sales transactions collapse, prices next

[stand off]

Big property stand-off
Posted on July 20, 2008
Developers are not lowering their prices, and buyers are not biting

It is seven months into the year, and while new private home sales have picked up from the lows seen earlier in the year, sentiments remain weak.

More bad news emerged recently from the United States, sending stocks plunging. The same question remains on potential buyers’ minds: Is it time to buy?

Some developers started to launch mass- to mid-market projects last month, drawing the crowds back to showflats. These include huge ones such as the 616-unit Clover by the Park in Bishan, the 724-unit Livia in Pasir Ris and the 521-unit Kovan Residences next to Kovan MRT Station.

But while the crowds are back, few are biting. Most are very cautious when it comes to signing on the dotted line. ‘I visited showflats to get a feel of what’s available but prices seem high to me. If I buy now, I am afraid that prices will fall further,’ said a 32- year-old marketing manager.

Another potential buyer, who is 27, said he has decided to wait one to two more years after a recent futile search. Those new projects that he likes are beyond his reach.

Lowering prices

Singapore’s property market went up too much too quickly last year. Inevitably, there will be a correction or, as some market experts say, a possible reversal. Already, price growth has slowed to an estimated 0.4 per cent in the second quarter, down from 3.7 per cent in the first.

Private home prices rose 31.2 per cent last year, up from 10.2 per cent in 2006 and 3.9 per cent in 2005.

Mr Colin Tan, Chesterton International’s head of research and consultancy, said: ‘First, if you believe that there is such a thing called a property cycle, then the price decline is inevitable. The next question is: How deep will the decline be and how quickly will it reach the bottom?’

For now though, many developers are reluctant to lower prices.

‘Developers will wait a while before lowering prices,’ said DTZ’s executive director and regional head for consulting and research, Mrs Ong Choon Fah.

Said a seasoned market watcher: ‘Prices will fall. It’s a question of how much. The US is likely to be in recession and it will hurt the rest of the world.

‘Oil prices are rising. Inflation is a problem for Asia as it is unable to feed itself. This second half will tell you where things are going.’

[Aiyah]

Another sotong. Don't even know that the June sales is 80% above May's at a grand total 801. And this is just the beginning of the show.

[f1 bester]

F1 effect not here yet and sales already going up? Prices are gonna thru the roof once hammy is here!

[F1 is a Minor point]

F1 effect not here yet and sales already going up? Prices are gonna thru the roof once hammy is here!

Wait for the gamblers.

[gamblers? loose change...]

The real boost to the market will come from all those fast teenagers in 2010...

[to the three above]

do you really think that one weekend out of 52 involving a few cars will make singapore into hongkong or london?

do you really think that a hotel-style IR resort will change anything? people have been cruising with star cruises for a decade doing the same thing. it's nothing new.

and what are these jet-setters of 2010? today's 18 year olds in singapore will be as bleak as yesterdays.

wow. you're right. jump in there and invest. the world is changing. singapore is the new "new york" we'll be millionaires overnight.

if you'd ever left these shores then you'd know that wasn't true.

[Overblown]

To the above poster, Singapore is already thriving. IR is another activity added to the whole picture. No need to get excited about any particular development. Some people just want to corner the discussion to the flywheel, F1, IR to skew things out of perspective. Take this types of discussion with a pinch of salt.

[OP is industry feedback]

The industry feedback confirms that Singapore economy is entirely dependant on the global recession. How deep how long. If the developers wait for a recovery they will be hit with much higher interest rates in 09 & 10. The held stock will be create a massive oversupply.

[aaaaaaaaaa]

do you really think that one weekend out of 52 involving a few cars will make singapore into hongkong or london?

do you really think that a hotel-style IR resort will change anything? people have been cruising with star cruises for a decade doing the same thing. it's nothing new.

and what are these jet-setters of 2010? today's 18 year olds in singapore will be as bleak as yesterdays.

wow. you're right. jump in there and invest. the world is changing. singapore is the new "new york" we'll be millionaires overnight.

if you'd ever left these shores then you'd know that wasn't true.

