Singapore Government Announced Property Cooling Measures

[Dennis Ng]

Sign of Possible peak or near peak for Singapore Property Market:

1. property agents tell me that last few months very quiet for resale condos markets, not many transactions.

2. some transaction prices start falling (shared by seminar graduate jimmyl on latest transaction at "The Sail".

I must remindmyself NOT to be itchy hand, wait till year 2013 first, don't be "trigger happy" and start shooting "Bullets" (buying properties now).

Cheers!

Dennis Ng

Just to share again on the Sail.

A unit on level 40 sold at $1840psf.
Are the prices really diving down.......

Regards

wow, that's quite a low price. Year 2008 lowest I think about S$1,700 psf.

Just to share again on the Sail.

A unit on level 40 sold at $1840psf.
Are the prices really diving down.......

Regards

wow, that's quite a low price. Year 2008 lowest I think about S$1,700 psf.

[Dennis Ng]

Government just released the lastest median household income in Singapore, now about S$7,037, and increased from S$5,362 in year 2007, or increase of 31%, which seems "good".

Median Household Income
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
4716 4590 4612 4552 4831 4952 5362 6100 6006 6342 7037

However, looking at prices of suburban condos, in year 2007, Casa Merah at Tanah Merah was launched at S$600 psf, now a typical suburban condo is S$1,200 psf, or increased by 100% in the same time period. So it is true when I comment in seminars that people in Singapore are actually getting poorer and poorer without them realising it. A person with just 1 house does NOT benefit from rise in property prices, since if sell at high prices, also buy at high prices, NET, no gains.

Imagine, if 5 years ago, your home cost S$500,000, now the same sized home costs S$1,000,000. If you sell the house you bought at S$500,000 for S$1 million, if you buy back a similar home, it would cost you S$1,000,000 as well. Where is the gain? However, if you didn't own a home 5 years ago, when your income was 31% lower, and now you buy a house which cost 100% more, do you gain or lose? Think about it. The increase in your income cannot catch up with "Asset Price Inflation"...you're actually getting Poorer.

On the other hand, the Rich, which typically own more than 1 property, do gain from rise in property prices. I reached my first million dollars 3 years ago at age 39 partly from realised gains in property investments. During the financial crisis in year 2008, I also took the opportunity to buy stocks and property at low prices and made another million dollars in the last 2 years...(The Rich knows how to Invest to grow their money, that's why the Rich get Richer. To the Rich, the more Severe the Crisis, the Better the Opportunity to make money). While for the poor, they might get retrenched or suffer pay cut in a Crisis and their lives worsened by Crisis. In U.S. many americans have remain unemployed for the last 3 years since Financial Crisis hits in year 2008...

This is another reason why the Rich get Richer, while the Poor get Poorer, and that the Rich Poor Divide, if left unattended to, would just get wider and wider. The best way to bridge the Rich Poor Divide is for you to learn how to invest, so that you can become Rich, not any other way. Think about it. If you want to help the poor, firstly, do not be Poor, becos one more person who is poor, means each poor would get even less.

I have a simple plan. Help to educate the middle class so that you can become Rich. And then together with all these New Rich (who were once middleclass, well, I was one of them too), we will together be able to do more for the less fortunate in the society, to empower the Poor to elevate themselves from Poor. Would you like to help in this "simple plan' to narrow the Rich Poor Divide? if you want, I can teach you how to invest so that you can become Rich, you can just read my book or attend my seminars to learn how to Invest like the Rich.

[Dennis Ng]

Hi all,

in my "Secrets to Making Money in Property Seminar", I have warned to avoid Investing into condo units less than 500 sf as they are known as Mickey Mouse Condos...looks like my warning has become reality...

When property market falls and when rental market is weak, it'll be even more difficult to re-sell such units or rent out such units. Ask yourself, if you're a tenant, and given a choice between renting a 400 sf condo unit and a 560 sf condo unit with difference in rent about S$300, which would you prefer to rent?

In my seminar, I also emphasize the importance of obtaining Prior Bank Loan approval as well. So before you go out to shop for properties, you can just call 6737 8801 or email to info@HousingLoanSG.com providing your name and contact number so that one of my www.HousingLoanSG.com staff can help you to get Prior in-principle Bank Loan Approval. This service is FREE (the bank pays us a fee separately as we basically replace the banker and help banks cut down staff costs). So there is NOTHING to lose for you as a consumer and everything to gain when you engage service of www.HousingLoanSG.com

Cheers!

Dennis Ng

Obtain a In-Priciple Approval from bank first before you purchase a property... RayNg

Denied: Banks cut lending to shoe-box buyers
By Andrew Batt (courtesy of PropertyGuru)

Ucertainty reigns as banks decline finance applications for small units.

