Property cooling measure not going away

Yet. For now, as long as global circumstances continue to destabilise, growth slows and home prices remain high, the local government is unlikely to loosen the noose on the property market and the property cooling measures look set to stay.

Thomson Impressions2Property analysts say only a drastic and sudden market plunge will move the authorities into action as they focus their energy into repositioning Singapore as research and development investment-worthy. Though a complete reversal of the sudden market boom between 2008 and 2013 seems unlikely, the property cooling measures rolled out by the government over the past few years have effected a slow and gradual decline in property prices.

More households are saving up for their first home or to invest in a second, and putting away less for research, education, entrepreneurship and development. And as high home prices also mean higher wage expectations and thus higher labour costs, the high property prices here may be detrimental to Singapore’s overall growth over the next few years. In the near future, it seems unlikely that the property cooling measures will be lifted, until such time when a balance between national growth, competitiveness and housing needs is struck. Or till a sudden fall in property prices. Would a prolonged period of suppressed property market be any less damaging to the local economy?

Completed private home prices fall further

Completed resale private non-landed property prices have dipped further in May, following a slight increase the month before. The muted sales could have also been a reflex response to the recent Brexit vote though in the long term, property analysts are not expecting the fallout to be too drastic.

FulcrumPrice decline of apartments in the central region were the lowest, with prices falling only 0.5 per cent last month, almost evening out with the 0.4 per cent rise in April. Properties here have the location advantage and will be unlikely to see a sudden price depression anytime soon. Astute buyers are however still out for the hunt and are likely to look towards properties in this areas for good deals. In the current market, buyers who lack holding power may find themselves having to let go of their properties within a time period, and may be more open to price negotiations.

As more new properties were launched in the last couple of months, activity from this segment may have also stimulated the resale private property sector and the spillover effect of positive market sentiments could have caused a slight blip in April’s price rise. Small apartments below 506 sq ft saw the steepest fall of 1.1 per cent as competition in the rental market heats up and prices continue to fall with high supply against lower demand.

 

The true value of Hong Kong homes?

Property prices in Hong Kong are at a record high, and there are no signs of it letting up anytime soon. Or does there?

From the number of foreclosures on properties surging to a 5-year high, buyers seem to be struggling to cope with high-interest home loans, almost impossible property prices and a weakening economy. Although a property bubble has yet to occur, cracks in the market seem to be showing as the Hong Kong Monetary Authority (HKMA) points to a growing number of homes whose value are lower than their original price tag.

Park yoho venezia Hong Kong propertyBy the end of 2016’s first quarter, 1,432 homes were already under the foreclosure hammer, and their value – a whooping HK$4.9 million (S$852.5 million). As the Hong Kong government has a strictly-regulated banking system and with 7 rounds of property cooling measures already in place, home buyers and investors have been borrowing from unregulated sources such finance firms and real estate developers, some up to 95 per cent.

Analysts are concerned that the household debt is at 70 per cent and more investors and home owners have been using their properties are collateral for other transactions such as stock trading. As the global and local economy shake, they find themselves in deep hot water. What will the near future hold for Hong Kong’s property market? Is a bubble brewing and is there a danger of the 2008 recession?

 

To buy or not to buy.

That is the question. When rental prices fall and rise according to property prices, which in turn are directed by local economies of scales and indirectly impacted by global economies and general market sentiment, that is often the question home-seekers ask themselves.

In the current market, is it wiser to buy or rent? Under what circumstances should you definitely choose one option over the other? Property analysts advice against renting while speculating on market direction as the uncertainties may not always work in your favour. Instead, the main factor should be whether renting or buying best suits your needs.

KembanganSuitesSingapore may very well be one of the cities in the world where most people own their homes. In many other cosmopolitan cities, rental is a more-than-common way of life. While renting may suit those who are not willing to be tied down by fixed monthly outlays such as mortgages, taxes and condominium maintenance fees, it also means that the money that goes into your rent does not ultimately accumulate into owning the roof over your head. There is also the danger of rental rates being raised and frequent moves.

Buying a property is not a small decision, and market advisors caution against doing so when you have not yet made sound financial calculations. The price differences in purchasing a freehold versus a leasehold property could also be considerable in the long run as most freehold properties tend to appreciate over time.  This then brings you to the considerations of when to buy and sell your property. While it is true that leasehold properties tend to depreciate, factors such as location and the competitiveness of neighbouring properties could also lend weight to the depreciation process, slowing it down considerably.

