Invest in Singapore Properties

Home loans for Indonesians up to 75% without proof of income in Singapore

2012-02-06T00:32:00.004+08:00

Home loans for Indonesians up to 75% without proof of income in Singapore

Who should read about asset based lending?

For Indian citizens earning above 8k a month in SGD equivalent in their home country buying a property in Singapore or refinancing a property for Maximum Singapore dollar CASH, so that you can invest in better yield.

It is also extremely powerful for: -

Singaporeans earning a joint income above 8k a month and buying a second property, but who already has several financial commitment, this scheme is able to gracefully over-look the other commitments.

For Singaporeans buying their 1st property, and able to put down a 25% downpayment. The loan quantum available to them can be substantial, allowing them to leverage highly.

Singapore Banks Asset Based Lending Criteria

What about the criteria for Asset Based Lending Mortgage?

Most banks in Singapore lend based on criteria such as debt to servicing ratio. The usual debt servicing ratio is capped at 50% to 60%.

This 50% to 60% debt servicing ratio is what the bank would lend at the maximum, not a financial planning guideline.

Only some banks in Singapore will do asset based lending for your property with minimum income.

Asset based lending is rare. Banks see it as risky. Most often, banks need you to put assets under management (AUM) of $250,000 or 24 months of repayment amount (whichever is higher), plus income level.

Typical Singapore Asset Based Lending

Someone with a fully paid up property valued at $3.2m. He goes to the bank to borrow 50% of $3.2m. He gets $1.6m in cash for an equity term loan (Cash out). The bank will usually want to see proof of liquid assets of 24 months of the installment amount.

illustration of a scenario: -

Age of owner = 50 years old

Property valuation = $3,200,000

Loan to value = 50%

Loan tenor = 20 years

Interest rate = 1.5%

Loan amount = $1,600,000

Monthly Installment = $7,720

In this scenario, the owner would most likely be asked to show proof of 24 months of monthly repayment in liquid assets of $185,280.

A Better asset based lending loan structure in Singapore

This type of Asset Based Lending goes up to 70% or 75% of the loan-to-valuation.

This type of asset based lending with high Loan quantum is good for Singaporeans buying 2^nd or 3^rd properties. This structure is also good for Foreigners refinancing their paid up property for CASH OUT.

Scenario: Indonesian, 50 years old, paid up property, earns $25,000 SGD worth of income, but in his own country.

Property Valued at = $6,000,000

Status = Fully Paid up

Loan-to-value of = Can to up to 70% (up to 75% subject to approval)

Loan tenor = up to 25 years

Loan amount = $4,200,000

He will be eligible to borrow up to $4,216,000 based on his asset and some proof of income instead of $2,529,000.

Most rich people have a lot of money, but they like to borrow money, because using other people’s money is a way to grow rich. His borrowing quantum goes from $2.529m to $4.216m. Cash is freed up at cheap cost (housing loan borrowings are the cheapest form of borrowing) to invest in higher yielding assets.

Here are the facts of this loan

Age = up to 75 years old

Tenor = up to 40 years

Min Income of $8,000 joint income

Documents required for Asset based lending

NRIC = front and back copy. (For foreigners who are NON-PR, copy of passport)

Income = Proof of income via Company letter only (or alternative proof)

As long as income certified by Financial officer or Human Resource, it is recognized

3 Months salary slip

2 years of Notice of Assessment (NOA) – from IRAS.

Existing home loan balance (if any)

= 6 months to 12 months bank statement showing outstanding loan amount. (if fully paid, copy of title deed)

Option to purchase = Required for a New purchase of a completed property. (Not needed if

refinancing)

Contact : loans@propertybuyer.com.sg

Mobile (sms) : +65 9782 8606

Get Asset Based Lending home loan

Get Asset Based Lending Refinance Home Loan

If you are a Singapore Mortgage Broker, do contact us, we will avail this to you and your clients. (Only for Mortgage Broker and Consultants)

Master Lynn Yap's Prediction for Dragon year 2012

2012-01-28T00:52:00.002+08:00

Master Lynn Yap's Prediction for Dragon Year 2012

How did you fare last year? Did you follow what Master Lynn taught? What are the things to look out for in the year of the dragon 2012?

Master lynn yap prediction for 2012

View more presentations from Property Buyer Singapore

WILL MONEY VELOCITY FURTHER SLOW DOWN DUE TO PROPERTY REGULATION IN SINGAPORE

2012-01-28T00:43:00.004+08:00

WILL MONEY VELOCITY FURTHER SLOW DOWN DUE TO PROPERTY REGULATION IN SINGAPORE

Let’s just say the risk is not about whether it will Cool inflation, but rather whether it will totally put out the fire and Freeze the property market in Singapore.

Inflation is influenced by the following equation.
{MV = PQ} = (by Irving Fisher, 1911)

Where

• M is the total dollars in a Nation’s money supply (generally the M3 or M2)
• V is the number of times per year each dollar is spent (Velocity of money)
• P is the avg. price of all the goods and services sold during the year.
• Q is the quantity of Assets, goods and services sold during the year.

When M2 or M3 increase, where V and Quantity stays the same, then P increase. The rate of P’s increase is inflation.

Right now, we are seeing M2 or M3 increasing faster than GDP in many nations, while prices are fairly stable at ~5.4% (in 2011) in Singapore and production (Quantity) is rather stable, this means that V, the velocity of money has yet to pick up. In other words, people are not yet spending.

Once Velocity of money V picks up, in order to control price rise, Quantity will have to pick up dramatically as well. Not all quantity can be ramped up quickly enough.

[M2 or M3 increase] x [V] = [P] x [Q]

So by taking out Foreign M2, M3 as well as M2 in Singapore attributed to foreign ownership by imposing a 10% Additional buyer stamp duty, Singapore has effectively reduced the M2, M3 money supply from the property market.

In short, this policy may somewhat reduce inflation attributed from Housing. However it may not stop these money from being channeled to other parts of the economy, especially commercial properties.

USA M2 Money Supply

(Source: Wikipedia)

European M2 Money Supply

Australian M2 Money Supply

Singapore’s M2 Money Supply

S$ MILLION
END OF PERIOD M2
2010
Nov 401,429.3
Dec 403,078.2
2011
Jan 406,246.8
Feb 406,280.0
Mar 413,255.5
Apr 422,475.6
May 422,716.1
Jun 423,516.7
Jul 431,311.5
Aug 431,253.4
Sep 434,818.4
Oct 439,817.4
Nov P 442,144.4

AS you can see, M2 from Dec 2010 up till Nov 2011, has grown by 10%, this exceeds the GPD growth figures.

As there are ample funds in Singapore, interest rates can stay low, due to low velocity of money, once there is signs of up-trend, then we expect markets to rally very quickly and these money will be drawn down. And cost of funds will consequently go up.

Call Property Buyer Mortgage Consultants at 9782-8606 or email
loans@propertybuyer.com.sg to assess your Home Loan Financing Needs.

Property investors hit by Singapore's Additional Buyer Stamp Duty

2012-01-14T21:17:00.002+08:00

Effective 8th Dec 2011 – Singapore’s URA imposes additional buyer stamp duty

If you are buying a property in Singapore and you are a foreigner, you will now be faced with an additional buyer stamp duty on top of the existing stamp duty imposed on property transactions.

Currently the stamp duty for purchasing a residential property is: -

• 1% of the selling price for the first $180,000

• 2% of the selling price for the next $180,000

• 3% of the selling price for the from $360,000 onwards.

Will Luxury Condominiums targeted at foreigners to be hit by new regulation?

Additional stamp duty is being imposed to cool the RESIDENTIAL property market.

The Additional Property Buyer stamp duty (ABSD) from 08 Dec 2011 is:

Foreigners and Corporate entities buying Residential private property have to pay an additional buyer stamp duty of

10 percent

Permanent residents (PR) owning one and buying the second and subsequent residential property will be liable to an Additional buyer stamp duty

• 3 percent

Singapore citizens owning 2 and buying the third and subsequent residential property will pay an additional buyer stamp duty

• 3 percent

Permanent Residents owning 1 and buying the 2nd and subsequent residential property will pay an additional buyer stamp duty

• 3 percent

Singapore Citizens (Singaporeans) owning two2 and buying the third and subsequent residential property will pay an ABSD of

• 3 percent

Foreign purchases account for 19% of all private residential property purchases in 2H 2011, up from 7% in 1H 2009. (URA)

In the case of a joint purchase, as long as any party is a PR or Foreigner, the higher additional property buyer stamp duty will apply.

HDB Property Buyers not affected URA clarified that HDB property buyers are not affected

Buyers for HDB properties are not affected by Additional Buyer stamp duty. Only Singaporeans and PR are eligible to buy a HDB flat. Someone buying into HDB flat or a new unit under the DBSS or EC will not be subjected to Additional buyer stamp duty since they will have dispose of their current property as part of the conditions for the purchase of the HDB, DBSS or EC units.

Buying property in singapore is becoming a complicated affair.

Likely Effects of Singapore's Additional Buyer Stamp DutyWhat is the effect of the Additional Buyer Stamp Duty (ABSD)?

We praise the URA for making this additional cooling measure. This measure will further cool the market. This cooling measure is also timely as it prevents foreign owned corporate entities from cheaply buying up private properties. There is currently a lot of Money supply in the world as the M2 money growth has often outpaced the growth of the GDP, especially since 2009 when the US has printed more money via quantitative easing. This may be a preemptive move against possible asset inflation. (Appendix 1: US M2 Money Supply and European M2 Money Supply).

What this means is, if these money is to be put to use to buy up assets, 10% of additional buyer stamp duty won’t entirely stop them from buying into Singapore properties, but only slow them down.

Inflation reduction?

What affects inflation?

MV = PQ = (by Irving Fisher, 1911)

Where

• M is the total dollars in a Nation’s money supply (generally the M3 or M2)

• V is the number of times per year each dollar is spent (Velocity of money)

• P is the avg. price of all the goods and services sold during the year.

• Q is the quantity of Assets, goods and services sold during the year.

When M2 or M3 increase, where V and Quantity stays the same, then P increase. The rate of P’s increase is inflation.

In recent years, money supply has grown largely faster than GDP growth. What this tells you is, the money velocity is slow. People are not spending. Even in Singapore, although inflation is 5.4% in 2011, it is still fairly stable and controllable in view of looming recession in Europe.

However there is risk as money supply is ample. Once there is light at the end of the tunnel, confidence returns, velocity of money will pick up. And at that time, the Quantity (Supply) will have to pick quickly to control price rises. As far as property is concerned, the lead time to complete a unit is 2 to 4 years and this will lead to imbalance in prices.

M2 or M3 increase x V = P x Q

Imposing a stamp duty has the effect of reducing the foreign owned portion of M2 or M3 from the Singapore property market.

In short, this policy may somewhat reduce inflation attributed from Housing. However it may not stop these money from being channeled to other parts of the economy, especially commercial properties.

Singapore Recession worries

Now, with the European debt crisis looming, we wonder whether this is the right time to impose such a regulatory measure. After all the property market has already cooled dramatically. Moreover, this policy hurts the mid tier private property markets and entry level luxury more.

Should the policy target run away prices in HDB instead?

In view of the massive under-supply of HDB’s physical stock given the massive mass increase in population, it will still take several years to balance the supply and demand. Currently demand far outstrip supply.

HDB pricing index will likely continue to rise into 2012 and 2013 as imbalance is gradually more balanced.

While DBSS is being added to the supply, these Design, Build and sell housing by private developers of HDB houses lead to a even more severe rise in HDB housing prices.

DBSS developers buy expensive land from the Singapore government, add on their profit and then pass on these costs to helpless Singaporeans and Permanent citizens.

Singapore government is the ultimate winner in terms of the good price for the land.

Spill over may soon be seen in Executive Condominium (EC) with some ECs approaching prices of Mass Market condominium prices. This supports the prices of mass market condominium to be launched in large volumes.

Unfortunately this additional buyer stamp duty (ABSD) does not apply to HDB, Design, Build and Sell (DBSS) and Executive Condominium (EC). This ABSD affects Private property while what it should have done is to manage HDB price rises, especially the Run-away prices of DBSS flats. It’s unfortunately for Singaporeans.

Severe Demographic effects – Singapore’s Resident Population to dramatically increase?

Could more PR become Singaporeans so as to buy more private property (a third or more)?.

More foreigners holding employment pass will apply to become Permanent residents to qualify for buying HDB flats, leading to more housing demand pressures.

Expatriates faced with additional Buyer stamp duty on buying private residential property and is not well off enough to buy a private property will likely want to become Permanent resident (PR) so as to buy a HDB. This scenario is quite unfavourable for Singapore as we may be attracting the lower level and lower skilled expatriates competing with native Singaporeans.

Our Proposal for the regulatory changes: -

If we cannot keep regulations simple, then perhaps this regulations could be considered.

To impose the following regulations on: - Proposal to Impose regulations on: -

Housing Development Board Flats

• HDB flat owners who own a private property must stay in their HDB regardless of whether they meet the minimum occupation period (MOP), within 2 years of this announcement. Else these HDB home owners must sell their HDBs in the resale market.

o This stops existing HDB home owner from owning a HDB and staying elsewhere and making money by renting out their HDB flats.

o No force to be applied to them to sell their HDB flats, but they cannot make money via renting out their HDB flats while owning other Private residential properties and staying in private residential properties.

• To prevent new Permanent Residents from competing in the HDB market, all Permanent Residents (PR) must wait 5 years upon attaining PR before qualifying to buy a HDB flat. (This is to prevent lower tier foreign talents from speculating in the public HDB Singapore property market).

o All PRs to pay additional buyer stamp duty of 10% on HDB resale flats.

Proposed regulation on Private Properties

• Corporate entities who buy residential properties will pay an additional buyer stamp duty of 10% (As URA proposed)

o This should be especially applied to landed properties where it is scarce.

• All New PRs must wait 5 years before being eligible to buy a landed property.

o PRs not meeting the 5 year waiting period shall be rejected by the Land Dealings Approval Unit (LDAU), else a 15% additional buyer’s stamp duty of 15% is applied.

For Foreigners or PR purchase of private property (non landed): -

o NO additional buyer stamp duty, but

o Loan to value from Singapore banks to be reduced to 50%.

Regulation for Commercial Properties

• Apply the additional property buyer stamp duty of 10% on Foreigners buying commercial properties.

Summary of additional buyer stamp duty

URA’s imposition of the additional buyer stamp duty is generally correct in pre-emptive prevention of inflation given the massive money supply, however the timing is questionable as European debt crisis is still unfolding and money velocity is still slow.

This policy seems like another political knee jerk reaction, while it hides dangerous and possible side effects of massively increasing the Singapore Citizen population and PR population through lower tier foreigners.

This additional buyer stamp duty should stop speculation in HDB instead and leave the private residential property market alone.

If the intended thinking behind this policy is to make HDBs more affordable, then our proposed policy changes will likely be more effective.

BUYING A HDB SHOPHOUSE WITH RESIDENTIAL QUARTERS TO STAY IN?

2011-11-09T19:55:00.003+08:00

BUYING A HDB SHOPHOUSE WITH RESIDENTIAL QUARTERS TO STAY IN?

With so many new regulations coming up in short spans of time, many people are confused.

You would normally associate HDB with residential flats. However HDB also has shophouse units which are considered commercial properties. These commercial properties are normally located with town councils or town centres near hawker centres.

Some Of These HDB Shophouses Contains Residential Quarters.

Due to these residential quarters within the HDB shophouses, this has caused a lot of confusion as to where they are considered HDB flats or partial HDB flats (apportioned by the size of the unit).

What if you already own a private property, can you buy a HDB shophouse commercial unit that also happens to have a residential dwelling?

Apparent if we go by the HDB rules that applies on HDB flats, then you cannot buy a HDB shophouse if you already own a Private property.

Say for example the HDB shophouse is 1600 sq feet made up of 2 floors.
— 800 Sq feet on 1st floor and
— 800 sq feet of residential unit on the second floor.

If you have NO outstanding housing loan, then the bank will consider to lend you 80% of the valuation for the property. However, if you have any existing home loan, some banks are considering: -

— Lending you 80% on the commercial portion of the HDB shophouse of 800 sq feet
— Lending you 60% on the residential portion of the HDB shophouse of 800 sq feet

Apparently some Singapore banks are still checking with MAS with regards to the treatment and classification of such property. As these properties typically have quite a number of regulations attached to it’s ownership and business use, they can be risky both for the property buyer as well as the banks who lends money out on these type of properties.

So we decided to check with HDB on how they Classify HDB shophouses

—————————- Original Message —————————-
Subject: ENQUIRY ON PURCHASE OF COMMERCIAL PROPERTIES
From: ”Yit Hah LEE” >xxxxx@hdb.gov.sg>
Date: Fri, October 21, 2011 6:40 pm
To: Property Buyer Mortgage Consultant
————————————————————————–

HOUSING DEVELOPMENT BOARD

Your Ref :
Our Ref :
Date : 21 Oct 2011
TEL : 1800-8663073
FAX : 63972477/8
EMAIL : pldmail@hdb.gov.sg

xxxxxx
(Email: admin@propertybuyer.com.sg)

Dear xxxxx,

ENQUIRY ON PURCHASE OF COMMERCIAL PROPERTIES

We refer to your email of 19 Oct 2011.

2 Please be informed that although some HDB commercial
properties have living quarters attached to them, these properties are
sold or tenanted out as a commercial property under a single title and
deemed as non-residential. The prevailing policy that persons who buy
non-subsidized flats are not allowed to concurrently own an HDB flat and
private property within the minimum occupation period is applicable only
to private residential property.

3 We have also no restriction for foreigner/ Singapore
Permanent Resident to purchase HDB commercial shops (i.e. shop with living
quarters at 2nd storey or shop without living quarters) provided the
individual(s) are above 21 years of age and is not an undischarged
bankrupt

4 You may visit our website at http://www.hdb.gov.sg>
Commercial Tenants & Lessees > Managing your sold premises. There is
more general information on the procedure; policies for Resale/
Transfer of Shop. Alternatively, you can call our toll-free enquiry
hotline at 1800-8663073

Yours faithfully

LEE YIT HAH (Miss)
SENIOR ADMIN EXECUTIVE
for HEAD, TENANCY; LEASE MANAGEMENT UNIT
PROPERTIES; LAND DEPARTMENT

CLARIFICATION FROM HDB REGARDING HDB SHOPHOUSE

We are thankful to Ms. Lee of HDB for her fast response to clarify the issue of HDB shophouses.

Even though this property is treated as Commercial, many of these properties have maybe between 40 plus years to 70 plus years of remaining leases as most HDB shophouses were older designs built in the 1970s onwards.

Will There Be Racial Quota?

We can’t help but wonder what would be the racial quota of these shophouses on the residential units?
How many people can stay in it?

Banks are generally only lending to HDB shophouses with a minimum of 60 years of remaining lease. The maximum tenor of the loan is capped by (Remaining lease – 30 years). This is not a rule set in concrete or by regulation, but a rule that banks normally apply.

Property Buyer’s Advice

If for any reason HDB shophouses come in at the cheaper range of the price range, this can best be explained by the possible ambiguity of investing in such category of properties. Investors fear uncertainty and generally apply a discount to uncertainty. Banks similarly may impose either a longer processing time or some conditions on lending on such property, or stay away completely.

The value of this investment will very much depend on the Singapore regulatory environment governing this type of housing as well as credit availability or restrictions at the point of sale. Else this asset will be purely a yield play without too much excitement on capital gains.

As trading volume is rather thin, you could very easily pick a gem as well as a lemon.

Queen Astrid Park houses

2011-11-03T03:44:00.002+08:00

Queen Astrid Park houses

Queen Astrid Park is located at the District 10 of Holland, Bukit Timah, Singapore. It is a landed housing estate with close access to the Queen Astrid Park, Klongtan Ping Restaurant, NTUC Fairprice, and School of Chemical and Life Sciences. Transportation access is the Bus Stop located at the Tan Boon Chong. If you want to use the MRT Stations, you may use the Holland Village MRT Station, Buona Vista MRT Station, and the Farrer Road MRT Station. Queen Astrid Park is near to Tanjong Pagar United Fc, Balestier Khalsa Fc, and Gombak United Fc football stadiums. The place is also near to the Padang Cricket Ground and the Kallang Cricket Stadiums.

invest in sentosa cove property in Singapore - Ocean drive

2011-10-23T21:34:00.000+08:00

invest in sentosa cove property in Singapore - Ocean Drive

We drove along the place to see our friend who happens to live there. And we sort of wandered off a little. And took this nice Ocean Drive video. The drive was really scenic. It's comparable to driving along a nice coastline in Australia or elsewhere, but of course the drive was relatively short and you cannot drive fast.

On both sides of Ocean Drive in Sentosa cove, are dotted with landed terraces as well as bungalows. And they are all very unique in shapes and design. Rich people want to be special, and they want to extend their personality towards there houses too.

It's really a sight. We want to work hard now after the inspiring drive.

Feel free to contact a Singapore mortgage consultant to get a home loan for your sentosa cove dream home.

Invest in sentosa cove - Oceanfront pool area

2011-10-18T21:21:00.000+08:00

Invest in Sentosa Cove - Oceanfront pool area

The pool area of Oceanfront looks and feel so good. The place is so breezy, so beautiful. You don't feel like you are in Singapore at all. Time seems to slow down, people seemed happy, the life seems beautiful. How can a place feel so different between mainland Singapore and Sentosa cove?

On both sides of the condominium, you see the sea and is surrounded by it. Sometimes you feel so small, and are awed by the natural setting.

Prices start from 3 million onwards. So if you want to finance your sentosa property, feel free to get in touch with us Property Buyer Mortgage consultants.

Invest in sentosa Cove - luxury finishing - Oceanfront condo

2011-10-14T21:15:00.001+08:00

High quality finishing - Oceanfront Condo - Sentosa cove

Have you ever wondered how the rich lived? What kind of basin they use? Well, the super rich have very exquisite tastes and enjoyed the finer things in life.

invest in Singapore property - Seascape showroom

2011-10-10T21:42:00.000+08:00

invest in Singapore property - Seascape showroom

By Property Buyer Mortgage Consultants

Exquisite is the word. Heaven on earth. Beautiful... These are expressions reserved for Seascape Condominium. Don't take our word for it, contact your property agent to take a look.

We can help you to do your home loan calculation prior to your purchase, so that you don't get too excited and over-commit your finances.

If you want us to introduce you to a trust worthy property agent, feel free to get in touch with us via SMS 9782 8606. We will put you in touch.

Sentosa cove - Seascape Condominium

2011-10-09T21:49:00.000+08:00

Sentosa cove - Seascape Condominium

by Property Buyer Mortgage Consultants

What is it like to live in Seascape Condominium. All I can say is, it is very exclusive, very snob, very beautiful. Previously when people have arrived, they want to stay in District 9, 10, 11. These days, when people have arrived, they want to stay in Sentosa cove. A lot of Wannabe developments have sprouted up in Singapore's district 9, 10 and 11. And there are also many so called Sea view condominiums in East coast.

They are not the same. You can see the sea, but you cannot touch it. When you take the lift downstairs and walk out of your condominium, you see heavy traffic, you see a mess, disorderly shops and so on. Where is the sea? It's one underpass away to get to the sea at east coast park. And the underpass is 200 to 300 meters away. Once you reach the underpass, it's another 100 to 200 meters to the sea.

How's that for Seaside living? Not a chance!

Seascape is right by the sea. The only thing against it is, there is no beach. For the beach, you have to take a drive to the Siloso beach.

Nonetheless, this is a beautiful place and it's not exorbitant on a per square feet basis. You can get something for around 4 to 5 million singapore dollars.

Not to worry if you do not have $4 to $5 million, as long as you have20 to 40% of downpayment, we can help you with your sentosa cove home loan financing, alternatively you can sms us at +65-9782-8606 for a chat on financing options for your investment in Sentosa Cove properties.

As we are NOT property agents, if you want to view any properties, we can introduce you to property agents who can take care of your needs, just let us know at +65-9782-8606.

Invest in Sentosa Cove - The OceanFront Condo

2011-10-08T21:09:00.003+08:00

Invest in Sentosa Cove property - The Oceanfront condo

Live it up at the Oceanfront condominium, the sun, the sea, the yachting lifestyle, the cocktails and the beach parties.

Analysis of reducing HDB lease to 66 years?

2011-10-08T21:01:00.004+08:00

Analysis of reducing HDB lease to 66 years?

We are not amused with the suggestion to reduce HDB lease. From what we gathered, increasing land price is a government policy set in stone.

Singapore has already embarked on Land productivity measures since 2007. (see links below)

(Source: http://www.scribd.com/doc/33276827/Economic-Strategies-Sub-Committee-Maximizing-Land-Value and http://www.asiaone.com/Business/News/My+Money/Story/A1Story20100222-200190.html)

Land productivity is a measure of how best to use land. And the best way to determine how to use a land is of course by who can afford to pay the most for it. Whoever pays the most is naturally assumed to have higher land productivity since they can afford the higher rates, hence they must be making a decent returns from running their business.

