Singapore - Housing 01 (May 08 - Oct 08)

[LenaHuat]

Hi K
Ha, TPY Garden Tower got meh??
I mean 'songbirds' like KTV songstress (wow...song-stress), niteclub singers +++.

Of course, I don't mean the sweeties like these (Do click on the audio tabs and listen. They are really sweeties):
http://www.guardian.co.uk/environment/2008/jun/06/wildlife.birdsong

[kennynah]

hi L:

oh..i see.... ya, many of these night "riders" around in this island... 5-6 of them packed into one room in a condo...that kinda thing... really does not add value to the property except to get frequent strange male visitors...hahaha...

[LenaHuat]

This is weird - the weirdest piece of news I've read 2day.
Has any1 seen 'caravans' parked on landed property?? Source : AsiaOne Forum.

Some wise Singaporeans are starting to buy a 'caravan/ moveable port-a-camp' and parked it into their landed property on the wheels.

It is cheap and legal, can be used by just married couple like one bed room HDB size. The structure can last for 40 years and also can withstand earth quake impact, estimated cost is around $50K for a good quality product.

URA should encourage building owners to build a caravan park along the sea side and empty land w/land leased at 30 years. It is a cheap and affordable housing for average Singaporean, why should we buy an expensive condo?...

Be a 'global thinker', learn from the western counter part.

[kennynah]

hi L : wow....this is new... not that i have noticed..but what an idea... cheaper capital outlay...mobile...can call some orchard road carpark or emerald hill, as weekend home and go centrepoint shopping...

or mount faber for some romance as well...

but petrol prices still high...and car park fees applicable...but in this regard, can post a signboard outside..."people inside vehicle, "getting off" soon "

[LenaHuat]

Hi K - Ho, ho Yo U are not makaning yet?

I'm not sure if the writer is serious abt what he wrote. I thought that is what's happening in the US. Americans who have their houses foreclosed are now camping out in caravans in campsites.
Mobile homes are pretty common in the US.

However, this idea has merits in Singapore. One can buy a piece of land (if that's all that one can afford for the time being) and live in a cheap caravan parked on the land. When one has acquired more wealth, then build hse........no need to be deep in debt right from the start.

It's quite a brainwave really.

[kennynah]

dear L : thanks makan finisto...

actually... buythe caravan...go to some swamps...camp there and parked ...dont ever move for next many years....and then, claim rights on the land... but of cos...plant some jambu air, campedat, and better still...cultivate a few durian trees as well...lay claim easier later... hahaha... "buy caravan and get land free" scheme

[winston]

From OCBC:-

Where are we headed?

Developers holding back launches since 3Q07.Developers have remained cautious with new launches as evident in the sharp decline in the quarterly new launches from the high of 4,362 units in 2Q07 to 1,343 units in 1Q08 and many are reportedly holding back their launches due to the weak market sentiments.

While bigger developers with strong balance sheet have the capacity to hold back their launches, smaller developers with high gearing may face pressure to launch their projects in a depressed
market as a result of their high borrowings. And with cost of debt rising due to the credit crunch and inflation, these small developers may face increasing difficulties in securing credit lines.

As such, we are cautious on small developers that had acquired land banks at high prices in 2007 and have yet to secure funding for their projects.

Take-up rate hits new low in 1Q08. While developers continue to cut back on their launches in 1Q08, the lower number of units launched still could not be absorbed by the market, as the take-up rate for new launches
has plunged sharply from 82.9% in 4Q07 to 54.4% in 1Q08, the lowest since 2000. On a segmental basis, while take-up rates in the other two regions had remained stable following sharp falls in the previous two quarters, OCR saw the rate plunge from 91.8% in 4Q07 to 38.1% in 1Q08. However, this may be due to the sharp 75.6% jump in new launches in OCR in the quarter.

Interest for mass market properties should come back. We believe this abnormality could be due to concerns over the oversupply of mass market properties as the take-up rate in OCR has been fairly resilient over the past two quarters, And given that only five projects with total of 1,139
units are expected to be launched in OCR between 2Q08 and 3Q08, this should ease concerns of oversupply and drive the take-up rate higher over the next few quarters.

Neutral on the sector. We reiterate our NEUTRAL view on the Singapore residential property sector as our expectation of price weakness in the high end and price stability in the mid to mass market properties remain unchanged. Thus, we remain cautious over developers that have large land bank exposure in the high end market, like Capitaland and Keppel Land.

We are currently reviewing our calls on CapitaLand, City Developments, Keppel Land and UOL Group due to a change in analyst coverage.

[winston]

Prime condo prices heading for long, gentle decline

Cushman model shows subdued market until 2012 but firm argues it's still a good time to buy

By KALPANA RASHIWALA


(SINGAPORE) The prices of condos and private apartments in the Core Central Region (CCR) will inch downwards and are unlikely to touch their recent peaks for almost the next four years, a model developed by Cushman & Wakefield (C&W) shows. The extent of the fall will depend on how slowly the Singapore economy grows, but C&W expects these median prices to drop between 8 per cent and 17 per cent from their peak of Q1 2008, before recovering by some time in 2012.

Even so, it argues that now may be a good time to look at buying into new developments, as the developers are unlikely to slash prices dramatically. Instead, a gentler decline is on the cards.

The trigger for this is 'there's still a lot of private housing supply', says C&W's head of forecasting Lee Chong Yong, who developed the model.

