Singapore Government Announced Property Cooling Measures

[ilovecck]

in the next 12 months or so, there will be several rounds of further downward revision of Economic Growth rate in Singapore, especially when the Global Financial Crisis hit us in year 2012...

So year 2012, Singapore economic growth rate in my opinion can be as low as 1% or even lower, instead of 3% (as forecasted currently).

Singapore property prices likely to start heading lower end 2012...especially with the looming huge supply of HDB flats and condos coming in year 2013 and year 2014... http://www.masteryourfinance.com/forum/ ... 7431#17431

Actually I think if the growth is only 1%, doesnt it mean in actually fact we may be facing a economic shrinkage of ~4% factoring in inflation?

[Dennis Ng]

in the next 12 months or so, there will be several rounds of further downward revision of Economic Growth rate in Singapore, especially when the Global Financial Crisis hit us in year 2012...

So year 2012, Singapore economic growth rate in my opinion can be as low as 1% or even lower, instead of 3% (as forecasted currently).

Singapore property prices likely to start heading lower end 2012...especially with the looming huge supply of HDB flats and condos coming in year 2013 and year 2014... http://www.masteryourfinance.com/forum/ ... 7431#17431

Actually I think if the growth is only 1%, doesnt it mean in actually fact we may be facing a economic shrinkage of ~4% factoring in inflation?

I think the economic growth rate is on real basis, after factoring in inflation, NOT sure anyone can verify?

But it is possible that next year Singapore economy might head into a Recession as I think it is likely for Europe to be in Recession and U.S. to possibly grow by 1%...

Some of the key statistics of Singapore:

http://www.singstat.gov.sg/stats/keyind.html

Inflation rates in Singapore:
http://www.singstat.gov.sg/stats/themes ... t/cpi.html

But from the info below it appears that Economic Growth rate annnounced by government might be on a Gross basis, before factoring in inflation rate:

GDP - real growth rate (%)
http://www.indexmundi.com/g/g.aspx?c=sn&v=66

[ilovecck]

in the next 12 months or so, there will be several rounds of further downward revision of Economic Growth rate in Singapore, especially when the Global Financial Crisis hit us in year 2012...

So year 2012, Singapore economic growth rate in my opinion can be as low as 1% or even lower, instead of 3% (as forecasted currently).

Singapore property prices likely to start heading lower end 2012...especially with the looming huge supply of HDB flats and condos coming in year 2013 and year 2014... http://www.masteryourfinance.com/forum/ ... 7431#17431

Actually I think if the growth is only 1%, doesnt it mean in actually fact we may be facing a economic shrinkage of ~4% factoring in inflation?

I think the economic growth rate is on real basis, after factoring in inflation, NOT sure anyone can verify?

But it is possible that next year Singapore economy might head into a Recession as I think it is likely for Europe to be in Recession and U.S. to possibly grow by 1%...

Some of the key statistics of Singapore:

http://www.singstat.gov.sg/stats/keyind.html

Inflation rates in Singapore:
http://www.singstat.gov.sg/stats/themes ... t/cpi.html

But from the info below it appears that Economic Growth rate annnounced by government might be on a Gross basis, before factoring in inflation rate:

GDP - real growth rate (%)
http://www.indexmundi.com/g/g.aspx?c=sn&v=66

Hi Dennis,

Thks for the links, it was informative. Singapore GDP growth for 2010 was 14.5%, even factoring in inflation, that was prety impressive!

I also notice for the past 10 yrs, our govt have managed to keep inflation low, except for 2008.

[Dennis Ng]

Now we finally know why government implemented the 10% stamp duty rule for Foreigners, becos it is clear that they are now even buying ECs, the so-called cheaper alternative available to Singaporeans and PRs...

Cheers!

