Singapore home prices drop in Q4

[Tiggerbee]

Buying a property now is like buying a hot stock that has already peaked. The bid and offer price gap will widen as transaction vol increases in the secondary market. And when the selling vol increases, more people will be willing to transact at lower prices.

Ipos (new launches) have to be priced lower to attract more investors or buyers. With the lock up periods of past ipos coming up (sellers ABSD), there will be more people eager to sell their stocks (properties) invested in 2010-2012. I foresee that the transaction vol will pick up between 2H 2014 to 2015 when prices will fall at a faster pace.

tigerbee buddy, what is that lock up period?

I made a typo error in my earlier mail. I was referring to SSD (sellers' stamp duty). You can find the details on the SSD measures from these 2 links. The SSD penalties act as a form of "self imposed lock up periods" on the buyers.

http://www.iras.gov.sg/irashome/page04.aspx?id=10212
http://www.iras.gov.sg/irasHome/page04.aspx?id=10202

The SSD measure is a double edge sword, it deter shorter term speculators who are in for a quick buck but also deter investors from selling. Investors who bought properties after Jan 2011 are not likely to sell their properties before Jan 2014 to avoid the 8-16% SSD penalty. That's why if you check the URA websites for those projects launched after Jan 2011, you will hardly see any transactions in the secondary market. However, these potential sellers in the 4th year after their purchase are already sitting on unrealized capital gains (as prices had risen about 40% since Jan 2011) might be more willing to take the 4% hit when the property prices decline accelerate. This will increase the number of available for sale properties in the secondary market and exert more pressure on new launches.

The new SSD measure had infact held back potential sellers who had purchased their properties after Jan 2011 and create a pent up selling supply of properties that will start to increase at a faster pace after Jan 2014. And it's not just new launches purchased after Jan 2011, we also need to include the re-sale properties as well. So there's gonna be a lot more available for sale properties from Jan 2014 onwards.

[Freenasi]

Is upgrading a need or a want??? Coz that is the main driver of mass market condos sales.

The mass market generally is well supported by the high HDB prices. I think that many people use the rental income to pay the monthly instalment and some of them sold their HDB at high prices thus upgrade to condo around their estates. Having said that, the mass mkt/HDB prices are closely linked. Thus it also matters how many PRs/foreigners are buying into this cat. If the highly paid are attracted here, there will be mroe funds to support the prices.

[lvpierre]

Price has not rise 40% from jan 2011. Mass market, there is some increase, but not 40%. In fact, some buyers (in 2011) are making a unrealized loss. If u want to know, I can name it.

Buying a property now is like buying a hot stock that has already peaked. The bid and offer price gap will widen as transaction vol increases in the secondary market. And when the selling vol increases, more people will be willing to transact at lower prices.

Ipos (new launches) have to be priced lower to attract more investors or buyers. With the lock up periods of past ipos coming up (sellers ABSD), there will be more people eager to sell their stocks (properties) invested in 2010-2012. I foresee that the transaction vol will pick up between 2H 2014 to 2015 when prices will fall at a faster pace.

tigerbee buddy, what is that lock up period?

I made a typo error in my earlier mail. I was referring to SSD (sellers' stamp duty). You can find the details on the SSD measures from these 2 links. The SSD penalties act as a form of "self imposed lock up periods" on the buyers.

http://www.iras.gov.sg/irashome/page04.aspx?id=10212
http://www.iras.gov.sg/irasHome/page04.aspx?id=10202

The SSD measure is a double edge sword, it deter shorter term speculators who are in for a quick buck but also deter investors from selling. Investors who bought properties after Jan 2011 are not likely to sell their properties before Jan 2014 to avoid the 8-16% SSD penalty. That's why if you check the URA websites for those projects launched after Jan 2011, you will hardly see any transactions in the secondary market. However, these potential sellers in the 4th year after their purchase are already sitting on unrealized capital gains (as prices had risen about 40% since Jan 2011) might be more willing to take the 4% hit when the property prices decline accelerate. This will increase the number of available for sale properties in the secondary market and exert more pressure on new launches.

The new SSD measure had infact held back potential sellers who had purchased their properties after Jan 2011 and create a pent up selling supply of properties that will start to increase at a faster pace after Jan 2014. And it's not just new launches purchased after Jan 2011, we also need to include the re-sale properties as well. So there's gonna be a lot more available for sale properties from Jan 2014 onwards.

[opmi]

the 'stay in condos/rent out HDB' pool of buyers will get smaller over time.
And this method is already used by too many people. They are basically leveraging
and it makes senses when interest rates is low.

the thing with property ownership is about loan and downpayment. highly paid PR/foreigners, still need hefty downpayment.
When you said 'mroe funds', you mean some money + huge loan, i assume.

When financing gets harder, property market 'lao hong' (out of gas). the 'greater fool' already got no loan to buy.

[Tiggerbee]

Price has not rise 40% from jan 2011. Mass market, there is some increase, but not 40%. In fact, some buyers (in 2011) are making a unrealized loss. If u want to know, I can name it.

Buying a property now is like buying a hot stock that has already peaked. The bid and offer price gap will widen as transaction vol increases in the secondary market. And when the selling vol increases, more people will be willing to transact at lower prices.

Ipos (new launches) have to be priced lower to attract more investors or buyers. With the lock up periods of past ipos coming up (sellers ABSD), there will be more people eager to sell their stocks (properties) invested in 2010-2012. I foresee that the transaction vol will pick up between 2H 2014 to 2015 when prices will fall at a faster pace.

tigerbee buddy, what is that lock up period?