New property taxes for Australian Homes

Purchasing a property in sydney? Be prepared to pay a 4 per cent duty surchage. The rule was put in place on 21 June and will apply to all home purchases in New South Wales, making the state the second in the Country to impose stamp duties on foreign buyers. On top of that,there will also be a 0.75 percent land tax surcharge from next year on.

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Increase in Foreign property purchases

The local property market is looking a little zestier as more foreign buyers picked up units in the first quarter. This affirms the continued popularity of properties in Singapore as compared to those in other major Asian cities, or global cities for that matter.

Kingsford HIllview PeakProperty prices in Singapore are still relatively affordable, and the number of purchases made by non-Singaporean residents rose by 5.4 per cent, while purchases made by permanent residents rose by 2.6 per cent in Q1. The Additional Buyers’ Stamp Duty (ABSD) initially dampened sales, but as foreign property investors find themselves having similar, it not even higher, fees levied upon them in other markets, their return is not particularly surprising. While there are other emerging markets with even lower property prices, the stability and proven track record of Singapore’s properties has done the market justice.

Most of the properties foreign buyers hunt down are priced between $1.5 to $3 million. They bought 79 units at Cairnhill Nine and 38 units at Kingsford Hillview peak. Most of the foreign buyers were Mainland Chinese or Malaysians. Property analysts are keeping positive about the market’s prospects for the rest of the year despite the number of local buyers falling 18.2 per cent, though it could be due to the Chinese New Year holidays falling in the middle of Q1.

 

 

London properties only foreign investors can afford?

Londoners are railing against the consistently rising property prices which have reached a mark where only rich foreign investors from Middle East and Asia are able to afford.

As foreign property investments become more common globally, countries are finding the need to regulate the property market and it ultimately comes down to the question of priorities. Taking notes from the US real estate bubble a decade ago, Australia and Singapore have both recently made policy adjustments to guard against excessive financial loans and foreign purchases on local properties.

London PropertiesLondon’s new mayor may also be lobbying to make moves to allow residents to purchase new properties ahead of foreign investors who have been snapping up units with fervour, with prices rapidly rising over the years. The average price of a home in London now costs approximately S$1.2 million and rental for a flat in central London can easily be S$2,700 per month. 20 per cent of home sales in Kensington and Chelsea are from foreign buyers and for new properties, the numbers can come up to as much as 75 per cent, with almost 67 per cent of them purchasing purely for investment purposes.

LondonProperty2Though some of these foreign buyers are purchasing units to rent out, some are owned by shell companies who leave the units empty on end, taking away essential numbers of available homes for London’s residents when they are already only rolling out half of the 50,000 new homes required each year.

With similar high-population versus limited land issues, Singapore’s average private home prices could easily rival that in London. While income growth lags behind other first world cities, living expenses are not necessarily remaining stagnant, will the country’s government need to revise their strategies in keeping homes affordable?

New Gem in Toa Payoh

Toa Payoh, one of Singapore’s oldest HDB estates and an integral part in the Nation’s housing history has been home to some for almost 50 years now. As part of HDB’s Estate Renewal programme in 1995, it is now an established and well-connected township in the central part of Singapore, much sought-after by property and business owners alike.

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Photo credit: HDB

Gem ResidencesOne of the recent launches, private residential project Gem Residences, will be a welcome addition to the area. And the public have shown their enthusiasm accordingly, as reflected in the 50% sales in the first day of sales even ahead of the public launch on Saturday. Industry experts are citing pent up demand for private condominium units in this estate as reasons for its more-than-positive sales figures.

Prices of the approximate 300 units sold were averaging at $1,426 psf. The 578-unit project offers up a arrange of units including one-bedders, two-room units and also penthouses. With the developer offering cash rebates of $7,500 to $10,000, buyers are taking the bait, fast and furious. Most of the smaller one- and two-bedders went quickly, with prices starting from $578,00 for a 452 sq ft one-bedder.

As a quick comparison, the average prices for new condominiums in Alexandra were at $1,600 psf and in Bishan, $1,500 psf. With the $1,426 psf pricing, the developers have shown that they are aware of what buyers are willing to fork out in the current market and are pricing more cautiously, sacrificing maximum profit margins for more palatable and sellable price structures.