Dennis Ng

Business Times - 07 Jan 2012

Foreigner share of resale ECs spikes to 49%

383 units in first 11 months of 2011 already exceeds 2010's total

By MINDY TAN

SALES of completed executive condominiums (ECs) on the resale market saw a surge of interest from foreigners in the first 11 months of 2011. Sales of new units too locked in a record number of transactions from January to November last year.

Foreigners, including permanent residents (PRs), bought 383 resale ECs in the first 11 months of 2011, exceeding the 322 units which were purchased for the whole of 2010, said property market research firm R'ST Research.

This accounts for 49 per cent of the 775 resale ECs transacted in 2011, up from the 33 per cent recorded.

Looking specifically at foreigners who are non-PRs, 108 EC transactions were made, more than twice the 49 units bought in 2010. The bulk of these purchases were by Chinese nationals (70 transactions) and Indian nationals (19 transactions).

On the developer sales front, 2,058 EC units were transacted in the developer (new) sales market. This marked fresh records for both new sales, and total EC transactions. The latter saw a total of 2,833 EC units purchased within the 11 months, breaching the last peak of 1,876 units in 1998.

ECs - a hybrid between public and private homes - come with condo facilities, but cost less than a private condo. They have initial sale restrictions similar to those for public housing, such as a minimum occupation period of five years.

After five years, they can be sold to Singaporeans and PRs. They are fully converted to private housing after 10 years - it is then that they can be bought by foreigners who are not PRs.

Supply of ECs will be further ramped up this year, with the government ready to release sites for up to 5,000 EC units through the Government Land Sales (GLS) programme - sites for 3,000 units will be launched in the first half of 2012, under the Confirmed List, comparable to the 3,000 EC units from five sites sold for the whole of 2011.

According to Ong Kah Seng, director at R'ST Research, the buoyant sales activity can be attributed to the attractive pricing ECs offer.

'Various EC projects were launched from end 2010 and received good buying interest amid the economic slowdown,' he noted. 'In fact, due to a significant run up in private condominium prices translating to record selling prices, ECs became an attractive alternative.'

Joseph Tan, executive director, residential, CBRE, agreed, noting that ECs are always relatively more affordable, given that their average prices are some 20 per cent to 25 per cent below those of new 99-year-leasehold private condominiums in the same neighbourhood.

There is also the issue of supply, he pointed out.

Eight EC sites were sold via the GLS programme in 2010, after a hiatus of six years. Three new projects were launched in 2010, with the remaining five launched in 2011.

Alan Cheong, associate director of Savills research and consultancy, added: 'ECs were designed for family units. They have sizes between 900 to 1,300 sq ft. That makes it attractive for owner occupiers (with families).'

On the resale front, 775 resale EC units were transacted in the first 11 months of 2011, according to R'ST Research.

Of this, 383, or 49 per cent, were purchased by foreigners (including PRs). Mainland Chinese, Indian nationals and Malaysians accounted for the bulk of the purchases.

Sales data showed that for the eleven months, mainland Chinese bought 151 resale EC units, followed by Indian nationals with 118 resale units, and Malaysians at 62 resale units.

Foreigners (non-PRs) bought 108 EC units in the first 11 months.

One of the key reasons for the surge in foreign interest lies in ECs' attractive pricing, with resale units about 13 per cent below those of private resale homes in similar locations, said CBRE's Mr Tan.

The top-selling EC projects in 2011 included Prive (537 units), Blossom Residences (293 units) and Belysa (278 units).

On the resale front, the top-selling projects were Northoaks (81 units), Woodsvale (75 units) and The Floravale (62 units).

Looking ahead, R'ST Research's Mr Ong expects the strong buying interest to continue into 2012, in part supported by the recent raising of buyers' income ceiling from $10,000 to $12,000.

'However, there may be a handful of home seekers who are waiting for prices of private residential properties to fall in 2012 in view of the ample supply, challenging economic conditions, and private residential cooling measures,' he added.

'As such, buyers are unlikely to rush into purchasing an EC unless it fits into his property buying requirements. The overall buying interest for ECs is expected to be encouraging, but not excessively optimistic.'