For example, a coffee shop at a neighbourhood coffee shop that sells you a 70 cents coffee. They may be low productivity. So if the government release another plot of land and a coffee shop chain bids a very high price for the land and wins the bid, then how will they improve productivity? (Low cost, increase coffee making speed, sell more coffee for same price or sell coffee for more price). And we suspect you guessed correctly, Singapore's government policy will lead to increased cost of living.

In order for land productivity to materialize, Singapore government must constrict land supply only until the best possible price. The Singapore government should produce less supply than there is demand, so that HDB prices and hence land prices can go up.

When land prices go up, then more revenues can be obtained, either via HDB or through various land holding/owning authorities. This is good for the country's coffers.

An average Singaporean has a huge housing loan interest burden and generally pays it off over 30 years.

HDB studio retirement flats with 30 years lease

In the past, the HDB has tried to create a sub-class of HDB flats (Still effective as at today) which are only 30 years lease. HDB tries to create a precedent and hopes that people will gradually accept 30 year land lease via the Lease and Buy back Scheme. On the surface, it seems like a great plan for retirees who are short of money, but in reality, due to the CPF used (with accrued interest), most of these retirees who let go of their normal 3-4-5 rooms HDB to go into such “Studio” and 30 years lease HDBs will have most of their money locked up by CPF, part of the money realized will go into an Annuity with CPF Live.

(http://www.hdb.gov.sg/fi10/fi10325p.nsf/w/MaxFinancesOverviewLeaseBuyback?OpenDocument)

People are buying in flats that are very costly on a Per sq feet per year basis.

For example a 99 years flat with 1200 sq feet cost $450,000. That works out to a $375 psf per 99 years.

• Or $3.79 per sq feet per year.

• Or $4,545 per 1200 sq feet per year.

Say for example, a 30 year flat with 500 sq feet cost $120,000. That works out to: -

• $8 per sq feet per year. (way more expensive than that of a 99 year lease)

In another scenario

In another scenario, the government offers a buy back of 40 years from a 70 years lease at $104,000 (valued 236,000 of 70 years ? 40 years should be 40/70 x 236,000 = $134,857), But the government offered much less, thereby “making” $30,857 from the poor HDB home owner. $30,857 can go a long way towards having a better retirement for these poor folks.

[caption id="attachment_750" align="aligncenter" width="645" caption="HDB lease and buy back scheme"][/caption]

Of course, this offer by HDB is optional. We see this as a very BAD deal and urge home owners to reject it.

Unfortunately, those people who are in those situation may not even have a computer, much less internet access, thereby possibly succumbing to a bad deal as they do not have enough knowledge.

(Source: http://www.hdb.gov.sg/fi10/fi10297p.nsf/ImageView/CORPORATE_PR_05032010_LBS_ANNEXA/$file/Annex+A.pdf)

Private developers buy FreeHold land and sell it as 103 years lease hold land

These buying of FH land and selling it as 103 years lease hold land is allowed under the common law.

These reduces the supply of FH/999 land and makes lease hold land more the norm for eventual gradual acceptance.

SMALLER UNITS BELOW 500 SQ FEET (Mickey mouse units)

With the reserve list bidding deposit dropping from 5% of bid price to 3%, this means that developers will likely bid higher for the land. There is also a cap of $5m on the bid deposit allowing more developers to participate.

(Source: http://www.ura.gov.sg/sales/reservelist/faqrlq11n12.html)

This means that developers wanting to stay in business will have to bid higher prices to win the land bids. As the population has limited income and affordability, in order to make money from their very high land bids, they will have to build houses smaller and sell at a higher per square feet price.

Recent trends indicate that Singapore Government has started land productivity

The land productivity measures by the government points the way towards making land more expensive on a per square feet per year basis. We have seen various measures to vary the land lease, vary the size or impose regulations, all trying to check what sticks.

Implications of Singapore’s land policies

There should be a class of land that the Singapore government provide for ordinary citizens without so much as worrying about land productivity.

Leave the productivity to Commercial properties, industrial properties, spare the hard working and over-taxed citizens. These Singaporeans merely want a roof over their heads and stay alive. Give them a chance.

Imposing Shorter leases on HDBs will only make them more expensive on a per unit basis with Singaporeans having lesser and lesser “equity” (because they own less of a house, instead of a house with 99 years lease, they own one with 66 years lease) while paying higher and higher prices.

Eventually, shortages in supply whether deliberate or via constraints will drive up the prices of HDB with 66 years leases up to the point where people can still afford it, sapping up most of the household portion of disposable income. Eventually 66 years leases will rise to the price point set by previous 99 year HDB leases.

So the key to maintaining reasonable pricing is NOT giving you less of a HDB flat, but by creating a balance supply and demand condition to smooth out the prices.

Based on these reasoning, we totally reject Conrad Rai’s argument of proposing HDBs with shorter leases!

See below for Article by Todayonline.com where the writer proposed a 66 year HDB lease.

Why not 66-year HDB leases?
(source: Todayonline.com
www.todayonline.com/Print/Business/EDC110930-0000244/Why-not-66-year-HDB-leases)

Introducing some flats with shorter lease periods would make them more affordable
04:46 AM Sep 30, 2011
by Conrad Raj
The Ministry of National Development's decision earlier in the year to raise the supply of HDB flats is a step in the right direction.
The move to raise the income ceiling for buyers from S$8,000 to S$10,000 for Build-To-Order flats and from S$10,000 to S$12,000 for executive condominiums is another welcome response from the Government.
The Housing Board is expected to put on offer 25,000 new flats this year and another 25,000 next year to meet pent-up demand for public housing. While the promise of higher supply is said to have slowed down the pace of price rises in the residential property market, prices are still on the high side and public housing needs to be made still more affordable.
At present new flats are sold on a 99-year lease, good for more than three generations. What the Government does after that is anybody's guess, although in the case of HUDC property, the Government has topped up the leases of flats in estates that have gone private for a fee. Perhaps they will do the same with HDB flats.
But do all leases have to be that long? Perhaps the Government should look at providing flats with shorter leases to make them more affordable.
After all in China, leases on residential property are for 70 years.
In Hong Kong, nobody really knows what is going to happen when the Chinese government's commitment to let the former British colony remain autonomous ends. While new leases are normally for 50 years and may be renewed, what the Chinese government will do after 2047 is anybody's guess - yet the buying goes on despite the deadline being just 36 years away.
Although most financial institutions here rarely provide loans on properties with less than 70 years left on their leases, there is nothing in the books to prevent them from giving loans for properties with shorter shelf lives.
In fact according to a financier some financial institutions here do give loans for properties with as short as a 40-year lease.
"We look more at the ability of the borrower to repay the loan rather than the life of the flat," the financier said.
Just look at the resale market where HDB flats are being sold with more than 30 years of their lease gone.
I, in fact, bought a property at Dover Close East with less than 70 years of its lease left, and flats are still being bought and sold in my estate.
In theory if HDB apartments are sold on a 66-year lease basis, one third less than the present 99 years, they should go for a third less.
But of course the HDB might want to recover its building and other costs much faster and so the actual selling price of these flats might be higher, but it should not be very much more.
Whatever the actual cost recovery basis is, shorter leases should provide substantial savings for buyers, especially the younger crowd who have been in the job market for a shorter period and thus probably would have less savings in both their CPF and bank accounts.
This is not to say that all HDB flats should be sold on a shorter lease plan. Perhaps there should be a mix to allow people preferring the longer 99-year lease period a choice.
In any case, why not have leases for just 33 years (or whatever period the HDB is comfortable with) for those who do not want to pass on their property to the next generation, but want a more affordable flat?
After all the current 99-year period just follows convention elsewhere and is not cast in stone.
According to Wikipedia, the 99-year lease was, under historic common law, the longest possible term of a lease of real property.
Although no longer the law in most common law jurisdictions today, 99-year leases continue to be common as a matter of business practice and conventional wisdom.
Mortgage News Daily and other online sources further note that under traditional American common law, the 99-year term was not literal, but merely an arbitrary time span beyond the life expectancy of any possible lessee or lessor.
So, can we look forward to more affordable public housing in the near future?
Conrad Raj is Today's editor-at-large.

WILL RAISING OF HDB INCOME CEILINGS AFFECT HOME PRICES? Part 5

2011-09-24T02:26:00.001+08:00

WILL RAISING OF HDB INCOME CEILINGS AFFECT HOME PRICES?

Part Five

PROPERTY BUYER’s PROPOSAL

We do NOT agree with PM Lee’s statement that people are marrying later and hence allowing a high income ceiling helps them to own a house. Happy pictures or interviews (as shown in Straits Times) showing people being happy for this new policy change may be taken from a skewed sample.

Instead, we strongly recommend that PM Lee looks into why people are marrying later.

Many people we have spoken to mentioned the high cost of living (Not high standard of living) and high cost of HDB flats as major contributing factors for delays in getting married. Not only that, having to wait for 2 to 3 years for an over-priced BTO flat (in their opinion) further adds to hesitation of getting married.

How to Make HDB more affordable?

Rather than raise income ceiling for new HDB flats, the government could instead impose an income eligibility ceiling of say $12,000 (for Singaporeans) and $15,000 (for Foreigners with Singapore PR) on resale HDB.

This would immediate cut off demand from the high income earners from competing in HDB resale flat.

(Currently Resale HDB has no income ceiling - this means that the very high income earners can compete in the HDB resale market, driving up prices of resale HDB)

This would nudge PR into private properties and retain HDB resale flats for Singaporeans.

New HDB flat income ceiling should NOT be raised!!!

Although there is a price differential of 20 to 30% (According to PMO) between Resale and new HDB prices, raising Income ceiling on the new HDB flats will allow new HDB flats to rise in price, rather than for resale prices to come down.

At the same time, HDB must double up it’s speed on building cost effective HDB flats, not BTO and not DBSS. It is the Shortage of Supply that is driving up prices.

Do away with DBSS, as there is too much froth built into the price by these private developers and they will pay too much for government land (in expectation of future profits), involuntarily ending up as "tax collectors" for the Singapore Government. Since they may corner the market forming some form of a cartel, a monopoly or duopoly or tri-poly, they can effectively pass on the higher land cost to the new HDB property buyers.

Do away with BTO as supply is in the catch up phase. Price new HDB flats lower and impose more restrictions if required (to create fairness), to make it more affordable for newly weds.

When the gap of the HDB resale and New HDB prices closes, this will lead to a more orderly market. And we don't mean for HDB new prices to go up to HDB resale level to close the gap. We prefer for resale prices to come down so as to close the price gap between HDB resale and New HDB prices.

Once a balance is reached, HDB should NOT indulge in BOOM and BUST supply cycles of HDB ever again.

Because from 2006 to 2010, the supply has been badly managed. There is absolutely no excuse.

DO AWAY WITH CASH OVER VALUATION

Last but not least, REMOVE the Cash-Over-Valuation system. A Valuation that is not really a valuation makes a mockery of the valuation professionals. If you use the benchmark method, then surely the price increase should be reflected in the price and hence the valuation, and not in the "Cash over Valuation".

We see the Cash Over Valuation as a means to help HDB home owners upgrade to Private properties if they sell their HDB flats (this is a form of social engineering).

We have no objections to helping people upgrade from HDB to a more comfortable Condominium living (now that they can pay the downpayment) , the only question is,

Can their incomes afford it?

If they can, how many years of loan tenor do they need? Have they really checked through in a home loan calculator?

What will happen to these hapless buyers when they lose their jobs in a recession?

Part 4 WILL RAISING OF HDB INCOME CEILINGS TO AFFECT HOME PRICES?

2011-09-24T02:25:00.001+08:00

WILL RAISING OF HDB INCOME CEILINGS TO AFFECT HOME PRICES?

Part four

WHAT IS THE IMPLICATION OF HDB CEILING INCREASE

By increasing the income ceiling from $8,000 monthly household income to $10,000, this will mean that more people will be competing to buy New HDB flats when the supply is still fairly constricted.

IMPORTANT NOTE:

At $8,000 income ceiling, the maximum loan quantum is estimated at $890,000. At $10,000 income ceiling, the maximum loan quantum that a Singapore bank will lend is estimated at $1,113,000. Home loan calculators can be found here.

This means that DBSS can price their flats $223,000 more potentially. ($1,113,000 - $890,000) = $223,000. Initially, those developers will make more money. And these developers would bid for land more aggressively, hence bidding up land prices. Expensive land prices end up as a form of “UPFRONT PERSONAL TAX” by the government on the new HDB property buyer.

The government’s stance has been that people are marrying later and hence will likely have more income when they get married. By consequence, increasing the income ceiling from $8000 to $10,000 will allow them to be eligible. This will cause them to compete with existing property buyers to add to the pool of new HDB flat buyers.

To revisit the Centrale 8 (in Tampines) furor, having more people eligible via higher income ceiling will allow DBSS developers to make more profit due to the higher number of demand that will find their pricing “Affordable”. Higher levels of income will allow the developer to price it based on home loan affordability and push it to the limit. (People will pay through their noses for their HDB flats and any changes in home loan interest rates will hurt them really hard)

When DBSS developers feel confident of making more money, then they will bid higher prices for the land, eventually it means that more money flows to either the HDB or through the statutory boards holding the land and eventually as revenues to the government.

NOTE: At the time of publishing, we still have not found out who are the agencies that are responsible for the land sale, is it Singapore land authority (SLA) or is it HDB.

When DBSS price rises, this will create headroom for BTO prices to rise. Eventually, this will mean more expensive HDB flats. This in turn means that there is a minimum price on the land, forming the base support level for all other types of housing further up on the food chain.

The root cause is, a mis-managed supply and demand situation by MND which we strongly belief the government of Singapore had all the data at hand to solve, but did not do a good job.

Eventual victims are: Singaporeans who are newly wedded or singles who just become eligible to buy HDBs.

Continue on Part 5 - Summary and Proposals for Singapore Government

Property Buyer is believed to be Singapore's ONLY mortgage consultant that does Property Research. We avail research to the every day men and women to help you de-myth the Singapore property market and make sense of it.

Continue on Part 5
http://propertybuyer.com.sg/articles/regulation/will-raising-of-hdb-income-ceilings-to-affect-home-prices-part-5/

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This is a FREE service, do contact us for a consultation at
SMS 9782-8606. or
Email us at loans@propertybuyer.com.sg

WILL RAISING OF HDB INCOME CEILINGS AFFECT HOME PRICES? part 3

2011-09-24T02:23:00.000+08:00

WILL RAISING OF HDB INCOME CEILINGS AFFECT HOME PRICES?

Part three - 3

HDB MEDIAN RESALE PRICES

HDB New flat prices are not lodged through Caveats. Data is too granular. And our enquiry with HDB ended with directing us to a HDB Annual report, which gives us some rather granular data. These data are too coarse to be used for any meaningful study or property research.

[caption id="attachment_320" align="alignnone" width="610" caption="Hdb flat supply statistics"][/caption]

(HDB Key statistics 2010)

And since we cannot get data on that, we can only infer.

“Before the change, a couple's combined income had to be below $8,000 a month for them to qualify to buy a BTO flat from the HDB, which is typically 20 to 30 per cent cheaper than a resale flat.”

(PMO,
http://www.pmo.gov.sg/content/pmosite/mediacentre/inthenews/primeminister/2011/August/HDB_raises_income_ceiling_to_10000.html
)

According to Prime Minister’s office, new HDB BTO flats are typically 20 to 30% cheaper than a resale flat.

And HDB median resale flat prices can be found here
(HDB, http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyResaleFlatMedianResalePrices?OpenDocument#Latest)

RESALE FLAT INCOME CEILING

There is no income ceiling for buying a resale flat

(http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyResaleFlatPublicScheme?OpenDocument) unless you are applying for a housing grant or a HDB loan.

Without an income ceiling in eligibility in buying Resale HDB, together with more demand from an increasing number of Permanent Residents (PR) each year, this causes the first time Singaporean buyers to be priced out of HDBs due to resale prices rise.

Population (Singstat) in '000s.

Year Total Population Singaporeans + PR
2004 ----------- 4,166.7 ----------- 3,413.3
2005 ----------- 4,265.8 ----------- 3,467.8
2006 ----------- 4,401.4 ----------- 3,525.9
2007 ----------- 4,588.6 ----------- 3,583.1
2008 ----------- 4,839.4 ----------- 3,642.7
2009 ----------- 4,987.6 ----------- 3,733.9
2010 ----------- 5,076.7 ----------- 3,771.7
(Census)

However this means that their only recourse is new HDB flats. But New HDB flats have been constricted in supply and HDB prices go crazy.

Singapore citizen grows (native) grow at a rate of 0.8 to 1% a year, excluding new citizens. It is obvious that by lumping Permanent Resident together with Citizen, the "Singapore residents" grows much faster.

Contact Property Buyer Mortgage Consultants for Customized Property Buying Research (fee based) or Contact us for mortgage advice (Free).

Continue on part 4.
http://propertybuyer.com.sg/articles/hdb-flats-and-loans/will-raising-of-hdb-income-ceilings-affect-home-prices-part-4/

WILL RAISING OF HDB INCOME CEILINGS TO AFFECT HOME PRICES?

2011-09-24T02:17:00.001+08:00

WILL RAISING OF HDB INCOME CEILINGS TO AFFECT HOME PRICES?

Part 2
http://propertybuyer.com.sg/articles/singapore-property-investor-buyer/will-raising-of-hdb-income-ceilings-affect-home-prices/

Executive Condominium Supply launched and in the pipeline

Executive Condominium is a class of condominiums that are restricted by HDB’s rules on minimum occupation for 5 years and will only fully become a private estate after 10 years. These condominiums tend to be pricey on a relative scale compared to other condominiums which does not have any restrictions. Most newly wedded couples will most likely not be able to afford these type of housing looking at median incomes.

[caption id="attachment_373" align="alignnone" width="701" caption="HDB Executive Condominium launched - adding to supply"][/caption]

[caption id="attachment_375" align="alignnone" width="548" caption="Singapore HDB confirms sites for EC"][/caption]

http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyingNewFlatFlatsonOfferEC?

http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyingNewFlatFlatsonOfferEC?OpenDocument

http://www.facebook.com/pages/PropertyBuyercomsg/101354546624904

Continue to Part 3 - Raising of Income Ceiling to affect HDB home prices

WILL RAISING OF HDB INCOME CEILINGS AFFECT HOME PRICES?

2011-09-24T02:12:00.002+08:00

WILL RAISING OF HDB INCOME CEILINGS AFFECT HOME PRICES?

Part 2
http://propertybuyer.com.sg/articles/singapore-property-investor-buyer/will-raising-of-hdb-income-ceilings-affect-home-prices/

Executive Condominium Supply launched and in the pipeline

Executive Condominium is a class of condominiums that are restricted by HDB’s rules on minimum occupation for 5 years and will only fully become a private estate after 10 years. These condominiums tend to be pricey on a relative scale compared to other condominiums which does not have any restrictions. Most newly wedded couples will most likely not be able to afford these type of housing looking at median incomes.

HDB Executive Condominium launched - adding to supply

Singapore HDB confirms sites for EC

http://propertybuyer.com.sg/articles/hdb-flats-and-loans/will-raising-of-hdb-income-ceilings-affect-home-prices-part-3/

Try out the carefully selected Home loan calculator

With HDB new raised income ceiling affect home prices?

2011-09-24T02:04:00.003+08:00

With HDB new raised income ceiling affect home prices?
with permission from www.PropertyBuyer.com.sg

Part – One A

“The ceiling will go up from the current $8,000 to $10,000 for HDB’s build-to-order (BTO) flats, and from $10,000 to $12,000 for executive condominiums, Prime Minister Lee Hsien Loong announced in his National Day Rally speech last night.”

“Before the change, a couple’s combined income had to be below $8,000 a month for them to qualify to buy a BTO flat from the HDB, which is typically 20 to 30 per cent cheaper than a resale flat.” (PMO)

(PMO, pmo.gov.sg/content/pmosite/mediacentre/inthenews/primeminister/2011/August/HDB_raises_income_ceiling_to_10000.html)

The income ceiling for New HDB flats will be raised to: -
Income Ceiling Type of Flat

$10,000
Studio Apartment 3-room (mature towns/estates),
3-room (Premium) 4-room or 5-room flat
$5,000
3-room Standard (non-mature towns/estates)
$2,000
2-room
(HDB, http://services2.hdb.gov.sg/webapp/BP13EligCheck/BP13SHome?strSystem=CHECK)

HDB Property Supply In The PIPELINE

As we discussed in our last article, despite all the HDB launches in 2010 and the “NOISE”, if we look at the statistics these announced supply are hardly enough to meet even Singapore’s local domestic needs, not to mention providing for the massive influx of foreigners and new Permanent Residents (PR). Ministry of National development got their numbers quite wrong. In that, they have under-supplied HDB flats to the tune of even up to 100,000 units (based on our estimates)

The fact that there is not a long queue at BTO registration (As claimed by some minister as indication of people not needing a home) itself does not mean that there is no latent demand, from the between 22,000 to 25,000 marriages each year. (http://propertybuyer.com.sg/articles/singapore-property-investor-buyer/why-singapore-property-prices-go-crazy/) This probably reflects the various complicated paper work and bureaucratic costs imposed as well as the people not being able to afford the supply.

HDB Property Supply In The PIPELINE

As we discussed in our last article, despite all the HDB launches in 2010 and the “NOISE”, if we look at the statistics these announced supply are hardly enough to meet even Singapore’s local domestic needs, not to mention providing for the massive influx of foreigners and new Permanent Residents (PR). Ministry of National development got their numbers quite wrong. In that, they have under-supplied HDB flats to the tune of even up to 100,000 units (based on our estimates)

The fact that there is not a long queue at BTO registration (As claimed by some minister as indication of people not needing a home) itself does not mean that there is no latent demand as there are between 22,000 to 25,000 marriages each year. (http://propertybuyer.com.sg/articles/singapore-property-investor-buyer/why-singapore-property-prices-go-crazy/) This probably reflects the various complicated paper work and bureaucratic costs imposed as well as the people not being able to afford the supply of such HDB BTO flats.

Supply From Balance HDB Flats

Supply of HDB flats are from current balanced stocks are also in short supply.

There are not much supply from Balance flats as well. “The flats offered in the Sale of Balance Flats exercise are mostly under construction or near completion. Because of strong interest for such flats, the chances of getting a flat in the Sale of Balance Flats exercise are slim. Property Buyers who are not invited to select a flat can consider applying for a new flat under the BTO system, which is where HDB’s main supply for flats comes from.”

(http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyingNewFlatSBF?OpenDocument)

There are hardly any supply of balance units, so the only way to go will be to buy from the HDB Build-to-order (BTO) market.

(http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyingNewFlatModeBTO?OpenDocument)

That means that the current shortage of HDB supply will stay at least until some of the proposed Build-to-order flats are completed. And more of such BTO sites will need to be launched, sold and completed. And the time frame for that will be 2 to 4 years considering that it takes on average 2 years to complete a HDB building project.

HDB Property Supply From BTO Launches

Let’s take a look at the supply of HDB flats from Build-to-order to be launched. There are only 5,500 units of HDB flats (Remember, we estimate that there is a demand of 22,000 to 25,000 of housing needs due to household formation, i.e. marriages)

Sentosa Cove - Bungalows

2011-09-18T03:32:00.004+08:00

Sentosa Cove has many bungalows. The bungalows are fancy, each with a unique character. The Sentosa home owners are proud home owners. At easily 10,000 to 15,000 feet in land, these bungalows cost easily 20 million singapore dollars at the minimum. Take a look at the surrounding environment of how rich people live.

Sentosa Cove - The OceanFront Condo

2011-08-21T15:11:00.004+08:00

Sentosa Cove - The OceanFront Condo

Investing in Singapore takes many forms. If you want to invest in a Singapore property, there are many to choose from. Make sure you choose the right ones. Are you looking for luxury or style or simply a place to stay while you conduct your daily business?

Contact a Mortgage Broker before you start your search or

SMS: 9782 8606 for your mortgage needs to find out how to finance a property first.

Check before you Invest in Sentosa Cove Properties in Singapore?

2011-08-21T14:43:00.003+08:00

Check before you Invest in Sentosa Cove Properties in Singapore?

By www.PropertyListings.asia

Sentosa Cove in Singapore was mooted as an idea and developed on an island resort and tourist destination in Singapore. Somewhere around 2003 to 2004, there was a realization in Singapore that we need to keep pace with the world's premium properties by offering super high net worth the luxury lifestyle that they have become so used to, such as in Monaco, Dubai and elsewhere. Many rich people from the western hemisphere prefer Sun and sea and a yachting lifestyle. So in 2004 onwards, the Singapore government re-zoned Sentosa to carve out a piece of land in the Eastern tip of Sentosa Island and created Sentosa Cove.

take a walk here to see luxury properties without setting foot into sentosa, which by the way is quite restricted, you cannot simply just walk in.