I made a typo error in my earlier mail. I was referring to SSD (sellers' stamp duty). You can find the details on the SSD measures from these 2 links. The SSD penalties act as a form of "self imposed lock up periods" on the buyers.

http://www.iras.gov.sg/irashome/page04.aspx?id=10212
http://www.iras.gov.sg/irasHome/page04.aspx?id=10202

The SSD measure is a double edge sword, it deter shorter term speculators who are in for a quick buck but also deter investors from selling. Investors who bought properties after Jan 2011 are not likely to sell their properties before Jan 2014 to avoid the 8-16% SSD penalty. That's why if you check the URA websites for those projects launched after Jan 2011, you will hardly see any transactions in the secondary market. However, these potential sellers in the 4th year after their purchase are already sitting on unrealized capital gains (as prices had risen about 40% since Jan 2011) might be more willing to take the 4% hit when the property prices decline accelerate. This will increase the number of available for sale properties in the secondary market and exert more pressure on new launches.

The new SSD measure had infact held back potential sellers who had purchased their properties after Jan 2011 and create a pent up selling supply of properties that will start to increase at a faster pace after Jan 2014. And it's not just new launches purchased after Jan 2011, we also need to include the re-sale properties as well. So there's gonna be a lot more available for sale properties from Jan 2014 onwards.

Agreed that prices on average may not have appreciated 40%. I was quoting the 40% appreciation in prices in RCR, which saw the biggest jump among all. I myself bought a property in the RCR in mid 2009 and sold it in Jan 2013 with about 70% gain. When I visited the show flat for Watebank in Dakota in Feb 2010, it was selling for about 1080 psf. Based on the latest transaction data, units were sold at about 1500 psf. If the buyers you mentioned had bought the right property, they should have significant unrealized profits. Another project is 8@Woodleigh in RCR segment. Units were transacted at about 1000 psf in Jan 2011. Latest transacted prices were about 1400 psf.

Even in the RCR segment, prices had appreciated about 30%. For Double Bay in RCR segment, prices were about 880 psf in Jan 2011. Latest transacted prices were about 1150 psf, which is still about 30% upside. The key to maximizing your capital gains is to buy a property which is near the mrt and close to nearby amenities.

[chialc88]

Singapore condo dream was an nightmare from 1997 to 2005!!!

Yes, quite scary actually.
Luck must play a big part for those who is able to catch the bottom and ride the wave.

TDSR structure/framework is Long Term and it will stay.
However, the 60% is too lax... aka unlikely it will stays at 60%.
I am quite sure Tharman will tighten it...
I'm just not certain when...

Singapore condo dream was an nightmare from 1997 to 2005

Pianist wrote: is buying one for renting out for passive income a need?

For those who had done it and had handsomely rewarded with monthly cashflow... this type of experience... if can be repeated...
I would says that it's definitely qualify as a need.

For those who is still look-see, look-see aka don't know what happen, then there is no need. (because they had been waiting for so many years, so just continue to wait law).

I had a need for speed.

[Temperament]

Singapore condo dream was an nightmare from 1997 to 2005!!!

Yes, quite scary actually.
Luck must play a big part for those who is able to catch the bottom and ride the wave.

TDSR structure/framework is Long Term and it will stay.
However, the 60% is too lax... aka unlikely it will stays at 60%.
I am quite sure Tharman will tighten it...
I'm just not certain when...

Singapore condo dream was an nightmare from 1997 to 2005

Pianist wrote: is buying one for renting out for passive income a need?

For those who had done it and had handsomely rewarded with monthly cashflow... this type of experience... if can be repeated...
I would says that it's definitely qualify as a need.

For those who is still look-see, look-see aka don't know what happen, then there is no need. (because they had been waiting for so many years, so just continue to wait law).

I had a need for speed.

It may be a need for some of us who can barely retire in Singapore.
Dividend Income from stock investment is better if portfolio is large enough.
The best is can afford to have both and then some.
Shalom.

[chialc88]

T,
Agree that ideally, we should have both.

The current challenge is there are too many -ve news/sentiments on buying properties.

Big pie now I'm seeing is by rich parents investing for their adult/teen children.

While waiting for the child to take over the new properties, they don't mind the hassle of renting it out and get some real cash.

For those who had never brought a property for rental yield, they will be scare by the current market sentiments and status quo.

My thinking process tells me that GOV will continue to curb the property market (because it's not dropping).

The real sigh of property market crash will be when the GOV stops the curb....

YMMV.

Enjoy ... What a beautiful weekend...

[pianist]

The mass market generally is well supported by the high HDB prices. I think that many people use the rental income to pay the monthly instalment and some of them sold their HDB at high prices thus upgrade to condo around their estates. Having said that, the mass mkt/HDB prices are closely linked. Thus it also matters how many PRs/foreigners are buying into this cat. If the highly paid are attracted here, there will be mroe funds to support the prices.

the seemingly high hdb prices are also cushioned by the mass market prices..ok to view it this way?

[pianist]

T,
Agree that ideally, we should have both.
The current challenge is there are too many -ve news/sentiments on buying properties.
Big pie now I'm seeing is by rich parents investing for their adult/teen children.
While waiting for the child to take over the new properties, they don't mind the hassle of renting it out and get some real cash.
For those who had never brought a property for rental yield, they will be scare by the current market sentiments and status quo.
My thinking process tells me that GOV will continue to curb the property market (because it's not dropping).
The real sigh of property market crash will be when the GOV stops the curb....
YMMV.
Enjoy ... What a beautiful weekend...

well thoughts. i doubt the real sign of crash will come because so many people are doing well in their stock portfolio, plus unemployment is so low here, plus the white paper already clearly states the magical 6.9m, plus analysts and economists are bullish on the global economy come 2014, plus fed for a fact is still printing paper money. it may be a long wait before property market really crashes. this is gg to be a very resilent bubble