Singapore Government Announced Property Cooling Measures

[ngtfook]

WING Tai Holdings chairman Cheng Wai Keung yesterday warned that the probability of a price correction in the residential property market is high.
The market has enjoyed eight years of price rises since 2005, he said, at the company's full-year results briefing.

Mr Cheng, however, did not give a firm prediction on when prices would start coming down.

He cited several factors as heralding a likely correction including an expected increase in interest rates, which at their current low levels have helped sustain the property boom.

He said the looming possibility of an oversupply of units as well as the implementation of cooling measures and loan curbs signal an inflection point in market trends.

"I'm more for the last measure (of a 60 per cent total debt servicing ratio)," said Mr Cheng.

"This helps to weed out the weaker demand or buyers who are financially weaker and might rush into the market even though they may not be able to sustain repayments on the loan."

The property group's fourth-quarter net profit soared 72 per cent to $275.8 million on the back of a 52 per cent revenue jump to $307.8 million.

Full-year net profit doubled to $531.1 million largely owing to the sale of residential units as revenue leapt 113 per cent to $1.33 billion.

Progressive sales recognised from developments such as Foresque Residences in Petir Road and L'VIV in Newton, as well as the additional units sold at Helios Residences and Belle Vue Residences contributed to the jump.

Verticas Residences in Malaysia, which got its temporary occupation permit earlier this year, also boosted the higher earnings as revenue from all its sold units by June 30 was fully recognised.

Earlier this month, Wing Tai launched a freehold condominium, The Tembusu, and has issued options to purchase for more than 65 per cent of its 337 units so far, said Mr Cheng, which is "not bad given the market situation".

When asked if Wing Tai will jump on the bandwagon and invest in Malaysia's Iskandar, deputy chairman Edmund Cheng said the group will not do so despite the opportunities there.

"For Wing Tai, we want to invest in more mature cities such as Penang and Kuala Lumpur, which we have been in for some time."

Its chairman added that there will be no change in the near future to Wing Tai's investment strategy in Singapore, Malaysia, Hong Kong and China.

Full-year earnings per share based on profit after fair value gains on its investment properties more than doubled to 67.81 cents while net asset value per share rose to $3.62, up from $2.85 a year earlier.

Wing Tai is recommending a final dividend of three cents a share and a special dividend of nine cents a share.

Its shares rose one cent to $2.04 yesterday.

rjscully@sph.com.sg

[chuajinyi]

Agree with his outlook on property and admire his honesty.
Same goes to Kwek Leng Beng whom has said similar things not long ago.
The property tycoon are singing the same song, better be careful.

yesterday, another soft round of cooling measures for buying HDB, hope this put off some buyers to achieve equilibrium in supply and demand.

[candy_chia]

Hi Chuajinyi & Ray,

Appreciate the insightful sharings.

Agree with his outlook on property and admire his honesty.
Same goes to Kwek Leng Beng whom has said similar things not long ago.
The property tycoon are singing the same song, better be careful.

yesterday, another soft round of cooling measures for buying HDB, hope this put off some buyers to achieve equilibrium in supply and demand.

Couple a weeks ago, CDL boss Kwek also mentioned the land parcel price is at peak....

WING Tai Holdings chairman Cheng Wai Keung yesterday warned that the probability of a price correction in the residential property market is high.

The market has enjoyed eight years of price rises since 2005, he said, at the company's full-year results briefing.

rjscully@sph.com.sg

Singapore Land Bids ‘Suicidal’ With Rules, Billionaire Kwek Says
By Pooja Thakur - Aug 6, 2013

Buying land in Singapore at current high prices would be “suicidal” given the government’s requirement that new homes must be sold within two years of completion, City Developments Ltd. (CIT) Chairman Kwek Leng Beng said.

Developers of land for high-end residential projects are subject to conditions of a so-called qualifying certificate, which includes the two-year deadline, according to the city-state’s rules. Developers can apply for an extension after paying a fee.

“With these qualifying certificates, it will be suicidal to keep buying land at high prices just because we want a land bank,” Kwek said at a press conference in Singapore today. HHe forecasts Singapore’s private home prices will decline as much as 5 percent over the next year due to the government’s property curbs.

The billionaire chairman of Singapore’s second-biggest developer is bracing for “stronger headwinds” after record home prices amid low interest rates raised concerns of a housing bubble, prompting the government to widen a four-year campaign in January to curb speculation in Asia’s second-most expensive housing market.