Leave us a message if you are keen at: info@propertylistings.asia

or leave the mortgage consultants a message, they can help you sort out the financing of the said properties.

loans@propertybuyer.com.sg

Mortgage Broker

Property Buyer spins off home loan consultancy to www.SingaporeHomeLoan.net

2011-07-30T03:51:00.001+08:00

Property Buyer, a Singapore based property portal is soft launching its revamped site with additional search engine application dedicated to finding real estate properties within Singapore. The company also is transferring its home loan functions to its sister website SingaporeHomeLoan dot net while maintaining a mortgage section at http://www.propertyBuyer.com.sg/mortgage for continuity.

The same team of home loan consultants will continue to service loan inquiries from both websites (the change over will be transparent for users) and will continue to be branded, “Property Buyer Mortgage Consultants,” with expertise on property buying loan consulting activities for high net worth individuals as well as the generic property loan refinancing activities.

This split will allow the two websites to be more focused in developing their own growth path while maintaining a symbiotic inter-dependence on each other as people who need home loans may need to look at properties and vice-versa.

Focus Of Singapore Home Loan Website

The new focus of SingaporeHomeLoan dot net (Property Buyer Mortgage Consultants) will be around providing better tools and data around loan comparisons to facilitate buyers to make an informed financing decision.
After the re-organization, the brand “Property Buyer Mortgage Consultants” will be used by http://www.SingaporeHomeLoan.net to ensure continuity. Property Buyer is a research focused mortgage consultant that does research into property economics as well as issues and regulations affecting property prices.

Focus Of Property Buyer Website

Property Buyer website continues to be the flagship website for the company and will continue to have a loans consultancy section within it’s website at Property Buyer Mortgage. The split will enable Property Buyer to break free from having to work around a home loans focus and to concentrate on providing tools, developing products as well as functionality that helps buyers to make the property buying process simpler and less risky. With the re-organization, the website will develop more revenue sources for the website around the property and wealth related segment.

The Managing Director of Property Buyer says, “We are pleased with our increased market presence so far. Currently “Propertybuyer.com.sg has a three-month global Alexa traffic rank of 1,091,767. The site is relatively popular among users in the city of Singapore (where it is ranked #4,876).” (Alexa, 21st July 2011) The split is more psychological in nature, as it frees up creative space to develop tools, products and services that is relevant to each website’s needs. And therefore we can better meet customers and readers expectations. We can develop more business successes only if and when we provide what the market is looking for.”

About Property Buyer

Property Buyer Mortgage Consultants is a research-focused mortgage advisory that helps property buyers look through hundreds of loan packages to find the best package that fits their financial circumstances, not simply some cheap loan packages. Property Buyer (CoreConcept Systems Pte Ltd) is a registered mortgage broker in Singapore. (Business registration 200618162C) with it’s office at No. 8 Liang Seah Street, #02-01 Liang Seah Court, Singapore 189029. Property buyer is also probably the only mortgage consultant in Singapore that produces research, not simply FAQs.

About The Company

All the websites and brands belong to CoreConcept Systems Pte Ltd. The company is focused on using technology to innovate traditional business segments and to use web technologies to bring to market, products and services. The company’s other divisions provides Search Engine Optimization (both English language as well as Chinese languages), Social media marketing and consulting, management consulting as well as professional career coaching and entrepreneurial start-up programs.

PropertyBuyer Mortgage Consultant
Home Loan Calculator
+65-9782-8606

loans@propertybuyer.com.sg

How to choose a Property in Singapore

2011-06-07T00:22:00.001+08:00

How to buy a property in singapore

View more presentations from Property Buyer Singapore

Invest in Greenleaf estate landed housing in Singapore

2011-06-07T00:19:00.002+08:00

Enjoy the quiet drive by to Greenleaf landed housing estate in Singapore. One of Singapore's well hidden luxury estates.

Invest in Singapore properties - Sixth Avenue and Lantana avenue landed property

2011-06-07T00:17:00.002+08:00

Found anything you fancy?

Drive by to Holland village

2011-06-07T00:15:00.001+08:00

Holland Road Community Club and Swimming pool drive by

2011-06-07T00:09:00.001+08:00

Take a drive along Holland Road

2011-06-07T00:08:00.002+08:00

Why use a Mortgage broker?

2011-06-06T23:48:00.002+08:00

Why use a mortgage broker?

Singapore Property Buyer mortgage and Home loan Broker

View more presentations from Property Buyer Singapore

If you are buying a property in Singapore, you need to have a very balanced emotion state. And Property Buyer Advisors can help you to maintain that state and guide you through the buying process. Apart from that, Property Buyer Mortgage Consultants can also do home loans selection either for refinancing or new home loans.

WHAT KIND OF ASSET IS HDB?

2011-06-04T04:58:00.004+08:00

WHAT KIND OF ASSET IS HDB?
by Property Buyer

There are many arguments for or against a HDB flat as an asset class. We shall list down the various benefits and shortfalls of HDB as an asset class in this research.

Technically anything that retains a monetary value, either appreciating or diminishing, is called an asset.

Let us first take a look at the charter of HDB so as to understand the characteristic of this asset class.

“Mission
We provide affordable homes of quality and value.
We create vibrant and sustainable towns.
We promote the building of active and cohesive communities.
We inspire and enable all staff to give of their best.”

(HDB, http://www.hdb.gov.sg/fi10/fi10320p.nsf/w/AboutUsVisionMission?OpenDocument)

HDB started off as a government housing program to alleviate severe shortage in housing. Therefore it is more of a social program when it started off. So it should be more concerned about providing shelter.

The HDB flats of yester years are based on the cost of construction maybe with some land cost added into the equation. Therefore these flats cost only several thousands of dollars in the late 1960s (around $5000 to $9000). At that time, factory workers earned around $200 a month (citations required), or $2400 a year. A flat is equal to about 2 times to less than 4 times of a factory worker’s annual salary. Home loan tenors are usually 15 years.

Today, HDB houses 82% (Singstat, http://www.singstat.gov.sg/pubn/papers/people/ssnsep10-pg25-29.pdf) of Singapore’s Citizens plus Permanent residents which numbers 3.11m. Singapore’s Total Citizen + residents stands at 3.77m (as at June 2010).

Singapore’s citizens stand at 3.23m as at 2010. (Singstat, http://www.singstat.gov.sg/stats/keyind.html#keyind)

HDB Subsidy And Regulations

HDB is a public housing program with a social charter. It is to provide affordable housing initially. As Singapore witness rapid progress from a third world country to a 1st world country (economically), HDB has gradually changed it’s stance. Prices of HDB flats soon soared. The prices today is no longer using the Cost plus model, i.e. using the cost as a base adding some margin as selling price. Today’s HDB pricing model is based on the Resale flat prices in the open market less off a market subsidy of typically $30,000 to $40,000 for new HDB flats. The grant is $20,000 for Singapore citizen and PR mixed household (HDB, http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyResaleFlatCPFGrantFamily?OpenDocument)

There are many policies and regulations governing HDB housing. This makes it much more cumbersome than any other classes of property asset classes either for selling, for buying as well as for leasing it out. There are also restrictions on minimum use (i.e. Minimum Occupation Period “MOP”) of between 1 to 3 years for resale flats and 5 years for new flats. Therefore, if you are able to bear with HDB rules and still manage to lease it out without breaking any rules, the yield can be higher than private properties. However, these rules changes without notice, and failure to comply can mean that HDB can forfeit your HDB flat.

EVOLUTION OF HDB AWAY FROM ITS SOCIAL CHARTER

HDB has also evolved away from its social charter of providing good quality affordable housing. It’s new pricing formula where a new flat is often pegged to a small discount compared to resale flat prices means that, any shortage in new HDB flat supply will lead to people being forced to buy in the open re-sale market. With more people buying in the resale market, the demand rises. From 2006 to 2010, HDB supply planning has been a massive failure where the Ministry of National Development under-supplies the market to the tune of an estimated >100,000 flats (Property Buyer, http://propertybuyer.com.sg/articles/singapore-property-investor-buyer/why-singapore-property-prices-go-crazy/)

based on our rough estimate. Naturally this led to a massive price hike of HDB flats. And subsequently new HDB flats also reflect the rises and raised prices.

The move away from a “COST PLUS” model to a market value model is in fact capitalist in nature and there is nothing social about it.

BETTER QUALITY HDB FLATS COST MORE?

As HDB flats began to have more and more frills, HDB adopted a one size fits all approach. Whether you liked it or not, HDB flats comes with valued added features. These features don’t cost very much to build, but they do nevertheless ends up increasing the selling prices quite a bit. In other words, HDB resembles more and more like a private developer. What these does is, it raises the base cost of land and subsequently prices of all HDB flats, regardless of whether you can afford to have those amenities.

Singapore’s median income per household (per month) is $5704 (Singstat, http://www.singstat.gov.sg/pubn/papers/people/pp-s17.pdf), while the average income in the 41th to 50th percentile income per household’s working adult is $1,506 (per month).

This means that at current prices in the range of 300,000 onwards, if people were to borrow $240,000 and pay a down payment of $60,000. This would result in a 30 year loan tenor with each monthly installment of $960.82 per month for 30 years. On a new household of 2 person, earning an average income (41st to 50th percentile median), the total household income would be $3,012. As each of them would need to contribute 20% to CPF, their total take home pay would be around $2,400. This $960.82 a month is about 1/3 of all their expenditure although CPF can pay for part of this amount.

What does this mean? It means that even at the 50% percentile point (the cut off point of half the people) many will find it very tough to afford a HDB flat, much less the others who are earning less. And all these frills are good for people who can afford it, but increases the hardship of people who do not need these frills as they still have to grapple with daily cost of living.

DOES UPGRADING INCREASES HDB VALUATION?

HDB flat’s valuation has always been subjected to some debate. All these upgrading projects are not free, home owners of HDB flats have to co-opt to pay for it.

Many older estates which are more than 40 years old such as Tanglin Halt HDB estates have been upgraded. However all these physical upgrades like adding a balcony and an extra room only make these flats more livable. As for the argument that upgrading really increase the value, we believe there will be some net increase in value, but whether there is any value added increase (above and beyond the cost of construction), that we doubt it will be much. The best comparison will only be verified using 2 similar type properties (in the same estate) before Upgrading and after upgrading. Compare the 2 properties again to mark the average selling prices. We believe that the price increase will likely be in-line with construction costs, and not much more. If at all it is much more, it is likely due to the construction time.

Say if it takes 18 months to complete construction, during this time, the base price of all HDB flats in the area also increases, these should be due to overall increase of HDB prices and not due to value added construction. For example, 2 similar properties of similar location, one undergoes upgrading. Before upgrading, both are priced at $300,000. After $50,000 of upgrading, the one after upgrading is priced at $400,000. Does this mean that it has increased much? Let’s see. If the HDB flat without upgrading is priced now at $360,000. What does it say about the upgrading program?

Hence the value added increase (above and beyond mere construction cost) are not necessarily due to upgrading works, but by overall market conditions in the resale market.

What is the purpose of upgrading the building without upgrading the lease?

Let’s call it sprucing up. At the end, it leads to increased consumption, as these increase in values are not realized in most cases.

HDB FLAT IS A HIGHLY REGULATED MARKET

All HDB flats have HDB appointed valuers. These valuers tend to value HDBs in a non-market driven way. In the 1998 and 1999 where there is a financial crisis, HDB prices were trading below valuation.

Illustration: -

A valuation could be $280,000 and the traded price could be $240,000. And these anomalies persists over extended periods of time.

During the HDB price booms in 2007, 2008 and 2010, Cash over valuation have reached levels such as $50,000.

The biggest question we would like to ask is, why are valuers pricing it as such? It could be that they are using a different methodology than the commonly practiced Benchmark method used in valuing private properties.

But persistently the valuations seemed to lag the actual transacted prices again.

So in other words, we can infer that the prices are set by the Singapore government and it is not entirely a free market as we would like to think, otherwise there is no reason that the HDB flats are valued using a different methodology than those of the Private properties.

PRICE INCREASE FOR HDB FLATS IS GOOD?

Price increase for HDB flats if it is in a moderate way and generally keeping pace with inflation and median wages, then it is acceptable.

Based on an average income of $1504 (41st to 50th Percentile) (Singstat, http://www.singstat.gov.sg/pubn/papers/people/pp-s17.pdf), a $300,000 HDB flat equals to 16.62 years of annual income.

Compared to previous level in the 1970s of about 2 to 4 times, the home loan affordability has gone down. Even though people can still afford the installment, they are nonetheless enslaving themselves for a typical 30 years tenor home loan.

As HDB flats are mainly to provide affordable housing, any price increase should be carefully calibrated. And as most people who own HDB flats would be assumed to own only 1 property, therefore the HDB flat is their one and only residential dwelling. If HDB flats were to rise in value, the whole asset class would generally rise in tandem apart from some pricing anomalies.

So where will these people stay if they sold their only home?

In fact, higher HDB prices attract higher Property Tax (IRAS, http://www.iras.gov.sg/irasHome/page04.aspx?id=9690)

This is because Inland Revenue Authority of Singapore (IRAS) revises the Annual values for HDB flats. Annual values are the potential rental income if it is rented out. And IRAS charges residential (own stay) 4% of the assessed value.

So Higher HDB prices (if you are not going to sell) ends up costing you more with no extra benefit.

So if there is a risk of HDB affordability, there is likely a risk of default some time down the road, causing a potential loss of asset value.

HDB FLATS ARE LEASE HOLD FOR 99 YEARS

Upgrading or no upgrading, HDB flats are leasehold properties. This means that both the land and the building depreciate in value. The most important component of that value is in fact the number of leases left on the property as well as it’s location. The condition of the property may not account for much of that value (as long as the building is not too run down). But expensive housing leads to higher home loan costs.

Even if HDB does increase in value even if the remaining leases are less, it reflects overall buoyant property market. These increases need to be compared with the increases in values of properties which have more number of years of leases remaining as well as Free Hold properties to get the ratio. If these increases are lesser in ratio or magnitude or both ratio and magnitude compared to 99 years properties with more remaining leases or FH properties, upgrading will mean no benefit at all as any gains to be had are wiped out by a even more expensive property.

SUMMARY: ARE HDB FLATS AN ASSET? WHAT SHOULD YOU INVEST IN SINGAPORE?

HDB Flats are a highly volatile asset class which is highly regulated with pricing mechanism which is not entirely transparent. Though there are some semblances of market forces at play, by and large, the Supply is controlled by HDB land sales and build program. The demand is based on demography of the Nation, therefore this demand is well known and understood by any actuaries. Also any additional demand in the form of New citizens or Permanent residents are known by the Immigrations and Check points authority of Singapore (ICA), therefore demand is also known and controllable. With HDB’s size and reach, it is safe to say that they are likely to have control of pricing of sub-contracting work.

So with Supply, Demand, Costing, Pricing and Regulation under control by the government, you cannot simply apply normal practices of investment into buying HDB flats, this is a highly dangerous asset class in our opinion coming from an investment stand-point.

For those people who are residing in HDB flats as their sole residence, HDB flats and its increased valuations becomes a Tax Liability (Property Tax), therefore in terms of Cash flow, it is purely a liability.

For those people who are residing in a HDB flats as their sole residence, the Upgrading works and its subsequent increase in value poses both a tax liability as well as increased consumption as they need to co-opt payment for these upgrades. (Of course the benefit is an enhanced living condition)

For those people who are Permanent residents or people who have private properties as well as HDB properties, the increase valuations may present golden opportunities to capture capital gains.

For those who bought new HDB flats at an elevated price, this increase in price will cost them huge amounts of interest servicing cost over the next 25 to 30 years. This also means higher stamp duties which goes immediately to IRAS.

For those who bought new HDB flats at cheaper prices or HDB resale flat using a housing grant, they could pay up to 25% of the HDB resale price or 90% of the valuation value (whichever is higher) or up to $50,000 in levy. Therefore any remaining capital gain is likely to be small in view of capital gains levy.

HDB flats are a dangerous and volatile form of asset. Many people may make money only to put in even more money for the next HDB flat or upgrade to a higher consumption bracket. Many people who decide to stay in their flats will only see paper valuation gains, there is absolutely no gains that can be had as it will attract increase property tax.

REFERENCES

Reference 1: -

(HDB, Vision/Mission, http://www.hdb.gov.sg/fi10/fi10320p.nsf/w/AboutUsVisionMission?OpenDocument)

Reference 2: -

(Singstat, http://www.singstat.gov.sg/pubn/papers/people/ssnsep10-pg25-29.pdf

“HDB Flat Dwellers)

An estimated 3.11 million Singapore residents were staying in HDB flats in 2010, accounting for 82 per cent of Singapore residents. In 2010, there were ten planning areas where at least 90 per cent of Singapore residents were staying in HDB flats (Chart 4).”

Reference 3: -

(Singstat, http://www.singstat.gov.sg/stats/keyind.html#keyind)

Reference 4: -

(Property Buyer, http://propertybuyer.com.sg/articles/singapore-property-investor-buyer/why-singapore-property-prices-go-crazy/)

Reference 5: -

(HDB, http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyResaleFlatCPFGrantFamily?OpenDocument)

Reference 6

Singstat, http://www.singstat.gov.sg/pubn/papers/people/pp-s17.pdf

Reference 7: -

IRAS, http://www.iras.gov.sg/irasHome/page04.aspx?id=9690

Reference 8: – Not quoted in this research, used only as a reading reference

(The Online Citizen, http://theonlinecitizen.com/2010/10/27453/)

Reference 9

Singstat, http://www.singstat.gov.sg/pubn/papers/people/pp-s17.pdf

HDB home owners - Agents partner with Rogue Lawyers to jack up rates

2011-04-05T23:16:00.003+08:00

HDB home owners - Agents partner with Rogue Lawyers to jack up rates

April 2011

Amidst many complaints against property agents, the Singapore government has set up the Council of Estate agencies to regulate the property agency business as well as to issue each property agent with a license number, and measures such as NO dual representation do not go far enough.

If you have discovered that you have paid more than a certain rate for your legal conveyancing, you should raise a suspicion and make a NOTE (though not necessarily a complaint) to Council of Estate Agencies (CEA).

There is also a rule in which agents cannot refer home owners to money lenders. Shouldn’t CEA ban agents from striking deals with bankers and lawyers and pocketing illegal kick backs?

Agents are still happily making referrals to lawyers and banks. This is a serious problem and we should highlight here so that in case you are a victim, you could raise this issue with Council of Estate Agencies.

Agents like to strike deals with lawyers to give them kick back. So where is the extra fees coming from? The lawyer (those bad ones) will go about charging the home buyer more in order to pay out the commission. Not only that, agents also work with companies that have pre-arranged ELEVATED legal fees with some law firms. This extra cost is passed on the home buyer. These illegal companies then pass on this extra commission gained as a result of illegal legal fee kick back to the agents. This is illegal under current law as lawyers cannot give out commission from their law fee.

Property agents also push you towards unattractive home loan rates just so as to benefit from the legal fees kick back.

It is always useful to note down the time, date of communication with the property agent. And try to communicate more with Emails and get them to confirm their facts via email. Do not rely too much on verbal conversation.

Attached here is a property agent complaint form which we downloaded from the CEA website. (Please note, you should always check the CEA website to ensure that the form is up to date, we only provide a convenience and are not liable to any losses whatsoever from using the form)A property agent complaint form is available at property buyer. You can contact them at loans (at) propertybuyer.com.sg

CEA Property Agent Complaint Form is available upon request.

Reasonable conveyancing rates guide

For HDB buyers - Buying a HDB in the resale market
$500 mortgage stamp fee is around $1900 to $2300. In fact, $2300 is already at the higher range, you should already start to open your eyes and raise a complaint or lodge a check with CEA if it is at above $2000.

Conveyancing rates for HDB home loan refinance
The estimated legal fees inclusive of Mortgage stamp fee is from $1900 to $2300.

For Private Property Loan- Buying a New Condo under construction
Total (Inclusive of Mortgage Stamp fee) is $2500 (for near to TOP) to $3500 (for those many years later)

Some law firms claim that it will cost them more resources to keep things on file and track condos which are still under construction. And indeed if the completion is far away, the law firm’s responsibility is dragged out longer. If they did not execute according to the letter of instructions from banks, they may become black listed by the banks and be kicked out of the bank’s panel. The cost is also more.

Legal conveyancing for buying Private residential – completed condominium
Total (Include of mortgage stamp fee) is $2500 to $3210.

The price varies a bit, depending on the law firm and the banks. Some banks are deemed more troublesome at the back end, therefore some law firms charge more. But there is a limit to it, so the above prices can be used as a guide.

Conveyance fees for Private Residential Refinance
The legal conveyance fees (including mortgage stamp fee) ranges from $2500 to $2800.

Why do legal conveyance rates differ?

Basically it is up to the law firms when to charge you higher. Perhaps sometimes, we feel it depends on their mood, other times, it depends on whether they are in cahoots with the Dishonest property agents.

Law firms can charge you extra under these situations: -

Last minute appointments such as 1 day before the exercising of option date, law firms may charge more.
Exercise dates falling into public holidays (maybe)
Faster that the normal legal completion date.
Liaising with CPF on expediting payment.
Multiple parties involved in the property.
Involving bridging loans or construction loan.
In illegal partnership with property agents.
Not corrupt, but legal conveyancing is not their core business and hence they charge a higher price.
Some property, usually those above 3m may face higher legal conveyancing fees, due to more potential complexity. (But not always the case)
Involving probate cases and estate issues.
What can you do if you get charged higher fees than normal?

If you have discovered that you get charged a higher fee than what we have described, it is possible that you have been cheated by the property agents, if you have not been cheated by the agents (in that they did not receive a commission), it is possible that you have over-paid.

Although the law society fee recommendation stipulates a higher fee, the free market has stabilized on the above fees which we have highlighted and hardly anyone uses the recommended fee.

In case you have paid higher than the highest range there, you can take down your property agent's license number and raise a complaint in case the bank and/or the law firm was referred to you by the property agent.

CEA Property Agent Complaint Form

These guideline fees are what we understand to be correct market rates as at April 2011

In case you do not know if you are cheated, you can tell us your story, we will be able to guesstimate whether you have been cheated.

write to loans at propertybuyer.com.sg perhaps we can go through your case to let us know if you have been cheated.

SMS Property Buyer mortgage consultants at: +65 9782 8606

New social Media for Singapore property listings

2011-02-04T03:20:00.005+08:00

New social media for Singapore Property listings

by www.PropertyListings.asia

What is New media? What does it generally include? Is there a business case to learn so many new stuff?

What is defined as new? Generally the internet and social networking sites are considered new forms of communication platform or media.

Brief review of forms of internet media

What are blogs and what are websites?

Blogs are originally sites hosted by others where you can post your own content. Websites are internet media where you own the domain name and you also host the site. Therefore you are not under the mercy of the blog operator's rules.

Image sites

There are many sites that allows you to upload pictures for sharing with friends. These sites such as Flikr, google’s Picasa, photobucket and many others allow you to upload your photos to share with your friends and family. If you are a property agent in Singapore, you could share the pictures of the Singapore property listings you had just taken with your potential customers. Some sites allow you to embed the code into your websites to show the photos. This saves you website space.

Video Sites

Video sites are many. Youtube is the most popular video site, but others are aplenty such as Vimeo, Youku, Tudou and many others. You could embed the video into your websites or you could simply post video footage of the property you are trying to sell.

Social networking media

Social media refers to sites where people congregate, either to do something or to participate in an activity or discussion. There are many forms of social media, facebook is a major one where people participate to play games, to talk to comment on groups and many other things. Facebook has become the biggest social media site worldwide. You can start your own group and invite your friends into your property listings group. All such groups will take time to grow. Alternatively you can market the group or fanpage using advertisements to grow it’s numbers. Do be careful though, places where people congregate, there are social etiquettes to follow. When you are trying to sell something in a social setting, please be tactful and discreet or else your efforts will backfire and your brand may suffer as a result.

Special interest group social sites

Some sites are more focused on music and entertainment such as Myspace. Then the are also others such as matchmake and adult friend finder and many adult social sites. These are probably not appropriate for property listings and will most likely be not effective for your needs. The other sites are Friendsters, Bebo, Orkut, Renren, h15, perfspot, zorpia, netlog, habbo, xiaonei, 5q, yeejee, kai xin wang, 51, Fanfou, Twitter, etc.

Social share and bookmarking sites

As there are too many websites out there. Some sites have spruced up to use people's votes or "choices" or "Likes" to rank websites. These websites are them served to users as the preferred websites. There are many interest groups within these sites. There are many sites that allows people to rank favourite websites and serve it to their users. You need to know that these are also powerful forces to reckon with. These sites are Delicious, Digg, reddit, stumbleupon, Hubpages, squidoo, yahoo buzz, google bookmarks and MSN network.

Therefore, new media is not necessarily a holy grail. But it is definitely a bed of roses with thorns. Once you remove the thorns, you can enjoy the roses.

How to succeed in new media depends on how you are able to get persistent visitor traffic that are not only relevant and cheap to acquire. If you do not have too much worry about acquiring clients, then you can focus more on serving them.