Would all the ever increasing number of expats be here if Singapore is not on its way to becoming a New York or London (I will not even bother to mention HK)?. Unless all expats here including yourself are 3rd class expats? Are you one? If not then accept the fact that we are heading in the direction of NY & London.

[Miks]

aaaaa:

Are you not being presumptive by dismissing HK? I wish well for Singapore, and am bullish about it's long term prospects. I would not, however, be delusional enough to take it in the same breath as NY, London, and HK.

In the banking world, these 3 cities are still the leaders and "it" cities. Singapore is making good progress in catching up, but is definitely not there yet.

Also, there is nothing wrong about being bullish about Singapore and being short term bearish on Singapore property. These are two distinctly different things - for some reason, you and some other "passionate" posters confuse the two. It is perfectly ok for you to have a bullish view on SG property, and it is perfectly ok for others not to have the same views. But by asking anyone with a different opinion to "go to Changi" or "go to IMH", you are only weakening your own credibility.

[Waste of time]

aaaaa:

Are you not being presumptive by dismissing HK? I wish well for Singapore, and am bullish about it's long term prospects. I would not, however, be delusional enough to take it in the same breath as NY, London, and HK.

In the banking world, these 3 cities are still the leaders and "it" cities. Singapore is making good progress in catching up, but is definitely not there yet.

Also, there is nothing wrong about being bullish about Singapore and being short term bearish on Singapore property. These are two distinctly different things - for some reason, you and some other "passionate" posters confuse the two. It is perfectly ok for you to have a bullish view on SG property, and it is perfectly ok for others not to have the same views. But by asking anyone with a different opinion to "go to Changi" or "go to IMH", you are only weakening your own credibility.

Well then what are you waiting for. Not good enough for THE 3 'cities'?

[Miks]

"Well then what are you waiting for. Not good enough for THE 3 'cities'?"

This seems to be the gist of your arguments - be bullish on SG properties, if you aren't, just get out of here 

[agent...]

Miks hi, save your breath. Not worth exchanging with that guy. He sounds lackey-ish. The cycle will assert itself. 2007 was peak. i am of the same view that one cannot equate S'pore with HKG London or New York.

[Quote.]

quote ..

Singapore's property market went up too much too quickly last year. Inevitably, there will be a correction or, as some market experts say, a possible reversal. Already, price growth has slowed to an estimated 0.4 per cent in the second quarter, down from 3.7 per cent in the first.

Private home prices rose 31.2 per cent last year, up from 10.2 per cent in 2006 and 3.9 per cent in 2005.

Mr Colin Tan, Chesterton International's head of research and consultancy, said: 'First, if you believe that there is such a thing called a property cycle, then the price decline is inevitable. The next question is: How deep will the decline be and how quickly will it reach the bottom?'

[analyst101]

aaaaa:

Are you not being presumptive by dismissing HK? I wish well for Singapore, and am bullish about it's long term prospects. I would not, however, be delusional enough to take it in the same breath as NY, London, and HK.

In the banking world, these 3 cities are still the leaders and "it" cities. Singapore is making good progress in catching up, but is definitely not there yet.

Also, there is nothing wrong about being bullish about Singapore and being short term bearish on Singapore property. These are two distinctly different things - for some reason, you and some other "passionate" posters confuse the two. It is perfectly ok for you to have a bullish view on SG property, and it is perfectly ok for others not to have the same views. But by asking anyone with a different opinion to "go to Changi" or "go to IMH", you are only weakening your own credibility.

I think that the comparison of the various cities is not useful at all. Every city has its good points. Every one will attract its own share of investors (and speculators), and those who want to call it home.

At the end of the day, while one must aspire to be better than the next, one must never have the mentality that he has `reached there'. Then complacency sets in. After that, it is all the way downhill - a long dark descent to the bottom - then it doesn't matter whether you started going down from the peak, or only half way there...