While out shopping (I use this term casually) for landed properties these days, I noticed a similarity that makes me think twice on my bet on landed.
Most owner occupiers of the landed property are selling their home because they are now old. Their children have moved out and they all say the same thing, "We don't need such a big house". Of course, I can understand..the maintenance of the house, garden and the climbing of stairs, not to mention landed properties tend to be situated further from amenities as compared to HDBs flats and condos.
And so a quick check with Singapore Statistics website confirmed my fears. Indeed, we face a rapidly ageing population (everyone knows that already) that will see 1 in 5 in the elderly group by 2020. That's barely ten years from now! Only ONE property cycle.
Previously, we had optimism for offsetting factors - immigration and economic growth as two key drivers. But now, the Government sees a 5 to 5.5mil population as optimal, and we are already there as of last year's census of 4.99mil. Not much upside in terms of population in this case.
A rapidly ageing population also means economic growth will be hurt, especially badly for Singapore knowing precisely well human capital is our pivotal driver for growth, if not the only factor. This is further aggravated by breaks recently applied on incoming migrants. Now BOTH drivers for optimism have been badly dented.
If so, this property wave we are riding now could very well be the last time we see a new high. Following a serious property bubble, we could even fall into a deflationary spiral the one Japan had (is still) seen (seeing). And landed homes, once heralded as "something you can always trust to appreciate due to our land scarcity" might have seen its most glamorous days.
Okay, maybe I'm just frustrated of being priced out of the market now and being all bearish (for my own benefit). But unless our two new IRs, diversification and productivity drive succeed with flying colours in the near future, Singapore might have already seen her golden age.
February 27, 2010
February 26, 2010
Buy buy buy
Singaporeans are really cash rich. I'm kind of proud of that..but hey, it's disrupting my buying plans! Where will I live when I get married with kids? Where will my children live? Will we still be able to afford housing? Okay..now I sound like the typical ranting going on in ST Forum against HDB nowadays.
My mum was just saying the other day that Hong Kongers used to be obsessed with property shopping (that still holds true anyway), and it was only recently that Singaporeans caught on the flu. She then proceeded shake her head in helplessness (think TSK). Well, couldn't blame her...even her son caught on the fever.
But the exuberance in the current market? (info taken from Business Times)
The Estuary, from my sources, has sold all their units launched in the first phase. Mind you, that is 200 units sold within a day. Prime properties in CCR (core central region) are also still doing very well, with 45 units at Hiap Hoe’s Waterscape at Cavenagh and more than a dozen units over the weekend at L’VIV at Newton Road.
Most interestingly, just hours before the Government unveiled the two new measures to curb property speculation, buyers were tussling it out to grab units at The Laurels on Cairnhill Road which eventually sold more than 40. I wonder what reaction they had after they had gone home and settled down in front of their tv screen for the news.
On the landed side, things are far from 'grounded'. Good Class Bungalows and bungalows alike have been flying off the shelves (in this case, maybe classifieds section). And you can't use 'small quantum, ideal for investment' to justify as each of these properties are in the $10mil+ range.
Like what an agent said, "There’s still a lot of money; if you can’t put it in property, where else can you put it?"
My mum was just saying the other day that Hong Kongers used to be obsessed with property shopping (that still holds true anyway), and it was only recently that Singaporeans caught on the flu. She then proceeded shake her head in helplessness (think TSK). Well, couldn't blame her...even her son caught on the fever.
But the exuberance in the current market? (info taken from Business Times)
The Estuary, from my sources, has sold all their units launched in the first phase. Mind you, that is 200 units sold within a day. Prime properties in CCR (core central region) are also still doing very well, with 45 units at Hiap Hoe’s Waterscape at Cavenagh and more than a dozen units over the weekend at L’VIV at Newton Road.
Most interestingly, just hours before the Government unveiled the two new measures to curb property speculation, buyers were tussling it out to grab units at The Laurels on Cairnhill Road which eventually sold more than 40. I wonder what reaction they had after they had gone home and settled down in front of their tv screen for the news.
