Singapore property prices jump to record high in second quarter as economy booms
Quote:Alex Kennedy, Associated Press Writer, On Thursday 1 July 2010, 18:09 SGT
SINGAPORE (AP) -- Singapore real estate prices jumped to a record high in the second quarter as the city-state's economic recovery broadened.
Private residential property prices rose 5.2 percent in the April-to-June period to the highest level since the government began the index in 1975, the Urban Redevelopment Authority said Thursday.
Prices leapt 5.6 percent in the first quarter and 7.4 percent in the fourth, bouncing back strongly after diving 25 percent in the 12 months to mid-2009.
Singapore's low crime rate, good schools and low personal and corporate taxes have helped the island rank near the top of expatriate global quality-of-life surveys and attracted investors to the residential and office property markets. Singapore opened its first two casino-resorts this year, boosting tourist visits.
Singapore has sought to slow price gains by implementing a series of measures this year to discourage short-term speculative investment in property.
The government earlier this year imposed a 1 percent to 3 percent tax on residential properties sold within one year of purchase and lowered the loan-to-value limit to 80 percent from 90 percent on loans for private housing. Officials have also pledged to release more government land this year for real estate development to help boost housing supply.
Policymakers throughout Asia have grappled with balancing low interest rates to spur economic growth and the danger that cheap credit can fuel asset bubbles.
By the end of last year, Singapore prime residential property was selling at $1,500 to $2,000 per square foot -- still less than the $2,000 to $2,500 per square foot in Hong Kong, Asia's most expensive property market, according London-based real estate consultancy Knight Frank.
Investor confidence in Singapore has been bolstered by a soaring economy in the first half, led by a surge in manufacturing. Gross domestic product grew a record 15.5 percent in the first quarter from a year earlier, and DBS Bank said it expects a 16 percent expansion in the second quarter.
DBS raised its 2010 growth forecast Wednesday to 13 percent from 10.3 percent and expects the manufacturing sector to grow 50 percent in the second quarter.
I think it'll con't to rise in near future but it may also mean the self-correction is coming....
Good time to release for ppty investor or con't to hold?
My unit is in Punggol 21 so that would be the main reason I would hold on as the water theme hasn't materialized yet.
No nice new condos yet etc. I think the upside is still there in the long term and the best time to let go would be when they start to actually appear.
I can't comment on the rest of Singapore but you should come invest in China property. :-P
bad news for new couples like me.. median COV $30k... gg!
I heard that China ppty can increase 1-2 folds (100-200%) easily if you get good units in solid location.
For S'pore, ppty price is kinda crazy now. I got a friend who bought a very old but big FH unit near town area and someone offers him half a million more within 2 mths after he gets the key. H/w, my friend likes the unit very much for his own stay so he didn't see, plus he predict the price will go higher.
Now in Singapore, if you can afford to hold a good unit for 1-2 yrs, you can easily gain 30-50% captial gain when you sell it. Of coz, with all the new regulations and stuffs, one needs to have the holding power to do so as it's not easy for anyone just to "short-buy" ppty for investment now. Not impossible, but more difficult.
My only concern is, during my father's time, HDB price is approx 20k for 4-rm. My time, 300k for 5-rm. When it comes to my children's time, I dun think their salary raise can catch up with the ppty price increment. Imagine for newly wedded graduated couple now, they prolly need to work 3-5 yrs b4 they can save the 20% downpayment (cash and CPF). Next time, I think they need maybe 7-10 yrs b4 they can save up the 20%. Private ppty will be impossible for most of them unless:
1. Supported by parents.
2. Come from rich family.
I know the ppty price index is lower than other developed neighbour countries (eg HK) but I think things will become very tough for the next generation...
Btw Fub, simi si "median COV $30k"?
I think fub is referring to the average person is paying 30k cash over the valuation of the house?
But I agree that as a new couple without any financial help it is really hard to afford a resale flat in a mature estate and with the growing population in sg due to foreigners, I reckon it'll just get worse.
