Property Market cautiously optimistic

[Property]

SINGAPORE: Early estimates show prices of private residential properties fell for the first time in four years in the third quarter. Concerns are that times ahead may be rough.

Still, about one-third of MCL Land's latest mid-range condominium project - The Peak@Balmeg - was snapped up over the last two days during its private launch.

Among the visitors at the launch were Panneer Selvi and her family, who have been shopping for their ideal home.

Over the last four months, they have visited 12 condominium projects, comparing prices, features and home loan packages.

Panneer Selvi said: "We have not made up our mind to buy one, we are checking with the bankers, at the same time looking around for a suitable unit."

Some visitors said they are not overly concerned with negative market sentiments. And with prices of private apartments expected to fall over the next six months, they hope to cash in on a good deal.

Michael Tan, a potential home buyer, said: "I am not plunging into it. Sometimes buying a home, if it's for a home, then there are other considerations other than just pricing alone."

Ronald Wee, a property investor, said: "I do not foresee a slump like in 2003 or 2004. It's just that if you have a good piece of property with a good location and nice view, I guess mid- to long-term is still very promising, especially the IR (integrated resort) is coming up next one to two years."

Wee Hian Woon, a potential home buyer, said: "The market condition is so bad, the financial market is in the news all the time, the general sentiments I think are quite weak, so the feeling is that prices are likely to drop, then go up."

MCL Land said it has yet to decide whether the project will be launched for public sales. The 180-unit project, going for S$1,000 per-square-foot, will be completed in 2011.

Overall, many home hunters are still confident that Singapore will be able to weather the financial crisis and economic slowdown in the US because the country has strong fundamentals in place.

[lemmings]

Singapore buyers have a lemmings mentality. They blindly follow the leaders up the hill, then blindly follow them off the cliff into the abyss

[is it necessary to...]

bash singapore at every opportunity? plenty of investors elsewhere behave like lemmings.

[Snapping up]

This is so hilarious: 1/3 "snapped up"... In other words 2/3 was not sold.

In theory, is it possible to say: 1 unit was "snapped up" from the new 1000 unit condo, 999 were not sold? 

[really just]

Take your head out of the sand.

Dont be a fool to yourself.

The world is tanking.

Get real now.

[Empty Homes]

there are about 5 empty apartments at my condo & the LL's are refusing to come down to realistic rental levels. Some have been empty for more than 3 months but I saw one yesterday @ $3.5k for a 3+1 near Bukit Timah as the agent convinced the LL to come down in price rather than leaving it empty for another 4 months.

[Kubes.SG]

Its Kiasu economics.    If the LL reduces his price and rents it out quickly at the new lower market rates, rational people who understand basic economic principles would say that was a smart economic decision.  However in doing so in a Chinese, Kiasu environment he loses face, amongst his friends, relatives and peers.   Better to show how strong he is, and hold out forever if need be, and thus keep face. 

[sums it up]

Analysts say Singapore banks may have over-lent to property sector

THE tables have turned. In the heady days when the Singapore economy was roaring ahead, banks which grew their loans the fastest were lauded. Now that the economic outlook has worsened considerably, a high exposure to loans is a cause for concern.

Analysts have been sounding the alarm on deteriorating asset quality, or the possibility of loans defaulting, when times are bad.

In a recent report, ratings agency Standard & Poor’s noted that property-related exposure is relatively high for Hong Kong and Singapore banks. ‘While housing loans form the bulk of it, the share of commercial real estate and construction is high for a single sector exposure,’ the report said. ‘With economic growth expected to slow down in 2008 and 2009, the quality of this portfolio’s unseasoned portion is at risk.’

Morgan Stanley analyst Matthew Wilson wrote in a report that from 2004 to 2007, banks lent aggressively at very low credit spreads ‘on the assumption that asset values would continue to inflate and macro growth trends in Asia would sustain’.

