New EC at Sumang Walk

Clazav

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More than difference of 2 years as if you include building period. Ec need 3 (building period) + 5 years (mop) while pc is only 3 years (ssd).

EC got 5 yr MOP but PC got 3 year Seller Stamp Duty (because no investor in the right mind will sell their PC within 3 years and pay SSD). So effective it is only about 2 yrs difference. The difference will be even narrower when EC sellers ask for exemption to their 5 yr MOP, hence right, EC and PC price will continue to narrow.

Resale prices will get hit again. So property buyers can expect their units to be sold cheaper and cheaper as the lease starts to run out.

Another thing is probably Govt is doing this to ensure sufficient demand for Tengah development. Expect lot of BTO and EC coming in that area for the next couple of years.
 

momoeagle

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Ec price sets pc price but it wouldn't be able to draw the crowd from pc to ec that much since there aren't many ec around as compared to pc.
So in your opinion, because there are many many more HDBs around, it will be able to draw the crowd from EC over?
 

sgpropertyblog

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PG is $1k+(even cheaper with grants)
but recent PCs where got $1.1k?
PG no ballot for most but some PCs also needed
balloting.

I have to agree with you.. haha..

firstly, PG price is from $933 psf( average $10xx psf) .. where can u find a cheaper new launch in Sg at this moment? the cheapest 3 bdrms is $888k ( assuming plus levy $40k) = $928k ( $1104 psf ) .. I seriously cant think of any new launch that is ard $1104psf...

with the increase in the income ceiling, I would reckon its matter of time the price will also follow suit.. just my own opinion.. pls dun quote me..
 

annetyu

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with the increase in the income ceiling, I would reckon its matter of time the price will also follow suit.. just my own opinion.. pls dun quote me..

Beyond a certain level of income, ppl won't be interested in EC. They want status, they want others to know about their success, they want a real "luxury" condo. And they want their kids to get into elite primary schools. Ceiling can well be raised to 50k but the effect on prices will be minimal.

Thats a good strategy of marketing piermont though. Clap for you!

We have to wait till next year to see the real effects. But as another member mentioned, last round of ceiling raising did not impact EC prices much.
 

sgpropertyblog

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Beyond a certain level of income, ppl won't be interested in EC. They want status, they want others to know about their success, they want a real "luxury" condo. And they want their kids to get into elite primary schools. Ceiling can well be raised to 50k but the effect on prices will be minimal.

Thats a good strategy of marketing piermont though. Clap for you!

We have to wait till next year to see the real effects. But as another member mentioned, last round of ceiling raising did not impact EC prices much.

hey, u r back... the forums was no fun without u.. too quiet.. lolss…

wat I meant is, with the increase in the ceiling cap, PG pricing may follow suit.. not the overall EC pricing.. but then again, monkey see monkey do.. if the next EC dev see PG increase price,what are the chances of them not increasing their price?? we'll find out next year..
 

annetyu

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hey, u r back... the forums was no fun without u.. too quiet.. lolss…

wat I meant is, with the increase in the ceiling cap, PG pricing may follow suit.. not the overall EC pricing.. but then again, monkey see monkey do.. if the next EC dev see PG increase price,what are the chances of them not increasing their price?? we'll find out next year..

No problem. Btw, we have fresh funds for investment, looking for highest yielding 1 or 2 bedder. Cash settlement. Any recommendations mdm? We are looking for highest rental yield, does not matter where the project is. Resale is also possible but not more than 15yo.
 

PostCountWarrior[+1]

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My views: In those mature estates, resale are selling at 500k and above. Hard to get combined 4k income to buy the place even if they have 45k grant. It's just too exp. More than combined income of 9k, no grant. So I would think impact on resale generally would be downward pressure now that more people can apply for bto, ecs. in the past trend, everytime gov increase income ceiling by 2k, btos launch price goes up by 150k to 200k. So what we will really see is narrowing of the price difference between bto and resale. Means gone are the days where people can make a huge fortune from selling their btos.

The sumang EC will probably be snatched up cos they know the next EC launch will probably be selling at a higher price since combined 16k income can buy. This will also cause downward pressure on PC which used to attract buyers from this income level.

