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malcontent
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Re: HK or Singapore

Post by malcontent » Wed, 21 Jul 2021 2:36 pm

madasahattersley wrote:
Wed, 21 Jul 2021 12:49 pm
I think Singapore residential property prices are ridiculously inflated already based on;

1) Extremely poor rental returns already (a $2m condo will get approx $40k in gross rent PA - even worse for landed properties)
2) A huge number of empty units with landlords unwilling to negotiate
3) The demographic paying most of the rent on private condos and houses (i.e. affluent foreigners) fleeing Singapore at an unprecedented rate

We've just had to sign a new lease which is annoying because I think it's clear that the market is going to crash very hard in the next year.
If Wd40 wasn’t enough to quiet the squeak, allow me to illubricate further. In fact, let me just come out and say it: there is no eminent crash coming for the Singapore property market in the next year. If anything, prices will go higher.

Prices might seem inflated if you compare with the outside world — Singapore is not the outside world, this is one of the most densely populated dots on the world map, one with a unique value proposition unmatched in this part of the world… combined with a culture that has an almost embarrassing fetish for investing in properties (ahem, the cooling measures are there for a reason). Adding to that you’ve got very carefully calibrated government controls on release of land for development.

Rental returns have always been poor, even negative at times during my 24 years living here. Many property owners here have deep pockets and extreme holding power, this wasn’t as much the case back during the Asian crisis in 1997-1998, that is when we actually saw what could be deemed a genuine property crash (although, even back then, properties never got super cheap) that extended into the early/mid 2000’s… lessons were learnt and we saw a completely different situation in the crisis of 2008, only a relatively small and brief dip in prices because buyers now had the holding power, and today it’s even stronger. Call it hard headed, but owners here are very willing let the unit go empty before accepting cheap rent or a low price. You’d need a whole lot more crisis than what we have on the radar screen today before we will see a genuine crash in property prices here.

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Re: HK or Singapore

Post by sundaymorningstaple » Wed, 21 Jul 2021 4:03 pm

Mal, I was a renter for 16 years before I jumped into the fray. After the Asian Financial meltdown of '97~98 The rental on my Black & White trebled over a 2.5 year period. When told it was going up again, I told myself it time to park that money somewhere were it is going to save me money and could possibly even make me a buck or two. So, instead of paying rent, in Jan of '99 I booked the sale of a 5 room resale HDB for official HDB valuation ONLY, no COV at all. If you remember COV's back then could be $50K to $100K or more over the official valuation. I snatched it up. within 18 months it had appreciated 35% and has hung here after losing the GRC to the opposition and whathaveyou. Today it's' still over 135% of my purchase price Plus all the rent I've saved over the past 21 years I've been here. Jan & Feb 1999 was the property market bottom after the crash. Mar it started climbing back up again.
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Re: HK or Singapore

Post by the observer » Wed, 21 Jul 2021 4:12 pm

Just another few plus pts for why it’s supported.
Deposit rates are awful. Even if it surges (haha) to 1.5% for fixed deposis like it did in 2018, renting out properties are not worse off than parking the $ in bank.

Meanwhile, prices are gaining ground now with the cooling measures in place.
The reverse has to be true, gahmen surely would remove those measures, if it’s a catastrophic crash

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Re: HK or Singapore

Post by malcontent » Wed, 21 Jul 2021 9:30 pm

sundaymorningstaple wrote:
Wed, 21 Jul 2021 4:03 pm
Mal, I was a renter for 16 years before I jumped into the fray. After the Asian Financial meltdown of '97~98 The rental on my Black & White trebled over a 2.5 year period. When told it was going up again, I told myself it time to park that money somewhere were it is going to save me money and could possibly even make me a buck or two. So, instead of paying rent, in Jan of '99 I booked the sale of a 5 room resale HDB for official HDB valuation ONLY, no COV at all. If you remember COV's back then could be $50K to $100K or more over the official valuation. I snatched it up. within 18 months it had appreciated 35% and has hung here after losing the GRC to the opposition and whathaveyou. Today it's' still over 135% of my purchase price Plus all the rent I've saved over the past 21 years I've been here. Jan & Feb 1999 was the property market bottom after the crash. Mar it started climbing back up again.
We kept renting up until 2007 because when I did the math… mortgage interest + maintenance fees + property taxes > rent.

Expense wise, we were better off renting. But what I didn’t count on was the rapid “reflation” of property prices, recovering back to the late-1996 peak by mid-2007. Notice that was a full 11 year period with ZERO property price appreciation… talk about a boom/bust cycle!

Since then it’s been mostly higher, but when you average it out… for example, Singapore vs US-wide average property price index over the past 15 years, the level of price appreciation here is virtually identical to the US.