Newly wed couples can get new HDB flat wor, why pay more for resale flats, unless u wanna stay near parents/in-laws. To me, the extra cash might as well spend to renovate the house and live more comfortably or reinvest on something else, afterall, transportation is quite convenient in S'pore now. By the time u got kids and your parents/in-laws agree to look after them for u, then consider a resale flat nearby lor. Moreover, with the existing flat u oso have something to "hedge" against the resale flat pricing so when pricing is low, u sell low buy low and when pricing is high, u sell high buy high. For first timers who have no asset now, if price high, u pay high.
I bought my HDB flat during the last peak (1996-1997) and pay high price for my prev house. When HDB re-launch my area (as still got several units unsold), the pricing dropped like 50k (of coz we oso been staying for 6-7 yrs liao), really heart pain. Fortunately with the recent price hitch, we managed to sell at a good price, by good price I mean just managed to cover the captial + renovation, ie live 10+ yrs for free. On the other hand, we can nvr predict the future, as long as not making a loss, I think it's good enuff liao, must learn to be content. I know some pple who use to buy some condo during the last ppty bubble whom fingers still burning until today.
Ziltus, this is already the situation in Shanghai,
Either rich family or parents spend all their money on their son's home.
Daughter marry out so ok. That's why more stress to have a son.
Or they can do like some do... go elsewhere in China to live. LOL.
New flats under the new BTO scheme are not so easy to get. Me and wife have applied for 5 different locations and have failed all 5. Fail meaning our queue numbers were so huge that the number of available flats were never gonna ever hit our number. In addition, all BTO releases are like 6x oversubscribed on average. Say u have 100 available flats, number of applicants will shoot to abt 600. Judging from our queue numbers with all the priority schemes and all, we have concluded that there are still many many young couples like us who are first time buyers as well. New flats don't come cheap too nowadays. On average, a 4 room flat can cost nearly $300k already.
In short, it's not that we don't wanna go for this option. It's just that it's more or less luck based and worse yet, u still have to wait a couple of yrs b4 the flat is built even if u get the flat. Not only that, there's also the 8k income ceiling for HDB grants for new flats. Me and wife are dangerously close to this ceiling. If things go on status quo for another 2 yrs max, we will be forced to buy a resale flat.
Leshrec is right. Median COV simply means on average how much people are paying for COV alone for resale flats. Imagine $30k upfront in cold hard cash... madness. Ziltus is right too. Our children will struggle a lot to even find a flat. Parents always want to provide for their kids, but if parents themselves are struggling with mortgage, our children will have to struggle.
There will always be a winner and a loser in this real estate game. Winners will always be the speculators and those who already own flats currently. 100% will be able to profit given current prices. The losers will be us, the later generation and generations to come.
COV = Cash Over Valuation
Prices are really crazy. my unit bought 1 year ago already earns me about 200k if i sell now.... ( and i havent even moved in yet) haha
But i really cannot imagine selling my unit and buying another one now.. cos the profits probably cant cover the increase in price!
Rykarx is right. I've spoken to a few friends, colleagues and some relatives. The general sentiment is the same. So what if I sell at a profit? If I sell now, I earn this much profit, it doesn't necessarily guarantee that I can find another suitable flat cos profits can't cover the increase in price!
That's one of the things about SG that really sucks.
Costs are going up quickly but while salaries may be up, they're not quite matching the pace of increase.
Most things are expensive in Singapore compared to elsewhere.
Everyone seems to enjoy charging Singaporeans higher prices.
But they know they can because Singaporeans spend anyway!
My tenant drives a Lexus, has a pretty air stewardess wife and goes diving as a hobby.
But cannot pay his rent on time every month without me chasing him.
And even OWES me one month still. WTF?!
Anyway, they are out next month. Changing tenants.
Sigh... but this is the way many Singaporeans live.