Mr Lee points to the Urban Redevelopment Authority's projections that about 8,000 non-landed private homes will be completed this year, followed by another 12,000 units next year, around 16,000 in 2010, and some 20,000 in 2011, before the supply eases to around 8,000 units again in 2012.

'Some of these units have not been launched yet. As time goes on, the unsold or yet-to-be-sold stock will keep creeping up, until 2011. The extent to which there will be downward price pressure from this will depend on the pace of economic growth. The stronger the economic growth, the faster the supply can be absorbed,' Mr Lee says.

Assuming Singapore's GDP grows at a rate of 4 per cent a year between 2008 and 2012, the median per square foot (psf) price for non-landed private homes in CCR - which includes the prime districts 9, 10 and 11, Downtown Core location and Sentosa Cove - will fall a total of 17 per cent between the Q1 2008 high and Q1 2012.

Based on a higher 5 per cent GDP growth rate, the price decline will be a lower 12 per cent over the same period.

If GDP grows at 6 per cent, the median price will decline 8 per cent between early 2008 and Q3 2009 before recovering back to the Q1 2008 high by end-2012.

C&W also tracked developers' sales in 255 new condo projects across Singapore and constructed an islandwide non-landed private residential new sales price index, which showed a 2.2 per cent decline between the peak in December last year and May this year.

'From the start of the credit crunch in August 2007 through to May 2008, developers of only 10 per cent of the 255 new condo projects tracked have cut their prices by more than a fifth,' C&W said.

C&W argues that 'compared to the 1997-1998 Asian crisis, today's falling prices are at present moderate without any signs of panic from the developers'. During the Asian crisis, most developers cut prices by at least 20 per cent while some reduced asking prices by up to 40 per cent in 12 months, it said.

The property consultancy group says 'now would be a good time to consider buying into new developments'. It also notes that expats living in Districts 9, 10 and 11 have seen a doubling of rents over the past two years, while sale prices of many condos are starting to see a slow price decline. 'For expats expecting to stay in Singapore, it would be a good time to consider buying (a condo) to take advantage of this short-term dip in the market,' C&W's head of residential Connie Looi says.

But JPMorgan analyst Christopher Gee gave a different view, saying that compelling values were needed to get buyers back to the market. 'The fear of making a purchase now, only to have prices fall later, is what's holding buyers back at this stage. Developers too don't want to sell too cheap; if prices recover, then they would have missed out on making bigger profits.'

One property market watcher said that tempting buyers back would require mass-market condos to be launched at $600-$650 psf on average, compared with a price of $700-$800 psf last year.

In the mid-range category, a freehold condo in the Balestier area for instance would today need to be priced at $900-plus psf, instead of the $1,000-plus psf they're still being marketed at, based on last year's pricing. For freehold projects in the prime districts 9,10 and 11, what would lure buyers back today would be an average price of no more than $3,000 psf, instead of $3,500-$4,000 psf last year, another industry observer said.

Giving his take, an experienced property industry player said: 'How Singapore home prices will pan out will depend on both internal and external factors. Residential property prices have fallen in many markets across the globe, such as the US, Europe, UK, Australia, Vietnam and China. If we want to be in line with the rest of the world, we'll also see some slide.'

[kennynah]

wow....can hold back buying now...if the report is credible...

[winston]

From UOB-Kay Hian:-

Property – Residential

Strong rebound in monthly sales volumes; maintain OVERWEIGHT

Highest sales volume registered in six months. According to the Urban Redevelopment Authority’s (URA) data on uncompleted homes in May, the number of units launched registered a 75% mom increase to 474 units and the number of units sold increased 55% mom to 441 units. The number of units sold is the highest in the last six months.

The take-up rate in May remained healthy at 93%. We believe the strong rebound in sales volume
was due to the soaking up of the pent-up demand over the last few months coupled with the attractive pricing of the newly-launched projects. Also, traditionally the second quarter sees high sales volumes.

High-end and mid-tier segments staging a comeback. The units sold in the high-end segment (Core Central Region) and mid-tier segment (Rest of Core Region) noted a 550% and 158% increase to 156 and 98 units respectively. The units sold in the mass market segment (outside central region) decreased 16% to 187 units. Developers have shifted their focus to the high-end and mid-tier market segments, with 76% of all launches coming from these segments.

The sale of 39 units at Nassim Park Residences at a median price of S$2,929 psf, 72 units at Vutton at a median price of S$1,225 psf and 42 units at The Verve at a median price of S$985 psf boosted the sales in the high and mid tier segments. Stocks that are focused on the high end – Ho Bee, SC Global, Wheelock and Wing Tai – are expected to benefit from the rebound in sales in the high-end and mid-tier segments in the near term.

Market factoring in a 40-50% decline in residential prices. We believe the market has over discounted the negative prospects for the sector, factoring in a 40-50% decline in residential property prices. This is an overly bearish scenario and the magnitude of the expected fall rivals only the declines seen at the height of the Asian financial crisis. Asian economies are lot more
resilient now. We believe a near-term correction is healthy for the long-term sustainability of the property boom and our forecasts already incorporate up to a 20% decline in residential prices.

We maintain our focus on quality, deep-value and diversified developers. City Developments (Target: S$14.05) is our top pick among large-cap stocks and Ho Bee (Target: S$1.50) is our top pick among small/mid-cap stocks.