Who is the winner then? Gov! Cos they can sell their btos and ec land plots at higher prices. This is mainly to plan for GSW where the btos probably will sell at 900k and above.

i agree. at the end of the day, its just a form of wealth transfer. those are earning very little will get the most grants and most grads or at least people who have the means to buy condo in the future should be earning above 9k when they buy their own house so most of the new grants will not go to them. where will gov get this money to sustain these poor people? has to come from somewhere, maybe from selling 900k btos or selling higher priced land plots after more bidding and demand for ec plots from developers.

election also coming, those who have seen resale prices falling for their hdb will have breathing space. I honestly believe this policy is for HDB owners not EC or condo owners to benefit. they may benefit at some point but i think government main consideration at this point are the HDB owners.

I still do not see value at these levels. its just a pure momentum play. rental and interest rates and additional buyer stamp duty really does not make sense for investment for yields. Unless rental goes up with more foreigners (i doubt with an election coming), or we enter a very very very low-interest rate environment like europe where danish mortgage rate is negative (its possible, 30y SGD bonds is around 2% now). will condo investing be like investing for landed? low yield but capital appreciation very good? or will we be like HK, where condo prices just keep going and nobody is looking for yield anymore and willing to just leave the place empty for momentum play?
 

momoeagle

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hey, u r back... the forums was no fun without u.. too quiet.. lolss…

wat I meant is, with the increase in the ceiling cap, PG pricing may follow suit.. not the overall EC pricing.. but then again, monkey see monkey do.. if the next EC dev see PG increase price,what are the chances of them not increasing their price?? we'll find out next year..
If they increase price, doesn't mean people must buy.

Then again, society is weird. When competition for business came over and tried a price war, I increase my fees by 20%. And got more customers instead.

Human psychology is tough.
 

momoeagle

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where will gov get this money to sustain these poor people?
Push private properties prices even higher. Because "EC sure earn", so charge high high and "people sure buy". Let the richer ones pay higher stamp duties and property taxes. Currently at 18% of iras revenue collection for 2018.

A general push of 10% increase in property values will probably help increase it to 19% to 20% I guess. Can fund many more grants.
 

NiShiZhu

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I have a few questions in mind and was thinking out loud.

1) the intent for raising the ceiling income for bto is to make bto easily available for ordinary folks (so that one would not need to turn to buy resale if exceed income ceiling) or was it meant to signal that future bto is not going to be cheap?

2) increase in bto ceiling inevitably also led to increase in EC ceiling to 16k. For a family with 16k income, are they still considered as sandwich class? They could have easily afford a pc instead of buying EC if gaps between the two are narrowing. Then what’s the point of having EC scheme?

3) by logic, this may give Developers the reason to bid the EC plot higher, thus, it naturally cause PC price to move in tandem. Is this what the govt wants? The last CMs introduced was aimed to moderate the price in property sector, wouldn’t this move contradicts the previous CMs’ intent?

Perhaps any expert can share some insights.
 
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annetyu

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Push private properties prices even higher. Because "EC sure earn", so charge high high and "people sure buy". Let the richer ones pay higher stamp duties and property taxes. Currently at 18% of iras revenue collection for 2018.

A general push of 10% increase in property values will probably help increase it to 19% to 20% I guess. Can fund many more grants.

Lol... I doubt thats the government's intention. Else, they will release all the cooling measures.

Prices goes however high we want. Demand v supply, assuming there is perfect information. In reality, there is no perfect information, and human's psychology and emotions frequently come into play when buying homes. Not everyone makes "rationale" decisions as we learnt in economics.

Supply - the prices developers are willing to sell. This is anchored by their land bid prices, which has formed the basis of the gains in psf prices over the past 2 years.
 

annetyu

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I have a few thoughts and questions in mind and was thinking out loud.

1) the intent for raising the ceiling income for bto is to make bto easily available for ordinary folks (so that one would not need to turn to buy resale if exceed income ceiling) or was it meant to signal that future bto is not going to be cheap?

2) increase in bto ceiling inevitably also led to increase in EC ceiling to 16k. For a family with 16k income, are they still considered as sandwich class? They could have easily afford a pc instead of buying EC if gaps between the two are narrowing. Then what’s the point of having EC scheme?