[Dennis Ng]

Another sign, sales volume first drops...

But I think property prices only likely to start falling in late 2012 or year 2013 when the impending supply of over 50,000 units in next few years becomes a well known fact to most people...also depends on when Global Financial Crisis hits us...

Cheers!

Dennis Ng

Private home sales fall in December
By Millet Enriquez | Posted: 16 January 2012 1259 hrs

SINGAPORE: Sales of new private homes in Singapore fell 62.9 per cent in December, based on latest data released on Monday.

The Urban Redevelopment Authority (URA) said a total of 632 units were sold last month excluding executive condominiums.

That's significantly lower than the 1,702 private homes sold in November.

Around 489 units were sold in the outlying areas or outside central region while 108 private homes were sold in city fringes.

Only 35 units were sold in the prime district.

The best selling projects were all located outside the central region: The Archipelago with 103 units sold, The Nautical with 84 units and The Palette with 61 units sold.

In December, developers placed 937 units of new homes for sale, compared to 1,967 units launched the previous month.

- CNA/cc

[Dennis Ng]

Last 3 years saw each year setting a New Record High in terms of number of private properties sold in Singapore. All good things come to an end, and some years from now, when we look back, we might realise that year 2011 was the Record High in terms of private properties sold.

According to URA statistics, as at 30 Sep 2011, there are 39,111 units of unsold uncompleted condo units. Using average demand of 15,000 in last few years, this "Inventory" is sufficient to last 2.5 years of demand. And that is assuming that demand remains strong in year 2012, 2013 and 2014...

However, if there is a Global Financial Crisis, which is likely to hit us in year 2012...and if this drags on to year 2013 or even 2014, then demand is likely to be lower, rather than higher.

It is my opinion that Singapore Property Market has peaked, prices would remain stable for next few months and might only start falling in late 2012 or year 2013 when the huge impending supply start hitting the market and when Singapore economy slows down further due to Global Economic Slowdown, especially Europe, which is likely to have a recession in year 2012.

As individuals, we cannot change or avoid the Crisis, what we can do is to prepare ourselves financially, and position ourselves financially for a coming Global Financial Crisis.

Cheers!

Dennis Ng


Below is more information on this:

BT's analysis revealed that buyers returned around 100 private homes (including 20 EC units) in December, probably a knee-jerk reaction to the introduction of the ABSD on Dec 7. This was higher than the around 70 units returned in November

Despite last month's sharp slowdown, developers sold a record 18,920 units (including 2,893 ECs) in 2011, going by preliminary official data, surpassing the 17,344 private homes (including 1,052 ECs) they sold in 2010.

The Urban Redevelopment Authority will release final 2011 figures on Jan 27.

Excluding ECs, developers' private home sales last year totalled 16,027 units, just shy of the record 16,292 units for 2010. Property consultants' forecasts for this year range from 9,000 to 14,000 units.

'With the ABSD already in place, the defining factors for developers' sales in 2012 will be the economic outlook and the prices that will be set by the developers,' said Knight Frank chairman Tan Tiong Cheng.

'Pricing is something developers will have to adjust, before buyers blink. Another factor will be the foreign contingent. If foreign buying is still relatively strong, it may give some impetus for Singaporeans to jump in.'

[Dennis Ng]

The performance of the economy affects property prices as well.

It is very clear (even Prime Minister has warned) that Singapore economy likely to slow down further in year 2012 and 2013...Deputy Prime Minister and Finance Minister Tharman put it clearly that "economy will slow down for at least 2 years" when interviewed recently.

http://www.youtube.com/watch?v=5Mbxjm3HlD8

Latest data released by government confirms their warning as well.

Cheers!

Dennis Ng

On a y-o-y basis, electronic NODX contracted by 4.6 per cent in December 2011, in contrast to the previous month’s marginal 0.1 per cent growth. The decrease in electronic domestic exports was largely due to lower exports of parts of PCs (-9.5 per cent), diodes & transistors (-23 per cent) and disk drives (-20 per cent).

