Are property boom or bust?

[Perisher]

http://www.propertyguru.com.sg/prop...5/126473/sales-at-gem-residences-lose-sparkle

Despite selling close to 300 of its 578 units within four hours during a VIP sales booking last Friday (27 May), Gem Residences in Toa Payoh only sold about 15 units on the first weekend of sales, which translates to 55 percent of units sold.

On the day of the VIP booking event, buyers were seen queuing outside the showflat at Lorong 5 Toa Payoh from as early as 8am, raising the possibility of a quick sell-out.

Nevertheless, against the backdrop of property cooling measures and challenging market conditions, this is believed to be one of the most successful private condo launches in recent times.

The 99-year leasehold project is jointly developed by Gamuda Land, Evia Real Estate and Maxdin, and marks Malaysian-based Gamuda’s first foray into Singapore’s property market. The infrastructure and construction giant has a 50 percent stake in the consortium.

Although sales have slowed dramatically, Gamuda Land’s Managing Director, Chow Chee Wah, was satisfied with the response.

“We are very pleased that sales have done well so far despite today’s lacklustre property market. We have kept prices fair, and we believe this has played a huge part in drawing in buyers,” he said.

Units were sold at an average price of $1,426 psf, lower than the indicative pricing of $1,480 psf.

Vincent Ong, Managing Partner of Evia Real Estate, said earlier that many buyers were drawn to the larger three- to five-bedroom units, measuring between 936 sq ft and 1,313 sq ft.

Chow added that the project’s new club and condo concept, which includes privileges at Gamuda’s Horizon Hills Golf & Country Club in Johor, also proved popular.

 

[Perisher]

http://www.todayonline.com/business/recovery-chinese-property-market-rather-fragile-sp

HONG KONG - A recovery in the Chinese property market that’s been fuelled by government stimulus may not be sustainable, according to rating agency Standard and Poor’s, which has cut ratings on 11 developers this year.

“The recovery isn’t all that rosy, in fact it’s rather fragile. It’s driven by liquidity,” Ms Cindy Huang, director of corporate ratings at S&P, said during a webcast on Monday (May 30).

S&P has downgraded Chinese builders, citing their reliance on short-term debt, margin pressure in lower-tier cities due to an oversupply of homes, and the risk of overpaying to replenish land banks. Particularly vulnerable to any tightening of credit are Evergrande Real Estate Group, Greenland (Hong Kong) Holdings and Country Garden Holdings, largely due to their aggressive investment appetite and large land needs in bigger cities, Ms Huang said.

Property sales in China surged 61 per cent in the first four months of 2016 compared with the corresponding period a year earlier, as the government cut interest rates and loosened home-buying rules to help stimulate the market and dissolve a glut of unsold homes in smaller cities. Declining interest rates in China have led to abundant liquidity, fueling a 25 per cent increase in mortgage growth in the first quarter, enabling developers to achieve strong sales.

 

[Perisher]

http://www.straitstimes.com/busines...er-to-bottom-than-hong-kong-says-fund-manager

SINGAPORE (BLOOMBERG) - Singapore's property market may be closer to a bottom than Hong Kong, according to LaSalle Investment Management, which manages more than US$58 billion in real estate funds.

Governments in Asia's two most expensive residential markets have imposed curbs in recent years to tame prices and improve affordability. As demand has dropped amid a slowdown in the region's economies, home prices in both cities are in the midst of a correction.

"Hong Kong and Singapore are in a different cycle," LaSalle's Chris Chow said in an interview. "Although Hong Kong also has government austerity measures for residential, that hasn't really translated into actual price correction until recently even though the measures came in a couple of years before."

In Hong Kong, prices surged 370 per cent from their 2003 trough through a peak in September before the correction began, as fears of a slowing economy in China damped sales. Home prices in Hong Kong have dropped about 13 per cent since September. Prices in Singapore have fallen 1.2 per cent since September and 9 per cent from the peak in 2013 as property curbs cooled demand. Singapore prices had surged 92 per cent from 2003 until the record set in September 2013.

In Hong Kong, LaSalle has been stepping back from investments for a few years even though they may yield good returns, because the risk is not justified at the current level, Mr Chow said.

A turning point in Singapore's property cycle "is probably closer and more advanced than Hong Kong, so we feel the market is bottoming out," Mr Chow said.

 

[Perisher]

You wouldn't own a Singapore condominium for rental yields!
http://www.globalpropertyguide.com/Asia/singapore/Rental-Yields

Last Updated: May 15, 2016

Holland Road, River Valley Road, Orchard Road, and Tanglin Road
Source: Global Property Guide Definitions: Data FAQ See also: Update Schedule

Singapore is a safe haven, it is a liquid market, everyone in Asia knows and trusts its institutions. Low interest rates have played their part in pushing property prices up, despite the efforts of the ever-vigilant Monetary Authority of Singapore and the government. Property in Singapore commands a premium, and conversely returns to owners who rent out their properties are low.

Nobody can say that condos in Singapore are cheap, at around US$13,500 per square metre (sq. m.). That’s because there’s a ‘global city’ premium. Gross rental yields in Singapore remain poor, at around 2.5%.

Yields are a little higher on smaller apartments than large ones, as is typical in most property markets. But those yields alone would not be a reason for owning property here.

Prices have been falling gently over the past 2 years, especially in the core and central region.

