Easy money cannot be new norm: MAS' Menon, mas mas News & Headlines - THE BUSINESS TIMES

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[He noted that it was sending out two messages: One was that policy has to eventually normalise - an important message, so that people do not think this is the new state of affairs and make investment decisions based on this.

The other message is that normalisation is not coming too soon, and that the pace of this would be dependent on the state of the US economy.

Mr Menon said in the interview that there was no recipe or textbook answer on how to do this and little certainty on how markets will respond to the normalisation of interest rates.

"Some economies, which may not have been as cautious as they should have been during the boom years of easy money, may have a tougher time negotiating the exit of these policies."]

Don’t rejoice yet: Why May’s property sales are not cause for joy

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From URA Website.

From URA website.

[Here’s more from Maybank Kim Eng:

YTD sales of 4,010 units (excluding ECs) were just half of last corresponding period’s. We thus cut our full-year new home sales projection by ~30% to 9,000-10,000 units (from 13,000-14,000 units).

In view of this, we cut our full-year new home sales projection (excluding ECs) by ~30% to 9,000-10,000 units (from 13,000-14,000 units).

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The key catalysts for the expected price decline include:

i) More developers adopting a ‘priced-to-sell’ approach to reduce inventory risks;

ii) Prospective homebuyers holding back in anticipation of the surge in physical completions in 2015 and 2016; and 

iii) Continued weakness in the HDB resale market to negatively impact the wealth effect, reducing upgraders’ demand for mass market private homes.]

Unsold homes big drag on developers coffers.

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Moving forward all hopes are on the government to slowly loosen the cooling measures to prepare for a soft and comfortable landing. Anyway most developers have done very well for the past 8 years.  The cooling measures might had hit them but are necessary to ensure that the housing market's bubbles if it exist, will not explode into a big mess.

[Given that the QCs allow developers up to five years to finish building a project and two more years to sell all the units, the heat is on developers to clear their stock by the deadline.

To extend the sales period, developers pay 8 per cent of the land purchase price for the first year of extension, 16 per cent for the second year and 24 per cent from the third year onwards. The charges are pro-rated based on unsold units over the total units in the project.

Such fees drove luxury residential player SC Global to delist from the Singapore Exchange last year after sales slowed significantly due to the government's property cooling measures.

Analysts warn that more extension charges will kick in. The charges paid up so far are just the tip of the iceberg as projects built from land acquired during the 2006-2007 en bloc fever have just crossed a seven-year mark, they say.

"More developers are caught between a rock and a hard place" as they have to decide whether to pay the extension charges or cut prices to move the units, said SLP International executive director Nicholas Mak.

If they pay for extension charges, there is also the question of whether they can recover these costs later on, he said. This is why some developers of luxury projects are resorting to selling the units in bulk to mega investors.]

Home alone: How Capitaland's Singapore home sales shrunk an amazing 94%

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The usual suspect will be that the developers is holding back launches. The sentiments are still good with strong employment rate and expanding economy. Probably need to wait a little bit longer for the bubble to prick.



[Only 34 units sold in Q1 down from 544.

If Capitaland is the canary in the Singapore new home mine, it's hardly chirping at all. The cooling measures massacred sales and the company is having to slash prices to sell remaining units. According to OCBC, an anemic 34 residential units were sold in Singapore over 1Q14, down significantly YoY from the 544 units sold in 1Q13, due to continued headwinds in the domestic housing segment and a lack of new launches over the quarter.

It has seen 106 units sold in Apr-14, mostly in Sky Habitat, as prices were lowered by an additional 10% to 15% versus initial launch levels.

It is very bleak. Over in China, total residential sales in 1Q14 fell 48% YoY to 1.2k units though we also expect the rate of sales to increase ahead as the group looks to launch about 8k units over the remainder of FY14.]

HDB COV hits zero for first time in 9 years

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[For the first time in nearly a decade, the median cash-over-valuation (COV) for resale public flats hit zero-ground last month as resale and rental volumes weakened, flash estimates show.

