds freehold land in the vicinity of AMK/YCK and I believe Bukit sembawang values them at the cost of the early years of Singapore when the family was still doing rubber plantation business. There are a lot of untapped valuable land banks in such companies unlike the sovereign linked developers who have to develop their land bank quickly due to reasons you and I can infer/aware of, but can't post here

I think that Pasir Ris farmland was bought before the 90s. When Pasir Ris New Town first started. IIRC.
"... but quitting while you're ahead is not the same as quitting." - Quote from the movie American Gangster
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(15-11-2014, 08:19 AM)opmi Wrote:
(14-11-2014, 09:21 PM)CY09 Wrote: Hi safetyfirst,

I can offer an explanation to why some developers trade above their book value; and that is because they hold valuable land bank bought in the years before the 90s property boom and recorded at such cost on their B/S. For CDL, it bought a large piece of land at pasir ris for a few tens of Mil around the early 90s. It was recently subdivided into 5 CDL projects and CDL is selling them off with the first two TOP. The revenue from these 5 condo projects are in the billion figures and probably half has been recognized. Bukit Sembawang is another example. It holds freehold land in the vicinity of AMK/YCK and I believe Bukit sembawang values them at the cost of the early years of Singapore when the family was still doing rubber plantation business. There are a lot of untapped valuable land banks in such companies unlike the sovereign linked developers who have to develop their land bank quickly due to reasons you and I can infer/aware of, but can't post here

I think that Pasir Ris farmland was bought before the 90s. When Pasir Ris New Town first started. IIRC.

Due to the foresight of Kwek Hong Png who bought on the back of HDB plans for a new township when it wasn't in existence...
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(14-11-2014, 09:21 PM)CY09 Wrote: Hi safetyfirst,

I can offer an explanation to why some developers trade above their book value; and that is because they hold valuable land bank bought in the years before the 90s property boom and recorded at such cost on their B/S. For CDL, it bought a large piece of land at pasir ris for a few tens of Mil around the early 90s. It was recently subdivided into 5 CDL projects and CDL is selling them off with the first two TOP. The revenue from these 5 condo projects are in the billion figures and probably half has been recognized. Bukit Sembawang is another example. It holds freehold land in the vicinity of AMK/YCK and I believe Bukit sembawang values them at the cost of the early years of Singapore when the family was still doing rubber plantation business. There are a lot of untapped valuable land banks in such companies unlike the sovereign linked developers who have to develop their land bank quickly due to reasons you and I can infer/aware of, but can't post here

(15-11-2014, 08:19 AM)opmi Wrote:
(14-11-2014, 09:21 PM)CY09 Wrote: Hi safetyfirst,

I can offer an explanation to why some developers trade above their book value; and that is because they hold valuable land bank bought in the years before the 90s property boom and recorded at such cost on their B/S. For CDL, it bought a large piece of land at pasir ris for a few tens of Mil around the early 90s. It was recently subdivided into 5 CDL projects and CDL is selling them off with the first two TOP. The revenue from these 5 condo projects are in the billion figures and probably half has been recognized. Bukit Sembawang is another example. It holds freehold land in the vicinity of AMK/YCK and I believe Bukit sembawang values them at the cost of the early years of Singapore when the family was still doing rubber plantation business. There are a lot of untapped valuable land banks in such companies unlike the sovereign linked developers who have to develop their land bank quickly due to reasons you and I can infer/aware of, but can't post here

I think that Pasir Ris farmland was bought before the 90s. When Pasir Ris New Town first started. IIRC.

So is there accounting consistency in this across developer on mark to market? Just curious. Example reits do value their property annually.

Just my Diary
corylogics.blogspot.com/


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