“The global economy remains fragile and unpredictable,” Kwek said in a statement today. “Domestically, with the latest round of property cooling measures which has been the most effective to date, the group expects stronger headwinds in the second half.”
http://www.bloomberg.com/news/2013-08-0 ... sales.html

[Jasper]

Good day to all,
good reading material, another point to check on those words by the tycoon is to closely monitor coming Gov land sale, are they still bidding at higher price?
Are they willing to lose out to other competitors by bidding a low price as they foresee property pricing heading south?

Regards
Jasper

[Jasper]

Good day,
crop and pasted here are material from Dr.Chan, but it was his view for HK market.
I would say same formular for SG property market: Labour cost and material cost will not be going down much, even the land price will drop in bad time, price will never go back to 2005 index. If I see index drop to close to 150, then I will consider to purchase property.
Just my persoan view


5,000蚊呎樓　抗跌力強

去年初，我多次勸那些未上車的人，趕快去買那些在去年仍然不足200萬元的樓；現在，不足200萬元的樓沒有了，但仍有不足300萬元的樓。
地價易變，但是建築成本不易變，因為薪水難減，在經濟不景時，老闆寧可炒人裁員，也不會減薪。薪水難減，建築成本也就難減。因此，抗跌力最強的樓，也是那些目前呎價僅5,000至6,000元的樓，因為四叔說建築成本每呎3,000元，對呎價5,000元的樓而言，地價只是2,000元，現在東北發展，政府收地每呎也得付900元，這還是土地，未平整土地；加上平整費用，每呎也接近2,000元。換言之，將來政府賣居屋，最便宜的單位，每呎可能也接近5,000元。

[candy_chia]

Perhaps the property buyers waiting on the sideline will spillover to stock market???



Developers slashing prices amid TDSR terror
Sep 9, 2013 - PropertyGuru.com.sg

Developers are lowering launch prices of new projects as the Total Debt Servicing Ratio (TDSR) begins to bite, media reports said.

Among the projects affected is UOL and Singapore Land's Thomson Three condo (pictured) in Bright Hill Drive.

“Without TDSR, we could easily have priced this project at S$1,500 psf on average, or even higher. We now expect to price it at a more realistic level, at S$1,350-S1,400 psf,” noted Liam Wee Sin, President (property) at UOL.

Although the 445-unit project opened its showflat last weekend, sales bookings will only start next Friday, on 20 September.

Another development that is seeing a downward adjustment in prices is The Skywoods in the Dairy Farm area.

Notably, the developers behind the 420-unit Skywoods “were looking at nearly S$1,300 psf on average pre-TDSR but we'll now release it at S$1,250 psf”, said TA Corporation's Group CEO Neo Tiam Boon. It is developing the project with King Wan Corporation, Far East Distillers and Hock Lian Seng Holdings.

“The issue today is not that there are no buyers. There are a lot of interested people who want to buy, but they could not get a loan...Conservatively, I estimate possibly one-third of those who saw our showflat couldn't secure a bank loan,” he noted.

Meanwhile, market watchers are looking closely at The Glades in Tanah Merah, to see how Keppel Land will adjust to the new framework. Agents had previously given average price indications of about S$1,400 to S$1,600 psf for the project.

“May be Keppel Land will price Glades a tad below S$1,500 psf,” said a property agent, considering that nearby Urban Vista achieved a median price of S$1,503 psf in March.

The developer declined to comment on the matter.



Sentiment over real estate dips further
SENTIMENT in the real estate market continued to weaken in the second quarter
The Business Times - July 11, 2013
By: Mindy Tan


SENTIMENT in the real estate market continued to weaken in the second quarter.

The composite sentiment index, indicating overall market sentiment, stood at 4.5 for the quarter, down from 4.8 in Q1. A score under five means deteriorating market conditions and one above five, improving conditions.

The Real Estate Sentiment Index (RESI), compiled from a poll done among members of the Real Estate Developers' Association of Singapore (Redas), measures current and future sentiments about real estate development and market conditions here.

The current sentiment index was 4.7 for Q2, down from 4.8 in the first; the future sentiment index fell to 4.4 from 4.8



Real Estate Sentiment Index (RESI)
http://www.redas.com/doc/RESI_Report_2Q13_(Final).pdf