Want the good life and to look good whether or not you can afford it!
(06-07-2010 12:49 PM)Zanderion Wrote: [ -> ]Costs are going up quickly but while salaries may be up, they're not quite matching the pace of increase.
As reported in the Straits Times a few days back, the median salary of real income of Singaporeans is just $2,400. Not quite enough for the rising costs + inflation.
Source:
http://www.straitstimes.com/BreakingNews...48819.html
Anyway I read abt China's property market starting to go downhill too. Hope we're not looking at another potential major recession here in Asia.
http://www.straitstimes.com/BreakingNews...50127.html
(06-07-2010 01:17 PM)Fubs Wrote: [ -> ] (06-07-2010 12:49 PM)Zanderion Wrote: [ -> ]Costs are going up quickly but while salaries may be up, they're not quite matching the pace of increase.
As reported in the Straits Times a few days back, the median salary of real income of Singaporeans is just $2,400. Not quite enough for the rising costs + inflation.
Funny thing is for the past few years I keep reading the median wage is $4,000++. Now they say it's $2,400.
Median wage $2,400, how the hell are S'poreans affording the current property market prices?
(06-07-2010 11:39 AM)Rykarx Wrote: [ -> ]Prices are really crazy. my unit bought 1 year ago already earns me about 200k if i sell now.... ( and i havent even moved in yet) haha
But i really cannot imagine selling my unit and buying another one now.. cos the profits probably cant cover the increase in price!
Precisely. Your current staying unit cannot be treated as an investment which can be sold away coz if u you, you end up in the same place again, ie sell high buy high. To invest on ppty, you need to get the 2nd ppty other than the one you stay (unless you intend to downgrade your current unit).
It's strange that many pple tell me they can't get the units they want after several trials. Is it bcoz u guys are bidding on the "hot" zones? I remember when I select mine, I have alot of choices (in Jurong/Boon Lay area). In fact, my side have vancant units like 4-5 yrs after we moved in that's why HDB decided to re-launch those units. The few blocks next to ours are even fenced up to few yrs even though aldy in TOP mode.
And even though we bought our unit at the peak, we still get good COV when we sold it and guess what, we had an open house for potential buyers to view our unit and bid the COV, end up 3 couples stay to bid - 2 from China, 1 from Myanmar and the Myanmar couple won the final bid.
(06-07-2010 12:49 PM)Zanderion Wrote: [ -> ]That's one of the things about SG that really sucks.
Costs are going up quickly but while salaries may be up, they're not quite matching the pace of increase.
Most things are expensive in Singapore compared to elsewhere.
Everyone seems to enjoy charging Singaporeans higher prices.
But they know they can because Singaporeans spend anyway!
My tenant drives a Lexus, has a pretty air stewardess wife and goes diving as a hobby.
But cannot pay his rent on time every month without me chasing him.
And even OWES me one month still. WTF?!
Anyway, they are out next month. Changing tenants.
Sigh... but this is the way many Singaporeans live.
Want the good life and to look good whether or not you can afford it!
eh! does that mean no more chiobu in skimpy outfits parading around your place anymore? hahaha
(06-07-2010 11:34 AM)Fubs Wrote: [ -> ]Not only that, there's also the 8k income ceiling for HDB grants for new flats. Me and wife are dangerously close to this ceiling. If things go on status quo for another 2 yrs max, we will be forced to buy a resale flat.
I thot the 8k condition is based on the combined household salary when you submit the application? So even if you and your wife exceed the cap later, it's still ok right? I have an ex-colleague who quited her job coz the combined salary exceed the 8k cap and she said applied liao then find new job lor.
Actually the 8k cap is very unrealistic liao. With the raising living std, it's not uncommon for newly wed couples (usually after working 3-5 yrs) to hit 8k combine salary with bonus nowadays.