He added: ‘Singapore banks, in particular, appear to have over-lent into an over-built property bubble. The credit cycle has now clearly turned and higher rates will exacerbate inevitable asset quality issues.’

[Greed]

Please do not make stupid remarks about Asians or Chinese. These countries are still doing relatively well in the current turmoil. Most of the people buying are buying the properties for their own stay - it is Asian culture to own physical assets and own their dream home instead of renting property for the rest of their lives.  There are lots of so-called "kiasu" people in every nationality - just because you sitting on the other side of the fence, i.e. a tenant who is at the LL mercy, doesn't mean you can laugh off every Chinese LL as kiasu. This is not kiasuism at play - it is greed - holding out for higher rental. And greed registers itself in every nationality. Trust me, a LL can easily lie about the rental rates to his friends without ever being caught - it is a greed problem, not a face problem.

Its Kiasu economics.    If the LL reduces his price and rents it out quickly at the new lower market rates, rational people who understand basic economic principles would say that was a smart economic decision.  However in doing so in a Chinese, Kiasu environment he loses face, amongst his friends, relatives and peers.   Better to show how strong he is, and hold out forever if need be, and thus keep face. 

[seller of condo]

Please do not make stupid remarks about Asians or Chinese. These countries are still doing relatively well in the current turmoil. Most of the people buying are buying the properties for their own stay - it is Asian culture to own physical assets and own their dream home instead of renting property for the rest of their lives.  There are lots of so-called "kiasu" people in every nationality - just because you sitting on the other side of the fence, i.e. a tenant who is at the LL mercy, doesn't mean you can laugh off every Chinese LL as kiasu. This is not kiasuism at play - it is greed - holding out for higher rental. And greed registers itself in every nationality. Trust me, a LL can easily lie about the rental rates to his friends without ever being caught - it is a greed problem, not a face problem.

Its Kiasu economics.    If the LL reduces his price and rents it out quickly at the new lower market rates, rational people who understand basic economic principles would say that was a smart economic decision.  However in doing so in a Chinese, Kiasu environment he loses face, amongst his friends, relatives and peers.   Better to show how strong he is, and hold out forever if need be, and thus keep face. 

I rest my case.  There really is some arrogant people out there who cant see that the good days here are gone and will never return.

This place has had its day.

Nobody wants to buy property here now. Why doesnt anyone own up and face the facts.

[stock punter]

Among the visitors at the launch were Panneer Selvi and her family, who have been shopping for their ideal home.

Over the last four months, they have visited 12 condominium projects, comparing prices, features and home loan packages.

Panneer Selvi said: "We have not made up our mind to buy one, we are checking with the bankers, at the same time looking around for a suitable unit."

Some visitors said they are not overly concerned with negative market sentiments. And with prices of private apartments expected to fall over the next six months, they hope to cash in on a good deal.

Michael Tan, a potential home buyer, said: "I am not plunging into it. Sometimes buying a home, if it's for a home, then there are other considerations other than just pricing alone."

Ronald Wee, a property investor, said: "I do not foresee a slump like in 2003 or 2004. It's just that if you have a good piece of property with a good location and nice view, I guess mid- to long-term is still very promising, especially the IR (integrated resort) is coming up next one to two years."

Wee Hian Woon, a potential home buyer, said: "The market condition is so bad, the financial market is in the news all the time, the general sentiments I think are quite weak, so the feeling is that prices are likely to drop, then go up."


Overall, many home hunters are still confident that Singapore will be able to weather the financial crisis and economic slowdown in the US because the country has strong fundamentals in place.

ok, so the actual people interviewed replied as follows


Panneer Selvi - looking around, but hasn't decided to buy yet

some visitors - expect prices to fall in the next 4-6 months

Michael Tan - not plunging into it

Ronald Wee - not forseeing a slump, likes the IR

Wee Hian Woon - market condition so bad, prices likely to drop.

