A 30% plunge or 6% drop in property price in 2009?

• iamgoondu

  25 Oct 08, 23:05

   

  It is time for me to seriously considering whether to continue to read our local papers.

  I had read the following article dated on Malaysian Sin Chew Jit Poh dated 24 October (工商时报 dated 23 October 2008). 

  Our local papers (from SPH) however is quick (on 25 October) to seek a more optimistic numbers for the most pessimistic outcome (6% drop in private properties price from SPH vs 30% from 工商时报) from a distinguished NUS professor.

  Our stock market has halved it market market, i can't help but to believe that 30% may be true, and the 6% prediction by that professor was just overly optimistic.

   

  2008-10-23 工商時報 ã€�蕭麗å�›ï¼�綜å�ˆå¤–電報導】 
      　亞洲è�¯çˆ¾è¡—日報週三報導，以往新加å�¡æ”¿åºœç”¨ä¾†åˆºæ¿€æˆ¿åœ°ç”¢å¸‚場的延é�²ä»˜æ¬¾è¨ˆç•«ï¼Œå¾ˆå�¯èƒ½å°‡æˆ�為星國房市æ�®ä¹‹ä¸�去的夢魘，引發房市é‡�挫。　。

      　延é�²ä»˜æ¬¾è¨ˆç•«æ˜¯æ–°åŠ å�¡æ”¿åºœåœ¨10å¹´å‰�為了因應低迷ä¸�振房價，所推出的一項刺激方案。ä¸�é�Žå®ƒå·²ç¶“在去年10月份喊å�¡ã€‚

      　這項計畫讓購屋的新買主å�ªéœ€è¦�支付10％或20％的頭期款，至於其他金é¡�等到該建案完æˆ�後æ‰�須付清，通常是3年以後的時間。

      　延é�²ä»˜æ¬¾çš„計畫確實å°�星國房市造æˆ�激勵的效果。新加å�¡é�²æ»¯çš„房市在2005年開始回春，ç§�人ä½�宅房價從那年開始至今也暴增55％。

      　ä¸�é�Žå°±åƒ�許多扭曲市場機制的政策一樣，部分批評人士èª�為由於該計畫的æˆ�效太好，å��而鼓勵房市投機，也為房市å�±æ©ŸåŸ‹ä¸‹ä¼�筆。

      　由於新加å�¡ç¶“濟已經正å¼�陷入衰退，也連帶影響該國房價一蹶ä¸�振。部份分æž�師悲觀é �估明年星國房價還會下修30％。

      　當åˆ�在房市多頭進場購屋民眾，除眼見他們的房價大幅崩跌外，還必須憂心ç©�欠營建商的其餘80或90％的房屋貸款。在信用緊縮下，這些ä½�戶都難以申請到貸款。

      　當然新加å�¡ä¸�至於é‡�演美國次貸å�±æ©Ÿï¼Œä½†æ­¤ä¸€æƒ…æ³�å�»æœ‰å�¯èƒ½å°�該國房市造æˆ�é‡�創。因為購屋者有å�¯èƒ½åœ¨æˆ¿å±‹å®Œå·¥å‰�或是房價還會進一步下跌å‰�，急著拋售出去。

   

   

   

   

  国大副教授：�宅价格明年料下调5至5.7％

  （2008-10-25）

  我国�宅价格预计将在明年下调5.0％至5.7％。

  　　新加�国立大学�济系副教授蒂拉克（Tilak Abeysinghe）根�我国未�几年�济增长的三��能性，预估了本地�宅价格的�化。

  　　他昨日在新加��济政策大会上表示，把�济增长分为�观�中性和悲观三�情况考虑，若明年�济增长达到4％，�宅价格预计将下滑5％，而如果明年�济增长为3％或2％，�人房地产的价格将分别下滑5.4％或5.7％。