Initially my wife and I wanted to upgrade to a bigger HDB unit (ie from 5-rm flat with 3 bed rooms to 6-rm flat with 4 bed rooms) but after seeing the unrealistically high HDB resale price in our neighbourhood, we end up getting a condo - even though we pay more now, at least the resale value will be higher than HDB when we sell later (eg downgrade to smaller unit when retire).
(06-07-2010 12:49 PM)Zanderion Wrote: [ -> ]That's one of the things about SG that really sucks.
Costs are going up quickly but while salaries may be up, they're not quite matching the pace of increase.
Ya, it's a matter of time we become the next Japan where the next generation has to work like a dog but still cannot afford to own a house...
lol... there aren't hot/cold zones anymore boss. Every new BTO project that shoots up gets like 1000+ applications within the day it opens, even at not so accessible places like Punggol, or the more quiet parts of Yishun.
Back then in your time, it wasn't called the BTO scheme. It was more of govt forecast demand then build. In the end, they forecasted wrongly and ended up with more supply than demand, which was why places like Punggol in those times were so damn cheap and you could have many choices.
And one half of a couple has to be unemployed/jobless for a certain number of yrs b4 he/she can 'cheat' the system... hehe...
So now the whole Singapore only got BTO? This is strange coz the few blocks opp my old flat got several vancancy at the lower floor and in the end they were changed to rental unit for foreign workers (hence the complaints from the flat residents)...
Anyway one thing for sure, life will be worse for the next generation...
yep only got BTO... anyway just to let u know the degree of craziness of the BTO scheme, Punggol Waterway Terraces which just launched a few days back is oversubscribed by almost 10x as of today!!!
3 room 178 available 646 applications
4 room 588 available 5218 applications
5 room 306 available 3994 applications
Good for my punggol unit. :-D
(07-07-2010 02:35 PM)Zanderion Wrote: [ -> ]Good for my punggol unit. :-D
pk Zanni!!!!
Zan: stewardess moving out? Since you are in China, want me to uninstall your hidden cam?
Ziltus: Even if they have excess units, the government will try any ways and means to keep property price up. If not, they will lose power.
My children will not have any problem. My son will be the richest man in Singapore and my daughter will be Singapore's first lady prime minister.
Seriously, no use worrying so much, evolution ensure that our offsprings are much more smarter, adapt faster, etc. Same that we are already more complex creatures than our parents. Somehow, they will survive. We just have to teach and nurture them now, the rest is fate.
They sure will survive, like the new generation now in Japan...
By then you will see S'pore produced AV by multi-races...
erm AV? like that I approve for more FT!! :p
Another interesting article.
The dark side of the boom
Quote: The dark side of the boom
A recovering economy and an influx of foreign money have contributed to a mushrooming of the number of the super-rich. However, not everyone is benefitting from the upturn.
Star, Malaysia
June 19, 2010
INSIGHT: BY SEAH CHIANG NEE
SINGAPORE has recovered nicely from an economic crisis, but few people are aware of the scale it has been accumulating wealth during the past year.
With 36% foreigners, the country last year produced millionaires at a rate faster than any other country in the world, according to a global survey.
The Boston Consulting Group (BCG) said the number of millionaires in the island republic increased by 35% – ahead of second-placed Malaysia (33%) and red-hot China.
Its annual report also showed that 11.4% of Singaporean households had more than US$1mil (RM3.26mil) in investable assets, excluding property.
This was the highest concentration of millionaire families in the world - ahead of Hong Kong, Switzerland, Kuwait, Qatar, United Arab Emirates and the United States, BCG reported.
(In absolute terms, America has 4.7 million more wealthy families – by far the most – followed by Japan and China, the report added.)
The high-end wealth book has filtered down to a segment of upper middle class and parts of the heartland.
“At this rate, every other man you encounter on the street will soon turn out to be a millionaire,” commented a retired teacher. If property is included, the wealth level rises further.
Yet he is worried – rather than happy – with the millionaire boom, fearing a permanently higher cost of living.
