It is official now

[stock punter]

i think chaos theory is aggressive in the job cuts assumption.  most job cuts will happen in NY and London, as those are the centres hit hardest with losses on subprime and leveraged loans, so singapore should be relatively insulated

but on the other the argument on how many expats get housing allowance is rather irrelevant.  It doesn't matter whether someone is on about 10k a month + 5k housing allowance, or on 15k a month with no allowane.  The bottom line is, it is the banking guys that set the market rate for rent, since they are the largest group that can afford these type of rents at 5k+ (this is higher than than the average salary in singapore...) so if there is a slow-sown / freeze in hiring, then it doesn't matter how many jobs in the 3-5k a month in total salary are created here... the 5k+ rental market will crash since there will be no new comers to rent all the upcoming supply (how many people will look to rent 600 sqft studios at The Sail for 5k?)

[chaos theory]

Stock punter. I agree with you. I probably have the numbers wrong but the basic concept I am trying to make is that high paying expat Finance jobs with big housing allowances of $5k+ per month will reduce and be replaced with local talent.

I think this is a good thing. More jobs but the impact on the top end of the housing market has a big effect because it is such a tight segment.

I still think there will be 250+ high end expat finance executives who will be heading to Changi over the next year. And these positions wont be replaced. The flow on effect of this is 15000000+ out of the rental market.

[just wondering]

Could we get the comments of people in the finance industry?  What's going on in terms of retrenchments?  We all know about the job cuts in NY and London, but what about Singapore?  You could make a case that Singapore is insulated because it's part of a growth region, but it would nice to hear from people in various banks.

And what about local vs expat packages?  Are a significant number of Western expats on a local package in your company?  Can you discern a trend there in your company?

[to just wondering]

Could we get the comments of people in the finance industry?  What's going on in terms of retrenchments?  We all know about the job cuts in NY and London, but what about Singapore?  You could make a case that Singapore is insulated because it's part of a growth region, but it would nice to hear from people in various banks.

And what about local vs expat packages?  Are a significant number of Western expats on a local package in your company?  Can you discern a trend there in your company?

Practically zero retrenchments in Singapore.

Foreign directors upwards tend to get a full housing allowances, VPs may get a half allowance for a shorter period or more commonly zero.  This has been the case for a few years (basically since it started growing as a back office hub, not much point moving people out of London/NY if your costs then go up), prior to that almost all foreigners got full housing irrespective of grade.

The trend, rather obviously, is to have less people on housing.  To replace foreign directors with locals though will take a few years as the experience just isn't here yet in enough numbers.  Time will fix that.

[stock punter]

ok, i wasn't very clear above, but my point is that it wouldn't take retrenchments to lead to a fall in rents... a hiring freeze is sufficient... all the high flying finance guys already here are presumably staying somewhere already, so they aren't looking for a new place, but all the supply coming on the market (including the past few months Icon, Sail, City lights, etc.) needs new tenants, and those aren't moving to Singapore

The rental crunch the past 1-2 years was caused by reduced supply (en-blocs) and increased demand (people moving to Singapore in the boom years for finance 2006-early 2007).  Now we are moving to an opposite situation... increased supply and stagnant demand, and that by itself would lead to a fall.  My personal punt is back to 2006 levels (say $3000 for a 2br place in Emerlad Garden or Riverplace, and say $4000 for a 2br place in the new developments like The Sail) house prices will adjust accordingly to the lower rental yield, as well as potentially higher interest rates.

If the global situation worsens and we actually get a severe slowdown in Singapore and retrenchments, then we may be heading back to 2004 levels (2br in bayshore park was going for 1400 in those days... i was quite junior then, so don't know what the places in town were going for back then)... not a likely scenrio (ie I dont think this scenario has a greater than 50% chance of eventuating), but certainly a greater possibility than would have been envisaged 12 months ago

[chaos theory]

With 10% of Citigroup investment banking jobs worldwide going, is everyone certain that Singapore will have zero redundancy?

I would argue that "investment banking" as an industry should and most probably will undergo a similar structural change that the DOTCOM industry encountered in 2001+. Lots of pain then some long term gain. see article below

Citigroup to slash thousands of jobs
June 23, 2008 - 10:41AM

Citigroup is preparing fire thousands from its worldwide investment-banking division, The Wall Street Journal has reported.

The Journal, citing people familiar with the matter, said the layoffs are part of a plan to cut about 10 per cent of the staff of the 65,000-member investment-banking group.

