With Mr Mah announcement yesterday, property price may go up
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From: http://www.todayonline.com/articles/62360.aspProperty's long night is ending
New govt measures are the best piece of news for market since its heyday in mid-1990s
Mano Sabnani
Editor-in-Chief/CEO
[email protected]
I WROTE in this newspaper just last Friday that the worm appeared to be turning in the long-moribund Singapore property market. The various positives, seen in aggregate, seemed to point to the beginnings of a sustained multi-year recovery in real estate values.
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The market has had a few false bullish starts in the past decade, during which the bear has prevailed in all our property sectors: Residential, commercial and industrial. So, it was necessary for me to note that I was not in a wishful-thinking mode.
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Still, that was the reaction I got the next day, from a few disgruntled property owners and investors. Here I was, they said, another clairvoyant who would have to eat his words.
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After all, most of the news relating to real estate in Singapore has been bad since May 1996, when the Government moved to curb excessive speculation in residential property.
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Between 1988 and 1996, home prices quadrupled, everyone made money and greed set in. But the subsequent bear market outlasted anyone's prediction and even today, Singapore properties are generally 35 per cent off their 1996 values.
Between 1988 and 1996 my parents income didn't quadrupled. They own only 1 property. So what if that property is worh 1 billion dollars? So what if they sell that one? The next one they intend to buy still cost 1 billion bucks. In short, it is zero gain for those who only own 1 property. But if someone owns more than 1 property, it is pure gain and we know who are the ones who own more than 1 properties - those who think $600K is peanuts. The scenario in 1995/96 is worst for those who just married and are planning to buy a flat. Imagine a 4 room cost $250K?? when your total monthly salary is $3 or $4K! Do we want another such scenario to occur? NO!
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In contrast, Hong Kong and Shanghai have recovered strongly from their 1998 Asian Financial Crisis lows and even Kuala Lumpur and Jakarta are doing better. Singapore should catch up and it is time to be positive about the property market, I argued.
You wouldn't want to be a fresh grad or $2K salary worker in Hong Kong or Shanghai. If you got young adult friends in Hong Kong, ask them if they are proud and happy that property prices have recovered strongly.
The economy has been steady, employment and incomes are rising, the stock market is buoyant and property values are low while yields are relatively attractive. Best of all, the glut in supply has been easing.
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So, even without any special stimulant from the Government, the positives had begun to outweigh the negatives. The worm was turning, but taking its own sweet time. No one was getting excited.
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Until yesterday, when Minister for National Development Mah Bow Tan unveiled a slew of measures he said were not designed to stimulate the market. Their purpose is to remove anomalies and ensure equity and fairness of policies relating to property ownership and investment. Yet taken together, the changes represent probably the best package of news since the property sector's heyday in the mid-1990s.
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It will be easier for any resident to buy property through the higher borrowing limit and lower cash downpayment requirement. Singles now have more options in home ownership in the public and private sectors. It will also become much easier for Singaporeans to buy or sell older leasehold properties thanks to sensible, relaxed financing rules. Even foreigners have been given positive signals on local property.
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The effects of the measures should not be underestimated. More can always be done but the measures, as proposed, are sufficient to underpin an already stable market edging upwards. Together, they take quite a bit of the slack out and nudge the market forward, especially with regard to the glut in older leasehold properties and the cash-strapped situation of many would-be buyers.
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The market is turning, but that turn could now be quicker, with fence-sitters making up their minds.
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Already, the stock market is excited. On Monday evening, it was stimulated by the news that Raffles Holdings is disposing of its entire hotel business at a stupendous 64 per cent premium to book values. The deal spoke volumes about the worth to foreigners of well-managed hotel properties, especially if some are located in land-scarce Singapore.
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Yesterday, even before the Minister unveiled his measures in Parliament, property stocks rallied broadly. Investors sensed the clearing of some property clouds and took positions in the morning. Their optimism was not misplaced. The uptrend in prices continued in the afternoon and the broad market closed at a five-year high.
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Could this be another false start? I think not. We are clearly in the early stages of a sustained recovery in the property market. But it is not yet time to speculate in physical property, or to let the topic dominate dinner conversations.
New govt measures are the best piece of news for market since its heyday in mid-1990s
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Lets look at commercial properties, aka you shopping centres and offices. If the property prices for those rise, do you think your Street 11 and your boss will bear the increase in rental? NO! Such increase will be bore by you, the average working Singaporean! Prices of consumer goods will increase, and your salary will decrease!
Employers will be complaining that property rental so expensive, can cut the employer CPF contribution from 13% (current) to 10% a not? With such a reduction in CPF, do you think you can afford the now more expensive HDB flat?