With the prospect of a drop in property prices looming large on the horizon, Singapore banks are already tightening their lending criteria. Prospective buyers of so called shoe-box units are already discovering that access to funding is proving to be a challenge.

PropertyGuru understands that at least one bank in Singapore is now declining all finance applications for properties under 500 sq ft in size — the generally recognised measure for shoe-box units in Singapore. Other banks remained tight-lipped about their individual policies and declined to comment on the record when contacted by PropertyGuru.

[Dennis Ng]

Is the Singapore Property Market really hot right now?

While new project launch of suburban condos are still selling well, the resale market for existing condos is very, very quiet...and recently, 1 bedroom condo in The Sail transacted at S$1,800 psf, down from average over S$2,100 psf...

Always ask yourself, who are the people buying the suburban condos? Are Smart Property Investors still buying such condos at current prices? Majority of people lose money in investing. So I rather keep track of the minority who make money and see what they are doing. As far as I know, none of my multi-millionaire sifus are buying condos (suburban or City central) at current prices.

Cheers!

Dennis Ng

The Straits Times
Feb 28, 2012
Sales of new homes remain robust
Aggressive marketing and wide array of new releases boost numbers

By Cheryl Lim

HOME sales over the past week stayed strong, with few signs of the expected declines brought about by December's property measures.

Parc Rosewood at Woodlands has moved 55 more units since Monday last week, bringing total sales at the 689-unit project to 565. Prices have averaged $1,000 psf.

Macly Group's Guillemard Edge in Geylang has nearly sold out. Last week, the developer reported sales of more than 230 units. Since then, about 40 units have sold with prices ranging between $1,180psf and $1,250 psf.

The Straits Times also understands that the UOL Group's Archipelago estate in Bedok Reservoir sold 15 units over the weekend, with prices hovering around $1,000 psf.

Noting that buyers are now more selective, property analysts caution developers that not all new project launches will necessarily enjoy similar levels of success.

Mr Mohamed Ismail, chief executive of PropNex Realty, said a property's location and pricing may not be the only deciding factors for buyers.

'The theme of a development now matters as well. We've seen some properties that are integrated with a shopping mall, or that have SoHo and loft concepts sell well, so it indicates that people are also looking for a unique piece of property that stands out from the rest,' he said.

Mr Lee Sze Teck, senior manager at DWG Research and Consultancy, said the abundance of cash in the economy is helping support the sale of new homes.

'There's still a fair bit of liquidity in the market, and people are still looking to put their money in property... This could see February's new home sales cross the 1,000 mark,' said Mr Lee.

He pointed out that people want value for their money, which could explain why some buyers are drawn to the discounts developers are dishing out.

Far East Organization, which has been offering discounts at selected projects, sold 66 units across its various projects last week.

But Mr Ismail pointed out that the recent robust sales of new homes comes after the Chinese New Year period, with developers and agents aggressively marketing a slew of new projects.

'While demand for new homes seems healthy, the market has not seen a similar reaction for resale properties and high-end homes in the core central region,' he said, noting that the response for luxury homes is lukewarm and the number of successful mass market resale deals is lower than before the December measures came into effect.

cherlim@sph.com.sg

[Dennis Ng]

Most people heard about the importance of "Location" in buying property. However, most people do NOT know that next to Location, "Timing" of property purchase is probably as important.

I have friends and clients who bought properties in year 1996/1997 at the Peak of the Last Property Market Cycle only to see prices Crashing by 40% to 50%...and it took them 10 years when property prices finally recover to their purchase price. Of course, if we add in the interest costs for 10 years, (which easily work out to 30% of the property price over 10 years), it means that they are still in Negative Equity position as their initial 20% downpayment has been wiped out (without them knowing it)...

Many people are now happily snatching and buying suburban condos at S$1,200 psf without realising that a similar condo back in year 2007 only sold at S$600 psf then...these people say that "property prices can only go up". I hope they are correct but History shows that they might be wrong instead.


Those with longer memories may also recall that it took 14 years for the Urban Redevelopment Index - which measures home prices - to surpass the last market's peak in 1996.

Most people lose money in Investing, only Minority make. If you want to make money from investing, who should you listen to? Most people or the minority who make money? The answer is obvious. My simple Investment Rule of only investing when Upside is at least double Downside has caused me to miss some Money Making Opportunities and will continue to do so, but it has also helped me Avoid making Devastating Losses and helped me avoid Buy High, Sell Low...