  　　���济环境日益严峻，房地产市场也有所冷�，但�宅价格的调整�然�分有�，市场�然存在�一定的阻力。

  　　蒂拉克表示，这些阻力将会消失。如果项目如期推出，加上�济衰退的�利因素，将出现�宅供应高出需求的现象，其价格也�得��低。

  　　�过他也指出，这一次房地产价格的回�将�会�上一次那样严�，最多下滑6％，除�世界�济衰退到�常严�的境地。

  　　今年以�，全�的�济增长开始��放缓，上�年由于能�和食�价格的大幅上涨，通货膨胀也一度�为了世界�济的头�公敌。在本地，金�管�局则是通过缩紧货�政策，加速新元上�的步��抑制通货膨胀的压力。

  　　�洋�工大学人文与社会科学院助�教授蔡建明表示，金管局利用货�政策有效地抑制了进�通胀，但这也造�了�济增长的放缓。

  　　他指出，央行在制定政策时，既�考虑��价格稳定，也�照顾到增长放缓所付出的代价，从中�得平衡。而牺牲率（sacrifice ratio）就�以显示��低通胀一个百分点，产值的累计�失为多少。

  　　蔡建明表示，新加�的牺牲率为2，这样的比例�算高，美国的牺牲率为3至4，而�济�作与�展组织（OECD）�员国的平�值为2.5。

   

  ublished October 25, 2008

  Singapore Economic Policy Conference

  Private property prices seen falling 5-6% in '09-10 This will be so even under NUS economist's best-case projection for the Singapore economy

  National University of Singapore economist Tilak Abeysinghe's forecasts see the domestic economy growing 3 per cent in 2009 - and one percentage point higher and lower under the best and worst-case scenarios.

  In all three scenarios though, his simulations result in 5-6 per cent price falls a year in 2009 and 2010. Only in the optimistic outlook is there a projected 1.4 per cent rebound in 2011.

   

• ArtBoon

  26 Oct 08, 19:41

  It is human nature for all of us to try to hope for the best, although in life we know there is good time and bad time.

• oxford mushroom

  27 Oct 08, 07:06

  30%? I cannot wait for property prices to drop 50%...in fact, cannot wait for the economy to collapse and people to default on their mortgages. Looking forward to the mortgagee sales :)

• Atobe

  27 Oct 08, 08:15

   

  What else can we expect from a parasite but to live off the hives from others ?

  For Singaporean properties to fall by 30% - most home owners will be continuing to pay for mortgages that will exceed the current values of their homes.

  Banks will soon make calls for home owners to rationalise the loan accounts to the new values.

  This is the same scenario that the Singapore Government had feared if it had taken any actions to rationalise the property market; and had instead preferred to let the speculative bubble to grow.

  It is crunch time soon, and Singapore will have our own version of the US sub-prime fiasco.

   

• charlize

  27 Oct 08, 12:28

  Property looks like it is headed for a big correction.

   

  30% drop from the peak sounds reasonable actually if you consider how much the stock market has plunged and is still falling.

   

  2009 will be a crunch year.

   

   

• Poh Ah Pak

  27 Oct 08, 12:59

  It is time for me to seriously considering whether to continue to read our local papers.

  I made the decision 7 years ago to laugh at our 144th state media.

  You NOW then want to consider?

• BadzMaro

  27 Oct 08, 13:29

  Fuk.. n i  just bought a house a year ago. diu...

   

• xtreyier

  27 Oct 08, 13:40

  Let's look at the property prices in perspective and macro-economically.

  
  Many who don't look at the fundamentals but view only the figures will be easily misled or mislead others.

   

  What props up the local property market?

   

  We have a small landmass and need to house the 3.2million and growing population in high rise buildings. Another few million citizens will be comming along the way in the next few years.

   

  The law of market demand and supply will determine that properties in Singapore will always face an upward trend, no matter turbulent recessions comes our way.

  
  We all need houses to stay and be sheltered.

   

  Unlike other countries with big land mass like China, USA or even malaysia, their properties will always face bubbles, driven by greedy speculators and developers.

   

  Many citizens there don't realize that if an area is hot, another plot is ready to be developed at even lower prices. What is hot soon turns cold due to the massive amounts of land they have.

  
  We don't have such plots, and are even running out of plots and willl have to tear down 10 storeys to build it 30 storeys, increasing its value.

   

  Price is largely placed on our income levels. As properties are scarce, thus a premium is required both by developers and our society ( govt )(which uses it to compensate other citizens thru reduced prices for public housing and leftover amounts to help future generations.