On a y-o-y basis, electronic NORX decreased by 12 per cent in December 2011, following the 2.2 per cent decline in the previous month. The contraction in electronic NORX was due to parts of PCs (-36 per cent), disk drives (-66 per cent) and diodes & transistors (-34 per cent).

[Dennis Ng]

SINGAPORE: Singapore's economy grew 4.8 per cent in 2011, significantly slower than the dramatic rebound of 14.7 per cent growth in 2010.

http://www.youtube.com/watch?v=oktxWYCB ... re=related

The performance of the economy affects property prices as well.

It is very clear (even Prime Minister has warned) that Singapore economy likely to slow down further in year 2012 and 2013...Deputy Prime Minister and Finance Minister Tharman put it clearly that "economy will slow down for at least 2 years" when interviewed recently.

http://www.youtube.com/watch?v=5Mbxjm3HlD8

Latest data released by government confirms their warning as well.

Cheers!

Dennis Ng

On a y-o-y basis, electronic NODX contracted by 4.6 per cent in December 2011, in contrast to the previous month’s marginal 0.1 per cent growth. The decrease in electronic domestic exports was largely due to lower exports of parts of PCs (-9.5 per cent), diodes & transistors (-23 per cent) and disk drives (-20 per cent).

On a y-o-y basis, electronic NORX decreased by 12 per cent in December 2011, following the 2.2 per cent decline in the previous month. The contraction in electronic NORX was due to parts of PCs (-36 per cent), disk drives (-66 per cent) and diodes & transistors (-34 per cent).

[Dennis Ng]

Property market tracks the economy very closely. Another sign that year 2011 was probably the best economic times (Property Market peaks) is news that 29% more Super Luxury cars were sold in year 2011 than year 2010 (the previous Highest Record achieved).

Cheers!

Dennis Ng

The Straits Times
Jan 19, 2012
Super-luxury car brands rev up record sales
10 marques sold over 1,500 units last year, trumping 2010's high

By Christopher Tan

It has been another superlative year for the super-luxury car market, with marques like Porsche, Ferrari, Bentley and Rolls-Royce chalking up record sales despite the overall market shrinking to an all-time low.

According to the latest figures released by the Land Transport Authority, the 10 top-end brands here garnered sales of 1,569 units last year - 29 per cent more than the figure in the previous record year of 2010.

Porsche emerged at the top, with 584 cars sold. The Cayenne sport utility vehicle and Panamera sedan made up the bulk of its sales.

Runner-up Jaguar sold 389 units, a rise from 339 in 2010.

Land Rover sales more than doubled to 233 to take third place, fuelled partly by the new Range Rover Evoque.

Ferrari had a sterling year with new models like the California convertible, 458 coupe and FF four-seater. Archrival Lamborghini's sales dipped by a mere 7.5 per cent despite having no new models.

Market watchers and industry players attributed the continued surge in the high-end segment to a growing super-rich class, more models offered by the brands and the fact that most consumers in this league are less sensitive to factors such as the economy and stock market.

Mr Zafar Momin, a Nanyang Business School lecturer and a former automotive expert with the Boston Consulting Group, pointed out that ultra-luxury cars are enjoying a boom worldwide.

Rolls-Royce, for example, posted its best year in its 107-year history, with 3,538 cars delivered to customers worldwide last year, a rise of 31 per cent from 2010's sales and 6 per cent better than the previous record of 3,347 cars sold in 1978.

Mr Momin said: 'The target consumer segment for such cars has been growing. Statistics indicate that the world's wealthy are growing in numbers and in their accumulated wealth.

'For the upper end of this segment, uncertainty about the world economy has not prevented them from splurging on cars of their choice.'

He added that buyers at the high end 'may view the typical luxury brands as having become way too common'.