You might think, I can borrow from the bank wah. Do you think the bank so stupid to maintain the current low mortgage rate when more people are buying properties? NO. The lending rate will be higher and who suffer? The single home buyers!
How do we stop the property prices from going up?
Answer: Do not participate in the speculation of properties! In Singapore, a flat is for you to live in. It is always a liability not asset! I would recommend non-business graduates to read Rich Dad Poor Dad. After reading you will understand more of what I said. -
Then Cham...i am not married..no house yet...how to buy house next time???
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Then do your part, tell whoever you know NOT to SPECULATE on properties. You do not want another 1996 where property prices QUADRUPLE right?Originally posted by laoda99:Then Cham...i am not married..no house yet...how to buy house next time???
Only the 49,000 millionaires will make money in today's property market. DO NOT BE FOOLED THAT YOU CAN MAKE MONEY out of property in Singapore! -
hope that more people will buy private properties...and get themselves ensnared in debt for the next 30years...
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Don't be too happy & rush to buy.
Most properties esp. HDB still high & they are 99 yrs.
Even with less cash upfront, u still have to pay high interest on your 90% housing loan.
U have to slog for the next 30- 35 yrs. Also u are not sure whether your job will still be there cos so many F/T can take it away.
Don't forget if u are bankrupt, the bank will seize your property (unlike the past your HDB is protected) -
one of my friends bought a 4rm flat at its peak, costing $300k.
he and his wife has a combined salary of only $3.3k.
can you imagine how hard their live is? -
How this would affect the price/payment of new HDB flats?
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may be harder if they have a car..children....maid....aged parents....Originally posted by dragg:one of my friends bought a 4rm flat at its peak, costing $300k.
he and his wife has a combined salary of only $3.3k.
can you imagine how hard their live is? -
Prices will spiral up again. Refer to Dragg's message for the consequence.Originally posted by laoda99:How this would affect the price/payment of new HDB flats?
http://www.channelnewsasia.com/stories/singaporelocalnews/view/158688/1/.html
Quoted from the above - Dr Amy Khor, Chairman of GPC for National Development and MP for Hong Kah GRC, said: "Why now? Some of these changes seem to suggest a reversal of the government's policy to ensure prudence in property investments."
Appluse to Dr Amy Khor, the rose among the thorns. -
he has a van, for part-time delivery job. but market is bad and hardly any delivery to do.Originally posted by Peppermint:may be harder if they have a car..children....maid....aged parents....
no aged parents but one baby daughter.
he drives taxi on alternate days. -
notice something?
Mabok Tongue is the one minister who is always announcing crap developments...
oh well.. thoughts of owning my own little pad just went up in smoke.. -
The people who will drive up property prices are the -investors-cum-speculators especially foreign talent. They'll come in droves, borrow, buy multiple properties, drive up the prices and exit.
Expect a bubble in the making.
Why now? Simply because GE is coming and how to get reelected with the dead status quo?
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you can always try renting...its the same as 'owning' a hdb piegon hole just that u pay less..Originally posted by the Bear:notice something?
Mabok Tongue is the one minister who is always announcing crap developments...
oh well.. thoughts of owning my own little pad just went up in smoke.. -
is it really realistic to rent?Originally posted by Peppermint:you can always try renting...its the same as 'owning' a hdb piegon hole just that u pay less.. -
I think it is not. But if someone with knowledge about the rental market could work it out, it will be great.Originally posted by dragg:is it really realistic to rent?
I am prepared to stay with my parents, work hard to get a Aus citizenship or PR in 5 years time, eat popcorns and watch how many people participate in the bubble, then finally I will say "I told you so in Chit Chat on 20th July 2005", Astalavista baby! -
for a single person like myself i dun mind renting...and i dun need the whole flat...just a room would do..say costing $300/month, if i share with a friend or gf its instanly 1/2edOriginally posted by dragg:is it really realistic to rent?
it depends ultimately on one own's situation.... -
so have u started planning to migrate...i have seen so many ppl talking abt want to migrate etc...but they dun even know the requirements to migrate to the country of their choice....Originally posted by Cindyfeh:I think it is not. But if someone with knowledge about the rental market could work it out, it will be great.
