When the economy recover, how many expats have a $4000 monthly budget (for singles) from the company to rent an apartment every month?
Yet the number of units in D9, 10 and 11 keep increasing.
For the expat 2 years later, they may quite renting and buy either HDB Resale (if they get PR) or condo.
At the current price, wonder how the owners can get positive cashflow every month?
If the prime areas cannot get $4000 rent per month, how can the Toa Payoh or AMK condos breakeven in terms of mthly cash flow?
The one that wins for sure are the developers and the agents and the tenants.
Any views from the rest?
yup, property prices do NOT Rise forever. The KEY Reality Check would be Income Affordability and Rental Yield.
In year 2007, many REITs were trading at above Book Value and at record prices and below 5% dividend yield. Currently, many of them are trading at Below Book Value and dividend yield of 7% to over 10%.
When the Crowd loses rationality, it is real Test of our own rationality and whether we can think independently, regardless of whether other people hold the same views or not.
Cheers!
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
May I pls have your personal views whether you think what will be the rental market for S'pore's prime districts (9, 10 & 11) over the next few years?
What my thinking is this:
- Assuming a W-shaped global economy, the S'pore rental market will be worse in 2010 than 2009, and 2011 should be about the same as 2009. 2012 will be better than 2009.
- As such, current tenancy agreements should be negotiated for 2-years, rather than 1-year.
For my 2-cents viewpoint: this is based on with the global economy still bad, unemployment across most countries will cause limited expats coming to S'pore (means weak demand). However, more condos are being completed in S'pore as time goes on, so there's increasing supply. Also, existing tenancy agreements which have ended will add even more available rental condos on the market. One thing I'm unsure about is whether there'll be a significant effect on the rental market for the prime districts, of the 2 new IRs starting operations in S'pore soon.
May I pls have your personal views whether you think what will be the rental market for S'pore's prime districts (9, 10 & 11) over the next few years?
What my thinking is this:
- Assuming a W-shaped global economy, the S'pore rental market will be worse in 2010 than 2009, and 2011 should be about the same as 2009. 2012 will be better than 2009.
- As such, current tenancy agreements should be negotiated for 2-years, rather than 1-year.
For my 2-cents viewpoint: this is based on with the global economy still bad, unemployment across most countries will cause limited expats coming to S'pore (means weak demand). However, more condos are being completed in S'pore as time goes on, so there's increasing supply. Also, existing tenancy agreements which have ended will add even more available rental condos on the market. One thing I'm unsure about is whether there'll be a significant effect on the rental market for the prime districts, of the 2 new IRs starting operations in S'pore soon.
Appreciate if anyone could pls enlighten, thanks!
actually from URA website, it appears that alot of supply is pushed to year 2011, 2012 and year 2013.
Thus, one possibility is year 2010 might still be up for property market, and year 2011 might have weakness if economic recovery is W shape.
Nobody has a crystal ball, just sharing one possible scenario.
Cheers!
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
My general view is that the construction industry in Singapore has been hit by high costs (sand & other materials + rental of heavy machinery) in the past 2 years due to the 2 IRs being given higher priority.
As a result, many public & private construction projects has been deferred or slowed down. Therefore, some of the housing projects would be expected to be completed in the next 1-2 years, thus increasing supply.
I personally feel current housing prices & rentals are bubblish and stretching the boundary of affordability. With increase in supply, I believe the tendency is for prices to go down to a more realistic and affordable level.
Thinking aloud, I am wondering whether the current property & stock market "boom" in Singapore is due to anxiety! (and possibly some amount of panic) because people do not know of any better and more rational way to preserve and grow their capital.
If economy really turns down for W-shaped recovery, and some of these people are not financially savvy enough or do not have sufficient holding power (eg. over-leveraged on debt/borrowing), they may be forced to sell off at a lower price. This would present golden opportunity for those who still have liquidity to buy cheaply.
In fact, this is one common way for the rich to get richer. Because they often keep some spare capital for opportunities like these.
Personally, I am keeping about 30% of my portfolio liquid in anticipation for W-shaped recovery.
wemakebread wrote:My general view is that the construction industry in Singapore has been hit by high costs (sand & other materials + rental of heavy machinery) in the past 2 years due to the 2 IRs being given higher priority.
As a result, many public & private construction projects has been deferred or slowed down. Therefore, some of the housing projects would be expected to be completed in the next 1-2 years, thus increasing supply.
I personally feel current housing prices & rentals are bubblish and stretching the boundary of affordability. With increase in supply, I believe the tendency is for prices to go down to a more realistic and affordable level.
Thinking aloud, I am wondering whether the current property & stock market "boom" in Singapore is due to anxiety! (and possibly some amount of panic) because people do not know of any better and more rational way to preserve and grow their capital.