This may explain the turbocharged sales of high-performance models from brands such as Mercedes-Benz, BMW and Audi. Last year, 381 such cars were snapped up in Singapore, a rise of 32 per cent from 2010. They include four Lexus LF-A supercars priced at $1.3 million each.

Observers said the trend is likely to continue not only in Singapore but also worldwide.

'In sum, what is driving ultra-luxury sales is a growing divide between not only the rich and poor, but also the rich and super-rich,' said Mr Momin.

Carmakers are preparing to cash in on the trend by introducing more models. Porsche, for instance, is aiming to double its global sales to 200,000 or more by 2018.

Meanwhile, newcomers are beckoning. The most notable is British supercar marque McLaren.

The first two McLaren MP4-12C coupes - each costing close to $1 million - have just arrived, delivered to tycoon Peter Lim, who also happens to be a shareholder of the manufacturer.

christan@sph.com.sg

[Dennis Ng]

Another sign Singapore Property Market has peaked or near peak:

En-bloc fever "appears to be receding"
By Joanne Chan | Posted: 21 January 2012 1210 hrs

SINGAPORE: The en-bloc fever seen in the housing market a few years ago appears to be receding and Minister for National Development Khaw Boon Wan said it could be a sign of a more stable property market.

In his latest blog post -- entitled "En-Bloc Fever Receding?" -- made on Saturday, he said this will be a good development for Singapore in the Year of the Dragon.

An en-bloc sale refers to the collective sale of units in a private development, by way of majority consent.

En-bloc was a major buzzword in the housing market six years ago.

But last year, only some 1,400 private housing units were sold en-bloc, a low number compared to the peak in 2007 when 5,860 units were sold.

Mr Khaw said such sales reached "feverish heights" in 2006 and 2007.

Then, a wave of collective sales swept through the market, peaking during the two years, when some 10,200 units were sold.

Mr Khaw said "this added stress to an already hot property market as housing units were removed.

"Displaced owners or tenants had to look for replacement properties to stay and invest in, pushing up property and rental prices."

Mr Khaw added en-bloc sales have their "pluses and minuses".

They can rejuvenate the city by removing old and dilapidated buildings but if done excessively, en-bloc activity can waste resources, if relatively new buildings are prematurely demolished.

One property watcher agrees the en-bloc market has been relatively quiet in the past two years.

He said one reason is a slowdown in the sale of high-end developments, which are typically built on freehold land acquired through en-bloc activity.

Another reason - the strong supply of government land for mass market properties.

SLP International executive director Nicholas Mak said: "Since a lot of the housing demand is in the suburban region, developers are actually earning fairly decent profits through some of these suburban condominiums, (so) land sales in the suburban region have actually taken away some of the developers' demand for land from the en-bloc sale market."

En-bloc sales of apartments usually spell huge windfalls for their owners.

For example, Henry Park Apartments were sold last month, and each apartment owner stands to gain S$2.3 to S$2.9 million in profit.

But the road to a successful en-bloc deal is often long and difficult.

In some instances, neighbours have turned against one another to get the requisite 80 per cent signatories.

- CNA/wk

[Dennis Ng]

New Condo project still selling well. Who are buying? 80% Singaporeans. And I would guess that most of them are home buyers or novice investors, becos experienced Property investors I know have stopped buying condos since Jan 2011 (1 year ago)...becos they feel the upside is not at least double downside.

If market continues to be hot, MND may be forced to come up with 6th round of Property Cooling Measures...in stock market, there is a saying "never go against the trend, let the trend be your friend." In Property market, I think it is "unwise" to go against the government. (They HINT to you NOT to buy, but you just go against their words and keep buying).

Cheers1

Dennis Ng

Far East Organization, Fraser Centrepoint and Sekisui House continue to achieve impressive sales at Watertown in Punggol, moving 148 more units over the weekend. They have now sold 744 units in the project since Jan 18.

Transacted prices range from $980 to $1,500psf.