If you want to sell your property, you will need to master these skills in order to market effectively on the internet. Consider talking to the Searh Engine Optimisation and Social media consultants to help you in creating and successful and sustainable business on the new media.

Write to info@propertylistings.asia

Traditional media for Property Listings in Singapore and Asia

2011-01-27T11:06:00.001+08:00

Traditional media for Property Listings in Singapore and Asia
By www.PropertyListings.Asia

We’re sure these are questions that you often ask. Listing a property for sale is not difficult. There are many ways to list a property for sale. You can place an advertisement on the traditional media such as newspapers or you can place advertisements on Facebook, spread the news amongst your friends, or post on numerous websites to list your property for sale. Let us first explore the merits and disadvantages of traditional media.

Traditional media for Property Listings
Print media such as newspapers or Free Magazines
Newspaper media can be quite fast and time targeted as you can choose when to advertise. For example, if you you have a property listings advertised on Friday and Saturday, you can expect replies on the same Friday and Saturday and maybe Sunday. But it is not persistent, because property buyers are unlikely to see your advertisements in the next week. So you have only 1 chance to make it work or else you throw away your money.

Flyers
Are flyers effective you may ask?

With flyers, the respondents may take a few days before responding to your advertisements and sometimes even longer. But most people throw away flyers the moment they receive it.

Direct mailing campaigns
There is another method, using direct mailing via Singpost or other private mail operators. If you address the letter or advertisement to the named addressee, you may be guaranteed at least a quick browse through of the advertisement.

However if you need to have a very accurate database. And good database is not cheap to come along. Some mail service provider may be able to provide the name of the addressee for you for a fee. However, you will need to print your own letter or flyer and engage someone to put it into the envelopes. All these are labour intensive and costly.

TV advertising and TV sales network
If you are a property developer, you may even need to do a television advertisement. Despite what the media says, TV is increasingly marginalized as people can watch movies on the computer. Again, TV advertisements do not engage the consumer, they blast everything at the property buyer and then hope that the viewer will quickly pick up the phone or copy the address and go visit them. So how many advertising slots do you want to buy? The same for the more persistent TV advertorials. But TV advertorials get repeated again and again. But these usually require long term contracts. Therefore, unless you have huge amount of funds, these form of property listings is out.

Professional magazines or niche magazines
Another form of traditional media is through the magazines. This form of advertising still works for some highly visible property agencies. The property listings are also more persistent. In such advertisements, most prefer to advertise their company or their brands or themselves. As long as the magazine is relevant to what their readers are reading, there is always a chance that the viewers will call the property agency, property agent or call up regarding the property listings.

Innovative traditional bricks and mortar advertising such as Car park barrier advertisements
You can also put up advertisements at Taxi stands, Taxi boards, MRT stations notice boards and so on. All these will more likely create Impressions than actual action. But as always, innovation doesn’t hurt as long as it does not cost too much. These methods are all very effective in a Saturation marketing campaign.

Master Lynn Yap predictions for Year of rabbit 2011

2011-01-23T19:24:00.002+08:00

With permission from Property Buyer mortgage consultants

Feng Shui for property buying in Singapore - Rabbit year 2011

View more presentations from Property Buyer Singapore.

Once again, we at www.PropertyBuyer.com.sg are honoured to receive Master Lynn Yap’s Feng Shui Prediction. In life, there’s economics, there’s finance, there’s statistics and there’s fate.

All these don’t always explain every phenomenon. Therefore Feng Shui (the harmonious way of natural living) plays an important part in helping to make sense of the complex world.

In the year of the Tiger, Master Lynn has given many predictions and most have come true. These included the drop of the US dollar, the rise of the price of gold, numerous calamities as well as political calamities. For those who wanted to check, you can review last year’s prediction.

Here is the prediction for 2011 year of the rabbit for property buyers, investors as well as general public.

PRoperty regulation in Jan 2011

2011-01-17T00:43:00.002+08:00

PROPERTY BUYING REGULATION IN JANUARY 2011
By www.propertybuyer.com.sg

As the election is approaching, it is imperative to paper over the failure to keep property prices in check. The Singapore government is again resorting to brute force tactics to artificially cool the property market. The measures are an over-kill and ill conceived when the market is already showing signs of slowing down.

Just weeks ago, we mentioned that Quantitative Easing will likely lead to regulation risk to slow the market and sadly this has come so quickly and without warning.

The New Property Buying Rules Will Come Into Effect On The 14th January 2011.

1) Increasing the holding period for imposition of Seller’s Stamp Duty (SSD) from the current three years to four years;

2) Raising the Seller stamp duty SSD rates to 16 per cent, 12 per cent, 8 per cent and 4 per cent of consideration for residential properties which are bought on or after Friday, and are sold in the first, second, third and fourth year of purchase respectively;

3) Lower the Loan-To-Value (LTV) limit to 50 per cent on housing loans granted by financial institutions regulated by MAS for property purchasers who are not individuals

4) Lower the LTV limit on housing loans granted by financial institutions regulated by the Monetary Authority of Singapore from 70 per cent to 60 per cent for property purchasers who are individuals with one or more outstanding housing loans at the time of the new housing purchase. The measures will take effect on Friday.

(Source: Straits Times, http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_623779.html)

ANALYSIS AND COMMENTARY ON PROPERTY BUYING REGULATION – SINGAPORE

The intention is to cool down the market and demonstrate to the Singaporean electorate that the government is really trying to do something to cool down the market and to show that regulation is starting to show results. Like we say previously, we hope they don’t over-react, but It seems that our hope is in vain. It could be that Q4, 2010 transacted prices are still moving up too quickly.

(We are still waiting for Q4, 2010 URA private property transacted prices to come out and we will be doing a research on it. We will first disseminate to all our ex-customers 3 to 4 weeks ahead of all others so that they get a head-start in decision making)

Trying to make property prices cheaper for Singaporeans and PRs

The supposed intention of the Singapore government is to try to make property prices not rise as fast. (We shall not go into who created the imbalance in the supply in the first place)

After much hard work digging (seems like median salary is not a favoured form of reporting statistics), we found the median salary statistics. Singapore’s median salary is only $2710 in June 2010.

This means that most Singaporeans will not be able to afford private properties. And since HDB flats is facing a severe supply shortage, the round of cooling is unlikely to have much effect given the extreme shortage of supply of HDBs. The segment of Singapore population most at risk is also the one most exposed to risks from over-priced HDB properties.

‘Boosted by the strong economic recovery, the median monthly income for Singaporeans in full-time employment rose by 4.2 per cent over the year to $2,710 in June. This is higher than the marginal growth of just half a per cent last year. According to the Ministry of manpower (MOM), the median income still rose by 1.8 per cent after factoring in inflation. The median income of part-timers also saw a significant increase of 13 per cent to $700 this year. Overall, the nominal median income for all employed residents rose by 3.3 per cent to $2,500.”

(Source: Reach.gov.sg, http://www.reach.gov.sg/YourSay/DiscussionForum/tabid/101/mode/1/Default.aspx?ssFormAction=[[ssBlogThread_VIEW]]&tid=[[947]])

Housing Benefit To Singapore Expatriates And Would Be Immigrants

The intention is to benefit the local population with some form of supposed lower property prices for HDBs, but instead it may cool the private property market. The new measures effectively will allow Expatriates in Singapore to own properties easily at 70% or 80% of loan to valuation (depending on the full regulatory statement from Ministry of National Development (MND) tomorrow on the 14th January 2011).

As most Singaporeans own their residential homes already, buying a second property will be a 40% downpayment and many cannot afford 40% downpayment. And most singaporeans earn only a median income of $2710, therefore most Singaporeans cannot afford private properties. Therefore, this paves the way for Singapore expats to buy their first property in Singapore without so much competition.

So Singapore expats, if you are looking to buy a property, whether the government intended or unintended to help you, this is the golden opportunity to consider to buy a property in Singapore now instead of renting (However please read Comparisons of buying versus renting property). Before their change the rules again and impose buying restrictions on Foreigners, this may be your last chance for 2011.

We anticipate that the next regulation may involve foreigners buying property in Singapore.

What If Property Buyers Want To Switch Properties Or Upgrade?

Property borrowers who can show evidence of Sale of property will not be subject to the new rules. If the Property buyer wants to buy another property, he must first sell his property, show a signed Sale and Purchase (S&P) agreement proving the sale of this property and then show the IRAS certificate showing that someone has bought his property and paid stamp duty on it.

Where the existing property is a HDB flat, he can show HDB’s approval letter to sell the flat, that HDB will issue within 2 weeks of the First Appointment. These borrowers will still be able to borrow at an 80 per cent LTV from financial institutions.

But the timings are extremely tight, 2 weeks for options to be exercised and another 2 weeks stamp duty to be paid. In this time, they must also apply for a home loan and show these to the banks to ensure that the bank can lend at 80%, (not all banks will lend in these cases, please check and confirm via approval in principle with banks at
loans@propertybuyer.com.sg or sms 9782 8606).

NOTE: we cannot be held responsible for the accuracy of this article and buyers please take all necessary precautions such as contacting us to ensure a loan can be obtained. Please read our terms and conditions.

Then they will need to complete the sale in 2 months instead of the usual 3 months in order to have a place to stay. Alternatively, buyers will need to drag out the sales completion date of the property they are selling.

Borrowers Without Any Outstanding Housing Loans Will Have A 80% Loan To Valuation Limit

These rules apply to housing loans granted by financial institutions for private residential properties, Executive Condominiums, HUDC flats and HDB flats (including DBSS flats).

Loans granted by HDB for HDB flats (including DBSS flats) will still have a LTV cap of 90 per cent.

INVEST IN SMALL CONDOMINIUM UNITS IN SINGAPORE

2010-12-25T20:40:00.006+08:00

INVEST IN SMALL CONDOMINIUM UNITS IN SINGAPORE
By www.propertybuyer.com.sg/mortgage
December 25th, 2010

The risks can be broken down into mainly returns risks, capital value risks. Due in part to potential capital value risks, it also comes with financing risks.

In recent years, developers in Singapore have rolled out smaller size units in order to justify higher per square feet prices. All the developer has to do is to meet the affordability quantum to extract the maximum value and loan servicing ability out of Singapore borrowers and property buyers.

From year in early 2000, sub 1000 square feet units such as those 2 rooms condominium units become popular. Then somewhere in between 2003 to 2006, those units with ranges from 700 to 900 square feet becomes popular. This trend started in prime districts where the location is generally expensive. People who wanted a prime location but could not afford the larger units could still end up with a prestigious address by buying smaller units with a lower price quantum, but higher per square feet price.

From 700 to 900 square feet 1 bedroom units, developers who are bidding for expensive land released by the government or through en-bloc sales can only make money if they sell at higher per square feet prices. This leads developers to develop even smaller units such as 1 bedroom units as well as studio units. The popularity of studio units eventually lead to sizes of sub 500 square feet condominium units.

Here is a taking a look at the price differential between the various property size ranges. We use Valley Park Condo as an illustration: -

Size(ft) Size category Price per feet (S$) Price quantum(S$)
797 Small 1422 $1,133,334
1550 Big 1398 $2,166,900
764 Small 1374 $1,049,736
764 Small 1413 $1,079,532
1550 Big 1290 $1,999,500
1216 Mid 1398 $1,699,968
1216 Mid 1398 $1,699,968
1109 Mid 1209 $1,340,781
861 Small 1394 $1,200,234
1216 Mid 1315 $1,599,040
1216 Mid 1340 $1,629,440
797 Small 1356 $1,080,732
764 Small 1452 $1,109,328

Transactions between July 2010 to Dec 2010 (Excluding 1 out-lying data point) – By www.Propertybuyer.com.sg sms 9782-8606

INVEST IN SMALL CONDOMINIUM UNITS IN SINGAPORE
Valley park condominium price range of different size units

Price on a Per square feet basis
Average (All types) $1,366
Average Small $1,402
Average mid $1,332
Average big $1,344

Valley park Condo different sizes of Condo development

There are some price differences, though not necessarily significant difference as Valley Park Condo is an older development. Some newer developments where small size condominiums are dominant are marketed at a much bigger premium relative to similar developments around the same location.

Of course, please do not read too much into this information as it is taken off a very small sample.

However, historically very big units are priced cheaper on a per square feet basis, but we are now seeing in some luxury areas bigger units are priced more than mid size units, therefore some niche luxury property developers may start to launch big size super luxury condominiums with sizes from 2000 to 3000 sq feet at very high prices to capitalize on this price difference and we at propertybuyers.com.sg will be monitoring the situation. Customers of property buyer mortgage consultants will be given free advice and first hand information and updates. Some people preferred Property Buyer Consultants to conduct a more detailed customized research, for those of you who wants a customized reach, do get in touch with us at consult@propertybuyer.com.sg or sms us at 9782 8606.

So what can you do with this information?

So you can clearly see the sandwiches of value range of each size class.

Some banks have declined to take on property sizes below 500 sq feet. Why is this the case?

According to the insiders, this is because of the excessive premium of such size of property over the other sizes of properties. With such additional premium for small size units, if the corresponding cost to customize to such configuration is small, then it would be almost certain that more developers will start to “arbitrage” this premium. When arbitrage happens, more such smaller size units will be available and hence put a pressure on the price and premium if demand do not also grow at a similarly fast pace.

What is the Consequence?

So in other words, the supply side is growing.
Demand side is unknown as there is no way to tell how the public will take to such properties despite being “affordable”.

The potential supply coming on stream may depress prices if demand is not found.
Rental yield may also become a serious issue as tenants will have more of such units choose from. This tends to lower the rental yields. Only the best units may be able to continue to command good rental rates.
The risk to individuals and property buyers is loss of rental income, reduced yields as well as loss of capital value of the property.

With these risks, banks are also cautious as the value of their collateral is impacted. And some banks will refuse to lend for smaller size units below 500 sq feet. Some banks will refuse to lend for smaller size units if the development consists of a large proportion of smaller units. They consider this concentration of risks.

Of course, things may change over time and banks will review their positions.

One of the key things is, what is the main reason why you are buying a smaller size unit.

RANKING OF RISKS FOR SMALLER CONDOMINIUM UNITS IN SINGAPORE

We categorize the risk in the following order with the top being the least risky in the group and the bottom being the most risky: -

700 to 1000 square feet units in prime locations such as district 9, district 10 and district 11 and central CBD. The development is a condominium and has large number of units where only a small number of units are smaller units such as these.

700 to 1000 square feet units in prime locations such as district 9, district 10 and district 11 and central CBD. The development is a condominium and has high number of units which are smaller units.

500 to 700 square feet units in prime locations such as district 9, district 10 and district 11 and central CBD. The development is a condominium and has large number of units where only a small number of units are smaller units such as these.

500 to 700 square feet units in prime locations such as district 9, district 10 and district 11 and central CBD. The development is a condominium and has high number of units which are smaller units.

Smaller than 500 square feet units in prime locations such as district 9, district 10 and district 11 and central CBD. The development is a condominium and has large number of units where only a small number of units are smaller units such as these.

Smaller than 500 square feet units in prime locations such as district 9, district 10 and district 11 and central CBD. The development is a condominium and has high number of units which are smaller units.

All other units in out-lying areas outside of prime districts such as District 9, 10 and 11 with the highest risk attributable to the smallest size units.

Of course the right entry price for such property type will mitigate the risks somewhat. Property buyers should not be too anxious to chase after the status symbols of prime districts if it stretches their pockets. Cheap quantum may not necessarily be a good deal. But of course the reverse is true, taking excessive risks and buying an over-valued property may not necessarily lose you money and can in fact make you rich if you risk it and win. However, one of our guiding principles is, “Don’t make any losses, the gains will take care of itself” If the downside is limited and controlled, that speaks volumes about the supporting value of the asset you have invested into. If you don’t lose your capital, you always have a chance to strike back.

Our role at Property Buyer mortgage consultants you can reach us at sms 97828606 is to highlight to you the risks. Similar to a musical chair game, there are 100 people dancing and there are only 50 chairs, when the music stops, 50 people may not find chairs to sit on, but for those lucky ones who are still able to find a chair after the music stops, congratulations.

THE REASON WHY WE EMPHASIZE SINGAPORE's PRIME DISTRICTS 9, 10 and 11

The reason why we emphasize traditional prime districts mainly because of it’s appeal to the psyche of the ordinary Singapore citizen, this leads to it being benchmarked as the top grade property locations. And due to this, it will always find support level in terms of buyer’s interest in case the prices falls. Singapore has about 40% foreigners out of it’s entire population of about 5.1m, while many foreigners also like District 9, 10 and 11, but they also like other areas. That means that some new “benchmark” locations may be established in the future. Before these new “Benchmarks” are formed, for safety, we will stick to discussing the traditional prime districts.

For property buyers who want a home loan, we will guide you through the property buying process, this service is free. For home loans, you can reach us at loans@propertybuyer.com.sg or go to www.propertybuyer.com.sg/mortgage to read more about our services.

For those who want a customized property buying research which consists of 30 to 40 hours of research and 3 consultations and a final report and recommendation, we charge 1% of the property price and you can reach us at consult@propertybuyer.com.sg

Invest in Singapore Property and impact of QE2 Quantitative Easing

2010-12-11T00:52:00.005+08:00

Invest in Singapore Property and impact of QE2 Quantitative Easing
Article contributed by: www.PropertyBuyer.com.sg

On the 3rd Nov, 2010, the federal reserve announced a US$600 billion bond buying. Quantitative Easing is euphemism for printing more money without a corresponding increase in economic output.

Since the last time, we highlighted in 2008, “The additional funding requirements total more than US$1 trillion (US$ 1000 billion) The concern is, how are they going to raise US$1 trillion in 2009? Bill Gates is worth around US$55 billion just to provide a benchmark. If they cannot raise this cash through increased taxes, (since both presidential candidates have declared they are not raising taxes), they will have to borrow from sovereign sources such as Japan, China, South Korea, Saudi Arabia who traditionally buys US treasury bonds. But going from an average borrowing of US$200-300 billion a year to US$1 trillion? This is an additional whopping US$ 700 to US$ 800 billion. Who’s buying? Even the sovereign funds do not have that much funds considering that much of their funds are already in US treasury bonds, Euro bonds and other investments. The US government may make up the short-fall through increasing money supply temporarily. If this increase of money supply is temporary, inflationary pressures may be controllable, if not, such increase in money supply is surely inflationary. In other words, inflationary pressure tends to force interest rates hike in the USA. ” (Source: http://www.propertybuyer.com.sg/articles/compare-singapore-home-loans-/Global-Economy-Credit-Crisis-and-Interest-Rates/)

So it has come true and it comes in the form of a US$600 billion fund to buy back long term treasury securities (Bonds with long maturity).

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By Property Buyer Singapore Mortgage Consultants and Broker

Not Simply Cheap, but what Fits. We Research, You Save!

Tel: 6100 – 0608

SMS: 9782 – 8606

Email: loans@propertyBUYER.com.sg

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Why Does Federal Reserve Want To Print US$600 Billion To Buy Back Treasury Securities?

The US federal government is in budget deficit since Republican Ronald Reagan came to power. Within 8 years he has single-handedly squandered America’s wealth. US turned from a net creditor nation into a net debtor nation. Since 2004 to 2008, the US government has been running consistent budget deficits in the US$ 200 to US$ 400 billion range. All these monies need to be financed by individuals, corporations from within America and sovereign states from outside of America.

Lately in 2010, the expected US federal government deficit is likely to be US$1.171 trillion with a total of US$14.078 trillion of debt. “The total deficit for fiscal year 2009 was $1.42 trillion, a $960 billion increase from the 2008 deficit.”

(source: http://en.wikipedia.org/wiki/2010_United_States_federal_budget)

The largest holders of US debt as at Nov 2010 are: -

(source: http://www.cnbc.com/id/29880401/The_Biggest_Holders_of_US_Government_Debt?slide=16)

1. Federal Reserve and Intra-governmental holdings – US$5.345 trillion

2. Other investors and Savings bonds – US$1.266 trillion

3. China – US$868.4 billion

4. Japan – US$836.6 billion

5. Mutual Funds – US$648.6 billion

6. Pension Funds – US$643.8 billion

7. State and Local Governments – US$534.7 billion

8. United Kingdom – US$448.4 billion

9. Depository Institutions – US$273.7 billion

10. Insurance Companies – US$260.6 billion

11. Oil exporters – US$226.6 billion

12. Brazil – US$165 billion.

13. Caribbean Banking Centres – $159.1 billion

14. Hong Kong – US$137.8 billion

15. Taiwan – US$130.2 billion

Looking at foreign governments, China, Japan, UK, Oil exporter countries, Brazil, Hk and Taiwan held US$2.813 trillion in US federal debt. The Federal Reserve and various government actually hold the most of the federal government debt.

“From December 2008 to March 2010, the Fed bought $1.7 trillion of Treasury and mortgage-backed securities.” (Source: AP, http://www.msnbc.msn.com/id/39954647) that explains the high federal reserve holdings.

Looking at foreign governmental reserves (Source: http://en.wikipedia.org/wiki/List_of_countries_by_foreign_exchange_reserves): -

1. PROC (China) - 2.4543 Trillion USD Sep 2010

2. Japan - 1.050235 Trillion USD Jun 2010

3. Eurosystem - 753.642 billion Sep 2010

4. Russia - 501.1 billion Oct 2010

5. Saudi Arabia - 410.3 billion Dec 2009

6. India - 300.21 billion Nov 2010

7. Republic of Korea - 293.35 billion Oct 2010

8. Brazil - 287.206 billion Nov 2010

9. Hong kong - 266.100 billion Sep 2010

10. Switzerland - 249.556 billion Aug 2010

11. Singapore - 221.398 billion Oct 2010

With the budget shortfall of US$1.17 trillion, this is the amount that must be borrowed in 2010. So this large amount is unlikely to find supporters amongst foreign sovereign funds. So a large part of this debt needs to be absorbed internally or by foreign corporations and mutual funds.

In any one year, there would be demand on US Treasury debt, but putting out such a large amount would totally overrun all or any potential lenders or buyers of the Treasury securities. In order to fully reach this borrowing quantum, the coupons being offered will have to rise in order to meet the dwindling demand.

If the coupons being issued is the 30 years treasury bonds, then this would raise long term interest rates. And it may also hit shorter tenor treasury bonds indirectly.

So the natural way to NOT saturate this demand for US dollar treasury bonds is to not issue so many, but since the US runs a huge deficit, it has to issue treasury bills.

In this case, the US federal government issues more currency (Print more money) to the tune of US$600 billion and use this money to buy back longer tenor treasury bills. This has the effect of freeing up money into the economy.

Intention 1 – Reduce Long Term Interest Rates To Facilitate Recovery

The intentions are to reduce long term interest rates. Like we mentioned previously, the US federal government cannot set interest rates and then do nothing about it, else a black market will form. They can set target interest rates and then put the money where the mouth is so as to achieve that.

Intention 2 – Print More Money To Reduce The Currency Exchange Rate

This is to devalue the US dollar versus trading partners so that it provides a competitive edge to the US exporters. The other side of it is also to reduce the imports and reduce the trade deficit.

Intention 3 – Pump Cash Into The Market

The third intention is to pump cash into the US market. With this money being used to redeem treasury bonds, money goes into the hands of bond holders.

Could The US Government Achieve The Desired Effect?

Throughout history, countless countries and countless times have economies defaulted or devalued their currency in order to get out of trouble. Since most debt are in US dollars, devaluing the dollar devalues the debts as well. So it is no big deal when this happens if the situation is dire.

As we stressed previously, the interest rates do not just go to the rate the Federal Reserve wants it to go. Businesses need funding and are willing to bid for the funds at a rate they can afford. The only way interest rates can go down is for the Federal Reserve to flood the money market with money in excess of borrowing demands therefore reducing rates.

Federal Reserve should reduce interest rates long enough so that the US economy has a chance to recover.

However there are major risks such as inflation within the US as purchasing power drops. This could hurt US consumers hard and hurt consumption if inflation becomes serious. It could have the opposite effect of what the US federal reserve wants, instead of stimulating the economy, it ends up killing the economy.

On The Money Printing (Quantitative Easing)

On top of that, it pumps US$600 billion into the market, of which at least 60% (www.propertyBuyer.com.sg’s guesstimates by looking at the 15 largest holder of Treasury bills) are expected to stay within the US and begin to re-inflate the economy judging by the composition of bond holders. The global economy is inter-connected, leakage is expected in an open economy such as the US. Thus some portion of this money is expected to find it’s way into other countries.

We believed that the US economy should be able to hold out a few months even without this round of US$600 billion of quantitative easing even while the Bureau of Economic Analysis has been publishing report of a weakening US economy.

By some possibility, the US economy could even recover without any of this quantitative easing. So we see this as election economics. This is pump priming to make sure that unemployment reduces to an acceptable level in 2 years, ready for the next presidential election.

We have no opinion about the US presidential elections, but for the good of the world economy, we need a strong USA until some other country takes over as the engine of growth and consumption. So between war mongering Republicans and Democrats, Democrats are the lesser of the two evils.