If economy really turns down for W-shaped recovery, and some of these people are not financially savvy enough or do not have sufficient holding power (eg. over-leveraged on debt/borrowing), they may be forced to sell off at a lower price. This would present golden opportunity for those who still have liquidity to buy cheaply.
In fact, this is one common way for the rich to get richer. Because they often keep some spare capital for opportunities like these.
Personally, I am keeping about 30% of my portfolio liquid in anticipation for W-shaped recovery.
Hi wemakebread,
I share similar views, and also have about 30% in Opportunity Fund, not yet utilised....
Cheers!
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
wemakebread wrote:
I personally feel current housing prices & rentals are bubblish and stretching the boundary of affordability. With increase in supply, I believe the tendency is for prices to go down to a more realistic and affordable level.
If economy really turns down for W-shaped recovery, and some of these people are not financially savvy enough or do not have sufficient holding power (eg. over-leveraged on debt/borrowing), they may be forced to sell off at a lower price. This would present golden opportunity for those who still have liquidity to buy cheaply.
Personally, I am keeping about 30% of my portfolio liquid in anticipation for W-shaped recovery.
I don't believe there will be a big dip again. But, how fast and sharp the recovery is, that is the $100M question.
Rentals have stabilised especially in the popular condos in good locations. Some with good facing and views have even started going up...
Market sentiments can change overnight. Back in Dec 2008, only fewer than 200 properties were transacted, and yet in July 2009, we had over 2,000 units transacted in a single month.
My personal experience is that chasing after Hot Stocks or Hot Properties typically land you in "hot soup". As an investor, a rule of thumb I use is I only invest when the upside potential is at least twice the downside risks, which is obviously not the case for Mass market and mid-end Condos currently.
If I were to invest, I might invest in high-end condos, which is still about 15% below 2007's high, or in commercial properties, which are still in the doldrums.
Cheers!
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
My guess for the next good time to shop for property is ~ 6 months after 12mths SIBOR first reach 3%(currently is 1%) & continue to stay ~ there or still edging up ...
It will be the time when it will show the real demand & the price will reflect it "efficiently"....
Quote from Warren Buffett
"Only when the tide goes out do you discover who's been swimming naked."
bulltick wrote:My guess for the next good time to shop for property is ~ 6 months after 12mths SIBOR first reach 3%(currently is 1%) & continue to stay ~ there or still edging up ...
It will be the time when it will show the real demand & the price will reflect it "efficiently"....
The people who buy property now can lock in 3 years fixed rate at 2%... this group will not be affected for 36 mths...
As someone who lives in Singapore only for a bit more then 10 years I am still completely taken by surprise how people here do invest so heavy into properties at such high prices. However, Dennis, as I have listened to you several times, I am sure there is not a lot of alternatives to put your money here. I guess there is a lot of money that has been taken out of the stock market and now is looking for a "safe" place to be parked. I have just tested the market with an apartment I own in D11 offering it at the high end of what I thought was the market. Within hours I find someone to pick it up "for own use". How much sense does this make? But this is not so much my point. In the neighbourhood there are new projects selling at a 400-600$/sft premium to my place at even less quality. How can this work out to be a positive cash flow then? How can my place have lost so much value within a period of 5 years compared to the market? I have decided to keep my place which is cashflow positive and will even accept a slight 10% rent reduction. However I am almost convinced that 2010 will still be a good year for rental income and I might not even have to accept lower rent at all.
Btw I thought the deffered interest scheme was not on anymore but there are still a lot of offers in the market is this legally correct?
However I am almost convinced that 2010 will still be a good year for rental income and I might not even have to accept lower rent at all.
Btw I thought the deffered interest scheme was not on anymore but there are still a lot of offers in the market is this legally correct?
Those projects already applied for IAS BEFORE curbs were announced.
A relative of mine has a condo she's renting out. She received a potential tenant's request to have the 2 months security deposit to be returned to him on the handover date, rather than 2 weeks after the handover date. It is because the handover date is the day that the tenant leave for his country. The tenant wants to put the above clause in the Tenancy Agreement.
I would like to sincerely seek your valuable advice if there are any implications or disadvantages to my relative if she accepts the above arrangement? Thanks a lot!
A relative of mine has a condo she's renting out. She received a potential tenant's request to have the 2 months security deposit to be returned to him on the handover date, rather than 2 weeks after the handover date. It is because the handover date is the day that the tenant leave for his country. The tenant wants to put the above clause in the Tenancy Agreement.
I would like to sincerely seek your valuable advice if there are any implications or disadvantages to my relative if she accepts the above arrangement? Thanks a lot!
the danger is if there is anything wrong discovered after the handover date, the tenant is already gone.
Cheers!
Dennis Ng - When You Master Your Finances, You Master Your Destiny
Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