So far, overall, in both Property Investing and Stock Investing, I've made money and can now count my millions from Investing...thanks to the Simple Investment rule of only investing when Upside is at least Double Downside...

Cheers!

Dennis Ng

The Straits Times
Mar 11, 2012
Why Singaporeans love to buy property

By Dennis Chan

Despite a looming supply of new homes and government curbs on demand, Singaporeans' love affair with property continues.

Make that Singaporeans and foreigners, who are also significant buyers of Singapore homes.

It is easy to see why local real estate is hot. While there has been a huge upheaval in the global investment climate since the 2008 US sub-prime mortgage crisis, investing in bricks and mortar in this little oasis of an island has remained profitable and safe.

Many rounds of government cooling measures to curb demand has had limited impact, except for the luxury home segment.

There are many reasons for this state of affairs. An oft-heard refrain is 'scarcity of land as Singapore is a small country'.

While this is true in the long run, scarcity has not prevented a fall in property prices from time to time. Real estate investment is not immune to the boom-bust cycle, as seasoned property investors who have gone through the lean years from 1997 to 2005 can attest.

The fixation on property investments instead stems from three prevailing circumstances.

Low interest rates

The low interest rate environment has been damaging to savers. With saving rates running as low as 0.1 per cent a year against inflation of about 5 per cent, the erosion in the value of money kept in a bank has been particularly severe. Simply put, for every $1 in interest you earn, buying power falls by $50.

When interest rates are this low, there are just three reasons for keeping cash: to fund daily expenses and short-term spending; as a buttress for a rainy day; or to build up a war chest if you believe a downturn is coming and you are hoping to pick up assets on the cheap.

On the other side of the equation, low interest rates are a boon to borrowers. For consumers, the lowest lending rates can be found in the home loan market, with rates typically well below 2 per cent. So it makes sense to invest in residential property, which can yield 3-4 per cent in rentals. Also, real estate investment is an effective hedge against inflation.

Relative safety

Compared to other forms of investment like unit trust and shares, investing in property is less volatile.

As long as you are financially prudent, your investment is safe. In Singapore, properties do not become worthless overnight.

This is an important consideration for conservative investors. The losses suffered by investors of minibonds and High Notes linked to bankrupted US investment bank Lehman Brothers have given structured notes a bad reputation.

The financial shenanigans at some China-based, Singapore-listed firms like China Gaoxian, Sino Techfibre, China Printing & Dyeing Holding and China Hongxing have hurt the image of stock investing among ordinary investors.

The disclosure-based principle behind stock investing has led to situations that are akin to shutting the barn door long after the horses have bolted.

In contrast, the Singapore housing market is more tightly regulated, which results in better protection for buyers. Strict rules on project accounts have ensured that there has never been a case of a developer leaving buyers in the lurch with uncompleted homes.

Past performance

Nothing attracts investors more than a winning streak.

Boom-bust cycle notwithstanding, it is human nature to look at the immediate past and project the trend into the future.

Local home prices remain at a record high. They have been on an uptrend since 2005, save for a brief period between the second quarters of 2008 and 2009.

The economy may be slowing, but there is full employment. Meanwhile, the world is awash with hot money as a result of a huge injection of liquidity by the central banks of the US, Europe and Japan.

Some of it has come to our shores, which may explain why the Government introduced an additional buyer's stamp duty of 10 per cent last December on home purchase by foreigners.

So, property remains a solid bet in the near future.

But past performance is no guarantee of future showing. One need only look at the West where a whole generation of Americans and some Europeans have been deeply scarred by their housing busts. Today, many no longer see property as a viable long-term investment and prefer to rent than buy a home.

Those with longer memories may also recall that it took 14 years for the Urban Redevelopment Index - which measures home prices - to surpass the last market's peak in 1996.

Unlike stocks and shares, property investment is more cumbersome. There are additional taxes and recurring fees to pay plus the hassle of tenants.

It is a matter of time before interest rates will rise from today's low levels. Price discovery is less transparent than the stock market. In a downturn, a home owner may not be able to find a tenant or buyer.

These are relevant factors to consider.

Property investment may indeed be described as a love affair. But to enjoy the payoff, one needs to be in it for the long haul.

[ngtfook]

Minister Khaw said there will no Cooling Measure for the time being...



Seeing Some Light
http://app.mnd.gov.sg/Newsroom/NewsPage ... &RA2=&RA3=

11. Many months of corrective action, policy modifications and hard work have brought some stability to the housing market. We are not yet out of the tunnel, but we are seeing some light at the end of it. Er Lee Bee Wah shared a similar observation.

