Resale flat COV hits low reached in 2009 crisis

Link Here

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

Link Here

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

Link Here

[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

Link Here
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 . . .

Link Here

[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

Link Here

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

Link Here

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

Link Here

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.]

2014 new home sales predicted to moderate to 13,000-14,000 units

Link: 2014 new home sales predicted to moderate to 13,000-14,000 units

let see what happen, market sentiment is still bullish.

[Property bull run set to end, says analyst.

According to Maybank Kim Eng, looking forward to 2014, it reiterates its belief that conditions would likely culminate in a ~10% decline in private residential property prices, led by the mass market segment.

Maybank also expects new home sales to moderate to 13,000-14,000 in 2014, down from the estimated ~16,000 units to be sold in 2013. In other words, Maybank thinks the property sector will tip next year.]

[Here's more:

After almost four years of uninterrupted increase, residential prices in Singapore are finally set to dip in 2014 in our view.

Following seven rounds of property cooling measures since 2009, the QoQ increase in the Urban Redevelopment Authority’s (URA) Residential Property Price Index (PPI) is moderating. However, the PPI for 3Q13 was still 3.9% higher than a year ago.

The number of new private homes sold by developers also declined by 30% in 11M13 to 14,964 units (excluding Executive Condominiums or ECs) from 21,288 in 11M12. We expect 2013 to end with sales of ~16,000 units, ie, ~30% drop from 2012’s robust figure of 22,698 units.]

Developers' new home sales climbed 54.6% in November

Link: Developers' new home sales climbed 54.6% in November

the sales volume is determined by developer strategy. hard time for policy maker to gauge.

[95% of newly launched private homes sold.

According to PropNex, developers sold 1,228 (excluding ECs) new residences in November, close to 95% of total new private properties launched, (1,293 units excl ECs) in the month. In comparison M-O-M, there is a 54.6% increase (incl ECs) 21.7% increase (excl ECs) in the total new launches sold.

“November is another exceptional month whereby developers strategically launched their new homes in time of the festive seasons. Core of Central Region (CCR) marked the highest sale this year at 662 units largely due to DUO Residences that were priced near the baseline of its region and as such, were highly attractive to buyers.

Regardless of the regions of these launches, sales of new homes had remained strong, mainly contributed by the rightfully prices projects of the other top-selling projects of Alex Residences and The Creek @Bukit. It was these attractive prices that set the tone for the sale of new launches in November and it gives the strongest signal for developers to pricing sensitively their new launches to attain high take-ups,” commented Mr Mohamed Ismail, CEO of PropNex Realty.]

Chart of the Day: This chart shows how bad residential oversupply can get

Chart of the Day: This chart shows how bad residential oversupply can get from SBR website.

［

There'll be 168,200 units by 2014-2016.

According to Phillip Capital, over the next 3 years, it would be an oversupply situation within the Singapore residential segment. Inclusive of both public and private sectors, they project the physical completion of 168,200 residential units from 2014 to 2016.
In contrast, they look into the underlying ‘real’ demand that stems from population growth.
Here's more from Phillip Capital:

We estimate that the increase in population will provide take-up of c. 71,400 residential units. Beside the local government intervention in the aforementioned portion, the oversupply situation will be a major factor in the gloomy outlook for residential.
The mass market continues the trend of having lesser individuals per residential units. Currently, based on the total residents and the total residential units, the ratio stands at an estimated 4.07 individuals per unit.
We do acknowledge that this ratio is exhibiting a downwards trend. However, for the market to absorb the upcoming 3-yr supply, we would need this ratio to lower a further 7%, at 3.78 individual per unit.
We do foresee residents continuing to favor having fewer individuals under a single roof. Nonetheless, with the aging population and the affordability issues, the ratio should not decrease much further. Within these 3 years, this factor will not substantially negate the oversupply effects.

］

HERO

HDB resale prices hit 15-month low in November

HDB resale prices hit 15-month low in November

Price still holding very well.

[It dropped by another 0.6%.

According to the SRX Residential Flash Report, overall HDB resale prices slipped another 0.6% in November, reaching the lowest level since September 2012.

According to flash estimates, 1,051 HDB flats were sold in November's resale market, an 11.5% drop from October's 1,187 resale cases. On a year-on-year basis, November resales volume represented a 34% drop from the same period in 2012.

An estimated 1,321 HDB flats were rented in November 2013, down by 11% compared to October.

HDB median rents slipped 2.1% to reach $2,350, marking the first drop since median rental prices reached $2,400 in June 2012.]

Expect HDB construction to taper from 2014: Khaw

Link here.