On US Currency Devaluation (By Default)

The US dollar will naturally weaken due to this extra money supply. This extra money supply will with returned to the holders of such treasury bonds and until they are withdrawn will end up in the banking system as deposits.

The availability of such deposits will enable banks to lend out more money. As the USA practices fractional reserve (reference: http://en.wikipedia.org/wiki/Fractional-reserve_banking), by making available this US$600 billion, the broad money supply could by multiplied by up to 10 times, if it is fully leveraged. The US sets it’s fractional reserve at 10% of deposits, but for depository institutions (smaller banks or thrifts) having less than $55.2m the reserve requirement is reduced thereby leading to more leverage potentially.

“A cash reserve ratio (or CRR) is the percentage of bank reserves to deposits and notes. The cash reserve ratio is also known as the cash asset ratio or liquidity ratio. In the United States, the Board of Governors of the Federal Reserve System requires zero percent (0%) fractional reserves from depository institutions having net transactions accounts of up to $10.7 million.[3] Depository institutions having over $10.7 million, and up to $55.2 million in net transaction accounts must have fractional reserves totaling three percent (3%) of that amount.[3] Finally, depository institutions having over $55.2 million in net transaction accounts must have fractional reserves totaling ten percent (10%) of that amount.[3] However, under current policy, these numbers do not apply to time deposits from domestic corporations, or deposits from foreign corporations or governments, called “nonpersonal time deposits” and “eurocurrency liabilities,” respectively. For these account classes, the fractional reserve requirement is zero percent (0%) regardless of net account value.[3]”

(Source: http://en.wikipedia.org/wiki/Reserve_requirement)

Printing US$600 billion and pouring it into narrow money supply M1 is quite a lot and could cause the market to re-inflate definitely. But much of these money will likely end up in Broad money supply. And because of the complicated way in which currency is created using Fiat money (money issued by central banks and sovereign nations as legal tender. It is based on faith in the country’s ability to repay the note), then the effects of how much devaluation it should do to the US currency will be very hard to compute.

And most people, even very seasoned economists will be hard pressed to predict or calculate how much the US dollar should depreciate given this excess currency. Given that it is so complex, the large majority of the people may trade one way or the other given the sentiments therefore rendering the best economist speechless. Therefore, the extend of the US dollar depreciation will be largely a matter of sentiment and consumer and business confidence level of the US economy as a whole. Hence the whole currency may stay under-valued or over-valued for extended periods of time.

When the market goes down, the market always predict that it will always go down. But when the market sentiment improves, the US dollar may yet appreciate in a few years. But nobody knows.

ON JOB CREATION AND US EXPORTS BY CURRENCY DEVALUATION

The US export sector is only US$ 1.057 trillion (year 2009) out of the total economy of around US$14 trillion. By devaluing it’s currency, even if it increases it’s exports by US$300 billion (illustration), it is expected that job creation will be marginal. Dropping $300 billion into a population base of 300million is like dropping US$1000 per person. Assuming that 70% of this extra US$300 billion GDP goes into wages, the rest taxes and profits. This is just an extra US$210 billion in national income. US domestic economy is in the magnitude of US$9 trillion range, therefore it may only have limited impact. And not to forget, by dropping the currency value, it can be a zero sum game as components and raw materials that are imported and necessary for finished products will cost more too.

On Economic Leakage Of This US$600 Billion Quantitative Easing

We estimate that easily up to 30 to 40% of this money could end up in other countries. So excess US cash will not all stay within the US boundaries. But US$180 to US$240 billion money inflow is not a big deal for the world, unless it is concentrated within a few countries.

Also, with quantitative easing, the US dollar is expected to fall in value thereby mitigating the impact of inflow of such money. Unless for countries whose currencies are pegged to the US dollars. In such a scenario, it makes sense for the other countries to alter the exchange rates in view of the true and reduced value of the US dollar, but that is not the only way.

In addition to the leakage coming from the Quantitative Easing (Printing money), low interest rates environment will also export credit to the rest of the world. In view of anemic economic growth in the US, some smart money will search for higher yielding assets overseas. This leakage will form what is known as a Carry Trade in which investors acquire cheap funding in USD and immediately transfer this money into foreign assets with a higher yield. It will be extremely hard to estimate this impact as we mentioned earlier in the article, quantitative easing leads to increase in broad money supply and due to fractional reserve system, there could be a large multiplier effect by making available funds to borrowers. Such money may be the more scary force.

Such HOT money or Smart money will find it’s way into the more open economies of the world.

China has already raised the reserve ratio for it’s banks to 17.5% to 18% (Source: http://www.chinadaily.com.cn/china/2010-11/10/content_11530809.htm), so any potential extra hot money is partially buffeted.

More countries who are likely to receive such hot monies may impose some form of regulation either on the banking side or on the housing side or on the stock market side. Let us just hope that these countries do not over-react and kill the market.

Some countries may impose rules making it harder for foreign companies to own properties or for foreign individuals to buy properties.

Some of these HOT money will arrive into some countries causing some form of inflation which may force the local governments to act.

How Much Is Expected Of This US$600 Billion To Come To Singapore?

However, for Singapore’s case, the strengthening of the Singapore Dollar versus the US dollar will mitigate to some extent these money inflows.

International Financial centers around the world will usually get a bigger share of this money.

“The main forex trading center is London, but New York, Tokyo, Hong Kong and Singapore are all important centers as well. “ (Source: http://en.wikipedia.org/wiki/Foreign_exchange_market) therefore these centers could also see an influx of funds. Other major financial, trading or commodity centers may also see an influx of short term investments.

If part of these US$600 billion quantitative easing funds is withdrawn and immediately transferred to Singapore markets, then surely Forex markets liquidity will suddenly rise will be the first to get this funding followed by equities.

What Is The Likely Effect Of Singapore Property Prices?

Some funds may start to buy up commercial properties, retail malls, offices buildings and industrial centers in Singapore. Individuals and some smaller funds may engage in carry trade leading to HOT money buying up shares. However we cannot then assume that Singapore’s economy as a whole will be fine, in fact higher risks awaits in 2011 on the economic front as global consumption has not yet recovered.

Equity Has An Impact On Property Sentiments.

It is important that landed properties in Singapore is still restricted to Singaporeans and Singapore PR, a prestige class of property assets otherwise foreign funds can corner the Singapore Property market.

The existing super rich may seek to become Permanent Resident to get into the landed market in Singapore buying up good class bungalows.

The other classes of properties such as Condominiums and apartments are all subject to the usual speculative forces. Cluster landed developments may see renewed interests.

There are currently no rules against foreigners purchasing property in Singapore therefore some funds may flow towards this sector.

It is very hard to estimate what effects such funds may impact on Singapore property market, but in case there is more statistic showing asset price inflation, we guess that the regulators can reduce the leverage by reducing the lending loan to valuation percentage.

Singapore Banks also have quotas limiting the percentage of loans they are allowed to make for investment properties, therefore limiting access to credit.

Whichever way the funds go, whatever effects it may have on the Singapore properties, if you are buying a residential property to stay in, do so at your own affordability and do not try to guess too much which direction it is heading.

POSSIBLE SCENARIOS FOR SINGAPORE INVESTMENTS

If inflation can be maintained in Singaore and controlled despite US currency devaluation. The US economy recovers and starts to resume it’s role and help global consumption. We would have survived another scare. However a more multi-polar world will emerge with China taking a larger share of the world’s economy. China Yuan will also become more dominant. However China still has some way to go before it’s export driven economy can upgrade, therefore China will continue to make sure that any currency increase vis-à-vis the US dollar will be moderate so as to allow time for China’s industries to upgrade.

What is almost certain is, the world’s economy will enter a period of higher risk and volatility. Growth and bust cycles may become shorter and the likelihood of anyone losing their jobs is higher.

In the short term however, equities may see increased volatility including sharp rallies and immediate pull backs. There is a likelihood that equities will rally and if sustained, will lead to improving property sector sentiments. The average P/E of Singapore equities may increase, leading to it being more overvalued as fundamentals have yet to catch up.

If such a scenario holds true, the property prices going up is not due to fundamentals but due to increased liquidity. Therefore property buyers will be faced with even elevated risks. You can check out Property buying versus renting in our article section.

And don’t rule out the US returning to the forefront of the global economy yet.

INVEST IN SINGAPORE PROPERTY OR RENT ONE

2010-10-28T02:22:00.003+08:00

INVEST IN SINGAPORE PROPERTY OR RENT ONE

There are many factors to consider whether to buy or rent a house. If you are a foreigner, you may be tempted to buy a house.
For own stay, you need to first like the place then you are buying. You need to be emotional and you need the house to “talk to you”, you need to feel good about the place. If you are buying for investment, you need to be as unemotional as possible. It’s all about safety, yield and capital appreciation.

Everyone needs a roof over their heads. Hence a residential home is first and foremost a consumption.

By Property Buyer Mortgage Brokers

When you rent a house

When you rent a house, you pay rent, rental stamping fee and some routine maintenance.

When you buy a house

When you buy a house, you pay interest costs for the housing loan, property tax, maintenance and repairs and many other associated costs.

Should you buy a house or Rent a house?

Let us examine the cost of renting a house versus that of owning a house.

There are of course price considerations. Timing is quite important as well as negotiation skills. Most people are disadvantaged when they deal with property agents alone.

RENTING COST

As the cost of renting a house will also change over time, we have factored in a +/- 30% renting cost so that you can compare the relative cost and hence savings.

WILL YOU SAVE MONEY THROUGH BUYING A HOUSE?

Assume you will now buy a house at Park Infinia at Wee Nam say at $1666 per square feet. How much will you save?

We worked out a few interest rates scenario and it’s various yearly housing cost.

We also worked out the rental costs over a 3 years period on both high, low and current scenario.

Rental Cost over 3 years (Ignoring time-value of money)

If you have a 3 to 5 years horizon, let’s say you sit out of the market for 3 years, this will be your cost over 3 years.

Current: 3 x $67,142 = $201,426
+30% : 3 x $85,844 = $257,532
-30%: 3 x $48,439 = $145,317

Cost of Buying a House over 3 years

If you are buying a house, let’s assume a 3 year horizon. Based on repayment, the amount will be almost the same as renting a place.
The cost over 3 years using various interest rates: -
Based on 1.5%: 3 x $31,278 = $ 93,834
Based on 2.5%: 3 x $44,622 = $134,064
Based on 3.5%: 3 x $57,966 = $173,898

Savings From buying a house versus renting (3 year horizon)

Rental cost Current price: 3 x $67,142 = $201,426
Housing loan cost
Based on 1.5%: 3 x $31,278 = $ 93,834
Based on 2.5%: 3 x $44,622 = $134,064
Based on 3.5%: 3 x $57,966 = $173,898

Savings from buying a place ranges from $27,528 to $107,592.
Based on 1.5%: $201,426 - $93,834 = $107,592
Based on 2.5%: $201,426 - $134,064 = $ 67,362
Based on 3.5%: $201,426 - $173,898 = $ 27,528

So it would seem that there will definitely be savings from buying a house compared to renting. Is that really the case?

If all property prices stayed stagnant, that would definitely be the case. However, prices of properties tend to fluctuate.

As you can see from the above chart that, if you buy at a wrong time, the difference can be easily a $321 psf difference within a 1 year period.

In other words, a 1001 sq feet condo would cost you $321,321 more.

Your savings ranging from $27,528 to $107,592 would be wiped out by getting in at a wrong price by overpaying $321,321.

Therefore, when property agents tell you it's cheaper to buy a house than renting, it's only half the story.
The other half of the story is still about buying at the right price, obviously this half, they don't want you to know.

Please note:
Calculations ignore time-value of money as well as the opportunity cost of sum of money repaid through principle repayment.

About Property Buyer Contact Property Buyer
www.PropertyBUYER.com.sg
We are a Research-focused Singapore Mortgage Consultant which helps you compare Singapore Home loans either for new home loans or Singapore Mortgage refinance home loans, we balance risks versus rewards for each home loan to match your risk profile and financing needs.
Not Simply Cheap, but what Fits. We Research, You Save!
Tel: 6100 - 0608
SMS: 9782 - 8606
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Career at Property Buyer

Invest in Singapore Property: Regulation and analysis

2010-10-08T02:43:00.004+08:00

ANALYSIS of Singapore Government Property Regulation

Commenting on the 30th Aug 2010 Property regulation
http://www.propertybuyer.com.sg/articles/regulation/singapore-property-regulation-30th-aug-2010/

Due to a mis-alignment in supply and demand from insufficient HDB flats in the year from 2006 to early 2010 HDB prices have shot upwards. We cannot help but be critical of the Singapore government as we feel this is a major mistake and causes untold hardships on first time property buyers and raises the cost of housing via raising land prices. We can only see one beneficiary, the Singapore government land sales program.

Using regulation to constrict demand is a Brute force mechanism. Of course regulation can stop some demand by curbing affordability, limiting access to credit or by stopping some Permanent residents (PR) from buying property in singapore. A more severe regulatory environment can even kill growth. But all these are necessary as most electorate stays in HDB flats and government must be seen to control rampant HDB price rises.

HDB has repeatedly clarified that they have a very sophisticated way to measure demand and therefore build houses, but these explanations while it seems like there are some logic, is illogical and out of touch with the reality.

Supply and demand is easy enough in a Country such as Singapore. Therefore we can only conclude that the Singapore government wants to maximise land productivity as Minister Mentor has mentioned.

Maximising land productivity means you can expect the singapore government to get the most out of you by selling you the land. This is our interpretation.

Demography

Just take a look at the statistics and our conclusion is still that supply and demand has been misaligned. Someone must have fallen asleep on the job.

From the year 2006 to 2010, the population (mainly from immigration) grew from 4.4014m to 5.0767m (http://www.singstat.gov.sg/stats/themes/people/hist/popn.html).

This is a massive increase 675,300 people in less than 4 years. A more than 15% increase in population. Not even a big country like America who has more than 300m population takes in so much people.

HDB flats built numbers are extremely elusive. We wonder why don’t HDB put these data in one place on the website.

From 2006 to 2007 – HDB built 4628 units (Adapted from Source: http://tankinlian.blogspot.com/2010/01/hdb-flats-and-population-growth.html)

From 2007 to 2008 – HDB built 1472 units (Adapted from Source: http://tankinlian.blogspot.com/2010/01/hdb-flats-and-population-growth.html)

From 2008 to 2009 – HDB built 8400 units
(“The Build-To-Order (BTO) system constitutes the main supply of new flats. HDB has to date launched about 5,000 of the planned supply of 8,400 Build-To-Order (BTO) flats for 2008.” source: http://www.hdb.gov.sg/fi10/fi10296p.nsf/PressReleases/82A850D8E04A77C8482574EC001188EC?OpenDocument)

From 2009 to 2010 – HDB built 13,500 units (http://www.hdb.gov.sg/fi10/fi10296p.nsf/PressReleases/78746BAD770849794825768C00147042?OpenDocument)

For 2010 – estimated HDB built flats are 16,000 to 22,000.
(Source: http://www.hdb.gov.sg/fi10/fi10296p.nsf/PressReleases/895204E2295BDC394825778E007FA919?OpenDocument)

Total HDB units built between 2006 to 2010 (estimated)
2006 - 4624 units
2007 – 1472 units
2008 – 8400 units
2009 – 13,500 units
2010 – 16,000 to 22,000 units

= 43,996 to 49,996 units

Total population increase = 675,300

Assume that 80% of these population growth stays in HDB or will eventually buy HDB.

80% of 675,300 = 540,240

With an average household size of 3.5 (Singstat figures for Singapore's household size). We do accept that foreigners can have a different household size, but this is simply an estimate.

The total HDB units demand is estimated to be 540,240 / 3.5 person per household = 154,354 HDB units of demand.

154,354 HDB units of estimated demand and only 43,996 units built.

HDB SHORTAGE = 110,358 units (Estimated).

It is precisely this shortage to fulfill latent HDB demand that fuels crazy HDB prices rise. And do bear in mind, there is a 2 years lag in building HDB, therefore the shortage is real.

In another words, part of the price rise is not bubble, but an actual acute shortage of HDB flats due to an imbalance created by HDB.

What about Property Supply in the Private Residential segment?

According to MAS, there is adequate supply in the pipeline. There is a pipeline of 75,700 units (61,800 as at 2Q2010 and 13,00 from Government land sales GLS programmes) available with 32,600 available or could be made available for sale. (Appendix 2)

Possible End result of this new Singapore property regulation

This new property regulation is nonetheless a move in the right direction and will lead to less speculation.
And since Private property dwellers will no longer be able to buy HDB flats, this will relieve pressures on HDB flats from rising too fast.
But the latent demand is real. Even if all these people that need HDB housing are not buying, they will be renting. The rental yields will rise and therefore lead to HDB price rise.
Some of the HDB dwellers will sell out and then upgrade to Private residential housing.
By constricting HDB flat supply and then creating more Private residential supply, if this was intended, this indicate that the Singapore government was intending on upgrading it’s citizens towards private residential housing.
The bulk of Singaporean heartland residents who stays in HDB or aspire towards owning a HDB will suffer. As HDB prices rise and closes the gap with private housing, newly wed couples will have a hard time to afford to buy even a HDB given that HDB is priced based on a market subsidy.

What is a HDB market subsidy?

HDB publishes financial statements, but they cannot be easily understood, let us just attempt to make some assumptions here based on our best understanding. You can go to this link to understand more about the financial report. http://theonlinecitizen.com/2009/11/hdb-annual-report-deficit-has-doubled-%E2%80%93-really/)

We read the financial report and we have a big headache understanding what they say.

After looking very hard, we have compiled the HDB flats supply here for you.

An example of market subsidy, the price of a resale flat is $350,000. And for first time buyers, you get a subsidy of $30,000. HDB sells you a HDB flat for $350,000 - $30,000 = $320,000. That $30,000 is a market subsidy, but that is not real money, it is simply a discount.

If the price of the flat in the resale market rises to $420,000, HDB will sell corresponding new flats in similar location at $420,000 - $30,000 = $390,000.

Say the cost of building an HDB flat is $100,000 per unit. And the price in the market is now $420,000. Then HDB could buy the land from another government body for $320,000. Add $100,000 to the construction cost, you will arrive at the selling price of $420,000. Since HDB sells you at only $390,000 HDB technically lose money.

But of course, the money would have gone into the Singapore government’s coffers via another government agency which holds the land.

Therefore HDB really did lose money subsidizing the citizens, but on the overall, the government ends up with increased prices for the land which HDB sits on.

Call it land productivity or whatever terminology. The end result is a fairly regulated and micro-managed property market in Singapore whereby the heartland Singaporeans are increasingly marginalized in the name of profits.

And for those who can afford more, the government is moving the population into a higher consumption bracket. We believe this is to create consumption or to suck up excess liquidity.

APPENDIX 1 - HDB supply of New HDB flats in 2010

“HDB will be offering more than 16,000 new flats in 2010. If demand remains strong, HDB is prepared to launch up to 22,000 new flats in 2011. These numbers are substantial. Over two years, HDB will offer more new flats than the total flats in Toa Payoh town today (35,400 flats).

In addition, HDB will release more land for tender in 2010 to yield an estimated supply of 3,000 DBSS 1 flats and 4,000 ECs. In 2011, HDB will release land sites for another 4,000 DBSS flats and 4,000 ECs, if demand is sustained. This injection of 7,000 DBSS flats and 8,000 ECs over two years is also significant. In comparison, 4,000 DBSS flats and 10,000 ECs have been launched for public sale so far.”

(Source: http://www.hdb.gov.sg/fi10/fi10296p.nsf/PressReleases/895204E2295BDC394825778E007FA919?OpenDocument)

Appendix 2 - Adequate Private Supply in the Pipeline

“12 The Government will also continue to ensure that there is adequate supply of housing to meet demand. In the second half 2010 GLS Programme, we have made available sites that can yield about 13,900 private housing units, of which about 8,100 units will be from sites on the Confirmed List. This is the highest potential supply quantum in the history of the GLS Programme. We will inject an even larger supply of private housing in the first half 2011 GLS Programme, if demand continues to be strong.

13 Apart from the supply from the GLS Programme, there are also 61,800 uncompleted units of private housing from projects in the pipeline as at 2Q20109. Of these, 32,600 units were available or could be made available for sale. These comprised units that had been launched for sale by developers, units that had pre-requisite conditions for sale10 and which could be launched for sale immediately, as well as units with planning approvals for which pre-requisite conditions for sale could be obtained quickly from the Government and made available for sale11.”
(source: http://www.mas.gov.sg/news_room/press_releases/2010/Measures_to_Maintain_a_Stable_and_Sustainable_Property_Market.html )

Property Investor Regulation in Singapore

2010-10-02T00:02:00.002+08:00

Singapore Property Buyer regulation 30th Aug 2010

With effect from 30th Aug 2010. The following measures are implemented. The moves are what the Singapore government claims are required to maintain a stable and sustainable property market.

Seller Stamp Duty in Singapore
Seller stamp duty is increased from the current 1 year to 3 years of holding period for residential properties bought on or after 30th Aug 2010.
The amount payable is 1% on the first $180,000, 2% on the second $180,000 and 3% thereafter of the property price.

Cash Down-payment for Property Buyers

For property buyers with one or more outstanding housing loans at the time of buying another property, the minimum cash payment is increased from 5% to 10% of the valuation of the property.

Decrease in the Loan to Valuation limit for housing loans

If you already have 1 or more existing home loan, all banks and financial institutions regulated by MAS can only lend up to 70% of the valuation amount if property buyers have one or more outstanding housing loans at the time of buying another property.

The decrease in the loan to valuation limit for housing loans applies to the following properties: -

Private residential properties
Executive Condominiums
HUDC
HDB flats
Design, Build and sell scheme (DBSS) flats

If this is your first residential property, the loan to valuation limit remains at 80%.

Seller stamp duty Calculation

Seller stamp duty is applied on a pro-rated basis. If the property is; -
Sold within the first year of purchase – Full stamp duty is applicable
Sold within the 2nd year of purchase, 2/3 of the stamp duty is applicable
Sold within the 3rd year (i.e. > 2 year and < 3 years), 1/3 of the
stamp duty is applicable

HDB houses – Seller stamp duty

Seller stamp duty will not affect the HDB flats as the minimum occupation period for HDB flat is at least 3 years.

For more details, please check with MAS or IRAS.

IRAS enquiries: 6351-3697 or 6351 3698
Downpayment for HUDC, HDB flats, Design, Build and sell Scheme (DBSS flats)

The cash downpayment increase from 5% to 10% of the valuation limit is only applicable to the those who has one or more outstanding housing loan at the time of applying for a housing loan for a new property purchase or those who are borrowing from financial institution regulated by MAS.: -

Private residential properties.

Executive Condominiums
HUDC flats
HDB flats
Design, Build and sell scheme (DBSS) flats

What about first time HDB buyers?

For loans granted by HDB for HDB flats including those design, build and sell scheme (DBSS) flats. These will continue to enjoy a Loan to valuation limit of 90%.
HDB loans are offered to eligible first-time flat buyers and some second timers who are right-sizing their flats to meet their housing needs.
People who are eligible for HDB loans must first WIPE OUT all their CPF ordinary account balance before HDB loan is granted.

For those taking a second concessionary HDB loan, they must use the CPF refund and the 50% of the cash proceeds from the sale of their previous flat before they are granted a HDB loan.

Definitions of property regulation

Date of purchase is deemed as the date when buyer exercise the option or signs the sales and purchase agreement, whichever is earlier.

By Property Buyer Mortgage Consultants
Tel: 6100 – 0608
SMS: 9782 – 8606
Email: loans@propertyBUYER.com.sg

Invest in Singapore: Career as a Mortgage Consultant

2010-08-30T11:40:00.005+08:00

Invest in Singapore: Career as a Mortgage Consultant
Article contributed by: www.PropertyBUYER.com.sg

Attention to all honest property agents out there. If you are financially inclined or if you are an ex-banker, you are welcome to send your resume for our selection.

With the new property agency ruling, those who has are currently employed may not want to continue to be property agents. You can consider a career as Mortgage Consultant.

At Property Buyer Mortgage Consultants, we want people with the right attitudes.

Are you driven? Do you want to make a lot of money?

If the answer is YES, we DON’T WANT YOU!!!

Our Beliefs - Property Buyer Mortgage Consultants

Why Integrity?

At Property Buyer Mortgage Consultants, we want to make money too, and lots of it. But we do not start off thinking about money. We believe that money and income is a consequence of providing a good and honest service.

Integrity also means, we do not engage in illegal legal fee kick-back.

Integrity means, we cannot favour one bank versus another. Some times one bank may give a slightly benefit than the others, we cannot deliberately steer the customer to such banks.

Integrity means that if you become Property Buyer Mortgage Consultants, you cannot engage in private deals and you cannot ask customers for additional fees for doing a job or use whatever means to extort or coerce for such fees.

Do Note that, such behaviour will mean termination and Property Buyer reserves the right to sue you to the maximum amount and extent permissible under the law.