   

  Should economic conditions worsened, there will be a small portion who may default, but that is because of their greed - over-extending themselves with credit terms.

   

  But on the whole, many pragmatic singaporeans can still pay their loan obligations due to the avaliability of jobs that are still avaliable, as well as future jobs in the pipeline due to the planning done years ago in the events crisis such as these comes along -such as bio-tech, hi-tech, and low level industries  such as IR projects.

   

  As for those living in HDBs, in 97 the govt gave rebates and extended loan repayments delays scheme to help those really down and out ones, providing training to help them get better jobs so that they may have a place to stay. Such schemes will be repeated should the economic takes a turn for the worse.

   

  All these will help to prevent the market from becoming a 'bubble'. But there will still be panic selling, as well as rumour mongering by clueless individuals and greedy speculators as well as a small portion of defaulters that will drive the sentiment a few percentages down.

   

  I too would like to purchase depress prices of Spore properties, but to be fair, do understand the value of what you are holding on before you listen to rumours or panic and do make attempts to resolve any payment issues, otherwise you will only be making losses.

   

  But in the end, properties are a sure bet in Singapore, unless our country becomes uninhabitable. But then there's nothing to worry about cos we'll all be dead anyway.

• skythewood

  27 Oct 08, 13:55

  property will devalue... inflation will cancel out the devalue....

  the price won't fall, just that everything else will get more expensive, and property will appear to be less expensive...

• reyes

  27 Oct 08, 15:15

  i am waiting.

  once it fall to below 30%,  i will seriously consider invest in 2 units of condominiums.

   

• iamgoondu

  27 Oct 08, 15:50

  Should economic conditions worsened, there will be a small portion who may default, but that is because of their greed - over-extending themselves with credit terms.

   

  when recession kicks in, and non residents being sent back, many will default their loans. There are many who service their loans from the rentals proceed.

   

• xtreyier

  27 Oct 08, 17:55

  Originally posted by iamgoondu:

   

  when recession kicks in, and non residents being sent back, many will default their loans. There are many who service their loans from the rentals proceed.

   

  
  Our society must draw the line between providing homes for our citizens and providing homes for investment.

   
  Those who needed shelters were never denied. Those who required upscale properties, were not denied too. They could use their CPF to fund homes.

  
  Do not confuse our banks with US banks which triggered the 'sub-prime' crisis.

   

  THeir banks offered loads of cash to anyone to buy property. Here in Spore, only those who have good credit ratings are allowed loans. For those who have bad ratings, they could not so much as even loan a bed, let alone million dollar homes.

  
  Furthermore, banks check if their customer has the income to support such loans before granting approval. Thus those who use their properties for rental income can afford to service their loans even if they have no tenants, and in the event they lose their incomes, they must get another job to service their loans.

  
  Homes in land scarce singapore were meant for shelter, not for investments. But if those who want it for investments, it is not a crime.

   

  Only they must take and accept the risks, just as anyone else who invests. Their profits, they get to keep. So too must they bear the losses, and society should not be cleaning up their mess.

  
  Even in the worse case scenario of bank foreclosure if these investors default, such heavy collaterised properties would be sold in an action.

   

  There will be no lack of investors for such auctions, and may even attract foreign buyers flushed with cash withdrawn from banks and investors to purchase prime land scarce but heavy density population spore properties, driving its price eventually up by the highest bidder.

  
  Have a little faith on your property and discern facts from lies and rumours.

• hmsg

  27 Oct 08, 18:03

  private properties will be closer to 50% off. hdb maybe 6 - 30% off

• oxford mushroom

  6 Nov 08, 00:43

  Originally posted by hmsg:

  private properties will be closer to 50% off. hdb maybe 6 - 30% off

  
  Hurray! Can't wait for mortgagee sales. I am hoping the banks start recalling the housing loans soon...

• eagle

  6 Nov 08, 08:44

  Nov 6, 2008, The Straits Times
  Prime office rents falling amid turmoil
  Rates are back to levels a year ago as landlords act to keep tenants
  By Joyce Teo
  
  AFTER rising steeply for several years, prime office rents are on the way down as landlords move to retain good tenants in uncertain economic times. In the wake of the global financial crisis, which erupted in mid-September, these prime rents are now back to levels seen about 12 months ago.
  
