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Home prices ‘to fall 20% by 2016 on restructuring, curbs’

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Home prices ‘to fall 20% by 2016 on restructuring, curbs’

Postby Wd40 » Wed, 10 Sep 2014 3:36 pm

http://www.channelnewsasia.com/news/sin ... 54620.html

Interesting point:

[quote]“Foreign labour growth is fast slowing, while permanent resident growth has turned negative … We believe total job creation is likely to slow to about 100,000 this year versus 136,000 in 2013,”

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Re: Home prices ‘to fall 20% by 2016 on restructuring, curbs

Postby PNGMK » Wed, 10 Sep 2014 4:03 pm

[quote="Wd40"]http://www.channelnewsasia.com/news/singapore/home-prices-to-fall-20-by/1354620.html

Interesting point:

[quote]“Foreign labour growth is fast slowing, while permanent resident growth has turned negative … We believe total job creation is likely to slow to about 100,000 this year versus 136,000 in 2013,”

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Re: Home prices ‘to fall 20% by 2016 on restructuring, curbs

Postby Brah » Wed, 10 Sep 2014 8:15 pm

PNGMK wrote:The real value in coming to Singapore is for GME (Global Mobile Executives).... I think most PR wannabes have worked out that unless they want to work on the dogshit Singapore wages they're better off leaving or not coming.

Never heard the GME term, assume it is expat package including everything, and if so, have to agree.

Back to topic, there have been a few articles of late saying how far the rental market is set to crash, and soon. Some say the rents have already gone down, I think they have stabilized and down fro a few peaks.

I think there is another drop imminent, but I am not that knowledgeable about this so will defer to those who are.

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Re: Home prices ‘to fall 20% by 2016 on restructuring, curbs

Postby PNGMK » Wed, 10 Sep 2014 10:07 pm

Brah wrote:
PNGMK wrote:The real value in coming to Singapore is for GME (Global Mobile Executives).... I think most PR wannabes have worked out that unless they want to work on the dogshit Singapore wages they're better off leaving or not coming.

Never heard the GME term, assume it is expat package including everything, and if so, have to agree.

Back to topic, there have been a few articles of late saying how far the rental market is set to crash, and soon. Some say the rents have already gone down, I think they have stabilized and down fro a few peaks.

I think there is another drop imminent, but I am not that knowledgeable about this so will defer to those who are.


For the condo for sale market it depends on how desperate the outside money sources are to park their funds (and pay 10% ABSD etc). For rental I don't know enough really to comment.

GME is the term the MNC I work for uses for fully found expats.

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Postby Beeroclock » Wed, 10 Sep 2014 11:44 pm

Interest rates still a key factor, and the timing for rate rises seems ever deferred.... I also expect the gov will reconsider the cooling measures if there's anything close to a 20% fall. But yes, the supply demand fundamentals are not that healthy.

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Postby Wd40 » Thu, 11 Sep 2014 12:08 am

It is the sentiment. Until recently, most players couldn't believe there will be a correction in prices more than 5%, if any. But after the latest cooling measure of TDSR, most speculative buyers have their hands tied. With no buyers and reduced number of foreigners/PR approvals in Singapore and more and more supply coming onstream, now it has finally occurred to all participants that a correction is due. 20% sounds very reasonable with all factors taken into account and considering how much the prices have risen.

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Postby Brah » Thu, 11 Sep 2014 12:31 am

I only care about rental prices, them going down gives a reason to stay here a little longer

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Postby Wd40 » Thu, 11 Sep 2014 12:43 am


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Postby JR8 » Thu, 11 Sep 2014 10:07 am

Beeroclock wrote:Interest rates still a key factor, and the timing for rate rises seems ever deferred.... I also expect the gov will reconsider the cooling measures if there's anything close to a 20% fall. But yes, the supply demand fundamentals are not that healthy.


Governments are only finally prompted to legislate for 'cooling measures' when the market is about to peak of it's own accord. By the time the legislation is enacted, it then completely f,f, f, er, hobbles the market.
Last edited by JR8 on Thu, 11 Sep 2014 10:19 am, edited 1 time in total.

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Postby Beeroclock » Thu, 11 Sep 2014 10:12 am

Wd40 wrote:It is the sentiment. Until recently, most players couldn't believe there will be a correction in prices more than 5%, if any. But after the latest cooling measure of TDSR, most speculative buyers have their hands tied. With no buyers and reduced number of foreigners/PR approvals in Singapore and more and more supply coming onstream, now it has finally occurred to all participants that a correction is due. 20% sounds very reasonable with all factors taken into account and considering how much the prices have risen.
let's see. 5-10% is correction, 20% is getting towards crash territory (I mean 20% on overall average basis, not taking isolated examples like sentosa cove). The Gov has said the cooling measures are intended to stabilize prices, not to engineer a crash. I think price moderation is overall beneficial. But large price fall will adversely affect Singapore economy, the local banks -> local stock market -> etc etc.