But, compared to hot markets like SF, Singapore is lagging way behind. In other words, Singapore property prices have not gone up crazily at all - and this is by design with the cooling measures. Yet another reason why a crash is unlikely, price appreciation has been very modest. That is exactly what the government is trying to achieve.

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Re: HK or Singapore

Post by sundaymorningstaple » Wed, 21 Jul 2021 10:22 pm

Yeah, not too many $1M HDB flats on the market in the past 10 years but there was a slew of them at one point.
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Re: HK or Singapore

Post by malcontent » Wed, 21 Jul 2021 11:16 pm

Here is an example of $1m HDB, apparently the first one in AMK.

https://www.99.co/singapore/insider/des ... b-million/

But doing the math, they paid $850k for the place in 2014, put in $200k worth of renovations ($1050k total) then sold it for $1030k, already a $20k loss before stamp duty, realtor commissions, etc.

The idea that everyone is getting rich from property here is highly overrated.

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Re: HK or Singapore

Post by bro75 » Thu, 22 Jul 2021 8:50 am

SG residents have a lot of cash nowadays and the interest rates are not bad. While the property prices are considered inflated by some, our hdb is only about +20% from our purchase price more than 10 years ago based on similar recent transactions. Compared to other countries, this is not considered over inflated. HDB in another locations and condos may have more price appreciation.

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Re: HK or Singapore

Post by the observer » Thu, 22 Jul 2021 9:22 am

Fwiw, I’m only bullish on private properties. Hdbs are a touchy subject given that it’s classified as affordable public housing. Hard to have a run up.

And I guess I got lucky
First foray into properties was when I was 28
10% down payment back then. Didn’t have the 10%, borrowed that from friends and personal loan. Ha.
Sold it at a 50% gain in 9 years and now I’m looking at 20% gain on my current.

The 1st was 5x on my downpay
The current is 1x on my downpay

Treated the mortgage repayments as rents, recouped when sold though. That’s a bonus

And oh yes, I don’t renovate. (?)
Coat of paint, and fresh laminates for shelving/cupboard/drawer skins. $5-10k max
Polish of the marble floors, sand down of the parquet, $1k or 2 max.
New mirrors, lightings etc. those are cheap to buy/replace.

Edit: stamp duty was just 3% in the past.
The current, paid 3% as well… I love my wife

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Re: HK or Singapore

Post by madasahattersley » Thu, 22 Jul 2021 1:18 pm

malcontent wrote:
Wed, 21 Jul 2021 2:36 pm
madasahattersley wrote:
Wed, 21 Jul 2021 12:49 pm
I think Singapore residential property prices are ridiculously inflated already based on;

1) Extremely poor rental returns already (a $2m condo will get approx $40k in gross rent PA - even worse for landed properties)
2) A huge number of empty units with landlords unwilling to negotiate
3) The demographic paying most of the rent on private condos and houses (i.e. affluent foreigners) fleeing Singapore at an unprecedented rate

We've just had to sign a new lease which is annoying because I think it's clear that the market is going to crash very hard in the next year.
If Wd40 wasn’t enough to quiet the squeak, allow me to illubricate further. In fact, let me just come out and say it: there is no eminent crash coming for the Singapore property market in the next year. If anything, prices will go higher.

Prices might seem inflated if you compare with the outside world — Singapore is not the outside world, this is one of the most densely populated dots on the world map, one with a unique value proposition unmatched in this part of the world… combined with a culture that has an almost embarrassing fetish for investing in properties (ahem, the cooling measures are there for a reason). Adding to that you’ve got very carefully calibrated government controls on release of land for development.

Rental returns have always been poor, even negative at times during my 24 years living here. Many property owners here have deep pockets and extreme holding power, this wasn’t as much the case back during the Asian crisis in 1997-1998, that is when we actually saw what could be deemed a genuine property crash (although, even back then, properties never got super cheap) that extended into the early/mid 2000’s… lessons were learnt and we saw a completely different situation in the crisis of 2008, only a relatively small and brief dip in prices because buyers now had the holding power, and today it’s even stronger. Call it hard headed, but owners here are very willing let the unit go empty before accepting cheap rent or a low price. You’d need a whole lot more crisis than what we have on the radar screen today before we will see a genuine crash in property prices here.
Agree on many fronts. I'm not comparing to the outside world - I'm more thinking about market conditions. Condos here are mainly occupied by expats. Expats are leaving, and will continue to leave faster than probably at any point in Singapore's history. I think the scale of the net outflow of foreign talent is yet to dawn on the decision makers here. A fake property market can only sustain itself up to a certain point if there are no private tenants.

The lease we just signed was 15% less than the previous tenants were paying BTW. Some of the units we looked around had been empty since 2018 and the landlord would not even knock a dime off the rent.

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