Property Prices in Singapore turns bubblish...

[Dennis Ng]

Our Minister of National Development Mr Mah Bow Tan says that property prices in Singapore are not bubblish yet, some other property analysts also share the same view, saying that prices are high but reasonable, and certainly not bubblish.

Well, I heard that "Suites@Guillemard", a very nice name, but basically this is a condo just 1 street away from Geylang Red Light District is selling at S$1,400 psf.......if this is not bubblish, I'm not sure what is bubblish then.

The property agents selling this condo say the price is very affordable, as the smallest units sell for less than S$400,000.....

However, they forget to tell you that the smallest unit in this Condo is only 258 sf, which is even smaller than my master bedroom (I stay in a HDB 5-room flat)....imagine your bedroom, living room, toilet, kitchen all in this space of 258 sf..... well, I really cannot imagine, but it is a Real Unit in a Real Condo.

And people are happily snapping up this "Geylang Condo" paying S$1,400 psf, I hope that they will be happy a few years down the road.

In my opinion, our Minister of National Development is "behind the curve". He better steps up efforts to reduce or prick this bubble before it gets bigger. The bigger the bubble, when it bursts, the more people will get hurt, as history has shown us again, and again.

[Contrarian]

That is why it is near to Geylang...

This mickey mouse unit is ideal for renting on 2 hour basis - just like Hotel 81.

The person who bought... Cannot Get Out Now...

[Contrarian]

Our Minister of National Development Mr Mah Bow Tan says that property prices in Singapore are not bubblish yet, some other property analysts also share the same view, saying that prices are high but reasonable, and certainly not bubblish.

Well, I heard that "Suites@Guillemard", a very nice name, but basically this is a condo just 1 street away from Geylang Red Light District is selling at S$1,400 psf.......if this is not bubblish, I'm not sure what is bubblish then.

The property agents selling this condo say the price is very affordable, as the smallest units sell for less than S$400,000.....

However, they forget to tell you that the smallest unit in this Condo is only 258 sf, which is even smaller than my master bedroom (I stay in a HDB 5-room flat)....imagine your bedroom, living room, toilet, kitchen all in this space of 258 sf..... well, I really cannot imagine, but it is a Real Unit in a Real Condo.

I agree there is a bubble, but this bubble is not widespread compared to 2007 and 2008.

The bubble is in the suburban condos. In the high end market, it is not yet moving so much, especially the completed units.

Agents - their lifelihood depends on sale, so even rubbish they will say it is gold. It is the investor who takes the risk.

What do you think Mah BoW Tan should do next? 30% down payment, or request bank to reduce loan to value? Or capital gains tax? There is a fine line to move next... he has to be careful about crashing the market...

[Dennis Ng]

Our Minister of National Development Mr Mah Bow Tan says that property prices in Singapore are not bubblish yet, some other property analysts also share the same view, saying that prices are high but reasonable, and certainly not bubblish.

Well, I heard that "Suites@Guillemard", a very nice name, but basically this is a condo just 1 street away from Geylang Red Light District is selling at S$1,400 psf.......if this is not bubblish, I'm not sure what is bubblish then.

The property agents selling this condo say the price is very affordable, as the smallest units sell for less than S$400,000.....

However, they forget to tell you that the smallest unit in this Condo is only 258 sf, which is even smaller than my master bedroom (I stay in a HDB 5-room flat)....imagine your bedroom, living room, toilet, kitchen all in this space of 258 sf..... well, I really cannot imagine, but it is a Real Unit in a Real Condo.

I agree there is a bubble, but this bubble is not widespread compared to 2007 and 2008.

The bubble is in the suburban condos. In the high end market, it is not yet moving so much, especially the completed units.

Agents - their lifelihood depends on sale, so even rubbish they will say it is gold. It is the investor who takes the risk.

What do you think Mah BoW Tan should do next? 30% down payment, or request bank to reduce loan to value? Or capital gains tax? There is a fine line to move next... he has to be careful about crashing the market...

Hi Contrarian,

I agree with your views. In my seminar, I share that if one wants to buy property, can still buy in High End Residential and also consider Commercial Properties (prices still falling).

If I were Mah Bow Tan, I would introduce land sale faster, don't wait till 1 Jan 2010, I will also announce more HDB flats, not just the 6,000 he already announced.....it is a matter of Demand vs Supply PLUS Market Sentiment.

When it is CLEAR to everyone that there is NO fear of lack of supply, prices would adjust downwards. Of course, he needs to balance between stabilising prices vs Crashing prices. But he should take more action now when the bubble is small, and not wait till the bubble gets bigger. When a bubble burst after it gets very big, more people will "get killed" (financially).

As investors, we just try to stay calm and rational when others get excited and crazy. Not easy to do, but it is something I am still learning to ....to keep my emotions in check when making decisions.

[SmartzWong88]

Why Mah Bow Tan should introduce land sale faster and don't wait till 1 Jan 2010? Does it mean after this date the demand will be even higher?

If currently those who need to buy suburban resale condos for own stay(which the bubble is forming), does it mean it is not the right timing?

[Contrarian]

Why Mah Bow Tan should introduce land sale faster and don't wait till 1 Jan 2010? Does it mean after this date the demand will be even higher?

If currently those who need to buy suburban resale condos for own stay(which the bubble is forming), does it mean it is not the right timing?

I never buy suburban resale condo for staying... only for renting. But I know if I buy even suburban condo now, the buyers may not buy from me at this price...

[Dennis Ng]

Why Mah Bow Tan should introduce land sale faster and don't wait till 1 Jan 2010? Does it mean after this date the demand will be even higher?