Far East Organization found buyers for another 26 residential units over the weekend, taking total sales to 386 units. It has released 479 of the project's 528 units. The most popular are one-bedroom Soho-style apartments (506 - 624sqft). Singaporeans account for over 80% of buyers.

Fragrance Group and World Class Land have sold 181 units at Parc Rosewood condo in Woodlands since Saturday. The average price is $960psf. The five-storey, 99-year leasehold project will have 689 apartments.

[Dennis Ng]

The property market follows the economy closely...and it is clear that the economy of Singapore is slowing down...

SINGAPORE, Feb 1 (Reuters) - Singapore's manufacturing
sector contracted for a seventh straight month in January as
orders continued to shrink, a business survey showed on
Wednesday, adding to pessimism about the city-state's economic
outlook.
The Purchasing Manager's Index (PMI) for January stood at
48.7 points, down from December's 49.5, the Singapore Institute
of Purchasing & Materials Management (SIPMM) said. Readings
below the key 50-point level indicate a contraction in activity.
A separate PMI for the electronics sector rose to 50.5 from
December's 49.7 due to domestic and overseas order expansions,
SIPMM reported.
Asia's factories have been hit by weak demand in the West,
particularly from Europe, although there are signs the sector is
beginning to bottom.
China's official PMI, released earlier Wednesday, showed
factory sector expanded slightly in January, confounding
expectations for a contraction and supporting hopes the world's
second-biggest economy will avoid a hard landing.

Taiwan saw an eighth straight month of contraction, but its
January PMI edged up to 48.9 from 47.1 in December.

Singapore's trade-driven economy contracted in the last
three months of 2011, and several economists predict the economy
will sink into a recession this quarter as global demand
sputters.
A survey by the city-state's Economic Development Board
(EDB) released on Tuesday showed manufacturers have become more
pessimistic about prospects compared with three months ago.


SINGAPORE OVERALL PMI
Jan Dec Nov Oct Sep Aug Jul Jun May
48.7 49.5 48.7 49.5 48.3 49.4 49.3 50.4 50.8

Electronics Index
50.5 49.7 50.9 52.1 47.2 48.0 49.5 50.9 51.4

New Export Orders Index
49.0 49.5 47.3 46.8 47.6 48.7 49.1 49.3 51.4

CONTEXT:
- Singapore's PMI is produced ahead of government data on
manufacturing and exports.
- The dip in the overall PMI was due to declines in new
orders, new export orders, inventory, input prices and
employment. There were, however, increases in production and the
stock of finished goods.
- For more PMI reports from around the world, see


(Reporting By Mark Tay; Editing by Kevin Lim & Kim Coghill)

[ui21cn]

The matter of the fact, while China started to show sign of slowing down (lower growth) but its leader has maintained that the Property Cooling measures will stay.
My friend from China said - property price is holding firm but there are not many takers.

In Singapore, most people are holding on well, since there is no major job lost or up-swing in loan interest. We all know that interest could be kept low into 2014 !

So, if most people can hold on and financial leveraging is available in the property market - then we may not see any "crash" in property price in the near future (~ next 12 months)

For those we do not need a roof over the head, the best thing to do is to build up the "fund" rather than trying to anticipate entry level.

Opportunity will come for those who are ready and well prepared.

All the best to our Financial Savvy ...

WeiTeck

[Dennis Ng]

Thanks dvortex for sharing the link:

Latest press release from URA on the residential market transcation and etc (including rentals/ supply/ in-the-making details etc)
http://www.ura.gov.sg/pr/text/2012/pr12-08.html

Just want to draw everyone's attention to the FACT that there remains 39,184 unsold condo units as at 31 Dec 2011. If we take last 2 years' annual sales of new condos of about 15,000, that's enough to last for about 2.6 years, until Feb 2014!

What if demand drops in the economic slowdown expected in next 2 years?

I may only be interested to consider buying condo for investment in year 2013 when the over-supply hits the property market.

Cheers!