On the landed side, things are far from 'grounded'. Good Class Bungalows and bungalows alike have been flying off the shelves (in this case, maybe classifieds section). And you can't use 'small quantum, ideal for investment' to justify as each of these properties are in the $10mil+ range.
Like what an agent said, "There’s still a lot of money; if you can’t put it in property, where else can you put it?"
February 25, 2010
Know your neighbours
Something I read in today's Straits Times gave me a chuckle.
"Mortgage debt may force Chans out of Everitt Road"
I'm sure everyone remembers this terribly embarrassing fracas years back. The remaining 4 neighbours involved who are still living there probably would not have welcomed better news than this.
But now another question arises. If the Chans attempt to sell their house, who will buy it? Apparently banks valued the 3 storey terrace at $1.5m, not too bad given today escalating land prices, but will anyone budge? Unless you find someone who was living under a rock or thinks neighbourly squabbles are nice to have, even rental income would be hard to achieve.
Now for the next question.. When the Chans sell their house, they must move somewhere else. (I'm assuming they own only one property) I really wonder where they will move to, and good luck to their new neighbours.
If you love and care for your neighbours, just remember to check this certain 'Chan' isn't the one signing on your option to purchase form.
"Mortgage debt may force Chans out of Everitt Road"
I'm sure everyone remembers this terribly embarrassing fracas years back. The remaining 4 neighbours involved who are still living there probably would not have welcomed better news than this.
But now another question arises. If the Chans attempt to sell their house, who will buy it? Apparently banks valued the 3 storey terrace at $1.5m, not too bad given today escalating land prices, but will anyone budge? Unless you find someone who was living under a rock or thinks neighbourly squabbles are nice to have, even rental income would be hard to achieve.
Now for the next question.. When the Chans sell their house, they must move somewhere else. (I'm assuming they own only one property) I really wonder where they will move to, and good luck to their new neighbours.
If you love and care for your neighbours, just remember to check this certain 'Chan' isn't the one signing on your option to purchase form.
February 24, 2010
The charm of Emerald Hill
Recently there has been a flurry of activity at an unlikely place.
Taken from the URA website:
LANDED HOUSING DEVELOPMENT EMERALD HILL ROAD Terrace House 1 $8,500,000 2,937sqft Land 2,894psf Jan-10
LANDED HOUSING DEVELOPMENT EMERALD HILL ROAD Terrace House 1 $5,000,000 1,567sqft Land 3,190psf Jan-10
LANDED HOUSING DEVELOPMENT EMERALD HILL ROAD Terrace House 1 $4,900,000 1,598sqft Land 3,065psf Jan-10
LANDED HOUSING DEVELOPMENT EMERALD HILL ROAD Terrace House 1 $7,000,000 1,992sqft Land 3,513psf Jan-10
LANDED HOUSING DEVELOPMENT EMERALD HILL ROAD Terrace House 1 $4,000,000 1,552sqft Land 2,577psf Jun-09
LANDED HOUSING DEVELOPMENT EMERALD HILL ROAD Terrace House 1 $3,980,000 1,321sqft Land 3,013psf May-09
Not unlikely at all in this particular district, but a place where the small quantum of landed houses in a "small back lane" raises eyebrows when one sees so many sales in a month.
And mind you, this is not any small back lane, its directly behind Orchard Rd, sandwiched cosily between giant malls in front and the posh Cairnhill area behind. The curious me went immediately onto Google Street View to take a look at the houses there - and I fell in love with their charm instantly.
Go take a look for yourself...such a quaint, quiet place nestled within the busy city is indeed what you call a cul de sac.
Taken from the URA website:
LANDED HOUSING DEVELOPMENT EMERALD HILL ROAD Terrace House 1 $8,500,000 2,937sqft Land 2,894psf Jan-10
LANDED HOUSING DEVELOPMENT EMERALD HILL ROAD Terrace House 1 $5,000,000 1,567sqft Land 3,190psf Jan-10
LANDED HOUSING DEVELOPMENT EMERALD HILL ROAD Terrace House 1 $4,900,000 1,598sqft Land 3,065psf Jan-10
LANDED HOUSING DEVELOPMENT EMERALD HILL ROAD Terrace House 1 $7,000,000 1,992sqft Land 3,513psf Jan-10
LANDED HOUSING DEVELOPMENT EMERALD HILL ROAD Terrace House 1 $4,000,000 1,552sqft Land 2,577psf Jun-09
LANDED HOUSING DEVELOPMENT EMERALD HILL ROAD Terrace House 1 $3,980,000 1,321sqft Land 3,013psf May-09
Not unlikely at all in this particular district, but a place where the small quantum of landed houses in a "small back lane" raises eyebrows when one sees so many sales in a month.