12. In the last quarter, private residential property prices rose by 0.2%, the lowest increase in over 2 years. HDB resale prices went up by 1.7%, lower than the preceding two quarters. This year, housing prices should moderate further. In some areas, they may even soften, and in some areas, they have already softened. How exactly property prices move in the coming months will depend on global economic developments: the sovereign debt crisis in Europe, the performance of the US and Chinese economies, oil prices and interest rates. We monitor these changes closely and will refine our policies in step with the economy.

13. Mr Zainal Sapari suggested that we take further measures and tighten homeownership rules. Mr Gan Thiam Poh raised the idea of shorter leases for some BTO flats. Mr Zaqy Mohamad asked for a larger housing grant in return for a longer Minimum Occupation Period. I have heard you and noted your suggestions but I do not propose any new measure, given the current price trend. I think let’s give the existing measures time to fully mature.

[Dennis Ng]

Minister Khaw said there will no Cooling Measure for the time being...



Seeing Some Light
http://app.mnd.gov.sg/Newsroom/NewsPage ... &RA2=&RA3=

11. Many months of corrective action, policy modifications and hard work have brought some stability to the housing market. We are not yet out of the tunnel, but we are seeing some light at the end of it. Er Lee Bee Wah shared a similar observation.

12. In the last quarter, private residential property prices rose by 0.2%, the lowest increase in over 2 years. HDB resale prices went up by 1.7%, lower than the preceding two quarters. This year, housing prices should moderate further. In some areas, they may even soften, and in some areas, they have already softened. How exactly property prices move in the coming months will depend on global economic developments: the sovereign debt crisis in Europe, the performance of the US and Chinese economies, oil prices and interest rates. We monitor these changes closely and will refine our policies in step with the economy.

13. Mr Zainal Sapari suggested that we take further measures and tighten homeownership rules. Mr Gan Thiam Poh raised the idea of shorter leases for some BTO flats. Mr Zaqy Mohamad asked for a larger housing grant in return for a longer Minimum Occupation Period. I have heard you and noted your suggestions but I do not propose any new measure, given the current price trend. I think let’s give the existing measures time to fully mature.

Yes, no need further Property Cooling Measures for now.

By next year, if Global Economies slow down and with many HDB flats and new condos completed, the situation will reverse from Supply cannot meet demand to Over-Supply situation. Guess what is likely to happen to Property Prices then?

I also object to shorter leases on properties. By having shorter leases, this will actually drive property prices further up, as a 60 year lease property will be priced lower and thus more room for Prices to move up by developers before properties become Unaffordable...

Affordability is the reality check, it helps to keep property prices from rising to the Sky. Currently, property pries already peaked as there is a limit to how much smaller can developer make condos to be before it becomes "Unliveable"....imagine 600 sf space with 2 bedroom, 300 sf for 1 bedroom condo... (the master bed room plus toilet of my 5-room HDB flat is 300 sf already)...

People moved to Condos seeing it as upgrade. I really can't understand how am I "upgrading" if I give up my 1,464 sf 5 room HDB flat and move to a 800 sf condo? After I close the door in my house, what's the difference between a condo and a HDB flat? Most people struggle to pay their Housing Loan monthly by buying a property they can barely afford, how can they be really relax and happy? I'm just paying S$1,200 per month for my HDB loan and rather use my Cash to generate returns of easily over 10% a year from investing and thereby getting Richer. While many middle class would try to pay off their Housing Loan ASAP and end up at age 60 with a fully paid house and very little cash and cannot afford to retire...

While I use my cash to invest and reached S$3 million at age 42 and can easily retire if I want to and still CHOOSE TO OWE S$100,000 Housing Loan on my House. If you have Financial Knowledge you would see which is a Better and Smarter choice in terms of using our money. (pay off Housing Loan or to invest).

Genting recently issue perpetual bonds to borrow money at 5.15%, the Rich knows how to Borrow money to be Richer, while the average would be so happy to earn 5.15% and lend Genting (Richer than you) money...while Genting laughs to the bank becos they can easily make more than 10% yearly so they rather pay you 5.15%...and get Richer and Richer, while you earn 5.15% with inflation at 5%, means earning 0.15% and laugh to yourself and think you're so Smart in investing.

That's why the Rich get Richer (knows how to invest to grow their money) and the Poor gets Poorer (returns on their money can hardly beat inflation).

[candy_chia]

With low interest rate of 2%, my current monthly instalment is only $2,066 for HDB loan of $472,000. However, will need to sell the house when our CFP depleted in 5 years time. We really CANNOT RELAX if interest rate increases to 4% which requires us to service monthly loan instalment of $2,481, additional $10k yearly payment.