I am prepared to stay with my parents, work hard to get a Aus citizenship or PR in 5 years time, eat popcorns and watch how many people participate in the bubble, then finally I will say "I told you so in Chit Chat on 20th July 2005", Astalavista baby!
assuming u are unable to stay with your parents...and with your aim to migrate....would u still think that renting is not a realistic possibility -
thought about it, but what the heck?
where i hang my head is home
Originally posted by Peppermint:you can always try renting...its the same as 'owning' a hdb piegon hole just that u pay less.. -
so so if u're gettin a roomOriginally posted by dragg:is it really realistic to rent?
if u're gettin an apartment to urself... u're better off buyin... at least teh mthly payout is lower..
say, 4 room flat at blk 51_ woodlands hor.. can cost u 1.1k in rentals p/mth excluding utilities n phone bills
if u "bought" the place, u're payin 700+ around there lar..
sianzation lebber upz.. -
1st paragraph.Originally posted by Peppermint:so have u started planning to migrate...i have seen so many ppl talking abt want to migrate etc...but they dun even know the requirements to migrate to the country of their choice....
assuming u are unable to stay with your parents...and with your aim to migrate....would u still think that renting is not a realistic possibility
Someone gave me this
http://www.australia-migration.com/page/MODL/58
Its quite a good and easy to read webpage. There are also quite a number of free migration seminars on weekdays. Just look at the small advertisements of Today newspaper. There are requirements, thats why I said i am preparing and it will take 5 years.
2nd para
If I am unable to stay with my parents and i am migrating, yes rental is a good option.
By the way, do you know how much is it to rent a 4 room flat say in tamp, ang mo kio or clementi area? -
close to 1k.. plus minus a fw hundred buckzOriginally posted by Cindyfeh:1st paragraph.
Someone gave me this
http://www.australia-migration.com/page/MODL/58
Its quite a good and easy to read webpage. There are also quite a number of free migration seminars on weekdays. Just look at the small advertisements of Today newspaper. There are requirements, thats why I said i am preparing and it will take 5 years.
2nd para
If I am unable to stay with my parents and i am migrating, yes rental is a good option.
By the way, do you know how much is it to rent a 4 room flat say in tamp, ang mo kio or clementi area? -
Actually i think there's a bit of overexuberance after the release.. I think they have lowered the cash downpayment a few years ago, but it din have much effect on the mkt. Now they are lowering it further.Originally posted by Cindyfeh:Then do your part, tell whoever you know NOT to SPECULATE on properties. You do not want another 1996 where property prices QUADRUPLE right?
Only the 49,000 millionaires will make money in today's property market. DO NOT BE FOOLED THAT YOU CAN MAKE MONEY out of property in Singapore!
The underlying problem is that there's still a shortage in demand and oversupply of houses. Our job market doesn't look so bright. Economy growth is a bit shaky with oil prices rising. If there's going to be a rise in property prices i would expect it to be gradual..
As for speculation, a lot of ppl have the misconception that their first house is an investment when it is not. As Cindyfeh pointed out, if you read RichDad Poor dad, you'll understand.. -
think the problem lies with the term.. if we're gg to take a loan for such a long period... the interest rates will kill...Originally posted by k4korny:Actually i think there's a bit of overexuberance after the release.. I think they have lowered the cash downpayment a few years ago, but it din have much effect on the mkt. Now they are lowering it further.
The underlying problem is that there's still a shortage in demand and oversupply of houses. Our job market doesn't look so bright. Economy growth is a bit shaky with oil prices rising. If there's going to be a rise in property prices i would expect it to be gradual..
As for speculation, a lot of ppl have the misconception that their first house is an investment when it is not. As Cindyfeh pointed out, if you read RichDad Poor dad, you'll understand.. -
Interest rate expected to be higher.. wonder how this will affect those who were thinking abt refinancing their loans..
Analysts expect high interest rates after changes in home financing cap
By Derek Cher, Channel NewsAsia 19 July 2005 2130 hrs
SINGAPORE : Singapore banks may now grant housing loans of up to 90 percent of the property value.
But they say it is still premature to determine the pricing for such loans.
As banks will face higher credit risks, analysts expect these loans to come with high interest rates.
Some also do not expect huge demand to come on-stream overnight.
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Most banks are now back at their drawing boards, to work out the pricing for loans up to 90 percent of the property value.
Some analysts expect that these loans will come with high interest rates.
That is because the banks will have to take on higher credit risks for such loans.
Gregory Chan, Senior VP, Secured Lending, OCBC Bank, said, "It allows us flexibility in offering a higher quantum of 90 percent, but it comes and has to be balanced with the credit risk, and also the higher capital required in view of the risk requirement. So it's a balancing act and we are looking at the whole structure and see how we can package this to our customers."
To mitigate the increased risk that banks will take, the Monetary Authority of Singapore will require banks to hold more capital against housing loans which exceed 80 percent of the property value.
It also expect the banks to carry out rigorous credit assessment before extending such high loans.
The central bank is also considering mortgage insurance as an alternative to the capital charge to mitigate the risks of high housing loans.
It will be studying the viability here and how best to regulate mortgage insurers. - CNA/ms -
cry..