MND appears to be ahead of the curve.

[Over 77,000 BTO flats delivered in the last 3 years.

The government will begin to taper off the massive construction programme from 2014 after three years of sustained ramp-up to restore the balance in Singapore's housing market. This was revealed by Minster for National Development Khaw Boon Wan on his blog.

He said the COV trend in the resale HDB market is symptomatic of this development and is welcomed. The government will do so in a measured way, to allow the market to gradually adjust, just like what it had done to cool the property market earlier.

"The Nov 2013 BTO/SBF launch is about to close. The offering of 8,952 flats in a single launch was the largest in HDB’s history. With this, we have delivered over 25,000 BTO flats this year and over 77,000 BTO flats in the last three years," he added.]

How badly will Singapore be hurt by the burgeoning supply of residential properties?

How badly will Singapore be hurt by the burgeoning supply of residential properties?

Analysts project a whopping 73,600 completed homes by 2016.

It has been predicted that there will be 50,000 completed units by 2014, but what really rattled analysts is the projection that a further 49,700 homes will be available to the market by 2015 and another 73,600 by 2016.

If the average population growth in Singapore hits 86,000 a year from 2014 to 2020, demand for physical homes will just hit a measly 29,000 per annum. This supply-demand miscalculation got analysts worried about how the Singapore market will be whipped.

Here are the effects that analysts are fearing:

Eli Lee, Kevin Tan, OCBC Research:

One significant headwind for the residential sector lies in the large physical supply expected over FY14-16. Including HDB, DBSS and EC completions, we anticipate that 50.0k, 49.7k and 73.6k homes will come into the physical supply in FY14, FY15 and FY16, respectively.

Assuming a 6.0m population target by 2020 from the latest Population White Paper, we forecast average population growth at ~86k
individuals p.a. from 2014-20, which translates to an average incremental demand of ~29k physical homes per year. In our view,
this mismatch points to a fairly clear physical oversupply situation ahead.

That said, barring a macro crisis, we do not believe headline prices will correct excessively (>20%) in 2014. This is due to three reasons:

1) The direct impact of a physical oversupply (of homes which are already sold) is first on vacancy rates and subsequently on rental prices. While falling rents will pressure home prices, we do not see many home-owners force-selling into a softening market given that a negative rental carry is the norm in Singapore historically and that the average individual balance sheet remains fairly benign.

2) The level of unsold pipeline held by developers (which forms the primary supply) is currently at 36k units. This is lower than the 10-year historical average of 43k units and is not overly onerous. While developers will likely ease prices ahead to move inventory, a fire-sale situation is unlikely to ensue given relatively strong balance sheets.

3) Finally, we believe the data currently point to a fairly high price elasticity of demand. That is, significant numbers of buyers will come into the market at every incremental price dip. This is illustrated when CapitaLand introduced discounts at its 1715-unit d’Leedon in 1Q13 and subsequently saw 543 more units sold by 3Q13. Similarly, developers which set lower prices at recent new launches (Sky Vue at Bishan and Thomson Three at Bright Hill Dr.) saw firm performances, despite the Jul-13 TDSR measures.

Brandon Lee, Tuck Yin Soong, Macquarie Research:

2014 will see the completion of 19,302 units (+6.6% in inventory), which would result in a vacancy rate of 9.3%. Historically, property price declines have coincided with vacancies of 8% and above. Downside pressures will come from both the primary and secondary markets, as developers could trim their price expectations (which some already have) to capture declining volumes and more resale units could become available post the 3-yr expiry of the seller’s stamp duty.

Overall, we are forecasting residential prices to decline 4% in 2014, led by the high-end (-5%)due to the continued  absence of foreign buyers, impact of ABSD and sizeable completions (30% of 2014 supply).

Mid-end and mass would decline by a lower 4% and 3%, respectively due to continued interest from HDB upgraders and investors in view of an improved macroeconomic environment and low short-term interest rates. We expect sales volumes of14, 000 units in 2014 (-5% YoY), as prospective buyers will continue to feel the effects of TDSR.

Min Chow Sai, Nomura:

While the introduction of sellers’ stamp duty (SSD) since February 2010 has helped to slow the secondary market over the past few years, our survey of caveats lodged for new private homes suggests that more sellers are willing to pay the SSD to move their units in the secondary market – 192 units changed hands in 9M13, vs. 99 units in 9M12.

The average SSD paid per transaction was also higher in 9M13 (SGD32,185), compared with 9M12 (SGD19,655).