Others fear it will widen the gap between rich and poor because the bottom 20% in incomes has been stagnating for years.
Reflecting the views of others, the former business teacher said he believed the wealth was mainly due to the influx of rich foreigners who can buy or rent property from locals.
A recovering economy driven by foreign money has significantly increased demand for goods and services. The heartland is spending more.
Weekend queues are appearing again in restaurants despite price escalation. People are upgrading their taste for pricier Italian, Japanese or Korean food.
A while back, a reporter observed that even school canteens were going up-market, offering pizza, lasagna, sushi and ice-blended drinks to students who, at times, have to eat three meals in school.
The price of cars, already the world’s costliest, is rising still higher.
During this season of The Big Sa-les and with the mid-year school holidays, the shopping arcades are packed.
A major factor is the threatened property balloon developing in the market, where rich profits are made.
A significant part of the foreign funds has ended up with middle-class Singaporeans.
There has been a dramatic reversal of fortunes in just a little over a year.
Before it happened, a recession had wiped out 21% of Singapore’s millionaire community.
Foreigners were packing their bags for home, leaving behind thousands of empty condos.
They have since returned, at first slowly, then with increased tempo.
Recently a Chinese national created waves by paying S$36mil (RM84.55mil) for a bungalow on Sentosa island, the most expensive residential sale.
This prompted surfer Wally Buffet to write:
“Forget about the Indians, the Malaysians and the Indonesians. They are no longer the super-rich.
“The new super-rich are the mainland Chinese, and there are plenty of them in Singapore.”
It has led to complaints from Singaporeans that their country is becoming a haven only for the wealthy.
Several years ago they led Prime Minister Lee Hsien Loong to assure undergraduates that Singapore is not just for the rich.
“It is a place where the vast majority of Singaporeans will enjoy a high quality of life,” Lee said.
So how much of the middle class is really benefitting from all this?
Answer: Apparently a fair bit. The reason is because Singaporeans were the region’s top savers to begin with.
Some 60% of households have bankable assets worth between US$250,000 and US$1mil (RM815,350 and RM3.26mil), a BRG representative was quoted by the Straits Times as saying.
Some negative factors are increasing. Singaporeans have just been told that their city is now the 9th most expensive place in Asia, dislodging Guangzhou and Shenzhen.
The higher costs are putting the squeeze on people who are not benefitting from the upturn, but paying the higher costs of living.
Other sufferers are the unemployed – or under-employed – and the elderly.
With so many foreigners buying real estate, the over-heating market is both a blessing and a curse.
Older citizens who had the foresight to buy property when they were young are now well-placed to ensure a reasonable retirement.
Not so young property-less graduates who plan to get married and build a life; the market is moving beyond their reach.
In the recent period of rising prices, I have watched several friends selling off their property to buy a cheaper home so they can have enough money to live through their days without income.
For owners of expensive homes, the temptation to “take provide” is rising. While some reap a rich profit, many – having sold off – have found it hard coping with high rents.
This has led to the long-term impact of Singaporeans cashing in their most valuable assets for temporary gains.
Asked prominent commentator Chuan Chin Leng after observing there are several thousand billionaires in China alone, with numerous rich Indians, Indonesians, Malaysians and all over the world: “How much more luxury property can we build to sell to the super-rich before we run out of space?”
Above all, Chua asked: “Why are we selling our precious land and space so happily? Who is benefitting and where is the money going to?”
o Seah Chiang Nee is a veteran journalist and editor of the information website littlespeck.com
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Welcome to the world of millionaires, just many of them are "imported".
And Chua obviously knows the answer.
Read from another forum:
Quote:A new transaction for HDB near Tanah Merah, 92sqm 5y old, valuation 450k, COV 70k.
92sqm = 990sft
ie 520k/990 = $525psf!
More expensive that some of those 10-20 y/o 99yrs neighbourhood condo liao...
lol COV 70k... all the bloodsuckers...