Always uphold the customer’s interest even if it may mean that we lose a deal. We know that it is painful, but we promise you, the rewards are enormous if we can set ourselves apart from all the dishonesty in the market place.

Why Passion?

If you are looking for a lot of money as a start-off point, you will find that there is a cost for observing our Integrity rules. That means that there may be many hungry months.

Such hungry months may mean that many will turn to cheating and deceit to achieve their monetary goals. If you do not have some financial resources and enough passion, you will stray. Therefore Passion to serve and do RIGHT and be the beacon in this industry is the principles we want all of you to have.

With passion, you can last long.

If you think this does not make sense, read no further. We don’t want you in our team.

Why Empathy?

Empathy is important in a service business. We would call it the “in-your-shoe” thinking. Property Buyer Mortgage Consultants cannot assume that they know best. You may have financial knowledge and some of you may have an MBA and a CFP, but that does not mean you know the customer’s own circumstances and situation.

There will be times when customer seems undecided between choices which to you may seem like a straight forward decision, what do you do during these stage?

This is the discovery stage at the customer’s end. They are pondering between the many choices and weighing it with their own career considerations, lifestyle choices, cash flow as well as many other permutations.

It is extremely important to try to see it from their point of view. Be patient and sympathetic to their dilemma. Listen and give them an un-biased view of the various options. Do NOT jump in with what you think is best. Do NOT recommend packages, but instead provide the PROS and CONS of each home loan package for their consideration.

Let the customer discover themselves what packages fits their own needs. This is important so that we do not have any decision blind-sight. This is very important, never assume that you know best!

Why Knowledge?

Www.PropertyBUYER.com.sg mortgage consultants must be financially well read and be in touch with the latest statistics and trends in the market. Most often, a customer do not want to simply compare rates, they want someone to guide them through the Property Buying process to avoid being cheated by Dishonest Singapore Property Agents or sometimes they want someone to guide them to help them to negotiate a fair value for their property.

Customers need someone knowledgeable to guide them through the process of property buying, of refinancing and to intelligently discuss the possible financial implication of each.

As Property Buyer Singapore Mortgage Consultants, we are a Research Focused company, we do not make unsubstantiated statements about the market.

We cannot and should not comment on market sentiments. For example someone says Casinos are built, the properties will increase in value. What do you respond? How do you respond?

You must have the wisdom to research the facts to justify or debunk the statement. Else keep your comments to yourself. Because we are seen as experts in the field, if you cannot say something that makes sense and that is factually correct, then do not say anything.

If what you say has some assumptions, then do also make sure to qualify your statement with the assumptions.

Why Income?

After carrying out a professional job, of course you will be rewarded. And you will find that it will be highly rewarding after you had done a good job. Income is a consequence of all the above. There is no easy money, we are not afraid to say it. We keep to our motto and acting on it and it has paid off.

Integrity, Passion, Empathy and Knowledge is good business. You can cheat a customer once or twice and earn good money, but you will not have repeat customers and not have many valuable referrals.

So by “DOING THE RIGHT THINGS, RIGHT” you will have plenty of income. And let’s face it, the customer will always remember the person, not the company. If you are professional and carry out the 4 values of Property Buyer Mortgage Consultants you will gradually gain a following of customers who trust you with your judgement and who trust that you will take care of their interests. You will have endless streams of business.

Every one customer you serve, you should uphold the 4 principles of Integrity, Passion, Empathy and Knowledge and with that, each customer will tell 10 others how well you have done.

At Property Buyer Mortgage Consultants, we believe in an honest day’s work, as a result, you must NOT give rebate out of your commission to anybody. This practice is NOT acceptable to us and you will be terminated if you do so. An honest day’s work (often several weeks of work), deserves to be paid a salary.

Why become a Property Buyer Mortgage Consultant?

As a person grows in his/her career, age catches up, retrenchments become common. Sometimes jobs are replaced outright with new processes or machines. A mortgage consultant’s career rises with the number of years in the business as more and more customers who have been served professionally grow with the mortgage consultant and refer ever more business.

Will Mortgage Consultant grow rich? Yes, the answer is yes. The more knowledge and contacts accumulated, the more potential income.

About Property Buyer Contact Property Buyer
www.PropertyBUYER.com.sg
We are a Research-focused Singapore Mortgage Consultant which helps you compare Singapore Home loans either for new home loans or Singapore Mortgage refinance home loans, we balance risks versus rewards for each home loan to match your risk profile and financing needs.
Call us if you fit the description.
Not Simply Cheap, but what Fits. We Research, You Save!
Tel: 6100 - 0608
SMS: 9782 - 8606
Email: Career@PropertyBUYER.com.sg

Singapore's Macro Economy

2010-08-09T18:06:00.002+08:00

Singapore's Macro Economy

Singapore economy is coming from a low base since the recession but still showed high GDP growth. The real strength of the economy is still uncertain. The GDP of Singapore would be pretty much the same. However, the increasing expatriates and immigrants needing housing, schools, food, services, etc, their massive immigration, has been affecting the growth of the overall nominal GDP values.

The condition implies that we would be expecting a slow rate ascent of the real property prices towards the end of 2010. However, the risks of the property buyers will continue to increase. A property buyer planning to purchase a property still needs to make a good decision based on research and other information.

A Singapore property investor looking for real estate property to invest should wait a few more years to experience a market flooded with properties developed by the government of Singapore. The government has been trying to develop properties in relation to their present massive land sales program. There is no speculation of a market crash since the Singapore government could always resort to bring in more foreigners to boost demand for housing, which will support high land prices.

Invest in singapore property: Risks involved in market swings

2010-08-06T20:33:00.002+08:00

Invest in Singapore property: Risks involved in market swings

The high-end properties as well as the mid to high-end properties risks largely depends on the demonstrated price volatility during market swings. The Singapore mass market condominiums are presently facing the challenge of a market affordability risks. With the present elevated market price levels, a new benchmark for prices could be formed provided the employment figures remain stable. The new prices could hold up for awhile depending on the employment factors. The HDB supports the condition of the mass market condominium. The HDB is the basis for mass market condominium pricing. The HDB is currently experiencing shortage of supply.

Availability of housing loan services

The only limitation that an individual may face is the availability of housing loan services that ignores cash down payment or owner’s cash equity part. Normally, housing loans require owner’s cash equity. The owner’s cash equity will serve as the down payment for the purchase of the property. The fact that the savings and cash holdings are not homogeneous across all income groups of the country, it would be impractical and misleading to use the national savings as a guide. To simplify the analysis, the cash down payment funding portion is ignored in the following computation.

Sample computation using condominiums such as Shenton Way
• 76 Shenton – between $1,900 - $2,400 psf.
• The Sail @ Marina Bay - between $2,000 - $3,300 psf
• International Plaza - $1,100 range
• Icon - $1,600 - $1,700 psf
• Some parts of China town, Tiong bahru, etc….
• Leonie Hill, Leonie Studio - $1,500 to $1,900
• Grange residences - $2,500 to $2,800 psf
• Ardmore park - $3,000 - $3,600 psf
• Balmoral - $1,500 - $1, 800 psf
• Cyan Bukit timah (New development) - $1,800 - $2,400 psf
• Aspen heights - $1,400 - $1,600 psf
• Rivergate - $1,600 to $1,900 psf
• 5th Avenue Condominium - $1,200 to $1,400 psf

Singapore BANKS CREDIT stance

Banks have generally been more careful in managing their loan portfolios, investments, and loan or credit facility offers. Banks such as Citibank that were greatly affected during the worldwide recession or sub-prime crisis are aggressively introducing the credit facility package Sibor with trend showing about + 0.5% ascending to 0.9% in June 2010. HSBC responded with the competition and started to campaign aggressively for their credit facilities. The Bank of East Asia eventually entered offering consumers the residential housing loan packages. This time, the banks learn to lend more freely and aggressively to regular households.

Mass Market versus High End Market Condominiums in Singapore

2010-08-05T23:34:00.005+08:00

Mass Market versus High End Market Condominiums in Singapore
By Shirley Tan of www.singaporehomeloan.net

Expensive amenities such as the port access, private lift lobbies, golf clubs, infinity pools, and private lift lobbies could add to the value of the high-end property. Super high ceilings, security services, and near to expatriates’ schools are the common services offered by high-end properties targeting the foreign investors. Expatriates would be more attracted and comfortable if the residential rights and special immigration policies are not too strict. This will also contribute to the demand for high-end properties on a certain country. The highest, tallest, most luxurious, and other superlatives attributes place these high-end properties as one of the best places to live worldwide.

An increase of the high-end properties prices singapore would also influence and create an increase for the properties below the high-end properties. This trend may greatly affect all other related sectors of the country. If the high-end market price increases were highly selective, then maybe it would not affect the whole country. This situation may result to a widening gap of the mass market and the high-end luxury market prices. The mass market and the high-end market properties have totally different attributes and offered amenities. The offered attributes and amenities contributed to the big difference of their prevailing market prices.

An increase of the high-end properties prices would also influence and create an increase for the properties below the high-end properties. This trend may greatly affect all other related sectors of the country. If the high-end market price increases were highly selective, then maybe it would not affect the whole country. This situation may result to a widening gap of the mass market and the high-end luxury market prices. The mass market and the high-end market properties have totally different attributes and offered amenities. The offered attributes and amenities contributed to the big difference of their prevailing market prices.

The properties belonging to the category of the mass market are more affordable and a bit cheaper than those properties belonging to the high-end market. Mass market properties could create more demand because of its affordability. It also highly supports the general income conditions. The high-end market cannot be as flexible as the mass market in terms of pricing because it has its own set of characteristics and high-end services that the properties in the mass market do not have (Source: Singapore Ministry of Manpower, aggregated from Central Provident Fund board). Mass market could easily create a demand than the high-end market.

MRT and condo price fluctuation

2010-08-03T01:01:00.004+08:00

MRT and condo price fluctuation
Article contributed by: Property Buyer Singapore Home Loan Consultants

Singapore is Digging everywhere in building MRT stations

Property Buyer Singapore Home loan consultants investigates the effects of MRT on Singapore property prices.

There are a total of 78 stations in operation (As at today) and many more being built. (Wikipedia).

How many properties are located within 1km radius of MRT? And 2km of MRTs?

How will property prices go up or down?

Is having the MRT convenient? Do you feel convenient or it is really convenient?

Is there readily too much availability of private condominiums claiming to be near MRT?

Before you get excited about being close to MRT, have you thought of the Over-crowding in MRT trains?

Will distance away from city centre be no longer important?

Will prices rise because of a MRT station or prices rise because of sub-urban developments?

Estimation of how many properties are within 1km of MRTs

SMRT stands for Singapore Mass Rapid Transit. A public train system.

According to Wikipedia, there are 78 MRT stations in Singapore. Based on a 1km radius coverage, the area is Pi x Radius x Radius.

3.1416 x 1km x 1km= 3.14 sq km

Based on 78 MRTs, area coverage = 78 x 3.14 sq km = 245 sq km.

Singapore's total size is 710.3sq km.(Singstat, http://www.singstat.gov.sg/stats/keyind.html)

Go to google map and open up a Singapore map, you will easily see that in the heart of Singapore is the Mac-Ritchie and Pierce reservoir water catchment area and there are other areas reserved for military use. There is a scale on the bottom left of the screen. You can roughly calculate that the size of those non populated areas may be around 100sq km in total.

WHAT IS THE SIZE OF SINGAPORE'S ACCESSIBLE AREAS?

So Singapore’s accessible areas are 710.3 – 50 – 50 = 610.3 square kilometres.

So 78 MRT stations will cover 245 sq km out of 610.3sq km. If we assume that all accessible areas are populated evenly, the 78 MRT stations already cover 40.14% of the accessible land area in Singapore.

In other words , if we draw a 1km area around each MRT station, we will end up with those areas covering 40.14% of singapore's usable land.

There are many properties across singapore, it would be easy to assume that properties are spread out fairly evening throughout the Singapore geography.

If we make the above statement, therefore roughly 40.14% of all properties in Singapore are within 1km of an MRT station.

How many number of units of Private housing is 40.14%?

Wow, that is a lot of properties that are near to an MRT station.

So there are some 250,334 (URA Q2, 2010) units of Condominium and apartments property units and many hundreds thousands of HDB flats.

40.14% of that is some > 100,494 of choices of private property on the market that is potentially near to MRT stations.

Technically you have some 100,000 units of private property to choose from. Even if these properties are not put up for sale all at once. Each year, there would be a turn-over of 3 to 6% which amounts to 3,000 to 6,000 of buy and sell activities on these private properties.

DOES STAYING NEAR TO MRT REALLY MEAN SO MUCH?

Let’s look at the travelling time and the number of train one must get off and get back on in order to get from one place to the other.

Is distance to your place of work no longer important if you have MRT near your home?

Is distance to your children’s school no longer important if you have MRT?

It's worth not to get carried away by MRT. The overall lifestyle needs and distances from all your lifestyle needs are important too.

MRT needs to maximize share holder return - Over-Crowding is the least of their worry

So many far away places are now covered by MRT. Does it mean that it is more valuation property? Yes to an extent, but that still does not address the distance issue.

Sentiments?

What are the effects of MRT on prices of Singapore properties?

If people start to realise that being near to a MRT station is no magic pill and neither is it a paradise, they will not bid as much.

For those properties which are far away from town, being near to an MRT will command a good premium, while those farther away will have likely lesser value.

For those properties which are near to city centres or near town, being near to MRT should have a smaller premium as access becomes more varied and not singularly dependent on the MRT.

To Summarise The Effects of MRT on Properties

For Far away locations

Near to MRT means easy access. Alternative modes of access not great.

Not near to amenities

Not near to working place

Not near to business centres

Not near to schools, etc.

So perhaps access to MRT gives a greater premium compared to those in the same area without MRT within easy reach.

For Central and Prime locations

Access to amenities – Good

Near to many places

Near to shopping areas

Near to schools

Near to business centres

Modes of transport varied and plentiful (such as Bus, train, taxis, etc) and distances near.

Such locations do not significantly (perhaps should not) be affected by whether there is MRT or not.

Will Premiums shrink for those properties near to MRT?

The premiums one pays to properties which are near to MRTs will shrink over-time. Singapore Property Buyer may need to focus on your own lifestyle core needs, rather than what is good to have in order not to overpay.

Those very far locations touting MRT as a feature should generally not be valued higher than those that are nearer to city centres or with good locations (but without MRT) except when there is HYPE. (people who buy into Hype may lose out)

At some stage developers want you to think that distances doesn't matter as long as there are MRTs. Now If you will only imagine how you will squeeze with all the people on the super crowded and not very regular frequency MRT train . Getting to town is no mean feat, then the choice will always be LOCATION and smooth connectivity as a priority, be it railway, MRT, bus, boat, car or whatever transport.

Contact Property Buyer Mortgage Consultants for your Home Loans and Refinance needs at sms / text 9782 8606.

Risks involved in Singapore property market swings

2010-07-30T10:02:00.004+08:00

Risks involved in Singapore property market swings

By Shirley Tan - Property Buyer Singapore Mortgage Consultants

The high-end properties as well as the mid to high-end properties risks largely depends on the demonstrated price volatility during market swings. The mass market condominiums are presently facing the challenge of a market affordability risks. With the present elevated market price levels, a new benchmark for prices could be formed provided the employment figures remain stable. The new prices could hold up for awhile depending on the employment factors. The HDB supports the condition of the mass market condominium. The HDB is the basis for mass market condominium pricing. The HDB is currently experiencing shortage of supply.

Availability of housing loan services

The only limitation that an individual may face is the availability of housing loan services that ignores cash down payment or owner’s cash equity part. Normally, housing loans require owner’s cash equity. The owner’s cash equity will serve as the down payment for the purchase of the property. The fact that the savings and cash holdings are not homogeneous across all income groups of the country, it would be impractical and misleading to use the national savings as a guide. To simplify the analysis, the cash down payment funding portion is ignored in the following computation.

Sample computation using condominiums such as Shenton Way

* 76 Shenton – between $1,900 – $2,400 psf.

* The Sail @ Marina Bay – between $2,000 – $3,300 psf

* International Plaza – $1,100 range

* Icon – $1,600 – $1,700 psf

* Some parts of China town, Tiong bahru, etc….

* Leonie Hill, Leonie Studio – $1,500 to $1,900

* Grange residences – $2,500 to $2,800 psf

* Ardmore park – $3,000 – $3,600 psf

* Balmoral – $1,500 – $1, 800 psf

* Cyan Bukit timah (New development) – $1,800 – $2,400 psf

* Aspen heights – $1,400 – $1,600 psf

* Rivergate – $1,600 to $1,900 psf

* 5th Avenue Condominium – $1,200 to $1,400 psf

Singapore BANKS CREDIT stance

Banks have generally been more careful in managing their loan portfolios, investments, and loan or credit facility offers. Banks such as Citibank that were greatly affected during the worldwide recession or sub-prime crisis are aggressively introducing the credit facility package Sibor with trend showing about + 0.5% ascending to 0.9% in June 2010. HSBC responded with the competition and started to campaign aggressively for their credit facilities. The Bank of East Asia eventually entered offering consumers the residential housing loan packages. This time, the banks learn to lend more freely and aggressively to regular households.

Singapore interest rates and World Economy

2010-07-29T19:39:00.002+08:00

Singapore Interest Rates and the World Economy

By Shirley Tan

July 28th, 2010
Posted by Shirley Tan under Singapore Property Investor, singapore mortgage refinance with No Comments
There is no effective way to measure the source of funds as well as the amount of funds each bank and lending institutions have. This would mean facing difficulty in making estimates as to the credit facilities and funds that they have available for lending to business enterprises and individuals. This could have help set the overnight benchmark interest rates. As the Federal Reserve gradually lower interest rates, it also slowly depletes its funds. The only thing that has been holding the interest rates is the Federal Reserve intervention. The interest could have skyrocketed without the timely intervention of the Federal Reserve.

CHINA

China is demonstrated good export trading and economic development. The economy is definitely showing increase signs of growth and consumption. China has a massive surplus and foreign currency reserves estimated to be worth more than US$2 trillion dollars. China’s surplus is one of the biggest worldwide! Their FDI is also impressive.

China supports the consumption of the United States as well as Europe. China has been exporting fish and other products to many neighboring countries as well as US and Europe. As long as China continue to export and support the US and Europe required commodities, they will have a good possibility to improve economic situation as well as build international relations effectively.

China has been supporting the consumption of the two big economic giants US and Europe, which makes it possible for these governments to issue more bonds. The action carries the hope that China and other rich sovereign countries would buy their bonds so they could efficiently support and finance national deficits. Issuing bonds while at the same time creating extra money supply might not be the best approach but it is still better than issuing more money supply without the support of a corresponding debt or higher tangible asset value.

The hot property market of China has become highly speculative. Although the rental yield of China’s properties are very low, these properties carry sky-high prices without any rental value. Many properties for rent are still unoccupied. This is surely a good example of bubble or what they would call, a musical chair, where one hopes to pass the problem to the next person for a profit. Assets that do not generate a yield turn into liabilities. If this situation will finally explode, the whole of Asia is set to suffer.

Singapore’s Macro Economy

2010-07-29T19:36:00.001+08:00

Singapore’s Macro Economy

July 28th, 2010
Posted by Shirley Tan under Singapore Property Investor, singapore mortgage refinance with No Comments
Singapore economy is coming from a low base since the recession but still showed high GDP growth. The real strength of the economy is still uncertain. The GDP of Singapore would be pretty much the same. However, the increasing expatriates and immigrants needing housing, schools, food, services, etc, their massive immigration, has been affecting the growth of the overall nominal GDP values.

The condition implies that we would be expecting a slow rate ascent of the real property prices towards the end of 2010. However, the risks of the property buyers will continue to increase. A property buyer planning to purchase a property still needs to make a good decision based on research and other information.

A property investor looking for real estate property to invest should wait a few more years to experience a market flooded with properties developed by the government of Singapore. The government has been trying to develop properties in relation to their present massive land sales program. There is no speculation of a market crash since the Singapore government could always resort to bring in more foreigners to boost demand for housing, which will support high land prices.

Invest in singapore property: Can single person use CPF to buy property?

2010-06-24T21:36:00.006+08:00

Invest in Singapore property: Can single person use CPF to buy property in Singapore?
by www.PropertyBuyer.com.sg Singapore mortgage consultants
Text (sms) : 9782 8606

We know that this topic is often asked and searched. The fact that many of our customers ask this question goes to show that this knowledge is not easily searched and found. In fact the answer can be found at CPF's website. So let us broadcast the message a bit wider.

" Q: I am single. Can I jointly use my CPF to buy a property under Residential Properties Scheme (RPS) with my friend/cousin?
A: Yes. You can use your CPF jointly with your friend/cousin to buy the property so long as both of you are single, divorced with Decree Nisi Absolute/Final Judgment(divorce) or widowed and not using CPF for any existing properties currently."
(Source: http://mycpf.cpf.gov.sg/CPF/News/InTouch/NL_082005.htm and http://ask-us.cpf.gov.sg/hybrid/Themes/CPF/related.asp?MesId=6169998&FolderID=0&Selected=2&CSRId=&SourceId=0)

If in doubt, please always check with CPF board and/or your lawyer prior to any property purchase, as regulations do change. We cannot be held responsible for any losses or damages arising from reading this article.

If you do not want to engage a lawyer and still want to find out prior to a property purchase, you can contact us at: -

go to --> http://www.PropertyBUYER.com.sg/contactus.php

Tel: 6100 0608
Sms: 9782 8606

Email: loans@propertyBUYER.com.sg

What do Conveyance lawyers in Singapore do?

2010-06-24T02:19:00.002+08:00

What do Conveyance lawyers in Singapore do?

The lawyer's role in property buying includes but not limited to the following:
The lawyer's role is to review the contracts and terms of purchase. Such as reviewing an Offer to purchase, Option to purchase or a sales and purchase agreement. (Many times, this important process is skipped as people go straight to the show room and sign contracts blindly after listening to property agents without adequate legal advice.)

Conduct title searches on the property which you are buying to make sure that the titles are unencumbered or unchallenged and can be delivered to you upon completion of the purchase of the property.

Check against government policies or regulations which may adversely affect the value of the property that you are buying. Such enquiries may include checks with URA, BCA, SLA, LTA or more.

Once all checks are complete, a caveat on the property title is lodged. This Caveat is then published and made available to the public. This serves to inform the public that you have a vested interest or claim in the property which has the corresponding property title. During this period, if there are other claims or counter claims on the property title, they must be raised at that time. Lodging a caveat increases the protection to the buyer from future legal challenges on the legality of the sale process.

Given that properties are large commitments. Most people will use a bank loan to finance a property buying. During this stage, (you would have already completed exercising option to purchase and already signed a bank's letter of offer for a Singapore bank loan.) your lawyer will liaise with your bank's lawyer to ensure smooth disbursement of the agreed home loan mortgage on your property. Sometimes, the bank's lawyer is also your lawyer. This lawyer will assist in coordinating to disburse your loan. The bank's lawyer will check against terms in the bank's letter of offer and compliance to matters of material facts and report such matters accordingly to the banks prior to funds disbursement.

Liaising with CPF Board (or Lawyers on CPF board). If you intend to utilize Central provident fund (CPF) - A Singapore's version of pension fund, your lawyer will check and ensure that the CPF funds are ready for drawdown in order to complete the property purchase within the completion time-lines. Sometimes, your lawyer may also be a lawyer on CPF panel of lawyers, that makes things potentially easier and faster (but CPF has internal processes for disbursing funds, these things still takes time).

Your lawyer will be responsible for liaising with the Bank and the CPF Board (or their lawyers) to ensure that your Housing Loan and your CPF Funds are in place and ready for drawdown to order to complete the purchase within the agreed completion period.

Completion of sale. This is a legal term which refers to all the payment of the agreed and contracted property sale price where you have fully paid all monies to the seller. The seller hands over to you the signed conveyance of title called the "Instrument of transfer" which effectively transfers the ownership of the titles from the seller to the buyer and hence the ownership of the property from sellers to buyers. At this stage, your Singapore bank loan is fully disbursed. Or in the case of a building under construction, whatever monies which should be paid during this stage of construction is disbursed.

Property Buyer Mortgage Consultants are experienced in the property buying process and can act as Property Buyer advisors to guide buyers into avoiding dishonest property agents.

Property Buyer Singapore Mortgage Consultants do NOT receive commission from Property transactions of Buying and Selling.

About Property Buyer Mortgage Consultants
Tel : 6100 0608
SMS (text) : 9782 8606
Contact us : http://www.propertyBUYER.com.sg/contactus.php
Email us : loans@propertyBUYER.com.sg

Invest in Singapore: Be careful of tricks property agents play on Option to purchase

2010-06-21T21:34:00.003+08:00

Invest in Singapore: be careful Tricks agents play on Option to purchase in Singapore

Option to purchase OTP in Singapore. An option to purchase is a prelude to buying a property in Singapore. An option to purchase gives the purchaser the right to buy a property within a given time window at an agreed price, but not the obligation to do.