So try as they might, the reporters managed to find only one investor who can geniuenly be described as "cautiously optimistic".  The rest are at best slightly pessimistic - expecting some falls and may buy then, or in the case of one person very pessimistic

To clarify, I am not commenting about the individual opinions.  Both Ronald Wee and Wee Hien Woon, the two extremes, are perfectly entitled to their individual opinion.  However, given these responses from the all the interviewees, how excatly can this article conclude that "many home hunters are still confident that Singapore will be able to weather the financial crisis and economic slowdown in the US because the country has strong fundamentals in place." ?

[seller of condo]

I like the IR too, but a casino (like they really need one with a recession on the horizon) is not going to change a thing.

Property prices here are going to dump in a big big way.

Even a fool can see.

[Face it]

You can have your views that the good days will NEVER return. But there are others who feel otherwise - people like you with a doomsday view will never make it big. From reading this forum, most are tenants (?95%) who have not made any profits from the property boom in the past 5 years - there were numerous opportunities. Understandably, they go around calling every other person who has made a killing in the property market previously as "stupid" or "arrogant". Just an example, the original launch price of The Sail is only 813psf. Even if the price has gone down from 2000psf to 1800psf, buyers are still sitting on huge gains. I'm pretty sure they can still sell it off at say 1300psf IMMEDIATELY and still make substantial money. Perhaps instead of looking down on the original buyers of the Sail, you should ask yourself why were you so pessimistic then? Why didn't you have the foresight? Do you honestly think you're smarter than them? Your LLs are not stupid by any standards. Those tenants who have paid rental for the past 5 years without any asset on hand are the dumbest. Face it - don't be in denial.

Please do not make stupid remarks about Asians or Chinese. These countries are still doing relatively well in the current turmoil. Most of the people buying are buying the properties for their own stay - it is Asian culture to own physical assets and own their dream home instead of renting property for the rest of their lives.  There are lots of so-called "kiasu" people in every nationality - just because you sitting on the other side of the fence, i.e. a tenant who is at the LL mercy, doesn't mean you can laugh off every Chinese LL as kiasu. This is not kiasuism at play - it is greed - holding out for higher rental. And greed registers itself in every nationality. Trust me, a LL can easily lie about the rental rates to his friends without ever being caught - it is a greed problem, not a face problem.

Its Kiasu economics.    If the LL reduces his price and rents it out quickly at the new lower market rates, rational people who understand basic economic principles would say that was a smart economic decision.  However in doing so in a Chinese, Kiasu environment he loses face, amongst his friends, relatives and peers.   Better to show how strong he is, and hold out forever if need be, and thus keep face. 

I rest my case.  There really is some arrogant people out there who cant see that the good days here are gone and will never return.

This place has had its day.

Nobody wants to buy property here now. Why doesnt anyone own up and face the facts.

[Face it1]

And to continue. You effectively help your LL pay his mortgage for the past 5 years. The interesting part is your LL has title to the property without paying for it - you have none. Even if the property which has appreciated almost 80% drop by 50% in value, your LL is still in good shape because he got his property without even paying in the first place. He got his property almost FOC - all thanks to your generous rental payments. I can see this forum comprise 95% of tenants petting each other's back for NOT buying property in SG - so naturally most of the posts are biased. But the views are so naive - perhaps it's about time u see things from your LL's perspective. Who's the kiasu and stupid one here? Who has title to the property here without forking out the cash?

[mr kubes]

Its Kiasu economics.    If the LL reduces his price and rents it out quickly at the new lower market rates, rational people who understand basic economic principles would say that was a smart economic decision.  However in doing so in a Chinese, Kiasu environment he loses face, amongst his friends, relatives and peers.   Better to show how strong he is, and hold out forever if need be, and thus keep face. 

it's quite easy to have your chinese cake and eat it too. rent out property at lower market rates and be economically rational. then lie to your friends and relatives about the rent and keep your face. it's not like they would demand to see the rental contract or call the tenant for verification.