If currently those who need to buy suburban resale condos for own stay(which the bubble is forming), does it mean it is not the right timing?

currently Supply cannot meet demand. Thus, Mr Mah should increase supply of HDB flats and supply of Land Sale asap, instead of waiting further.

Even condos at Tana Merah costs close to S$900 psf, I personally will not buy at such prices, that does not mean asking you not to buy.

[bulltick]

I think Far East has set the benchmark for other projects. Those agents & developers will tell you my project is only $9xxpsf, it is so "cheap" compared to Centro residence which will cost you at ~$1150psf with no parking lot guranteed. (260 parking lots for 329 units)
Your visitor may need to park at AMK Hub or nearby HDB carpark when they come to visit you. That's what FE projects as a condo living style of a xxxxpsf project beside a noisy bus interchange with view of the MRT line at a hip sub urban estate.

[Dennis Ng]

I think Far East has set the benchmark for other projects. Those agents & developers will tell you my project is only $9xxpsf, it is so "cheap" compared to Centro residence which will cost you at ~$1150psf with no parking lot guranteed. (260 parking lots for 329 units)
Your visitor may need to park at AMK Hub or nearby HDB carpark when they come to visit you. That's what FE projects as a condo living style of a xxxxpsf project beside a noisy bus interchange with view of the MRT line at a hip sub urban estate.

I agree with your observation. Actually, if a developer launch a project at a higher price, that in itself straight away benefit all its property holdings and other developers as well, as it will lead to their property holdings increasing in value.

Developers are pushing back completion of new condos from year 2010 to year 2011 and year 2012, thereby creating a temporary Supply Squeeze (supply unable to meet demand). However, the supply didn't vanish, it is just the completion date get pushed back 1 or 2 years....

Mr Mah should not "fall into the trap of developers", he should release more land and build ECs and build more new HDB flats to stabilise and to prevent prices from escalating to crazy levels...

In year 2007, Casa Merah was launched at S$610 psf, in year 2009, Optima (near to Casa Merah) was launched at S$800 to S$850 psf....some of the property prices are already higher than Peak 2007's prices...

Not sure why Mr Mah is still so slow in responding....

[patricktaynk]

Hi all,
This is my first posting here. Just to comment on the higher end properties at D9. Noticed from the URA transactions that some of the units have already moved from $900+ psf to $1300+ eg 8@Mt Sophia. Some of the properties on the market are also asking at higher psf than 3-6 mths ago.
Just to generate some discussion on whether the high end properties have started to move too? Comments anyone?
Patrick Tay

[Dennis Ng]

Hi all,
This is my first posting here. Just to comment on the higher end properties at D9. Noticed from the URA transactions that some of the units have already moved from $900+ psf to $1300+ eg 8@Mt Sophia. Some of the properties on the market are also asking at higher psf than 3-6 mths ago.
Just to generate some discussion on whether the high end properties have started to move too? Comments anyone?
Patrick Tay

Hi Patrick,
My personal opinion is that high end properties' prices are still reasonable, but low and mid-end properties, prices are probably too high.

[Stradlinz]

Agree with that. Actually most of high-end prices still below 2007 peak. I've been trying to digest the property market and was very surprised that recent land sales by URA was done at very high price (e.g. dakota at $500+/sq ft ppr and seletar at $376/sq ft ppr. The seletar sale especially caught my eye as the breakeven price would be ard $700/sq ft and final selling price of ard $850/sq ft. FEO is not stupid but i cant think of their motives of bidding at such high price. The only reason I can think of is the development of seletar aerospace, so they are bullish abt the area. Any other seasoned property expert to give some views?

And lastly even at this current market we can still find value buys, eg tanjong rhu area which i think is still undervalued, this area should benefit from the marina bay development, new mrt and the garden. I'm speechless seeing people buying centro residences at $1150 but not tanjong rhu area at even cheaper price of ard $1100. Wonder what is the motivation of these buyers...

[Contrarian]

And lastly even at this current market we can still find value buys, eg tanjong rhu area which i think is still undervalued, this area should benefit from the marina bay development, new mrt and the garden. I'm speechless seeing people buying centro residences at $1150 but not tanjong rhu area at even cheaper price of ard $1100. Wonder what is the motivation of these buyers...

1. Tanjong Rhu developments > 10 years, most are 99yr LH. Do u think asset value will hold?

[Dennis Ng]

And lastly even at this current market we can still find value buys, eg tanjong rhu area which i think is still undervalued, this area should benefit from the marina bay development, new mrt and the garden. I'm speechless seeing people buying centro residences at $1150 but not tanjong rhu area at even cheaper price of ard $1100. Wonder what is the motivation of these buyers...

1. Tanjong Rhu developments > 10 years, most are 99yr LH. Do u think asset value will hold?

wow, Tanjong Rhu at S$1,100 psf.....was S$800 psf 1 year ago. Not exactly great deal. Might as well buy Citylight at S$1,100 psf as well.

[Stradlinz]

Tanjong Rhu areas is often overlooked in the past. I guess it's due to poor amenities and no public transportation. I believe this area will be one of the major beneficiaries of the marina bay development. Govt spend tens of billions to develop marina bay area from scratch. There will be garden by the bay, marina bay IR, sports hub, and choice of two mrt stations. This will greatly enhance the amenities of tanjong rhu areas. I think leasehold or freehold does not really matter. What matters most is still location. The way i see it, in raffles place/ marina bay there are very very limited residential developments. Tanjong rhu is the nearest alternative. So i like this area a lot and it's very popular with expats communities