Most people struggle to pay their Housing Loan monthly by buying a property they can barely afford, how can they be really relax and happy?

I'm just paying S$1,200 per month for my HDB loan and rather use my Cash to generate returns of easily over 10% a year from investing and thereby getting Richer. While many middle class would try to pay off their Housing Loan ASAP and end up at age 60 with a fully paid house and very little cash and cannot afford to retire...

[Dennis Ng]

Key is to buy a property one can comfortably afford.

When both my wife and I bought the HDB Resale flat in 1995, our combined income was S$6,000 a month and S$1,200 per month Housing Loan instalment works out to 20% of our income. I remember I have friends who said I should have bought a condo instead but we calculated and found that buying a condo then would mean us using 40% of our income to service our Housing Loan and we decided to buy what we can comfortably afford.

17 years later, we are still living in this HDB Resale flat while many of our friends have moved house many times. Some of them have managed to pay off their Housing Loan but they have very little other Wealth to speak of. While we choose to continue staying in the HDB resale flat and have over S$3 million and can retire NOW if we want to.

It's really a matter of making our own decisions and choices in life, to me, the most important thing is the House is a Home filled with love and NOT just a House made of concrete with no love. It's NOT how big the house is, it's how much Love there is in a House that matters more.

I was born in a 1 bedroom HDB flat with 5 other brothers and sisters and the 8 of us live in a House with 1 bedroom and 1 toilet. But the house was a home, and that's most important actually. I lived the first 16 years of my life in this 1 bedroom HDB flat and I remember that my dream then was one day if I can live in a bungalow with a swimming pool. Becos when I watch movies and TV, it seems that the Really rich ALL live in bungalows with a swimming pool.

Now that I'm a multi-millionaire, such Material Luxuries NO longer really attracts me. I'm very happy living in a HDB flat as I find that instead of spending my wealth on my own enjoyment, I can actually help a lot more people if I give a part of my wealth to society where there are many people less fortunate and need help. I'm (and my family) are also very happy NOT owning a car as well.

This is why I'm passionate about teaching others to reach Financial Freedom as I think I can help bridge the Rich Poor Divide if I help more middle class become Rich, and these Newly Rich then help the poor and less fortunate in the society...instead of waiting for the government or the Rich to help the Poor. I decide to do and contribute what Little Part I can do and contribute.

I used to think that all I want to do is to take care of my family and myself. Now I realise that the Purpose of Life is about each of us, developing to our Potential and continue to strive for Continuous and Never-Ending Improvement, so that we can contribute our utmost to the society. And the more we contribute to society, the greater value add we provide, the Richer we become. I don't have to focus on making or chasing after money. Making more money is just inevitable and a Natural Consequence of my providing more value to the society.

Frankly, if your income is Low, it only means that you're serving very Few People and/or Giving Very Low Value Add. The KEY to increasing your income is to increase the number of people you serve and the Value Add you provide. As simple as that. The choice is yours to see how you can achieve that.

Cheers!

Dennis Ng

With low interest rate of 2%, my current monthly instalment is only $2,066 for HDB loan of $472,000. However, will need to sell the house when our CFP depleted in 5 years time. We really CANNOT RELAX if interest rate increases to 4% which requires us to service monthly loan instalment of $2,481, additional $10k yearly payment.

Most people struggle to pay their Housing Loan monthly by buying a property they can barely afford, how can they be really relax and happy?

I'm just paying S$1,200 per month for my HDB loan and rather use my Cash to generate returns of easily over 10% a year from investing and thereby getting Richer. While many middle class would try to pay off their Housing Loan ASAP and end up at age 60 with a fully paid house and very little cash and cannot afford to retire...

[Dennis Ng]

In the stock markets, Investors have a "mantra", never go against the market.

I think in property markets, it is also risky to go against the government. It is clear that the government wants to cool down the Property sector, and so far have launched 5 rounds of Property Cooling Measures.

Yet, the Property sale figure for Feb 2012 is even higher than before the launch of 5th round of Property Cooling Measures in Nov 2012. Guess if the market remains hot, what is likely to happen? Yes, government will be forced to come up with 6th round of Property Cooling Measures. What will the government think of "next" in cooling the market, nobody knows.

I would not risk their wrath to buy condos now and risk the uncertainty of not knowing what might "hit" me next.

Actually, almost the same thing happened in China, china property prices continued rising despite many property cooling measures, then the government continued with more measures, and finally property prices in China started falling since Jul 2011...and still falling...and now China government says China property prices still remain too high and must fall further...