Dennis Ng

Supply in the Pipeline

As at the end of 4th Quarter 2011, there was a total supply of 77,089 uncompleted private residential units from projects in the pipeline6 , higher than the 76,255 units in 3rd Quarter 20117 (see Annexes E-1 & E-28 ). The pipeline supply of 77,089 units was the highest ever recorded since such data was first available in 1999.

Of the supply in the pipeline, 39,184 units remained unsold as at 4th Quarter 2011. The unsold units comprised 10,741 units in CCR, 8,350 units in RCR and 20,093 units in OCR (see Annexes B-1 & B-2).

Cheers!

Dennis Ng

Hi racoon12,

Looking at PPPI (private price property index) data from URA may also provide you an insight to the "demands" (or uptake rate) of the private property market.

Latest press release from URA on the residential market transcation and etc (including rentals/ supply/ in-the-making details etc)
http://www.ura.gov.sg/pr/text/2012/pr12-08.html

Brief description of PPPI back in 2000
http://www.ura.gov.sg/pr/text/pr00-13b.html

Hi Dennis

Can I make assumption that there're always some tell tale sign of property is going down? Like: Lots of new condo adver in newspaper, developer offering discount on purchase, Government implement lots of intervention policies, (any other sign that can be observe???) etc etc?

Please do correct me if I'm wrong.

Many thanks

Hi racoon12,
key thing is to look out for potential supply figures from URA and HDB. There's lot of supply in year 2013 and 2014...

[Dennis Ng]

Hi all,

I found what I wrote a few months ago in Aug 2011 being featured by Yahoo News:

http://sg.news.yahoo.com/blogs/property ... 35605.html

What new HDB rules mean for the property market
By http://www.MoneyMatters.sg | Property Blog – Wed, Aug 31, 2011

Singapore's property market may see an oversupply by 2013.

By Dennis Ng

The news that the income ceiling to qualify for an HDB flat was being raised had been expected, but it will still have an impact on the property market.

Here's what may happen now that sellers and buyers may be more active as the Ghost month comes to a close:

1. Demand for DBSS (Design, Build and Sell Scheme) flats might drop. DBSS flats were previously for those whose income exceeded S$8,000 but are below S$10,000. There is no longer this sandwiched class in the new ruling.

People earning S$8,000 to S$10,000 can now either buy new HDB flats or resale HDB flats and be entitled to a Housing Grant.

2. Demand for 3-room resale HDB flats will go up. Many more singles will be given the housing grant to buy a resale flat and many of them are likely to rush out to buy 3-room resale HDB flats.

3. Some of the demand for mass-market condos, especially those priced between S$1,000 psf to S$1,300 psf will drop, as part of the demand will shift to ECs and HDB Resale Flats.

4. With more higher income families (those earning above S$8,000 to S$10,000) qualifying to get the grant for HDB Resale flats, this might push up demand for HDB Resale flats and there might be upward pressure on COVs (Cash Over Valuation).

My outlook for property prices

All in all, I do not see the possibility of Singapore property prices falling much in the next six to 12 months as we still have a tight supply situation within this period. Most of the 25,000 new HDB flats announced by Minister Khaw Boon Wan to be built in year 2011 would probably only be completed in year 2013 at the earliest.

Next year, Minister Khaw again promised to build another 25,000 new HDB flats. So I worry that there might be an over-supply of new HDB flats in year 2013 and year 2014, especially if it coincides with a slowdown in the Singapore economy. By 2013 we might be in the midst of a global financial crisis.

Year 2013 and year 2014 will also see over 30,000 units of new condos being completed, so there might be an over-supply situation in condos during the same time period as well.

Dennis Ng is director of Leverage Holding www.HousingLoanSG.com and www.MasterYour Finance.com . This article is posted courtesy of http://www.Propwise.sg, a Singapore property blog dedicated to helping you understand the real estate market and make better decisions. Get your free Property Beginner's and Buyer's Guide here