Messages left with Citigroup spokesmen on Sunday were not immediately returned. The Journal said the fired employees could be notified as early as Monday.

The New York-basked global bank, along with much of Wall Street, is in the throes of recovering from bad investments on mortgages and leveraged loans that cut billions of US dollars from its portfolio.

In May, Citigroup unveiled a three-year plan that included getting rid of more businesses, mortgages, real-estate operations and jobs.

The bank called for shedding between $US400 billion ($A419.73 billion) and $US500 billion ($A524.66 billion) of its $US2.2 trillion ($A2.31 trillion) in assets and growing revenue by 9 per cent over the next few years as it tries to rebound from the huge losses tied to deterioration in the credit markets.

Earlier this month, the bank said it was closing the Old Lane Partners hedge fund that was co-founded by Chief Executive Vikram Pandit. The bank is shuttering the fund just 11 months after it was acquired for more than $US800 million ($A839.45 million).

[The Wheel]

Don't worry, the Wheel and Casino workers will all make up for any IB redundancies. Also didn't you see the article in BT about a week back saying all the laid off IBankers are making a beeline for Singapore?

Being facetious in case the sarcasm meter isn't working 

[.........]

To CT...

Even if there were to be layoffs in Citi IBD it would have a neglible effect on the rental market. Citi IBD only has ~10 people in Singapore and the majority Singaporeans not expats.

[SG Filter]

To multiple dots -

Yes I noticed a pattern in some responses:

"All positive global news will have a immediate and leveraged upward impact on Singapore"

"Any negative global news will have negligible or no impact on Singapore"

[chaos theory]

Guys,

Thanks for the response. It is nice to post a "change catalyst" comment and not get flamed.

The 65000 Citigroup IB jobs just are just 1/3 of the citi workforce of 150000. I find it amazing that Singapore can be isolated from a 10% global downsize when everyone keeps telling me this is a finacial hub for Aisa Pac.

I am sure the downsize in Singapore wil be constrained within the expat community. It would be nice to get a wave goodbye here on this site on their way out to Changi.

[SG FILTER]

Sales of Dakota Residences encouraging

By KALPANA RASHIWALA


A CLOSELY watched property market preview has yielded encouraging results amidst the current subdued market conditions

Ho Bee Investment and NTUC Choice Homes have sold 80 units at Dakota Residences over the weekend. The developers have so far released 122 units in the 348-unit project at an average price of $970 per square foot - lower than the $1,000 to $1,100 psf Ho Bee had indicated in June 2007 when the developers emerged as the top bidders for the 99-year leasehold site.

No deferred payment is available for the 19-storey condominium project, which will front Geylang River.

Buyers are predominantly Singaporeans, many with private home addresses. 'The majority of them live in the East Coast area, some even in landed homes. We have quite a number of professionals among the buyers,' said Ho Bee executive director Ong Chong Hua.

'It shows that if you price your project right, there are still buyers. There's quite a bit of pent-up demand. Also buyers like the project's proximity to Dakota MRT Station and the popular Old Airport Road Food Centre. The location is also very close to the popular East Coast area,' he added.

The plans for the Sports Hub and and Kallang Riverside area have also helped to stir interest in the project, Mr Ong reckons.

The project comprises a mix of two, three and four-bedroom apartments and penthouses. Both penthouses in the stack of 122 units released so far have been sold - a 3,700 sq ft unit went for $3.37 million and the other, a 2,605 sq ft unit, fetched $2.62 million. A typical three-bedroom apartment of about 1,300 sq ft in the development costs about $1.3 million on average.

Ho Bee and NTUC Choice Homes paid $524 psf per plot ratio at a state tender last year for the Dakota Residences site, which attracted a whopping 15 bids.

Asked if the developers will consider raising Dakota Residences' selling prices, Mr Ong said: 'We'll review it but any price adjustment will be moderate. Sentiment is still fragile. If you're too aggressive in raising prices, you run the risk of stalling the sales momentum.'

Urban Redevelopment Authority data released last week showed developers sold 441 new private homes in May, up from 284 units in April

[Wtff??]

"the sales momentum". That is brilliant. Award that man the Spindoctor of the Year trophy, it's unanimous.