And mind you, this is not any small back lane, its directly behind Orchard Rd, sandwiched cosily between giant malls in front and the posh Cairnhill area behind. The curious me went immediately onto Google Street View to take a look at the houses there - and I fell in love with their charm instantly.
Go take a look for yourself...such a quaint, quiet place nestled within the busy city is indeed what you call a cul de sac.
February 23, 2010
Buying behaviours
There has always been something illogical about the buying behaviours of Singaporeans in the property market.
Investors always caution against judging a product by its face value, looking thoroughly instead at its intrinsic value. But how does this theory measure up in our property segment?
Besides being well known in recent times for having a speculative environment, home buyers in Singapore also tend to buy based to "prestige" instead of the true-to-bid-rent-theory "location".
Don't get me wrong. Of course residential sites in prime areas in close proximity still do well. But you may be surprised at the amount of "forgotten enclaves" within the city. Is this a sign that Singapore might be experiencing what urban surveyors call inner-city decline that used to only affect long-surviving cities?
Take for example Newton and Little India. Newton is known for all its glitzy condos, often selling at record prices in recent times (with Lincoln Suites and more recently, L'viv selling at more than $2000 psf). Little India, on the other hand...the location seems almost to be left in the past. Little India is actually much closer to the city.
Of course properties in Little India would command less than desired prices you might say...what if I tweak the scenario a bit to include Cambridge Rd or even Mackenzie Rd areas into the comparison? You will be shocked to find a freehold condo along these above mentioned roads selling at barely $550 psf, compared to the average of $1500 psf in Newton and Mount Sophia respectively, barely just a few hundred metres away.
Once again, this is to be expected, as "face" indeed plays an important aspect for a Singaporean household.
Investors always caution against judging a product by its face value, looking thoroughly instead at its intrinsic value. But how does this theory measure up in our property segment?
Besides being well known in recent times for having a speculative environment, home buyers in Singapore also tend to buy based to "prestige" instead of the true-to-bid-rent-theory "location".
Don't get me wrong. Of course residential sites in prime areas in close proximity still do well. But you may be surprised at the amount of "forgotten enclaves" within the city. Is this a sign that Singapore might be experiencing what urban surveyors call inner-city decline that used to only affect long-surviving cities?
Take for example Newton and Little India. Newton is known for all its glitzy condos, often selling at record prices in recent times (with Lincoln Suites and more recently, L'viv selling at more than $2000 psf). Little India, on the other hand...the location seems almost to be left in the past. Little India is actually much closer to the city.
Of course properties in Little India would command less than desired prices you might say...what if I tweak the scenario a bit to include Cambridge Rd or even Mackenzie Rd areas into the comparison? You will be shocked to find a freehold condo along these above mentioned roads selling at barely $550 psf, compared to the average of $1500 psf in Newton and Mount Sophia respectively, barely just a few hundred metres away.
Once again, this is to be expected, as "face" indeed plays an important aspect for a Singaporean household.
February 22, 2010
Hold, and then buy
In a surprise announcement by the Government, private property prices are set to be controlled once again (the last measure implemented in Sept last year).
This time, after repeated re-iteration of the highest-in-history government land sales being put available, they will be 'curbing speculation' by reducing the limit on all private home loans to 80% and imposing a Seller Stamp Duty.
Well, we are not so interested in these measures per se and whether they are applicable, but we are more interested to get the answer to an age-old question: Is it STILL time to buy?
Two ways to go about interpreting.