A Ministry of National Development (MND) spokesman confirmed that the authorities were keeping a sharp eye on the developments, saying: 'The government will continue to monitor the market closely and, if necessary, we will introduce further measures to ensure a stable and sustainable property market.'

The mass market condos, which are still selling like hot cakes are mostly bought by middle class income families who are either buying for Home stay or are Novice Investors. What about the sale of higher end properties? Looks like it has grind to a almost a halt...and these properties are mainly bought/sold by the Rich and experienced property investors. So who is doing the Right thing? The Rich or the Middle Class? Only Time will tell us.


However, Mohammed Ismail, CEO of PropNex Realty, highlighted that the sales volume of such luxury homes continues to remain low with only 11 units priced above $2,500 psf being sold in February, putting sales in the high- end bracket at a 'standstill'.



Cheers!

Dennis Ng

From The Business Times

Govt keeping eye on the market as developers sell 2,413 private homes


By MICHELLE TAN


(SINGAPORE) It seems the government's property cooling measures have lost their 'cool factor', as February marked the highest number of units sold by developers in a month since July 2009.


Urban Redevelopment Authority (URA) figures reflected a total of 2,413 private homes - excluding executive condominiums (ECs) - being sold in the month of February.

This is 29 per cent more than in January (the month that Chinese New Year fell this year) and more than double that sold in the same period last year.

If ECs were added to the mix, the spike was even more impressive, with a total of 3,138 units sold in February - up 51 per cent from January's 2,077 units.

The robust buying sentiment revived conjecture that the government could act again to puncture any possible property bubble in the making. It has taken several steps of late, including an additional buyer's stamp duty (ABSD), to cool the market.

A Ministry of National Development (MND) spokesman confirmed that the authorities were keeping a sharp eye on the developments, saying: 'The government will continue to monitor the market closely and, if necessary, we will introduce further measures to ensure a stable and sustainable property market.'

Chua Yang Liang, head of research, South East Asia, at Jones Lang LaSalle, warned: 'As a result of this strong market performance, we have elevated the policy risk but not to a level where we can expect any immediate government intervention. However, should transaction volume continue to rise unabated by March, then the risk of further measures is quite likely then.'

Several factors contributed to the pick-up in February.

Said Alan Cheong, director of research & consultancy at Savills (Singapore): 'The main demand driver has been low mortgage rates, which are generally below 1.5 per cent. Short of having an interest rate policy of some sort, administrative measures have not been effective in reining in the buying penchant. Unless interest rates rise very significantly, it would have little impact on demand.'

Moreover, Chia Siew Chuin, director of research & advisory at Colliers International, added: 'The creative promotions and sweeteners dangled by developers in various forms to cushion the impact of the ABSD - such as part absorption of the stamp duty, price discounts, early bird or VIP preview prices, as well as furniture and fit-out vouchers - have also encouraged homebuyers to commit.'

Sales of ECs (a type of hybrid public-private housing) also soared, with 725 units sold in February, more than treble the 205 units in January and almost six times the volume sold in the year-earlier period, making it the highest monthly figure since the resumption of EC sales in October 2010.

Credo Real Estate executive director Ong Teck Hui said: 'The increased demand for ECs was expected especially after the income ceiling for it was raised last August, resulting in a larger pool of eligible buyers.'

Top-selling projects for the month included Parc Rosewood (380 units sold at $994 psf median price), Guillemard Edge in Geylang (275 units sold at $1,215 psf median price) and Watertown at Punggol (182 units sold at $1,341 psf median price).

Notably, Guillemard Edge - which sold all the units that were released - was one of the new launches during the month, together with other developments such as Bartley Residences and Casa Cambio.

Among ECs, Twin Waterfalls at Punggol was the most well received with 257 units sold at a median price of $727 psf.

The most expensive unit sold by a developer for the month was an apartment at Scotts Square, which transacted at $4,661 psf.

However, Mohammed Ismail, CEO of PropNex Realty, highlighted that the sales volume of such luxury homes continues to remain low with only 11 units priced above $2,500 psf being sold in February, putting sales in the high- end bracket at a 'standstill'.

'The demand in the city centre is expected to remain subdued as it has a higher proportion of foreign buyers compared with suburban areas,' commented Mr Ismail.

Much of the action was in the mass-market outside core region (OCR), with 1,830 units being sold in the month compared with 1,761 in the month before. This was despite the fact that the number of OCR units released by developers fell 21 per cent month- on-month to 1,567 in February.

Some 56 units were sold in the core central region (CCR) and 527 in the rest of central region (RCR).

The number of units launched but unsold has also risen steadily since last October - when it stood at 5,922 - to 7,586 in February.