3) by logic, this may give Developers the reason to bid the EC plot higher, thus, it naturally cause PC price to move in tandem. Is this what the govt wants? The last CMs introduced was aimed to moderate the price in property sector, wouldn’t this move contradicts the previous CMs’ intent?

Perhaps any expert can share some insights.

Minister for National Development & Second Minister for Finance
Lawrence WONG
Ministry of National Development
5 Maxwell Road #22-00
Tower Block MND Complex
Singapore 069110

69087399
lawrence_wong@mnd.gov.sg
 

momoeagle

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For 1), I used to work in an engineering firm. I had a colleague who was getting married after 3 years of work, and had to pay more for a DBSS because he and future spouse income just exceeded the 8k ceiling back then.

Savings wasn't a lot yet, but they did not qualify for HDB.

In the end still no choice, he had to pay more for DBSS. This new policy would have helped him.

Imagine having to pay for house, wedding and potentially a kid or two next. It's not easy if you have housing loan that is too high.

Some couples I know forgo having more kids, or even any kids, because their housing mortgage already so high and they cannot foresee how they can afford.

Then again, what do I really know right? Just my observations of a few couples out of the millions of couples and households out there.
 

momoeagle

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Lol... I doubt thats the government's intention. Else, they will release all the cooling measures.

Prices goes however high we want. Demand v supply, assuming there is perfect information. In reality, there is no perfect information, and human's psychology and emotions frequently come into play when buying homes. Not everyone makes "rationale" decisions as we learnt in economics.

Supply - the prices developers are willing to sell. This is anchored by their land bid prices, which has formed the basis of the gains in psf prices over the past 2 years.
The argument is because developers bought high, that's why they have to sell high and prices will increase.

I must have failed Economics back then. The A probably was fake. I don't remember prices being determined by the supplier only.
 

NiShiZhu

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For 1), I used to work in an engineering firm. I had a colleague who was getting married after 3 years of work, and had to pay more for a DBSS because he and future spouse income just exceeded the 8k ceiling back then.

Savings wasn't a lot yet, but they did not qualify for HDB.

In the end still no choice, he had to pay more for DBSS. This new policy would have helped him.

Imagine having to pay for house, wedding and potentially a kid or two next. It's not easy if you have housing loan that is too high.

Some couples I know forgo having more kids, or even any kids, because their housing mortgage already so high and they cannot foresee how they can afford.

Then again, what do I really know right? Just my observations of a few couples out of the millions of couples and households out there.

That was what I thought too.
But then again, looking at the property price holistically, there may have some repercussions in other property segment such as EC and PC too.
 
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annetyu

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The argument is because developers bought high, that's why they have to sell high and prices will increase.

I must have failed Economics back then. The A probably was fake. I don't remember prices being determined by the supplier only.

Of course buyers matter too, but in today's market, at least for now, the supply-side is the stronger one.

I am sure you have learnt of market power and the oligopoly market structure where societies welfare is not maximised. The developers are the one with market power (for now). Buyers have no choice but to accept the pricing. A few rich en bloc millionaires attack and the rest will follow suit. Monkey-see, monkey do. Thats how new pricing become a "norm".
 

momoeagle

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Of course buyers matter too, but in today's market, at least for now, the supply-side is the stronger one.

I am sure you have learnt of market power and the oligopoly market structure where societies welfare is not maximised. The developers are the one with market power (for now). Buyers have no choice but to accept the pricing. A few rich en bloc millionaires attack and the rest will follow suit. Monkey-see, monkey do. Thats how new pricing become a "norm".
Game of musical chairs. Buyers only need to accept the pricing if they are very sold by the idea of condo living and yearn heavily to it.
 

momoeagle

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That was what I thought too.
But then again, looking at the property price holistically, there may have some repercussions in other property segment such as EC and PC too.
Likely yes for other segments. My thought is this.

Some group of people who could only buy EC and not HDB can now buy BTO.

Some group of people who could not buy EC can now buy.

Net flow of buyers in this manner.

Those who can qualify for BTO -- more people

Those who cannot qualify BTO but can qualify EC -- same or slightly lesser because 14k to 16k income households probably less households than 12k to 14k households.

Those who don't qualify for EC and BTO -- lesser people


Which mean for the general population, there will be slightly less demand for PCs. This may further add pressure to developers to quickly sell off their units.

Then again, I might be wrong.
 
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