  They fell 5 per cent last month and could fall another 10 to 20 per cent over the next six months, according to consultancy Cushman & Wakefield.
  
  Office rents in general started falling in the third quarter ended Sept 30, given the weaker economic outlook.
  
  But the fall in net effective prime office rents was even more pronounced last month as landlords became more flexible in negotiating rents, experts said.
  
  'It is almost as if it was the landlords who blinked first,' said managing director Douglas Dunkerley of Corporate Locations, which helps firms find office space.
  
  'The reason we saw such a swift change is that landlords have gone out of their way to retain their current tenants who have lease renewals coming up over the next six months.'
  
  He said the search firm is not seeing many 'distressed' relocations by tenants as many had moved to take advantage of cost-saving opportunities.
  
  'But now, more landlords are recognising the market has changed and are determined to keep their tenants,' he said.
  
  Latest estimates from Cushman & Wakefield show that gross prime office rents dropped 5 per cent from September to reach $14.05 per sq ft last month. This cut prime office rents to levels of a year ago, said its head of research services, Asia-Pacific, Mr Ang Choon Beng.
  
  'The difference though is that a year ago, rents were being adjusted upwards every month and now rates are being adjusted downwards at almost the same speed,' said Mr Dunkerley.
  
  Cushman & Wakefield already noted a quarter-on-quarter fall in prime office rents in the three months ended Sept 30 - a reversal from straight quarterly gains for more than four years prior to that.
  
  The rent rises - which reached nearly 95 per cent a year in Raffles Place last year - slowed this year. Rents peaked around late August.
  
  Government data also showed that office rents fell in the third quarter, though by a smaller 0.8 per cent. Knight Frank said earlier those figures reflected growing resistance by some tenants to renew leases at higher costs, given that the current economic uncertainty will impact business profits.
  
  DTZ executive director Cheng Siow Ying said landlords are prepared to look at creative lease packages with rent-free periods so the effective rental rates are lower. Landlords have not had to give rent-free holidays in over two years, said Mr Dunkerley, adding that nearly every landlord cut asking rents last month.
  
  But the market is generally more subdued now, with tenants in a wait- and-see mood, experts said.
  
  Supply-wise, there are more choices now than just a few months ago, but the bulk of the fresh office space supply will come onstream from 2010. So, while the downward slide in office rents is expected to continue, the speed should slow temporarily till nearer to 2010, said Mr Dunkerley.
  
  Still, Cushman's projection is for prime office rents to fall by up to 20 per cent in the next six months. 'Given the sharp run-up in prime office rentals over the past two years, we are circumspect about the current downward trend of prime office rentals,' said Mr Ang.
  
  The rental moderation is 'ultimately healthy' for Singapore's long-term prospects as it lowers the overall cost of doing business here. The slide is also a signal to firms that the office rental market is efficient and can adjust quickly in a changing market, he said.
  
  Mr Dunkerley is looking at a fall of possibly 20 to 30 per cent over the next 18 months, which would ensure Singapore remains an attractive business location and in good shape to compete with other major regional centres

• charlize

  6 Nov 08, 10:12

  Since this is reported in the main newspaper, you might want to be a bit more conservative and adjust the possible drop by another couple of % points.

   

  State media usually tries to soften any bad news with an optimistic outlook despite the gloom.

• oxford mushroom

  6 Nov 08, 23:23

  US stock market dropped another 500 points...property prices slipping....that's just wonderful. Cannot wait for the economy to collapse and people to default on house loans. There will be forced sales ahead and with low bank interest rates, it'll be a buyer's market in a year's time.

• charlize

  7 Nov 08, 10:30

  Even people loaded with cash who want to buy property might be a bit more cautious despite the softening of property prices next year.

   

  You never know how much prices might drop.  And drop even further.

• angel7030

  7 Nov 08, 10:47

  Originally posted by charlize:

  Even people loaded with cash who want to buy property might be a bit more cautious despite the softening of property prices next year.

   

  You never know how much prices might drop.  And drop even further.

  
  Well, that is the fun of it, the entry and exit points are the main fun of this game.