Bad Property deal Practices by dishonest Property agents regarding OTP Option to purchase

We treat any act that puts the interest of the buyer and seller last as unethical and bad practices.

Some Bad Singapore Property agents want the seller to sign an Option to Purchase document leaving out the date and the price unfilled. This puts the seller at risks of selling accidentally below cost and gives a potential dishonest property agent a chance of a quick sale which could costs the Owner hundreds of thousands of dollars.

On the buying side , the unethical property agents trick the property buyers into making an offer, believing that the price is agreed.

In this scenario , Dishonest agent dupes buying into believing that the deal is sealed at $1.23m, and this is the agreed asking price.

So the Property buyer makes an offer and pays a deposit for the option to purchase of $12,300 for the property. The Dishonest property agent then banks this cheque into the property owner bank account . He/she forces or sweet talk the Seller into agreeing to the deal.

In case the Property seller refuses, the property buyer is stuck while his/her cheque is already cashed by the property seller. Then the Property agent uses delay tactics to delay returning the money.

This causes buyers much worry. When they are most anxious , the dishonest property agent will offer a solution to help negotiate with the seller.

Be really angry if you will because , during this time, the crooked property agent may ask for some fee for "doing you a favour".

In case this does not work, he/she may come back telling you that the property selling wants $1.31m instead of $1.23m. And since your Option to purchase money is stuck and the Dishonest property agent has no intention of returning you the money easily (even if it is not them who kept the money), some buyers may be tricked into paying more. BINGO, the deal is done! The deal is closed!!!

We are no match for the Dishonest Singapore Property agent, they are smooth

The common man or woman on the street is usually no match for the dishonest property agents as even very senior executives get cheated. Nothing to be ashamed of, because these people have an innocent face and are genuinely cunning. But of course, there are a small fraction of honest singapore agents out here, you just have to look very hard.

A new bad development in our opinion. This practice stems from a botched deals where smart buyers discovered last minute that something is not quite right and cancelled the cheque.

Since these buyers actually do outsmart the property agents and agencies, something needs to be done to protect the interests of the Property agencies and property agents.

So they came up with a document called OFFER TO PURCHASE. An offer to purchase may hold legal weight or it may simply function more like an acknowledgement slip. But the terms of the offer needs to be carefully evaluated.

Do check through on the terms and make sure that they are reasonable for an Offer to purchase and that you have the right to rescind the offer should it not be accepted within 3 days. If possible, post date your cheque. And that you must also specify your rights such as "the offer is valid upon a reasonable and satisfactory terms stated within the Option to purchase" or words to that effect.

What if a Buyer offers to purchase and it is accepted and the subsequent Option to purchase comes, but with terms that are UNFAIR and not acceptable? Does that mean that the Property Buyer has also accepted the terms and conditions of the Option to Purchase?

Will Dishonest property agents show you an Option to purchase OTP document for your review?

Try asking them to provide you a copy of the Option to purchase, 9 out of 10 will be most reluctant to show you. Since the agencies drafted the Option to purchase documents, it usually favours the agencies and the agents and sometimes to the detriment of the Property seller and buyers. Those rare agent who may be willing to show you may be new to the trade.

So if a Singapore Property agent asks you to offer a cheque and sign an OFFER to purchase, ask them to send you both documents for your review first. And have the terms and conditions of an Option to purchase included in the offer to purchase. Otherwise you may be signing a blank cheque.

If worried , you can sms Property Buyer Singapore Mortgage Consultants at +65 - 9782-8606 in Singapore or email them at loans@propertybuyer.com.sg to guide you through the minefield of Dishonest Singapore Property agents. They have crossed swords with property agents in protecting buyer's and seller's interests in many occasions.

Should the Property Buyer sign the Option to Purchase?

Only the rightful sellers needs to sign the option to purchase. There is no need for property buyers to sign the Option to purchase. The property buyer only needs to have the original signed copy of the option to purchase in their possession. Do not leave the original copy with the Property agent!!!

Beware of letting your agent handle your original option to purchase document. They can easily sub-sale your property without you knowing about it, simply by filling in the name of the buyers if it is not filled in.

During property hype , we have heard that some agents who held copies of the original option to purchase managed to flip the properties for higher price making the difference. When the original buyers wanted to exercise option, they did not want to HAND OVER the ORIGINAL option to purchase. The buyers have no recourse as they do not have the original OTP and cannot exercise the option.

Some of the option to purchase contains a section called "And / or nominees". If the names of the buyer and the and /or nominee section is NOT filled up, then the BUYER needs to hold the original copy of the option to purchase OTP.

Some crooked Singapore Property agents may take your original OTP , make copies and then submit it to many banks to try and secure property loans from their favourite bankers and lawyers from which they have an under-table deal. These rogued lawyers then over-charge you and pay the dishonest agent a commission , which is illegal.

Is your Singapore Property agent too eager to introduce to you a bank, a banker to you? RUN for your life.

Is your property realtor too eager to recommend a lawyer or law firm? RUN for your life.

Is your Singapore property agent too keen to recommend you a contractor? RUN for your life.

Singapore property agents don't do things for free, just try asking them to give you some comparisons and some paperwork, they will try all ways to turn it away. Many are lazy and yet want to make money. If they are too keen, something's fishy. Just tell them firmly, NO thank you. We will find our own contractors, our own bankers, our own mortgage consultants and our own lawyers. Check with your close friends who are not agents to find out.

Many people in Singapore do not buy property regularly , so naturally, you may need a Singapore Mortgage Consultant at loans@propertyBuyer.com.sg who has no stake and no commission in property buying. Propertybuyer.com.sg offers free mortgage advice and property buying guidance for free. They offer their services for free to property buyers in selecting home loans as they fill the role of independent and unbiased outsourced bankers. Banks would need to incur staffing cost if not for mortgage consultants, therefore this service is offered to you free of charge at sms (text) +65 9782 8606.

Invest in Singapore Property: Will Low singapore SOR rates inflate property prices?

2010-06-08T02:22:00.005+08:00

Invest in Singapore Property: Will Low singapore SOR rates inflate property prices?

Quotes -->

“Analysts say the Sibor drop may complicate recent government efforts to rein in rising asset prices, in particular a surging real estate market.” (David Roman and Gaurav Raghuvanshi, Dow Jones Newswires, online.wsj.com/article/BT-CO-20100519-718371.html

,19th May 2010)

"Property is the most interest-rate sensitive sector of the economy," said David Carbon, an economist with DBS. "The economy is growing very fast, rates are very low: You can draw your own conclusions." (David Roman and Gaurav Raghuvanshi, Dow Jones Newswires, online.wsj.com/article/BT-CO-20100519-718371.html

Some financial news reports or articles have been saying that Sibor at an all time low is making the situation more complex as low interest rates cause asset bubbles especially in the property market.

Though the statement looks correct universally and is more or less so, but if you bother to drill down, a lot of so called Universal truth is not so Universal afterall.

How much movement in interest rates before something happens? Is property most sensitive to interest rates? (Maybe but maybe not)

The general hypothesis is that when Interest rates are low, people can afford the properties, therefore bidding up the property prices . We are usually very careful about being a parrot and repeating statements such as these.

While in the extreme, that statement "Property is the most interest-rate sensitive sector of the economy" is usually true, but the degree of sensitivity of property to that is suspect.

Because if you look at 2007 to 2008, during the property boom, the run up in prices as well as interest rates are almost in tandem. It took quite a lot of interest rates hike (from about 2% home loans singapore rates to almost 5%) to slow down the property market. So there is a substantial lag effect.

And eventually it was the break-out of the global financial crisis that made people lose jobs and lose confidence that did the job or slowing the property market.

So how will Singapore condominium prices be affected by varying property loan singapore rates.

At Property Buyer Singapore Mortgage consultants, we like to research it and present the facts.
Tel: 6100 0608
Sms: 9782 8606
http://www.propertybuyer.com.sg/articles/about-us

Arguments FOR AND AGAINST " Low Interest rates complicate recent government efforts to rein in rising asset prices"

Our customers are buying for reasons that are NOT how much Singapore bank interest rates they have to pay.

Then they will check the repayment schedule, only then they will realize that they are over-stretching or not.

The cases that we have seen are very different.

It is often not just about the Home loans Singapore, it's more than that.

Property Buyers who are getting home loans in Singapore do so for the following reasons : -

Need a place to stay
Replacement for their renting
Property available in their locality
Property meeting their budget
Property meeting their lifestyle
Investment reasons – Income (very few)
Many people stated Capital appreciation as a reason
Interest rates are very low Not many people told us this was their main reason for considering property purchase.

We have a sample size of 50 clients over the past many months , population of 5 million people, 90% of people did not state interest rates being low as buying criteria (only 10% stated low mortgage interest rates as property buying criteria).

Based on a statistical tool at (://www.surveysystem.com/sscalc.htm) we have arrived at a figure of 90% +/- 8.32% using a 95% confidence level.

Property investors ARE NOT BUYING DUE TO LOW Property LOANS RATES!!! (We are 95% certain) - Based on our 30min rough estimation

People that bother to read our research material are typically skewed towards private properties, their range do vary a lot, from property purchase between $1m to $10m. And as these people are not related, we can therefore assume that they are fairly homogeneous and representative of Singapore’s Private property buyers.

We can say with a 95% confidence level that between 81.68% to 98.32% of people buying properties in Singapore , they are buying for reasons other than low interest rates. Between 3% and 1% bank interest rate, it makes little difference to their property buying intentions. Of course it would still make a difference to them if interest rates are between 10% and 1% (But historically unlikely as it has only happened once within this 20 years) . Of course there are between 1.68% to 18.32% @ 95% confidence level are buying due to low interest rate reasons.

So low interest rates is one of the many factors that cause property asset prices to rise, but only a small reason .

Low interest rates don't mean that banks can grant you loans, you must pass the bank affordability test

Singapore Banks practice a safety threshold for property mortgage loans interest rates. Therefore only those who have a healthy income (cash flow) minus off their liabilities meeting a certain debt servicing ratio (typically 50%) are granted a loan.

Singapore banks generally set a property loans interest threshold at between 3.5% to 5% at this point in time. Even if the prevailing interest rates are 1% or less on your home loans, you will be tested for your servicing ability at between 3.5% to 5% home loans rates. You must pass the bank's credit department test to get a loan . As there is some buffer between existing rates and the bank's threshold, there is some time lag .

Therefore singapore bank residential interest rate is INELASTIC to creating property demand when interest rates are low.

So if you cannot pass the affordability test, you cannot buy a property using bank's financing, so how will you add to the demand to force property prices to rise?

Singapore's SIbor interest rates have peaked at about 3.6% within the last ten years. And the banks usually Lag in increasing interest rate means threshold.

When banks set their threshold for interest rates, they look at historical interest rates. No matter how low the prevailing rates are, they will still keep it at a higher level just to make sure that you can afford to repay the loan.

Therefore dropping Sibor from 3.5% to 1% or thereabouts is INELASTIC to create any demand and hence will NOT push up Singapore property prices.

Therefore your affordability do NOT increase with lowering interest rates in Singapore. It's whether the bank will lend to you, or NOT (if you fail the cash flow criteria).

The interest rates from about 3.5% to 1% is inelastic to actual demand in Singapore's context aided by bank's interest threshold setting.

Third point - IF PROPERTY INTEREST RATES ARE HIGH AND YOU NEED A PLACE, WITHIN THE INELASTICITY RANGE OF INTEREST RATES YOU WILL STILL BUY (If you can afford it)

Say you need a place to stay, you will still buy a place even if interest rates increases. So interest rates increases beyond a certain (will cause the bank to raise their safety threshold interest rates even higher) and eventually cause people to shun away from buying a property.

But Low interest rates alone do not do the opposite. It may not cause people to want to buy a property. When the rates are low, it could be more of a need based demand.

As there is a safety threshold, however low the interest rates go, the bank's safety Sibor interest rate threshold typically do not fall further. (But it is the bank's decision).

novice property investors cannot simply believe in news reports and rumours

We are not Singapore economists, we are mindful and wary of generic motherhood statements . Because this is how most news work. They report something that is easy to read and digest.

Though the print media always try to get things right, because some of them are under a lot of time pressure to churn out sensational news on a daily basis, therefore it is also prone to dishing out generic motherhood statements that does nothing to help the investor.

So, Sibor must raise significantly (say several percentage points say 2 to 3% ) before it dampens property buying sentiment and ease the rising property prices. Singapore government got it wrong again leading to the treasury coffers swelling due to high prices for land sales. But nonetheless, we think policy levers are more effective than interest rates.

With this we conclude that low interest rates will not complicate housing demand or property asset bubble , but rather the shortage of housing due to poor timing and planning by the Singapore government is the cause of it.

Invest in Singapore property: Mortgage Insurance for Property Buyers

2010-05-30T01:00:00.003+08:00

Invest in Singapore property: Mortgage Insurance for Property Buyers

By www.PropertyBUYER.com.sg Singapore Mortgage Consultants
In the US or elsewhere , Insurance sector is over-saturated, insurance companies are getting too innovative in creating products. Some are borderline betting houses in our opinion and they undertake too much risks, such as buying insurance to insure against the person having the cash flow to continue to service the home loan.

There are other mortgages that can even insure against the price of the property staying above a certain valuation. Taking easy money but naked exposed risks such as such "Book-making" deals are what made some BIG insurance giants to fall. What has the world come to? (This is part of the reason how the world got into the financial crisis).

Hopefully Singapore's Assurance sector will not go astray . Some Singapore banks may give you some preferential Singapore SIBOR-SOR-fixed bank loan rates , but try to cross sell their partner's insurance package on you.

Home loan Reducing Term Insurance

Mortgage insurance is designed to ease partially the pain of a partner who has lost a loved one and still ended up taking over the liabilities of the home loan repayment.

For example , if the loan is $1,000,000 in which each person shares half the repayment burden. In this case, each person buys $500,000 of insurance. So that when a partner dies, the other partner gets $500,000 towards payment of the house. There is also what is called Mortgage insurance .

When the loan is being repaid , the principle becomes smaller , hence the insured amount is reduced and hence also the premiums.

This assures the Singapore bank that the home loan can be serviced and serves to defray default risks of singapore home loans borrowers as this insured amount may be tied to this liability .

If you are well insured and you have various policies against your death, such policy is an over-kill. Essentially whatever they call it, it's just a name. What is important is that you are able to pay or your partner is able to pay in the case of one's death .

Why must Banks sometimes force you to insure with their partner insurance company ?

Banks are increasingly doing cross sell , so this helps to increase their profits targets.

Sometimes, such bundling may or may not be the best option for the Singapore property Buyer or the Singapore home owners refinancing their properties. Please SMS (text) your property buyer Mortgage broker at Singapore GMT+8 +65 - 9782 8606, they will be able to assess the pros and cons of each home loan package choice.

Housing Insurance : home content Insurance

Home content insurance pays you if your contents are lost, stolen or destroyed. There may be various insurance riders which covers many different conditions leading to the loss or damage.

Housing Insurance : Property Insurance

Just to digress , you can guess fairly correctly how much your house costs to build. As this is the amount that the actuary department reckon it costs to re-build in the case the building is destroyed.

For example your condominium is $1,000,000. If the evaluated construction cost is $400,000, this means that $600,000 is attributed to land and $400,000 is the building cost .

Developers won't tell you how much it cost to build a condominium, therefore you can look for your Fire and building insurance to find out how much your unit is insured for to know how much is the replacement cost . (We use this method at PropertyBUYER.com.sg as a proxy for estimating building cost)

Singapore banks can then use this money to pool it into the sinking funds for the condominium to be reconstructed , into a complete and building ready for occupation .

At www.PropertyBuyer.com.sg our Singapore Home loans and mortgage consultants (www.propertybuyer.com.sg/contactus.php) can help you through your property buying process .

Invest in Singapore Properties

2010-05-08T23:21:00.004+08:00

Invest in Singapore Properties: Home loans using two borrower and Three mortgagors.

The economic climate has recovered. The recession seems a distant memory (even though it’s only 1 year ago). Many banks have relaxed credit, including banks such as DBS, OCBC, Maybank and recently HSBC, Bank of China. And from our experience and sampling working with the banks, the easing of credit from the bank is rather across the board.

Recently up until June 2009, credit was very tight. Very high barriers were set up to qualify whether to lend out money. Property buyers or investors have a tough time to get any housing or property loans approved if they are sharing a property with multiple non-related parties. Even if they are buying an investment property, many banks would require them to put up 30% down-payment. This means a 70% loan of the property valuation.

Any complicated Singapore property deals is almost impossible with extensive processing time and uncertain end-result.

Refinancing mortgages in Singapore is equally hard as property values plummeted with loans outstanding greater than 80% of the valuation of the property.

Investing and Sharing a property in Singapore

Many family members and friends tend to get together to buy a second or third property. This phenomenon is getting more common as far as our mortgage consultancy – broker has experienced.

Usually all will share in putting up the cash for the down-payment and all will become borrowers.

Recently, Property buyers have found an innovative way to borrow for your Singapore property loans.

Many of the so called “Property Gurus or experts” with property buying or investing systems or those, “How I manage to own a multi-million dollar portfolio earning $2500 a month” are also mainly using similar ways. We will delve into the risks in the later paragraphs, remember, there are no free-lunch. Many are dishing out standard generic advice, masquerading as divine investment and view of the future.

Let us now explain how it works.

One would avail cash for down-payment while the others will make their cash flow available so as to borrow large sums of funds.

For example, Property Buying amongst three people (real example, fictitious people), Oliver, Soon Huat and Kim Seng.

Do you want to know how Oliver and Soon Huat can buy a property without having CASH down-payment?

Do you want to know how Oliver and Soon Huat can buy a property without the cash down-payment?

• Oliver earns $2000 a month
• Soon Huat earns $5000 a month
• Kim Seng is a retired cousin, who has lots of cash, but no cash flow. Cash in excess of $400,000.

Property loans Borrowers

• Oliver and Soon Huat are borrowers.

Using a very relaxed criteria and barrier, they may be able to borrow up to $800,000 to $940,000 if they have no other financial commitment and are eligible to borrow over 30 years. (Maximum loan quantum is very risky, you have to assess your risks. The amount illustrated are estimates, banks have final say in actual amount of lending offered)

Based on the cash flow (salary) of Oliver and Soon Huat, they would be able to afford to buy a property in the range of $1m to $1.175m.

What is the Cash down-payment?

The cash down-payment required would be $200,000 to $235,000.

Since Oliver and Soon Huat did not have cash, Kim Seng who is retired and seeking an investment would pay the $200,000 to $235,000 cash plus stamp duty for it.

How does the Property Buyer Investment system work?

PROPERTY LOAN BORROWERS

• Oliver and Soon Huat would make available the cash flow (salary) so that they can borrow money to buy an expensive property.
• Kim Seng would pay the cash down-payment.

PROPERTY OWNERS – Mortgagors

• Oliver, Soon Huat and Kim Seng are all co-owners and mortgagors.
• The apportionment of the asset share is agreed by the property investors in private. They can do so under the tenancy-in-common structure.

Oliver, Soon Huat maxed out their Property borrowing capacity.

The Singapore property loan was based on Oliver and Soon Huat’s credit standing and cash flow.

Since Kim Seng is the Mortgagor (owner) and not the borrower, his credit assessment is not being looked at. (Not all banks allow this)

What are the risks for Borrowers and owners of such Property Investments structures?

Oliver and or Soon Huat lose their jobs, they will be unable to repay their installment if they have no savings.

The Singapore property loan – mortgage will be in default.

Soon the bank will likely serve notice to pay up to borrowers or mortgagors (owners).

Hence, the end result is, all people are liable for the loan, not simply the borrowers.

The bank will re-possess the property and put it up in the market for sale. If the sale comes short of the outstanding loan amount, all mortgagors and owners are likely to be liable. The bank may sue all three and recover whatever monies it can.

What is the RISK for Kim Seng the Financier of the property?

If Kim Seng finances the property deal and is himself involved in several such deals, he may be able to pass the cash flow requirement (because his credit and liability is not checked).

In case Kim Seng has many such properties, if One property falls through by default of payment or installment, Kim Seng will be exposed.

In addition to that,

Kim seng may be forced to pay up for any short-fall. Because if one or multiple properties default may cause a cascade of properties to fall.

These type of Singapore property buyers or investors typically rely on rental income. If rental income is not forthcoming, trouble will come very quickly.

Invest in Singapore properties Sibor or SOR Rates

2010-04-26T00:34:00.008+08:00

Invest in Singapore Properties: Sibor or SOR rates

by: Property Buyer Home loans

If you are investing in Singapore properties and you want to know how safe is your cash flow? What can affect your property investing cash flow?

Rental rates can affect your revenue while the underlying Borrowing costs determined by Sibor and SOR can affect your Cost.

Which is safer? SIBOR rates or SOR rates?

In order to know the answer, we need to dwell deeper into how Sibor and SOR works in Singapore.

Setting Interest rate targets in USA and Singapore?

The USA is united from many states. There is a federal government and the state government. As the Federal government has certain rights and controls while the local government the others.

Therefore, the federal reserve uses rougher policy tools such as using interest rates to control inflation and regulate growth for the country while the local government does it's part.

Singapore on the other hand is small. The Singapore government can micro-manage. When the economy heats up and Consumer Price index (CPI) rises, instead of raising interest rates to control inflation, Singapore could raise it’s currency value against a trade weighted basket of currencies.

This reduces the prices of imports as the Singapore dollar strengthens. This has the effect of lowering inflation for Singapore citizens. However this also impacts certain industries which relies on exports.

SO DOES SINGAPORE GOVERNMENT SET AN INTEREST RATE TARGET?

Singapore’s interest rates are consistently set low. Though we are not sure “SET” is the right word. There are many factors including the liquidity of banks in Singapore which helps “SET” the interest rate environment.

Banks that are flushed with cash from depositor’s funds or it's own capital will release unused funds it into the Singapore Inter-bank market, made available to be borrowed by other financial institutions, for a small interest rate charge of course.

The rate is called, the Singapore Inter-bank offered Rate (SIBOR). This is the rate at which the banks lend to each other. Sibor is traded and published in the Association of banks of Singapore (ABS).

SOR is the Swap offered Rate also traded on the Association of Banks of Singapore.

SOR is a Swap. Swaps are basically derivatives contracts. These contracts are traded at a fairly high volume between the banks and financial institutions in Singapore.

SOR or Swap offered Rate is a benign form of Derivative which involves the US dollar and the Singapore dollar where banks trade with each other to borrow the funds. And the borrowed funds carry an interest rate. SOR is determined this way. Swap contracts behave a little like a share in a stock market.

Singapore’s interest rates are consistently lower than that of the US and that of Australia. This ensures that Gross Fixed capital formation is maintained at a higher level of which a significant portion goes into investment. Such as that of plant, machinery, software, etc. All of which could significantly enhance the long term productivity and efficiency of the Country.

Low Sibor and SOR rates drive investment driven inflation?

Singapore is not immune to inflation. However, due to the various policies tools at the disposal of the Singapore government, it can selectively target industries that are over-heating by imposing levies, taxes or restrictions while leaving the other industries which are not over-heating to continue to grow.

Thus Singapore’s micro-managed economy can maintain a higher growth rate due to long term lower interest rates driven by investments.

Australia's housing loans Interest rates are Crazy

Will Singapore’s interest rates reach the levels seen in Australia and US? It is hard to say whether Singapore will ever reach those rates seen in Australia or the USA, but on a comparative basis, Singapore’s interest rates tend to be lower than those in Australia and the USA.

Why will Singapore’s Sibor or SOR rates rise?

In most modern economies, credit is well developed. What this means is, when there are investments or economic activities, funds are being used up. For example, a project that costs $600 million may need financing of at least 60% of that fund.

That means the company who invests in that project only comes out with capital of $240 million while borrowing $360 million. Even the company’s investment of $240 million may also come from issuing shares or bonds of the company, leaving the actual capital of the investment lesser than $240 million.

In other words, investments deplete the funds available for lending into the Singapore inter-bank market. This leads to an investment activity based and economic expansion based rise of rates.

The other instance is when there are major economic shocks where we do not know how much are the banks exposed to these shocks. In such a scenario, each bank will view the other one with suspicion as they do not know whether they will get back their money if they leave lend it out. In such a scenario, the SIBOR or SOR rates move up very quickly. In such scenario, it is expected that the Singapore Government would intervene to provide the liquidity of the last resort, thereby stabilizing the market.

So it is safe to say, when investment grows, funds are sucked up because most investments are still credit driven in a developed economy like Singapore.

For Investors looking to invest in Singapore properties, it is important to understand the Singapore government's interest rate policy levers to estimate if you will be able to afford your Property loans in the coming future.