 

[Squaredot]

GEM residences next to Chinese temple and main road. Not all will fancy location.

 

[Perisher]

https://propertysoul.com/
Too many unoccupied flats is a waste

Ku Swee Yong, CEO of Century 21 Singapore, pointed out that between 2011 and 2015, the total stock of Singapore’s residential units has increased by 150,000. Over the next four years up to the year 2019, another 155,000 residential units will be completed. The stock is enough to cater to population growth in the next ten years and enough for home supply for up to 2030.

Data released by Urban Redevelopment Authority on Monday showed that sales of new private homes fell 11.6 per cent last month despite more new projects being launched. We now have a total of 24,919 vacant units in the market.

There are close to 20 EC projects being launched since 2014. In Punggol alone, there are already 8 ECs but developers are adding 2 more in the crowded market.

Despite monthly household income threshold being raised from S$12,000 to S$14,000 last August, according to Knight Frank, 40 to 50 percent of ECs launched in the past two years remain unsold. A new EC project may be over-subscribed with many e-applications. Yet the actual take-up rate can be very low. According to URA, the vacancy rate of completed EC units now stands at 14.3 percent.


Too many condo projects is a waste

After Singapore emerged from global financial crisis in 2009, the long period of vibrant sales in private properties has led to a massive boom in construction in Singapore. For more than five years, the government released new residential sites incessantly while the developers continued to build new projects unrelentingly. When the two forces become unstoppable, overbuilding is inevitable.

Since the en bloc fever in 2007, many old low-rise buildings haven been pulled down to make way for new high-rise condominium projects. The choice of demolition over refurbishment creates unnecessary waste in construction.

The East Coast used to have the blue sky, lush greenery and open view. A drive along Marine Parade Road these days can no longer see the big tall trees but countless new condominium projects. At night, many projects only have a handful of lights on.

With or without occupation, new flats start depreciation the moment they obtain their TOP. With close to 25,000 unoccupied units and another 53,512 in the pipeline, how many building materials, foreign labors and investment dollars we have wasted in this building craze?

 

[Shiny Things]

You wouldn't own a Singapore condominium for rental yields!

Nobody can say that condos in Singapore are cheap, at around US$13,500 per square metre (sq. m.). That’s because there’s a ‘global city’ premium. Gross rental yields in Singapore remain poor, at around 2.5%.

Yields are a little higher on smaller apartments than large ones, as is typical in most property markets. But those yields alone would not be a reason for owning property here.

Prices have been falling gently over the past 2 years, especially in the core and central region.

Wow, prices have been dropping and they're still only yielding 2.5% gross? That is a disastrous investment.

 

[Shion]

Property developers are the biggest winners while consumers will be at the losing end

 

[hindsight]

Property developers are the biggest winners while consumers will be at the losing end

Not really, property developers are stuck with a lot of unsold inventory too...

 

[Shion]

Not really, property developers are stuck with a lot of unsold inventory too...

They have been winners for the past few years. Time for consumers to win.

 

[microtek]

Singapore property isn't for the rental yield, it's for the capital gain you get after 5 - 10 years. Patience is key. And remember, the market is dead only because of the cooling measures. Look at car sales now, once the MAS relaxed restrictions on motor vehicle financing everybody is running to the showrooms.

 

[cybercom8]

Wow, prices have been dropping and they're still only yielding 2.5% gross? That is a disastrous investment.

yeah, gross yield...factor in maintenance fees etc, the actual yield may be lower than banks' deposit rates

 

[cybercom8]

a lot of early birds who booked the units there were enticed (conned?) by the free cheques promised by the developer/agents?

 

[V_for_Vanilla]

a lot of early birds who booked the units there were enticed (conned?) by the free cheques promised by the developer/agents?

CEA put a stop to the cheque scheme.

 

[Majestic12]

it's all about flipping properties until you cannot any longer.

Singapore property isn't for the rental yield, it's for the capital gain you get after 5 - 10 years. Patience is key. And remember, the market is dead only because of the cooling measures. Look at car sales now, once the MAS relaxed restrictions on motor vehicle financing everybody is running to the showrooms.

 

[cybercom8]

CEA put a stop to the cheque scheme.

yes, but that's after they have signed up thousands of sheep to book a unit

think there may be cases of buyers' remorse after the much poorer sales after the first wave...can monitor and see for the next 2 months if anyone gave up on the otp

 

[hindsight]

Singapore property isn't for the rental yield, it's for the capital gain you get after 5 - 10 years. Patience is key. And remember, the market is dead only because of the cooling measures. Look at car sales now, once the MAS relaxed restrictions on motor vehicle financing everybody is running to the showrooms.

Real estate is a function of rents, you won't get any long term capital appreciation without a reasonable yield on the asset.

 

[shareholder]

Real estate is a function of rents, you won't get any long term capital appreciation without a reasonable yield on the asset.

yeah agree, sure property bust, just have to be patient to see the debt holders default.

 

[starfish.starfish]

Wow, prices have been dropping and they're still only yielding 2.5% gross? That is a disastrous investment.

Steeper price drops only for the real high value properties.
Others are still holding up prices

 

[starfish.starfish]

yeah agree, sure property bust, just have to be patient to see the debt holders default.

Once us interest rates start climbing that's when panic will start for those over leveraged property owners.
Else I think not much fire sale going around.