Singapore - Housing 01 (May 08 - Oct 08)

[millionairemind]

Regarding rental properties, do be careful who you rent out to and make sure damage repair clauses are added into the rental agreement.

One of my friends went to China to work for a couple of years and rented out his HDB 5room apartment. When he came back, he spend almost the same amount of money collected from rental to renovate his flat cos' he told me he could not recognize it when he got back and he did not specify a damage repair clause...

[kennynah]

oh...cannot just rent out without visiting occasionally... usually, the one month rental deposit is to be used to offset any non-wear and tear damages, either along the way or at the end of the tenancy, which must be clearly accepted by the tenant.
even if one is away, someone must be tasked to go see look... and drill into the tenants heads that they have to exercise duty of care to the property, besides the contractual obligations.

more headache, is harbouring of illegal immigrants. this one can only catch by doing surprise visits...this way, the tenants know they cannot anyhow sublet.

the consequences of having non-valid visas personnel staying in your premise, is that HDB will chong kong back the property, and they dont care for ignorance on part of the landlord.

[LenaHuat]

2 points to add :-
(1) previously HDB rentals were very low and so the rental yields were inadequate to cover repair and renovation costs. Agree must have watertight 'damages' clause to protect your property.
(2) Agree, must jaga your property. Conduct both regular (bi-monthly) and surprise checks.

[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.

In 2day's BT, the Head (Wealth Mgmt) of UBS Ag revealed that his best investment 2date was his purchase of a piece of land near the old Singapore Chinese Girls' School. I am juz wondering if it would be a good idea to purchase a very old house, raze it down and leave it as a 'garden' and wait for the next upswing of the property cycle.

The Cons : no rental income but hopeful of capital appreciation in some 7-8 yrs' time.
The Pros : cheaper than a built-up house.

However, I suppose I will have to maintain the land so as not to invite visits from those NEA officers. Hence the idea of having a fenced-up garden. I am juz wondering if Singapore has a law, like Perth, that requires a buyer to re-develop the land within 5 years. In Perth's case, it applies to a non-Australian resident.

Does any1 know??

[kennynah]

land near the old Singapore Chinese Girls' School

at the heart of orchard road...i suppose cant go wrong...except this is the kinda investment where only the ones with deep deep pockets can afford... again...the rich can only get richer...

[LenaHuat]

Hi K
He didn't say when the land was bought. I recall that land around the Mt Emily area was not that expensive until this 2007 property craze.
A classmate's father bought a very old house in the Balestier Road area during the financial crisis (pretty cheap then) and is now singing his way to the bank because the row of old houses got sold en-bloc.

If property prices correct say another 15%, it may not be a bad idea to pick up something around the city fringe.........gonna look for pockets of such properties.

[kennynah]

hi L : u are an astute investor indeed... best wishes to your hunt for the best deal !!!

[LenaHuat]

Hi K - Thank Q. Hope U really huat big in equities.

[winston]

From CIMB:-

CIMB keeps [b]Neutral stance on Singapore property sector. [/b]

Broker notes new home prices still resilient, but that "secondary transactions tell a different tale," seeing 20%-40% price declines from September 2007 levels. Adds, while property traditionally ideal investment in inflationary environment, May''s nearly 10% on-month, seasonally adjusted fall in non-oil exports and current high inflation levels show Singapore might be entering stagflation period.

"We believe this could have negative implications for the mid-high-end of the property sector," says broker. But notes that there are some positives in sector with recent launches drawing demand due to more realistic prices.

Adds, "in the current risk-averse environment, we take selective bets on well-capitalized developers with strong pre-sales expected to come though such as City Developments (C09.SG) and Wheelock Properties (Singapore) (M35.SG); rates City Developments Outperform with S$13.90 price target, Wheelock Properties at Outperform with S$2.85 target price.

[winston]

DBS Research maintains overweight call on the property sector.

Latest Government Land Sales Programme (GLSP) for 2H2008 indicated that the government is
pulling the breaks on land sales in Singapore, keeping overall quantum of residential units, hotel rooms and commercial space largely flat compared to that in 1H2008.

DBS research is positive on the news given that it ensures a sustainable and steady growth in the
property sector for the medium-term.

Top picks remain City Dev (BUY, TP S$12.90) as a proxy to the Singapore residential market.

In addition, maintain BUY on F&N (TPS$5.80) for its predominantly mass-market landbank
(~5.5m sf) and Among the mid-cap developers, Allgreen (BUY, TP S$1.66) for its undemanding valuation and exposure to the mid-tier/mass-market segments.