First, the government is sending a clear message that property prices must not be allowed to rise much quicker than the pace of the overall economic recovery. And if it still does, more measures are coming in fast. Prices are therefore still set to moderately.
Second, the government KNOWS prices will shoot through the roof in the near term, and are therefore doing all they can now to prevent a huge fallout subsequently, and meanwhile get some revenue through the additional seller's stamp duty (which might just be the case given our budget deficit last year and this year's projection).
Let's ask ourselves why prices will continue rising. After all, the property market has always been a follower of the stock market, and the latter is definitely not doing very well recently.
There is optimism in the economy. But for how long? Already news of bubbles due to burst are popping out in Hong Kong and China. With US still picking up its pieces and the PIIGS of Eurozone in debt, how long more can we continue to deceive ourselves that EVERYTHING is fine?
Sure, lets talk about a more immediate cheer in our national context. Growth forecasts were raised to up to 6.5% and we have two IRs opening, which is supposed to generate many jobs, attract many high rollers to further boost our property market.
Nevertheless, we are a very open economy and we depend a great deal on other world players in almost all our markets. Significant population growth, coupled by commendable economic growth since independence has been the recipe for our mindsets that "our house prices will always increase in the long term".
But will this continue to hold true now that the government is stepping its breaks on its migration policy and focussing on increasing productivity instead? We can always succeed and produce more but one household will only need (and I mean the strict definition of a need) ONE home. Where is all the demand going to come from for our "investment properties"?
RWS Sentosa has already opened, and MBS will open some time around the 2nd quarter. Taking all things into consideration, I predict a slight dip in property prices and volume in March before rebounding when interest in the market returns when MBS opens.
In conclusion. HOLD now, BUY in March. After that, good luck.
This time, after repeated re-iteration of the highest-in-history government land sales being put available, they will be 'curbing speculation' by reducing the limit on all private home loans to 80% and imposing a Seller Stamp Duty.
Well, we are not so interested in these measures per se and whether they are applicable, but we are more interested to get the answer to an age-old question: Is it STILL time to buy?
Two ways to go about interpreting.
First, the government is sending a clear message that property prices must not be allowed to rise much quicker than the pace of the overall economic recovery. And if it still does, more measures are coming in fast. Prices are therefore still set to moderately.
Second, the government KNOWS prices will shoot through the roof in the near term, and are therefore doing all they can now to prevent a huge fallout subsequently, and meanwhile get some revenue through the additional seller's stamp duty (which might just be the case given our budget deficit last year and this year's projection).
Let's ask ourselves why prices will continue rising. After all, the property market has always been a follower of the stock market, and the latter is definitely not doing very well recently.
There is optimism in the economy. But for how long? Already news of bubbles due to burst are popping out in Hong Kong and China. With US still picking up its pieces and the PIIGS of Eurozone in debt, how long more can we continue to deceive ourselves that EVERYTHING is fine?
Sure, lets talk about a more immediate cheer in our national context. Growth forecasts were raised to up to 6.5% and we have two IRs opening, which is supposed to generate many jobs, attract many high rollers to further boost our property market.
Nevertheless, we are a very open economy and we depend a great deal on other world players in almost all our markets. Significant population growth, coupled by commendable economic growth since independence has been the recipe for our mindsets that "our house prices will always increase in the long term".
But will this continue to hold true now that the government is stepping its breaks on its migration policy and focussing on increasing productivity instead? We can always succeed and produce more but one household will only need (and I mean the strict definition of a need) ONE home. Where is all the demand going to come from for our "investment properties"?
RWS Sentosa has already opened, and MBS will open some time around the 2nd quarter. Taking all things into consideration, I predict a slight dip in property prices and volume in March before rebounding when interest in the market returns when MBS opens.
In conclusion. HOLD now, BUY in March. After that, good luck.
February 21, 2010
Marina Bay, the new Orchard?
Are properties in our CBD area undervalued?
As far as I know, there are only a handful of condos that made it into this distinction. Namely One Shenton, The Sail, Lumiere, The Clift, Icon, MBR, The Arris, Altez (the new cousin) and probably a few more low profile ones.