Some consultants feel that with an increasing pipeline of projects rolling out in the months to come, demand could potentially continue to chase supply. This may result in the return of en bloc sales and reignite foreigner purchases.

Upcoming launches include Allgreen's 928-unit Riversails in Sengkang and MCL Land's 679-unit Ripple Bay in Pasir Ris.

[Dennis Ng]

Buying DBSS flats at S$650 psf only to find out that HDB is launching BTO New HDB flats just next door which will probably sell for S$400 psf. That's not a nice thing to find out and some buyers of Trivelis (DBSS flats - ie. nicely renovated HDB flats built by private developers) found out recently.

Cheers!

Dennis Ng

The Straits Times
Mar 21, 2012
BTO launch near DBSS site upsets some
BTO units usually cheaper, so some who opted for DBSS flats are unhappy

By Daryl Chin

LAST October, EL Development launched the Trivelis - a Design, Build and Sell Scheme (DBSS) project - in Clementi.

About 80 per cent of the 888 units of these public flats built by the private developer have been snapped up. Prices averaged $650 per sq ft.

In January this year, the HDB announced that a Build-To-Order (BTO) project of 670 units would be rolled out in Clementi - right next to Trivelis.

The news has made Trivelis buyers like Mr Low Tian Chye all hot and bothered. The businessman had booked a five-room unit for $706,000, and is now having second thoughts.

The reason? BTO flats, built by the HDB, are usually priced lower than DBSS ones.

Analysts said prices in the Clementi BTO project could be as much as 25 per cent cheaper than its DBSS neighbour.

However, they also warned that those who drop out run the risk of not getting the BTO units when they are put up for sale - given the popularity of Clementi as a mature estate.

Mr Low, 65, said: 'I didn't mind paying the $706,000 as the location is good but I would have gone for the BTO flats if I had known earlier.'

He has not yet exercised the option to buy his Trivelis unit. If he pulls out now, he will lose 1.25 per cent of the purchase price, or $8,900. If he had already exercised the option, the penalty would be 20 per cent of the cost of the flat.

EL Development's spokesman Lim Yew Soon said about 100 others who had booked a Trivelis unit have also not exercised their options.

Mr Lim said that, so far, two Trivelis buyers have pulled out of the deal and paid the 1.25 per cent penalty, citing the upcoming BTO launch as a reason.

The reason for the rest who have backed out - about 23 others - was linked to financial and eligibility factors.

Mr Lim is aware of the unhappiness on the ground, having received numerous e-mail from applicants. He said, however, that EL Development found out about the upcoming BTO project only in January, 'the same as everybody else'.

Dennis Wee Group spokesman Lee Sze Teck said it is rare for new flats to be launched close to DBSS units as the latter are generally in better locations such as mature estates. 'This could be a side effect of the Government's move to have more new flats in mature estates.'

At the Trivelis, three-room flats cost from $375,000 to $470,000, four-room units from $530,000 to $650,000, and five-room types from $658,000 to $770,000.While the exact prices are not out yet, analysts said the BTO flats might be up to 25 per cent cheaper.

'But, bear in mind, these are not apple- to-apple comparisons,' said PropNex chief executive Mohamed Ismail. 'A person who buys the cheaper BTO flat might still need to dip into his cash reserves to spend on renovations if the finishings are not as nice as the Trivelis'.'

He added that a Trivelis unit is a surer bet than the Clementi BTO, which will likely be oversubscribed.

Meanwhile Mr Low has not yet decided which road he will take. He hopes, however, that the developer will consider giving some 'discounts or concessions, to make the decision easier'.

darylc@sph.com.sg

[Starfire]

Till today I still don't see the logic for building DBSS flat. There is existing HDB, BTO HDB, DBSS HDB....too many tiers to differentiate HDB flats. Why can't they just make it simple.

[Dennis Ng]

Till today I still don't see the logic for building DBSS flat. There is existing HDB, BTO HDB, DBSS HDB....too many tiers to differentiate HDB flats. Why can't they just make it simple.

in short, such "NEW" property types were launched during times when Property Market hot and the "sandwiched" class (middle class) could NOT afford private properties.

in the 80s, HUDC introduced.
in the 90s, ECs introduced.
in year 2006, first DBSS introduced.

Now with income ceiling for buying HDB flats raised to S$10,000 and for ECs raised to S$12,000, there is Little Role NOR Value Add that DBSS can provide. It's near the end of the road for DBSS flats, just my opinion.

Those who bought DBSS early and at lower prices are ok. eg. those who bought CITYVIEW (near Kallang) for S$500 psf, with nearby condos (citylight) going at S$1,500 psf currently, there can only be upside and no downside for those who bought at S$500 psf.