It also showed that more sellers are apparently willing to sell at a net loss (taking into account stamp duties and agents’ commissions) – 26 such transactions in 9M13, vs. nine in 9M12.

Lastly, of the 192 units sold with SSD paid in 9M13 and the 26 units sold at a net loss, 136 units and 16 units, respectively, are scheduled for completion in 2013-14F.

Sentiments have turned more cautious and the market is rightly concerned about the projected surge in completions, in our view. About 9,000 units of non-landed private homes [excluding executive condos (EC)] were completed in 9M13 and we are
projecting another 28,570 units to be completed by end-2014F, about 51% of which are located in the outside central region (OCR, a proxy for the mass-market segment).

While a lot has already been said about the potential impact on the rental market, we believe the impact on the secondary market could also be significant, notwithstanding the introduction of sellers’ stamp duty (SSD) in February 2010.

Iskandar developers seen taking a big hit

Link here

Malaysia gorvernment announced measures to cool its property markets.

Against the wall: RHB said Medini, one of Iskandar's flagship developments, is likely to experience a slowdown in home sales in the near term. - FILE PHOTO

[DEVELOPERS with substantial exposure to the Iskandar Malaysia region are expected to be the "worst hit" by recent property measures, as heftier taxes would deter short-term foreign purchasers who also account for a significant portion of residential sales in some areas, a research house has said.

At the same time, overseas developers are expected to be more cautious about land transactions as more punitive taxes could lead to higher landholding costs, said RHB Research.

CBRE data indicates that foreign buyers account for 54 per cent of total high-rise residential sales (by developers) in Nusajaya, and 39 per cent in Johor Baru and major suburbs.

But the new 30 per cent RPGT (real property gains tax) on foreigners who gain on disposals within the first five years of acquisition is likely to "wipe out short-term foreign speculators to a certain extent", RHB observed in a real estate report dated yesterday.]

Broker seeks to recover US$68m from 10 clients

Broker seeks to recover US$68m from 10 clients

[SINGAPORE] Global broking giant Interactive Brokers has launched the largest legal action so far in the wake of October's penny stock collapse, taking aim at at least 10 clients as it seeks to recover about US$68 million of losses.

BT understands that Interactive Brokers launched arbitration proceedings earlier this month against 10 individuals and entities through the American Arbitration Association.

Pending the start of arbitration proceedings, the global broker has also obtained court orders in Singapore and Malaysia to freeze the assets of eight of those clients, including certain directors and shareholders of Asiasons Capital, Blumont Group, LionGold Corp and Innopac Holdings - four of the stocks at the centre of last month's selldowns.

According to court documents inspected by The Business Times and confirmed by sources, Interactive Brokers on Nov 8 sought court orders to freeze the assets of Malaysian nationals Neo Kim Hock, Peter Chen Hing Woon, Tan Boon Kiat, Quah Su-Ling, Lee Chai Huat and Kuan Ah Ming; and two British Virgin Islands-registered companies, Sun Spirit Group Ltd and Neptune Capital Group Ltd.

How Singaporeans can get 10 long weekends in 2014

How Singaporeans can get 10 long weekends in 2014

Mark your calendars now.

Singapore – With proper planning, you can enjoy 10 long weekends next year without busting your leave bank.

Based on the 11 gazetted public holidays for 2014 released by the Ministry of Manpower, you can enjoy 10 long weekends by taking only six days of leave and two days off-in-lieu.

There will be three long weekends next year for Chinese New Year, Good Friday, Hari Raya Puasa and Hari Raya Haji, and because National Day falls on a Saturday next year, employees are entitled to claim a day off-in-lieu. 
Most employees should be able to claim and extra lieu day for Chinese New Year.

Mark the following dates in your 2014 calendar to make the most out of your vacation days:

To kick-start the year with a long weekend, take leave on January 2 and 3 so you get January 1 to 5 off.
Over the CNY period, claim January 30 as off-in-lieu, so you’re off until February 2.

In April, Good Friday falls on April 18, so the long weekend will span from April 18-20.

As Labour Day falls on a Thursday, take May 2 off so you’re off work from May 1-4.

For two long weekends in a row, apply for leave on 12 May so you get May 10-13 off for Vesak Day.

In July, you’ll have a long weekend from July 26-28 for Hari Raya Puasa.

In August, because National Day fall on a Saturday, you can choose to claim an off-in-lieu on August 8 for a long weekend.

October is another month with two long weekends; October 4-6 are public holidays for Hari Raya Haji, while you can take October 24 off for Deepavali and enjoy the long weekend from October 23-26.

Take December 26 off to enjoy a long Christmas weekend from December 25-28.