Interim Review of Crystal Ball Prediction

By Centauri78

If you have been following the blog, you may recall a prediction that I made a while back in August 2012 with regard to the residential property market, as measured by the URA housing price index. The prediction was for prices to rise for a couple of years from the beginning of 2012, and for prices to stagnate thereafter. Now that the first period of the prediction is over, let’s take a look as to where the market is now. Continue reading “Interim Review of Crystal Ball Prediction”

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An idea to explore if you’re renting (Part II)

By Centauri78

If there’s part I, there must at least be a part II, right? Of course!! If you’ve been waiting for this sequel, sorry I’ve kept you waiting for so long. I hope I pack enough of a punch here to be worth your waiting time!

So anyway, some of you out there may be thinking that you’re nice and comfortable living in your rental place and moving’s such a hassle. However, property ownership still sounds like a good option to hedge against rising rentals. Well, certainly, you can do both! However, there are a few options, and correspondingly, there are a couple of questions you have to ask. Continue reading “An idea to explore if you’re renting (Part II)”

An idea to explore if you’re renting (Part I)

By Centauri78

I imagine that in every tenant’s mind, there comes a time when they will question whether it is better to continue renting or to buy a home. After all, rent paid is basically water under the bridge, lost forever. If they were going to pay anyway, wouldn’t it be better to pay your own mortgage and build equity? Just about everywhere, home ownership is the cornerstone of the [insert country name here] Dream.

Of course, there are pros and cons to renting vs owning. Here’s a quick (non-exhaustive) rundown of the main pros and cons:

RentOwnProsCons
Continue reading “An idea to explore if you’re renting (Part I)”

Budget 2013: Impact on the Property Market

Last week, Finance Minister Tharman Shanmugaratnam gave his Budget Speech for 2013. Amongst the main themes of the speech, the most glaring to me was the re-distribution of costs from the lower-income/lower-wealth group to the higher-income/higher-wealth group. This is a natural progression in a maturing economy and should be expected. Of the items listed as part of this theme, those that pertain to the property market are:

Continue reading “Budget 2013: Impact on the Property Market”

After the Cooling Measures and White Paper: Is Property Still Viable?

Now that the new cooling measures and the White Paper on population has had time to sink in, it’s time to figure out what the effects are, and how they will impact the property buying/selling decision.

Continue reading “After the Cooling Measures and White Paper: Is Property Still Viable?”

The 7th Round of Cooling Measures: Will raising ABSD lead to falling prices?

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We’ve been expecting the government to trot out another round of cooling measures, as I mused on Facebook just hours before the official announcements came out. Prices have continued to defy gravity despite the 6 earlier rounds of cooling, and the recent ruckus over $2M Executive Condos had also alerted Minister Khaw to the need to bring developers back in line with the original mission statement behind Executive Condos.

Still, the 7th round of cooling measures does stand out amongst its predecessors as the broadest spectrum of cooling measures we have seen, affecting both private and public housing, as well as the industrial property market. The measures have drawn a mixed response, ranging from fiery profanities from property agents concerned about their rice bowl, to mild jubilation from Singaporean first-home buyers (and more cursing and swearing from PR buyers yet to secure a home.)

On the whole, I agree with the government’s decisive move this round. The market, jaded by countless rounds of “cooling” measures, has reached a stage where anything less than draconian simply won’t cut it. However, I question whether the ABSD measures introduced will truly serve the interests of those they are seeking to protect -the Singaporean first-time home buyer. Today’s post shall be focused mostly on the ABSD hike and its repercussions.

Continue reading “The 7th Round of Cooling Measures: Will raising ABSD lead to falling prices?”

SC Global Privatisation Update

Image courtesy of SC Global via The Straits Times

Here’s an update on what has happened since my post on the subject:

1. On 19 Dec, the offer documents were despatched to shareholders
2. On 26 Dec, SC Global’s IFA, PrimePartners Corporate Finance, released a statement to offer their opinion that the offer was fair and reasonable, being 15 – 20% discount to their calculated RNAV
3. On 30 Dec, Simon Cheong released a statement that he has no intention of raising the offer. As such, the Takeover Code forbids him from subsequently changing the offer.
4. In response to an analyst’s speculation that there may be a chance for the privatisation to go through with joint privatisation of Wheelock, the Board of SC Global released a statement affirming that there are no talks with Wheelock and that the Code forbids any such transaction.

Talk about throwing a spanner in the works! Well, now we know 2 things. The first is that $1.80 is the only game in town for now with no chance of increase. The second is that the privatisation will fail, assuming that Wheelock stick to their guns.
Continue reading “SC Global Privatisation Update”

ECs: Why so unfair?

Executive condomiums (“ECs”), in case you weren’t familiar with the term, are 99-year leasehold properties that are developed and sold by private developers within certain restrictions imposed by HDB. ECs have condo facilities such as pools, gym, etc.

To be eligible to purchase from the developer, buyers have to be Singaporean and the joint purchaser has to be Singaporean or PR, the buyers have to form a proper family nucleus, purchasers cannot own or dispose properties 30 months prior to application, buyers cannot earn more than $12,000 per month etc. Click here for the full requirements at the HDB website. Eligible direct buyers are able to obtain housing grants from HDB.

Additionally, purchasers of units have to be the principal occupiers of the property for the first 5 years starting from the TOP of the project, meaning that they cannot sell the place or rent out the whole unit. From the 6th year from TOP, Singaporeans and PRs can buy resale without restrictions. From the 11th year onwards, foreigners can buy without restrictions. Buyers of resale ECs are not eligible for HDB subsidies. From the 6th year onwards, the whole unit can be rented out.

In other words, ECs are condos that are meant for own-stay buyers who intend to stay there for at least 5 years. After that, they can pretty much sell it as a private condo (subject to citizenship restrictions).
Continue reading “ECs: Why so unfair?”

SC Global Privatisation

Straying slightly away from straight property market commentary, I’d like to weigh in on Simon Cheong’s bid to take SC Global private. For those who haven’t been paying attention to the news, here are the terms of the offer:

The all-cash General Offer price is $1.80, representing:

49.4% premium to the last transacted price before the announcement; and
39.5% premium to the highest closing prices in the 12 months prior to the announcement.

Reasons given for privatisation were the usual generic few: low liquidity, no requirement for market access, management flexibility and savings on listing costs.
Continue reading “SC Global Privatisation”

The Myth of Hot Money

Something’s been bothering me. I keep hearing people blaming rising housing prices on truckloads of hot money coming into Singapore and blowing bubbles into the property market, and how the property market will subsequently implode when the funds inevitably leave.
Continue reading “The Myth of Hot Money”