[Dennis Ng]

Can property prices keep going up and up, all the way up to the sky?

The answer is there is a limit to how high prices can go, becos prices will reach a certain point when it becomes unaffordable to people and thus unlikely to go further up. Have we reached this point yet?

Cheers1

Dennis Ng

HDBs more unaffordable than private homes

Property Guru
22 March 2012

Housing and Development Board (HDB) resale homes in Singapore are more unaffordable than private homes, PropertyGuru can exclusively reveal. They are also classed as being ‘severely unaffordable’.

Using a globally-recognised formula where the Median Multiple (median house price divided by the annual median household income) is used to calculate housing affordability, HDB resale flats are also classed as being severely unaffordable using a scale which was most recently published in the 8th Annual Demographia International Housing Affordability Survey.

Housing affordability is evaluated based on the quotient deduced from the given formula, where a result of 3.0 and below would imply that houses are affordable, 3.1 to 4.0 (moderately unaffordable), 4.1 to 5.0 (seriously unaffordable), and 5.1 and over (severely unaffordable).

Given that the international report centred on the mid-end market, PropertyGuru focused its attention on private apartments and condominiums within the Outside Central Region (OCR) and Rest of Central Region (RCR), as these areas are home to most of the mid- to high-end properties.

The median multiple is based on calculations using the median household income from Singstat’s Key Household Characteristics and Household Income Trends, 2011, and the median price for all types of resale HDBs, ranging from one- to five-room and executive flats, according to data from the HDB and PropertyGuru.

The median multiple for private properties is 6.03 which means they are ‘severely unaffordable’ but for HDB resale flats, the result is arguably shocking. The median multiple was found to be at a high of around 6.7, which lies within the ‘severely unaffordable’ bracket – and even more unaffordable than private properties. While private properties and HDB resale flats hit the ‘severely unaffordable’ mark, it has to be noted that the monthly household income for HDB dwellers is considerably lower than that of private homeowners.

Tejaswi Chunduri, Regional Analyst at PropertyGuru, offered her insights on the findings. She said: “The data is reflective of the housing affordability issues the country has been facing the past few years. In the last five years the median household income in Singapore has increased by 42 percent whereas HDB resale prices have shot up by 84 percent according to the HDB price index. Private property has risen 58 percent when we look at the private property price index.”

She added: “This is a great contradiction to HDB’s role which is to offer affordable housing to the masses,” however she was quick to add that homes in Singapore are more affordable than Hong Kong which earned a rating of 12.6.

Despite the high prices, private home sales in Singapore continue to skyrocket, rising 29 percent in February from the previous month. “It is yet to be seen if the multiple rounds of cooling measures and other policies introduced by the government will prove effective in making home prices more affordable,” added Chunduri. The HDB was contacted for an official statement but were unable to issue any comment prior to publication.

[racoon12]

Is this the telling sign of another cooling measure coming very soon.



Slew of new projects launching this week
Following record home sales in February, developers will be rolling out several housing projects into the market this week, amid fears over further cooling measures by the government.

The slew of new projects include the Natura project (pictured) from Macly Group and Roxy-Pacific Holdings, MCL’s Ripple Bay condo, Frasers Centrepoint’s Palm Isles development at Flora Drive and Far East Organization’s 416-unit Hillsta project at Choa Chu Kang Road.

Except for Natura, all the other projects are 99-year-leasehold.

The 10-storey Natura is located at Hillview Terrace and will likely be priced at an average of S$1,250 psf. Comprising one- to three-bedroom units and penthouses, the project is offering smaller-than-usual three-bedroom units, as small as 635 sq ft.

Ripple Bay offers apartment units close to Pasir Ris Beach with an average selling price of slightly over S$850 psf. It comprises 679 units spread across four 12-storey blocks and three 13-storey blocks, with one-bedders and two-bedders comprising 18 percent and 42 percent of the units respectively. The one-bedder 484 sq ft units are priced from S$415,130 (S$858 psf) while 990 sq ft three-bedders start from S$795,500 (S$805 psf).

Units at Palm Isles will be offered at an average price of between S$850 psf and S$880 psf. Featuring 429 residences; the project includes a low-rise block with 28 garden homes inclusive of individual private carpark lots and gardens.

Peter Ow, Managing Director at SLP International, noted that developers are launching projects soonest to prevent the effects of possible cooling measures from the government, as a result of strong private homes sales in the primary market last month.

“To ensure a good take-up rate, developers are likely to price new mass market condo launches say about S$10 to S$15 psf below existing nearby projects,” said Ow.