Sentiment is bearish agreed but for prices to fall a lot it I believe it requires a decent interest rate rise to force a larger proportion of sellers to actually bite the bullet and sell, rather than hold on.

So the way I see it, 1) without interest rate tightening, there can be further falls expected but I doubt it will be anywhere near 20% and the market will dry up even further on volume as Sellers will just hold, agents will twiddle thumbs and fight even harder to survive... 2) If higher interest rates, there could be a scenario of a bigger sell off and in more volume of transactions, but in this scenario I believe the Gov will be compelled to rollback cooling measures which will stabilize any fall, and encourage Buyers on the sidelines to come back into the market, so this could be the start of the next uptrend.

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Postby Beeroclock » Thu, 11 Sep 2014 10:48 am

JR8 wrote:
Beeroclock wrote:Interest rates still a key factor, and the timing for rate rises seems ever deferred.... I also expect the gov will reconsider the cooling measures if there's anything close to a 20% fall. But yes, the supply demand fundamentals are not that healthy.


Governments are only finally prompted to legislate for 'cooling measures' when the market is about to peak of it's own accord. By the time the legislation is enacted, it then completely f,f, f, er, hobbles the market.

yeah agree regulation can be lagging and therefore misses the boat / causes more harm.

However in SG perhaps less so, as the Gov can act faster here. As I've stated a few times before I think the cooling measures have been well executed and performed well so far

I think there should be a distinction amongst the "cooling measures" , some of them are probably ongoing as they are prudent credit controls to ensure a buyer has an adequate deposit equity, etc. However the ABSD, SSID imposing substantial taxes on both buyers and sellers in my mind are temporary policies that should be withdrawn once the market stabilizes and interest rates return to historical norm range.

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Postby Barnsley » Thu, 11 Sep 2014 10:56 am

Beeroclock wrote:
Wd40 wrote:It is the sentiment. Until recently, most players couldn't believe there will be a correction in prices more than 5%, if any. But after the latest cooling measure of TDSR, most speculative buyers have their hands tied. With no buyers and reduced number of foreigners/PR approvals in Singapore and more and more supply coming onstream, now it has finally occurred to all participants that a correction is due. 20% sounds very reasonable with all factors taken into account and considering how much the prices have risen.
let's see. 5-10% is correction, 20% is getting towards crash territory (I mean 20% on overall average basis, not taking isolated examples like sentosa cove). The Gov has said the cooling measures are intended to stabilize prices, not to engineer a crash. I think price moderation is overall beneficial. But large price fall will adversely affect Singapore economy, the local banks -> local stock market -> etc etc.

Sentiment is bearish agreed but for prices to fall a lot it I believe it requires a decent interest rate rise to force a larger proportion of sellers to actually bite the bullet and sell, rather than hold on.

So the way I see it, 1) without interest rate tightening, there can be further falls expected but I doubt it will be anywhere near 20% and the market will dry up even further on volume as Sellers will just hold, agents will twiddle thumbs and fight even harder to survive... 2) If higher interest rates, there could be a scenario of a bigger sell off and in more volume of transactions, but in this scenario I believe the Gov will be compelled to rollback cooling measures which will stabilize any fall, and encourage Buyers on the sidelines to come back into the market, so this could be the start of the next uptrend.


The Govt owns 80% of the housing in Singapore , they are the makers of the market.
Life is short, paddle harder!!

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Postby JR8 » Thu, 11 Sep 2014 11:04 am

Barnsley wrote:The Govt owns 80% of the housing in Singapore , they are the makers of the market.


They ultimately own ALL land, same as in the UK.

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Postby Wd40 » Thu, 11 Sep 2014 11:16 am

I meant 20% fall from the peak. The last 3 quarters prices have already fallen by 1%,1.3% and 0.9%

http://www.ura.gov.sg/uol/media-room/ne ... 14-44.aspx
http://www.ura.gov.sg/uol/media-room/ne ... 14-07.aspx

The increase in supply of new houses has just started. The peak of supply will hit by 2016 and lot of other factors will come together, like rise in interest rates, elections so even further tightening of foreigners. So a perfect storm so to speak. 20% over a period of 2 years, not a lot, no?

Also the goal of the gahmen is to make the housing affordable. A slow drift down of prices until the elections should actually be good.

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Postby Beeroclock » Fri, 12 Sep 2014 10:03 am

http://www.todayonline.com/business/sharper-focus-interest-rates-needed-property-market-projections

"Another month passes and another property market forecast is made — but nothing really new is said. If you want to be cynical about it, the prediction of the market’s demise in the near future is old hat. Analysts have been queueing up to repeat this mantra with increasing frequency since a couple of years ago, some even as early as when stamp duties were introduced in an attempt to cool the market.

While the analysts have backed their forecasts with arguments and data about the oversupply, the tepid growth, the new productivity-driven economic model and tighter population policy, there is very little discussion on interest rates and how they may trend in the near future....."


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