Data from the Singapore Real Estate Exchange (SRX) showed that overall HDB COV fell from $3,000 in January to zero in February.

Overall HDB cash-over-valuation (COV) dropped from $3,000 in January 2014 to zero in Feb 2014 - the first time COV hit zero since 2006 when SRX began collecting COV records.

Twelve out of 26 HDB towns saw zero or negative median COV, according to SRX. This marks an increase from eight HDB towns in January that saw zero or negative COV]

Development charge rates up from today

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[The Ministry of National Development, in consultation with the Chief Valuer, revises DC rates based on current market values twice a year - on March 1 and Sept 1. The rates are stated according to use groups across 118 geographical sectors in Singapore.]

Time to tweak property cooling measures: Kwek Leng Beng

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Mr. Quek Leng Beng, CEO of CDL has also weigh-in and hope that the  government will loosen the cooling measures in the coming budget announcement. But has the price really came down to an affordable range? hope the government will make a wise decision.

["As the property market starts to cool, I would like to humbly suggest that this may be the right time to tweak the control measures in the light of concern over the global economy even in the year of the horse. It does take time for the medicine to work. Both the private and public sectors want a soft landing," he added.]

Resale flat COV hits low reached in 2009 crisis

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Resale flat's median COV or cash over valuation used to be around 35k during good time. Now its only about 3k. while rents stay stable at 2.3k.

[Median cash-over-valuation (COV) premiums for Housing and Development Board resale units dived from $5,000 in December to $3,000 last month - similar to the previous low in June 2009 during the Global Financial Crisis - as eight out of the 28 HDB towns saw zero or negative median COV.]

Property sector hopes for the pain to end

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Wishing upon a star, that the government will loosen the housing cooling measures.

[For property players, there is one Budget wish above all else: that some of the cooling measures introduced previously - including the total debt servicing ratio (TDSR) and additional buyers' stamp duty (ABSD) - might be tweaked or even rolled back.]

Redas-NUS index throws up mixed signals

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[In the latest Real Estate Sentiment Index (RESI) survey, the Composite Sentiment Index that captures the overall market sentiment of property developers increased to 4.0 in the fourth quarter of 2013, up from 3.9 in the third quarter.

The Future Sentiment Index also edged up to 4.0 from 3.9 over the same period.

In this index, developed by the Real Estate Developers' Association of Singapore (Redas) and the National University of Singapore, a score under five is a flag for deteriorating market conditions.]

Resale prices of public housing fall first time in 2013 since 2005

Link here: Resale prices of public housing fall first time in 2013 since 2005

The year 2005/06 marked the year where singapore economy made a turn for the better. With the introduction of two integrated resorts a year later, which brought in billions dollar of investment and together with China extraordinary economy booms, singapore has recovered quickly from the '98 asia financial crisis and the 2002 SARS epidemic to scale greater high once more.

[THE Housing & Development Board (HDB) announced on Friday that the resale price index (RPI) fell to 201.7 in the fourth quarter of 2013, down 1.5 per cent from 204.8 in the third quarter. For the full year 2013, the RPI registered a decline of 0.6 per cent, in what is the first annual decline since 2005. Resale transactions decreased by 12 per cent from 4,529 cases in Q3 2013 to 4,001 cases in Q4 2013. The number of resale transactions for the full year of 2013 stood at 18,100 - a decrease of 28 per cent over 2012.]

1 in 5 Singapore borrowers nearly overstretched: MAS

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So is this low interest rate inflated housing bubbles?
[As long as there is no sudden spike in interest rates - and the hike is expected to be very gentle -- most people should be able to continue servicing their loans]

Why Singapore is not Iceland . . .