[Smart buyers]

These are the smart buyers unlike the many fencesitters in this forum. They definitely do not believe all that rubbish talk of 40% price crash

Healthy weekend home sales as attractive pricing draws buyers

Price levels set below those at nearby units launched recently or not yet completed

By Joyce Teo, Property Correspondent


BUSY TIME: Huge crowds visited the show-flat for Dakota Residences during the weekend, with more than 80 units of the 99-year leasehold project in Kallang sold since Saturday morning. -- PHOTO: HO BEE

THE anaemic property market received a shot in the arm during the weekend, with robust sales and buyers keen to show that they will still deal if the price is right.

Suites 123 at Rangoon Road was sold out - a rarity these days - while Oxley Ventures offloaded 50 units of Parc Sophia in Adis Road. Sales were also healthy at Dakota Residences in Dakota Crescent.

Market watchers said the sales at these mid-market projects show that homebuyers can be drawn off the sidelines if prices are attractive.

'Buyers will bite if you price your developments below recently launched or yet-to-be completed projects nearby and about 10 to 15 per cent above older properties in the vicinity,' said Savills Singapore's director of business development and marketing, Mr Ku Swee Yong.

Ho Bee Investment and NTUC Choice Homes have sold more than 80 units of the 99-year leasehold Dakota Residences since Saturday morning.

The developers released 122 units in the 348-unit project at an average price of $970 per sq ft (psf) - under the $1,100 or so they wanted a year ago.

Said an investor who went to the launch on Saturday: 'This project is not exactly cheap. What it offers is value for money, especially in view of the makeover plans for Kallang.'

Ho Bee's general manager of marketing and business development, Mr Chong Hock Chang, added: 'Another reason the project did well in the current market was pent-up demand. It shows that there are people on the sidelines who are waiting to come out to buy at the right price.'

Suites 123, a 43-unit development marketed by Huttons Real Estate Group, was sold out yesterday.

The 37 residential units next to Little India and Farrer Park MRT station went for $940 psf to $1,277 psf, while the six shop units fetched between $375,000 to $595,000.

In the Mount Sophia area, buyers snapped up all 50 flats released at the 152-unit Parc Sophia over the weekend. Prices ranged from $1,500 psf to around $1,650 psf, or between $742,000 and about $1.2 million.

Developer Oxley Ventures, which is also behind Zenith in Zion Road and Tyrwhitt 139 in Tyrwhitt Road, offers an interest absorption scheme. It lets buyers postpone the bulk of their payments on new purchases.

Listed developer Sim Lian also started sales at the The Amery, a 74-unit development in Telok Kurau at the weekend. It sold 16 out of 39 launched units at an average of $860 psf, or between $1.16 million and almost $2 million.

More launches are expected in the next couple of weeks, including mass-market projects such as the 724-unit Livia in Pasir Ris and the 616-unit Clover by the Park in Bishan.

Meanwhile, the Strata Titles Board gave the go-ahead yesterday for the collective sale of the 342-unit Minton Rise. Kheng Leong, which bought the site early last year, plans to build 1,300 flats for launch next year.

joyceteo@sph.com.sg
     

[Makes Sense]

Isn't that how markets are supposed to work - lower prices, higher demand? What's so surprising about that? There were ultra bullish posters here saying people will buy AT ANY INFLATED PRICE

'Buyers will bite if you price your developments below recently launched or yet-to-be completed projects nearby and about 10 to 15 per cent above older properties in the vicinity,' said Savills Singapore's director of business development and marketing, Mr Ku Swee Yong.

[Fallacy]

Isn't that how markets are supposed to work - lower prices, higher demand? What's so surprising about that? There were ultra bullish posters here saying people will buy AT ANY INFLATED PRICE

'Buyers will bite if you price your developments below recently launched or yet-to-be completed projects nearby and about 10 to 15 per cent above older properties in the vicinity,' said Savills Singapore's director of business development and marketing, Mr Ku Swee Yong.

The truth that reporters have not reported or investigated is that prices are not realy lower than what they were in 2H 2007 (the peak). For eg 940-1277psf achieved for Suites 123 are on the high end of prices acchieved for that area at Rangoon Rd. Not forgetting this is not even a proper condo project with limited facilities and is not even fenced up as it has shops below. The prices achieved for such a project in such a area are record prices. City Square located a short distance away next to City Square Mall and built on 400000sq ft of land with full facilities including a bowling alley which will TOP end of ths year is going for an average price of 950psf in the sub-sale market.

Parc Sophia's prices of 1500-1650psf are similar to prices launched last year. The average price of adjoining Parc Emily which just received its TOP is around 1250psf.

So it is a fallacy that people are snapping up these condos because they are being sold at reduced prices.