Excluding The Sail and MBR which were prematurely infected with the Marina Bay Fever, the rest are still struggling to meet the $1800psf to $2000psf mark, with new launch Altez taking the lead. In 2007, the highest psf reached in this area was barely in the $3000+ range.
If you compare with prime Orchard properties however, they are still far below their current average of $2500+psf and 2007 peak of $5600psf! The honour of course goes to the centrepiece Orchard Residences, which sits right on top of Ion Orchard.
Singapore falls far behind other international cities in terms of development of private homes in the CBD area, but then again its no surprise. Just take walk at night say maybe 10pm in the CBD and in Orchard. You will get your answer on why Orchard is still a better dwelling location.
But now that the Marina Bay Sands in opening in April and the Gardens by the Bay are slowly taking shape, Marina Bay may just succeed in becoming another Orchard, or better. So maybe everyone should buy CBD properties now before prices shoot through the roof (that's probably what the lady in her 30s who bought 4 units in Altez thought)? Either way, 2010 will be an exciting year for us, I'm sure.
As far as I know, there are only a handful of condos that made it into this distinction. Namely One Shenton, The Sail, Lumiere, The Clift, Icon, MBR, The Arris, Altez (the new cousin) and probably a few more low profile ones.
Excluding The Sail and MBR which were prematurely infected with the Marina Bay Fever, the rest are still struggling to meet the $1800psf to $2000psf mark, with new launch Altez taking the lead. In 2007, the highest psf reached in this area was barely in the $3000+ range.
If you compare with prime Orchard properties however, they are still far below their current average of $2500+psf and 2007 peak of $5600psf! The honour of course goes to the centrepiece Orchard Residences, which sits right on top of Ion Orchard.
Singapore falls far behind other international cities in terms of development of private homes in the CBD area, but then again its no surprise. Just take walk at night say maybe 10pm in the CBD and in Orchard. You will get your answer on why Orchard is still a better dwelling location.
But now that the Marina Bay Sands in opening in April and the Gardens by the Bay are slowly taking shape, Marina Bay may just succeed in becoming another Orchard, or better. So maybe everyone should buy CBD properties now before prices shoot through the roof (that's probably what the lady in her 30s who bought 4 units in Altez thought)? Either way, 2010 will be an exciting year for us, I'm sure.
February 20, 2010
Outrageous Ang Mo Kio
Honestly, I cannot comprehend how such atrocity can continue well into present day.
From URA Website:
CENTRO RESIDENCES ANG MO KIO AVENUE 8 Condominium 1 $1,118,800 904sqft Strata 1,237psf Jan-10
CENTRO RESIDENCES ANG MO KIO AVENUE 8 Condominium 1 $927,730 807sqft Strata 1,149psf Jan-10
Everything about this development just screams outrage! Never before has any developer had the cheek to launch an OCR (suburban) "mass market condo" so high. We all know and there is no need to mention who the developer is.
Bishan 8 in bishan (of course), launched in 1997, was the last condo to have seen launch prices of above $1000psf. (Once again, no prizes for guessing who the developer is) And many first owners are still sitting on paper loss today.
This project would easily win the most outrageous project launched in 2009. Either the 83 buyers (so far) know something we don't, or like what I always say, in a bull market, people actually believe in bull*.
From URA Website:
CENTRO RESIDENCES ANG MO KIO AVENUE 8 Condominium 1 $1,118,800 904sqft Strata 1,237psf Jan-10
CENTRO RESIDENCES ANG MO KIO AVENUE 8 Condominium 1 $927,730 807sqft Strata 1,149psf Jan-10
Everything about this development just screams outrage! Never before has any developer had the cheek to launch an OCR (suburban) "mass market condo" so high. We all know and there is no need to mention who the developer is.
Bishan 8 in bishan (of course), launched in 1997, was the last condo to have seen launch prices of above $1000psf. (Once again, no prizes for guessing who the developer is) And many first owners are still sitting on paper loss today.
This project would easily win the most outrageous project launched in 2009. Either the 83 buyers (so far) know something we don't, or like what I always say, in a bull market, people actually believe in bull*.
Subscribe to:
Comments (Atom)