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[The bottom line...
Singapore's financial sector and economy are not at risk of an "Iceland- style meltdown", as Jesse Colombo claims. Still, the market mechanisms on which his analysis is based are standard features of global capital markets, and fragilities and excesses do exist in our financial system. Consumers and investors can keep our money and its purchasing power safe by understanding and acting on a few simple principles: low interest rates (and high and rising property prices) do not last forever; excessive leverage (indebtedness for speculative purposes), like gambling, puts one at risk of losing everything; the government cannot protect and rescue us from all our behavioural excesses (that is, market risks exist in Singapore investments just as they do in other places - to expect otherwise is to court "moral hazard"); and the most secure way to make more money is to increase productivity from which sustainable higher incomes and real wealth flow. As a mature, developed economy that is now one of the world's richest as well as most open, we can no longer rely on future rapid GDP growth for recovery from a potential financial crisis.]

The Hillford sells out in 5 hours

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Looks like the residential price is holding up pretty well. Bubble it might be but not bursting anytime soon.

[All 281 units bought on first day.

World Class Land announced that all 281 residential units up for sale at retirement resort The Hillford have sold out on the first day of sales. 1,000 potential buyers turned up at the showflat at Jalan Jurong Kechii.

There was a good showing by buyers aged 50 and above, said World Class Land.

"The response to Singapore's first retirement resort has been spectacular, with many buyers responding very positively to The Hillford's wide range of elderly-friendly features, services and facilities specially introduced to serve their needs," said Koh Wee Seng, CEO, World Class Land.

Koh said that based on observations a "substantial portion" of buyers were over 50 years of age.

The 281 residential units were sold at an average of S$1,100 psf.]

Resale, rental prices of non-landed private homes down in Dec

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We still do not see any significant drop in house price.

[Resale prices of non-landed private homes declined 0.2 per cent in December last year, marking the fourth straight monthly drop in SRX’s overall property resale index released on Monday.
The Core Central region (CCR) saw the largest decline at 2.3 per cent, followed by Outside Central region's (OCR) decline of 1 per cent. The Rest of Central region (RCR) bucked the overall trend by registering a price increase of 2.9 per cent.
Rents also slipped another 1.3 per cent in December, reflecting a sustained weakening of rents for the fifth consecutive month.
“This is the weakest rental prices observed since December 2011,” said SRX.]

Call to relax some rules as property market wanes

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Feeling the heat? or the cold from the cooling measures.

[Singapore, government should relax some of its property-cooling measures as demand for real estate wanes.

This was the view of Getty Goh, director at Ascendant Assets, who felt this was necessary given "the lacklustre property market" and the likelihood that interest rates will rise this year and the next.

Speaking at the 12th Singapore Chinese Chamber of Commerce and Industry-Business Times (SCCCI-BT) Business Outlook Forum yesterday, Mr Goh said the government should consider repealing the Seller Stamp Duty (SSD) for residential properties introduced in January 2011, because sellers who are keen to dispose their properties may find themselves tied down by it.]

HK property sales fall to 17-year low as tax hike bites

Links to Business Times Singapore

[HONG KONG: The number of properties sold in Hong Kong fell by more than a third last year to a 17-year low as a drastic increase in tax on home sales, introduced to tackle rising prices, easily outweighed discounts offered by the city's property developers.


The total number of sale and purchase agreements concluded in 2013 was 70,503, down 39 per cent from 2012's level, according to the Hong Kong Land Registry. The value of deals dropped 30 percent from a year earlier to HK$456 billion (US$59 billion).


Forecasters expect the downturn to continue this year. With tycoons like Li Ka-shing warning of the impact on his property business, in November Deutsche Bank said Hong Kong home prices could drop up to 50 per cent over the following 12 months.


Designed to burst the city's long-term property price bubble, last February's doubling of stamp duty on residential transactions to as much as 8.5 per cent of the sale value has yet to stop the price of homes creeping up. According to property service firm Centaline Property, overall home prices edged up 3 per cent for the year, and have jumped 120 per cent since 2008.]