Invest in Singapore property: SINGAPORE BANK WITHDRAWS SOR SIBOR PROMO RATES

2010-04-16T15:43:00.002+08:00

Invest in Singapore property: SINGAPORE BANK WITHDRAWS SOR SIBOR PROMO RATES
Contributed by www.PropertyBUYER.com.sg

In the last issue, 1st week of April we spoke of 2 Singapore banks withdrawing promotional rates. See last article (http://www.propertybuyer.com.sg/articles/compare-singapore-home-loans-/singapore-banks-raise-sibor-margins-on-housing-loan-rates/)

By today 16 April 2010, 1 more Singapore bank has removed their promotional rates. The choices of promotional rates SIBOR or SOR packages are shrinking, at least in April, 2010, until better rates comes about in May or if some banks choose to break ranks with the others.

Shortly after the last article which we posted, the tradionally media published a report saying that banks are lowering rates and competing to acquire home loans. And more are about to follow.

This lead some of our customers to come and ask us, "Why are you saying Sibor Sor margins are rising when the traditional media has just mentioned that the banks are reducing rates to compete?"

We found that article and we read it. It was factually correct and in that article it did mention that banks are revising rates in April 2010. However the headline title said banks are reducing rates to compete. The article was probably written early march and only approved for posting in 1st Week of April, 2010.

So we concluded and explained to our customers that the traditional media is at least 2 to 3 weeks behind the internet media.

For Singapore property buyers wanting to buy completed or Building-under-construction (BUC) properties, the cost is potentially getting higher.

Singapore banks raise SIBOR and SOR Margins on home loan rates

2010-04-04T03:10:00.004+08:00

Singapore banks raise SIBOR and SOR Margins on home loan rates
Courtesy of www.PropertyBUYER.com.sg Mortgage Consultants

The market has begun to awake. Investment activities are coming back. Hedge funds and private equity are again investing in properties as well as equities around the world.

The world economy has also been showing signs of recovery. The US household income has grown several by between 0.1 to 0.3% over the past several months. The household income number’s absolute growth are in the single digit billions, which is a drop in the ocean. But this signify that the world’s locomotive of consumption has gradually recovered.

Singapore has also shown signs of recovery. Unemployment rate fell in Singapore. Singapore’s domestic activity is also waking up, with property prices shooting up. The market is no longer fearful.

Several measures to curb speculators are not showing much results as demand outstrip supply in HDB sector. HDB prices rising is pushing up mass market private properties. Although there is still ~60,000 units of supply in the pipeline for private properties, these units are still building under-construction (BUC) and do not add to supply immediately.

All in all, Singapore economic activity is rising mainly from domestic consumption as well as recovering of demand worldwide. There is also substantial percentage of investment in property from the overall gross fixed capital formation. The demand of funds for financing all sorts of activities will be high. Even though that the Sibor or SOR rates have kept relatively stable up until now March 2010.

Singapore banks are raising their lending margin. For example, banks usually charge SIBOR + margin%, this margin is being raised.

We should now expect more and more banks to follow suit with more expensive home and housing loans from 05 April 2010.

Stay tuned while we wait for latest updates from banks. Meanwhile, some older housing loan rates in Singapore from March 2010 will be only valid until 9th April 2010 and all documents must be in.

You may wish to quickly compare singapore home loans and then to decide one within days.

Contact property buyer Singapore mortgage consultants

SMS: 9782 - 8606

Email: loans@propertyBUYER.com.sg

All articles are the intellectual property of www.PropertyBuyer.com.sg. You are welcome to reproduce our articles provided that you include an active and working link back to http://www.propertyBuyer.com.sg

Gross floor area calculation methods

2010-03-20T20:49:00.005+08:00

Gross floor area calculation methods

Have you ever wondered how your Gross floor area is being calculated?

If you are an investor in Singapore property (properties), you would probably want to learn about plot ratio. As a consequence of plot ratio, you might want to read up on gross floor area.

URA has a handbook written specifically for that. You will also know that it has instituted Green space within high rise buildings by exempting green landscaping areas from Gross floor area (GFA) calculation.

This is important because when a developer builds a condominium, what happens is that they have a plot ratio for any given land plot.

Plot ratio = Gross floor area (GFA) / Land size

If some of the features or landscaping do not count as GFA, that means the developer can build nice features and landscaping and green space to enhance the property while not costing it Gross floor area (GFA). This means that it is not losing floor area which it can sell.

So kudos to URA for excellence in city planning.

http://www.ura.gov.sg/circulars/text/dcdgfahb_d0e4.htm

Singapore mortgage refinance

Property buyer Singapore mortgage consultants

Singapore Property Buyer forecast for 2010 and 2011

2010-03-14T00:03:00.007+08:00

Singapore Property BUYER forecast for 2010 and 2011.

Recently the government has done the people a favour by releasing land and stopping the property prices from going out of hand.

We felt that the error was created in the first place because there was a squeeze in the HDB supply side. HDB was building massively inadequate supply for annual demand.

Although HDB can say that there is nobody queueing up for their BTO flats, but it could also be that the flats are priced too expensive due to benchmarking it to resale prices. Therefore if people cannot afford HDB flats, does it mean that there is no demand for it?

So the supply shortage in HDB is leading to a bottom up rise in prices of HDBs. This is pushing a wave of HDB upgrades into Private housing and condominium.

This demand is then pushing upwards and depleting supplies in the lower end of the private property segment (at least for this year 2010 and maybe next 2011) leading to massive demand for land. (Strangely so, as the supply in the pipeline is still some 60,000 units at at March 2010, equal to easily 6 to 7 years supply)

We can only speculate that perhaps it is because: -

1. Those supply of property in the pipeline is concentrated mainly amongst the big players.
2. Those supply of property in the pipeline is concentrated in certain districts or in certain price ranges, while demand is coming from the "MASS segment".

With increased demand for land due to HDB's miscalculation of demand by under-building, this leads to huge demand for land. Property developers seeing a possible opportunity may want to get in on the act by bidding for land.

Singapore government is happy to release land for sale
Singapore government is in turn happy, because it can be seen to be doing the public a favour by releasing land and cooling the market, whilst at the same time, the property developers are frantically meeting the land reserve price and starting a bidding war for land.

Our guess can only be that Property developers see this as a start of a price hike in land and therefore property prices. What this means is that if the Property developers bid and win at the early part of this property supply imbalance cycle, design and launch the properties quickly (say within 1 year), they can get out at the peak of the market or before the peak of the market. While during this time, the property prices are rising, so by the time they launch for sale, they could be sitting on massive profits.

But not all property developers will be lucky. Some smaller ones and those that mis-time their purchase can go bankrupt. While if again it is the big property developers who win, Singaporeans and Singapore property buyers will be unlucky. This is because with their holding power, they will then be able to continue to set new price benchmarks.

Will Singapore land supply catch up fast enough?

The supply of land will need around 2 to 4 years to be ready. So during this time, the property prices will continue to be squeezed from the mass market end all the way pushing up to the mass and mid market Private housing.

Singapore government and it's coffers are the major beneficiaries

So this time round, the Singapore government is the major beneficiary as it yet again was able to release land for sale at very high prices on the run up to the peak. And it is sparing no effort to sell much land to maximize land productivity.

Singapore government shows hand in wanting to make smaller HDB flats

2010-03-10T23:06:00.004+08:00

Singapore government wants to make smaller flats - essentially raising prices.
Commentary by www.PropertyBUYER.com.sg

"SINGAPORE: Instead of reducing the HDB flat lease of 99 years to make the flats more affordable, the government prefers to use other methods to help those with a lower income own a flat, said National Development Minister Mah Bow Tan.

Mr Mah told Parliament the HDB now provides additional grants to the lower-income group and builds smaller flats that are priced more affordably. Another way is to make sure higher-income flat applicants do not compete with them for the same flat - this is why the HDB has a income ceiling for applicants of two-and three-room flats. "With all these in place, we do not see any problem in making HDB flats affordable for first time lower-income families."

Having shorter leases of 60 years for young couples could also be an issue with time - "we are going to run into trouble especially when that particular family grows old", said the minister."

Mr Mah was also asked by MP Cedric Foo if Singaporeans are not buying the flats situated in poorer locations because they are not "priced correctly".

(TODAY, Ong Dai Lin, Grants, smaller flats instead of shorter lease tenure, 9 March 2010)

Voila, Singapore Government finally shows hand in one of the most blunt admission that it is building ever smaller flats. We predicted this in many earlier articles in Q4, 2009 and early this year that the government land sales program will lead to 2 possible outcomes.

One outcome is that the property prices quantum rise. If affordability is not there, the developer will instead sell a smaller size unit at higher per square feet (PSF) to maintain their margins after paying through their nose for land.

Another outcome is that property developers will sell a lesser lease. As seen in quite a few developments already, the property developer maintains a master lease of Freehold or 999 years leasehold and sells the property as a 103 years lease hold.

Now even HDB wants to it's flats at rock solid prices. If you cannot afford those properties at the prices HDB is asking, then HDB will help you afford it.

HDB will offer you smaller size flats.

Isn't this great? At least you will not be left behind.

HDB is indeed benevolent.

www.PropertyBUYER.com.sg Singapore Mortgage Consultants

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email: loans@propertyBUYER.com.sg

INVEST IN SINGAPORE PROPERTIES: PRICES GONE MAD

2010-03-07T05:40:00.007+08:00

INVEST IN MAD SINGAPORE PROPERTY PRICES?

Contributed by www.PropertyBUYER.com.sg Singapore Mortgage Consultants

"The measures that were announced by the Singapore government on February 19 do not address the root cause of the problem yet. The root cause of the problem is a short-term supply crunch at the lower end of the market, but it definitely helps mitigate the risk of bubbles being formed in the future." (Channel NewsAsia, 2 Mar 2010, Asian property prices expected to continue to rise despite govt measures, Karamjit Singh)

We read Mr. Karamjit Singh's comments and we did a bit more research. So here is what we found.

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Buying property is a serious affair, we do NOT advocate a Greed or fear based buying approach, we emphasize that you need to check your property home loan affordability. Check out the mortgage calculators or call us so as to do your sums right.
Not Simply Cheap, but what Fits. We Research, You Save!
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Singapore's population (in '000s) according to the Singapore department of statistics are: -

Year Total Singapore
Residents
2000 --- 4,027.9 --- 3273.4
2001 --- 4,138.0 --- 3,325.9
2002 --- 4,176.0 --- 3,382.9
2003 --- 4,114.8 --- 3,366.9
2004 --- 4,166.7 --- 3,413.3
2005 --- 4,265.8 --- 3,467.8
2006 --- 4,401.4 --- 3,525.9
2007 --- 4,588.6 --- 3,583.1
2008 --- 4,839.4 --- 3,642.7
2009 --- 4,987.6 --- 3,733.9

The population growth in 2006 over 2005 is a net increase of 135,600
The population growth in 2007 over 2006 is a net increase of 184,000
The population growth in 2008 over 2007 is a net increase of 250,800
The population growth in 2009 over 2008 is a net increase of 148,200

There is a nice table at
http://tankinlian.blogspot.com/2010/01/hdb-flats-and-population-growth.html
which shows the relative growth rates of HDB.
We are not against importing talent.
But we think Singapore is over-doing importing talent, signifying a lack of ideas for growing the economy. This could be a harbinger for long term negative prospects for Singapore's economic growth. Growing the economy through immigration policy is considered a brute force economic strategy.
Not even the USA have such a huge foreign talent import quota and they are a country of 300 million people.
We are worried that the government has run out of ideas to grow the economy and is resorting to brute force economic growth.

Based on household size of 3.5 people (Source: Singstat), this would translate into a potential housing demand of: -

2006 - 38,743 units
2007 - 52,571 units
2008 - 71,657 units
2009 - 42,342 units

"In year 2006, we were building about 2,400 new flats. This year, we are
building about 8,000-plus new flats. Supply has gone up to meet demand. That's
why HDB prices have gone up but they have not gone through the roof." (Source: Straits times)

MASS MARKET HDB BEING PROPPED UP

Many of these new supplies were "Built-to-order" flats which can take 3 to 4 years to complete adding to acute shortages of HDB flats.

LOCAL demand from Household formation (Marriages) come in at a range of 23,000 to 25,000.

These newly married couples surely need somewhere to stay.

Why didn't the HDB anticipate the demand?

Marriage rates is something which is very easy to estimate and very consistent over the years. Why didn't HDB anticipate the demand?

Although not all immigrants are granted Permanent resident (PR) status and may not impact resale values immediately, these people must surely end-up staying somewhere. This drives up rental yields.

WHAT IS THE LIKELY EFFECT OF MASSIVE IMMIGRATION?

Rental rates are being pushed up.
HDB property prices are being pushed up.

Without much choice, Fussy Singaporeans will be forced to choose undesirable locations such as Punggol which in the past has excess units. Not only that, some may not wait and instead go directly to buy private housing if they can afford it.

HDB flat owners whose valuations have risen and are sitting on profits will now consider to sell their HDB. After they sell, and look for a replacement unit, they will find that it is meaningless to buy another HDB. They very soon may end up buying a private unit instead.

There is currently no shortgage of supply of Private properties at around 60k units over several years (Refer to earlier article). This is easily 7 to 8 years of supply based on the average consumption trend.

The end effect is that a greater proportion of people will end up living in Condominiums and private apartments. This will gradually deplete supplies and bring smiles to property developers in Singapore.

The Singapore government on the other hand will be happy that prices of land will rise and reach the land's minimum reserve price to trigger a bidding process. More land sales equal more revenues for the government. And more developers bidding for land means higher prices. These higher prices are then translated into higher priced condominiums. Singaporeans will have to work even harder and hopefully earn more to pay for such private apartments or condominiums of which the major price component is the land price.

MICRO MANAGEMENT OF SINGAPORE PROPERTY MARKET???

Although it is a market driven economy, various policy levers which the government has access to means that it is not a full market driven economy.

Singapore has perfected the art of micro-management.
At $8000 household income, HDB income ceiling, you cannot buy HDB flats.
At $10,000 you reach the Executive Condominium ceiling, you are not eligible to buy Executive condominium anymore.

At a household income of $10,000 onwards, the Singapore government strongly encourage you to move upwards in consumption.

Consumptions helps increase tax revenues (annual property tax, stamp duty, transaction fees for property agents which translate into taxes, sale of furniture, construction, work for lawyers, etc.), and helps the economy in creating jobs.

WHAT THIS MEANS FOR THE SINGAPORE PROPERTY BUYERS AND THEIR HOUSING LOANS?

If you are Singapore Property Buyers, you have to be mindful that there is a gradual shift in Singapore Government policy in play. The government is the largest land-owner, it can regulate supply to influence prices. Being an honest and efficient Singapore government bent on maximising land productivity, you can expect land prices to continue to rise and set new benchmarks. If you already own land, good for you, if you do not own any property, you could be price out (at least in the short term), until the next recession sets in.

These subtle or not so subtle policy directions will either enrich or impoverish you. And when you consider your Singapore housing loans, you ought also to take care to choose the right loans structure to capitalize on these unwritten government policies or mis-calculations.

We do not support or reject any government policies, we only highlight such policies to the attention of our readers so that they can find ways to benefit from these policies or outcomes of government's miscalculations.

Tel: 6100 - 0608
SMS: 9782 - 8606
Email: loans@propertyBUYER.com.sg

Singapore property Buyers - Investors Beware : MM Lee says HDB prices should rise

2010-03-01T02:27:00.005+08:00

Singapore Property Buyers - Investors Beware: MM Lee says HDB prices should rise

Contributed by: www.PropertyBUYER.com.sg

MM Lee's words often move markets. Afterall, MM Lee is often see as the supreme commander of Singapore.

Singapore Property Buyers may want to note that MM Lee often practice tough love. If you want property prices to stay low or drop, then prepared to have a third world Singapore.
If he positions thing this way, then the answer is, we want the economy to grow. And as a consequence we are wishing that property prices grow.

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HDB flats will be more expensive. “HDB flat value will rise as long as economy grows: MM Lee, By Asha Popatlal, Channel NewsAsia 13 December 2009”

“Responding to questions later on about young couples who are concerned about flat affordability, Mr Lee said this is linked to the country's growth - if the country is doing well, property prices will go up.
But if the economy goes down, unemployment goes up but incomes and property values decline.”

So you can almost forget about HDB prices staying cheap and affordable. Poor people can have harder lives if they can't keep up.

SUPPLY AND DEMAND OF HDB FLATS IN SINGAPORE

If the total number of physical properties remain the same and consumers are making more money, and you do not build more HDBs then you have a problem.

More money and people needing housing chasing after a limited number of will end up in HDB prices shooting up in price.

So if you finally earn much more and everyone else is also earning much more, then the extra money you have will not be able to buy you more goods and services. This is because of inflation. If it is not HDB prices being more expensive, then it is others, food, fancy restaurants, cars, travel, foreign goods, etc.

HDB as a result wants to be able to price their homes using resale properties as standard.

PRIVATE Property House owners Investing in HDB Sustains HDB VALUE

Have you any idea that property owners who own private condomimiumns can buy HDB flats?

By allowing Singapore property buyers who owns private estates to buy HDB flats, the prices of HDB should improve. Though there is at the moment no meaningful date to evaluate. The segment of private property owners buying HDB flats may still be insignificant, as our contacts with many property buyers and people who refinance with us did not show us such cases.

We really hope that HDB, together with it's land issuing body can keep close to it's Social charter to provide cheap and affordable housing to Singaporeans and not view itself as a profit and loss centre.

HDB gives the impression that it is keen to get in on the hot property action and maximize profits.

Despite the fact that in most economies, it is normal to increase prices when you earn more. We were hopeful that things could be different and more compassionate in Singapore.

The next issue, we will look at whether HDB supply is enough in the face of massive increase of foreign immigration into Singapore.

What is our worry for Recent Property Purchasers?

In the case of a new graduate couple making a total domestic income of $4000. The HDB real estate charges for a four room HDB flat is easily $400,000. This is 8.33 times of yearly income.It is essential for salary to keep pace along with the raise in HDB property prices.

Not only does HDB seem interested in your money, dishonest property agents are also on stand-by to sell you stuff.

After that, there are hundreds of Singapore property loans to sort through. Sometimes dishonest property agents even bring you home loan application forms and tie up with bankers as well as lawyers which will give them a commission. These conveyancing lawyers having to pay the dishonest property agents, then make it back from you by charging higher conveyancing prices for your home loans.

Singapore government cools Property market

2010-02-19T23:36:00.003+08:00

SINGAPORE: The Government has introduced two new measures that will take effect Saturday to temper sentiments and pre-empt a property bubble from forming in the private residential market.

It said they will help to ensure a stable and sustainable property market.

The first is a Seller's Stamp Duty on all residential properties and residential lands that are bought after Friday and sold within one year from the date of purchase. The stamp duty will be applied at the standard ad valorem stamp duty rates for the conveyance, assignment or transfer of property.

Housing and Development Board (HDB) flats will not be subjected to the stamp duty as they are already subject to a minimum occupation period of at least one year.

The Ministry of National Development (MND) said the objective of this new tax measure is to discourage short-term speculative activity that could distort underlying prices. It stressed that it is not targeted at the purchase of properties for owner occupation or longer term investment.

The housing loan limit will also be capped at 80 per cent of the private property's value, instead of the current 90 per cent.

The 80 per cent Loan-To-Value limit will apply to all housing loans granted by financial institutions for private residential properties, Executive Condominiums, HUDC flats and HDB flats, including those under the Design, Build and Sell Scheme.

Loans granted by the HDB for flats - including those under the Design, Build and Sell Scheme - will still have a cap of 90 per cent.

MND said this is because HDB flats are already subject to other criteria to prevent speculation and encourage financial prudence, such as minimum owner occupation period and restriction on ownership to one flat per household.

Explaining the rationale for the measures, MND said there is a risk that the market could overheat in the next few months, given the optimism fuelled by the economic recovery and low global interest rates.

However, it noted that the current level of speculative activity is still lower than what it was at the height of the property market boom. Overall price levels are below the previous peak.

MND warned that any excessive exuberance will make the property market vulnerable to the continuing risks in the global economy.

The Government described the new measures as "calibrated", saying it prefers to take small steps early, rather than be forced to impose more drastic measures after a bubble has formed.

It will continue to ensure that there is adequate supply of housing to meet demand. Sites that can yield 10,550 private housing units have already made available in the Confirmed and Reserve List of the Government Land Sales (GLS) Programme in the first half of 2010.

This is the highest supply quantum in the history of the GLS Programme.

- CNA/sc
(Source: Channel News Asia, 19 Feb 2010)

Master Lynn Yap Tiger Year Feng Shui Forecast 2010

2010-02-17T02:05:00.003+08:00

Predict2010 1

View more presentations from Property Buyer Singapore.

Feng Shui forecast for Tiger year 2010 by Master Lynnyap

We are grateful for the support Master Lynn Yap have always given to this website.

Master Lynn Yap never ask for any favours in return for her help. And we at Property Buyer are truly honoured to have Master Lynn Yap as our Anchor Feng Shui master for this website.

It is of no surprise that Master Lynn Yap is well liked and popular because she is not only good in Feng Shui, but has a personality.

Here is her forecast for 2010.

Master Lynn Yap Feng Shui Forecast for Tiger year 2010.

Invest in Singapore Property: The Shore residences, Greenwood Terrace

2010-02-16T00:43:00.006+08:00

Singapore Property buyer Investors Can buy Freehold land and sell as Leasehold

Contributed By www.PropertyBUYER.com.sg

Our blog is happy to receive articles and materials and publish them for you. In return, we will acknowledge your article with a working link back to your site.

In the last issue http://www.propertybuyer.com.sg/articles/singapore-property-investor-buyer/singapore-property-developers-buys-free-hold-land-and-sells-as-103-years-lease-hold/,

we investigate the possible implications of Singapore Property developers buying freehold land, developing it and then selling it as 103 years leasehold strata titled Condominium.

The Recent Launches such as (but not limited to) Far East's "The Shore residences" in the east coast as well as "Greenwood Terrace" in the prestigious greenwood vicinity of District 10 are such examples of the Singapore property developer buying Freehold land and launching as 103 years leasehold strata titled land.

Why do Singapore Property Buyers and Investors need to know?

Singapore property buyers and Investors need to know this because the future value of their condominium and cluster landed properties with Strata titles will be affected some 20 to 30 years down the road when the development becomes run-down.

What about Singapore property owners with Freehold or 999 Leasehold land titles?
For current Singapore property owners who owned landed properties with freehold or 999 leaasehold land titles, this means a potential future bonanza. Please read on, we have got the reply from Singapore land authority.

Reply from Singapore Land Authority (SLA) On Freehold land being sold as Leasehold strata titled developments.

"www.PropertyBUYER.com.sg:
We are doing a research for the benefit of our readers. Our website is at www.PropertyBUYER.com.sg and our readers have been urging us to enquire about how Far East and numerous others have been able to acquire FREE HOLD land from the government (could be SLA) and then develop and sell the properties as a 99 years property.  Could you please help us understand under what circumstances are Developers allowed to buy Free Hold land and re-sell as Lease hold land?   We appreciate if you could point us to any such literature, web link,  sites  which explains these in greater details. 

Singapore Land Authority:
Developers can buy freehold land through the private market. You  should  approach the developers for details on your queries as these are all  private transactions. 

"www.PropertyBUYER.com.sg:
Thank you for your reply. We understand that developers can buy from the private market. But having  said that, our readers would like to understand under what statute does  it  allow the developer to buy Free Hold land and then sell it as a 99 years lease?  Hope you can point us in the right direction. 

Singapore Land Authority:
We refer to your enquiry dated 11 Jan 2010.
Common Law provides that a smaller interest in land can be carved out  from  a  larger interest in land, with the registered proprietor/developer  retaining  a  reversionary interest.

The duration of this smaller interest is not  governed by  any statutory provision.   Hence it is acceptable for a developer to retain the reversionary  Freehold  title in a development and merely sell the strata lots in the development  with  a 103-year lease or any determinate number of years out of the Freehold  title. 
"

Good News for Singapore Property Owners with Freehold land
Singapore land authority has clarified that "Common Law provides that a smaller interest in land can be carved out from a larger interest in land, with the registered propietor/develop retaining a reversionary interest."

This means that you can possibly sell your landed property on a 99 years lease or any numbers of years lease as you deem fit if you sort out the legal paperwork.
This would mean that you will be able to pass on wealth to your descendants while selling properties while retaining the reversionary rights to freehold land.
Maybe you are stting on 3 or 4 Semi-detaches or Bungalows, you can't really lease it out to get a good cashflow and yet you don't want to sell it as you may not be able to buy another property in a similar good location and you need to grow your business.
What could you do?

Perhaps you can sell one or two of your Semi-detaches as leasehold while you maximise and free up capital and at the same time share in the upside the land can possibly provide.

Sad day for Singapore Property buyers

For Singapore property buyers, it means that more and more property developers will likely get in on the strategy to retain the freehold title while selling developments as Strata title leasehold. Freehold land may gradually disappear into the hands of the well funded and rich property developers.

About Property Buyer Contact Property Buyer

www.PropertyBUYER.com.sg
We are a Research-focused Singapore Mortgage Consultant which helps you compare Singapore Home loans either for new home loans or refinance home loans, we balance risks versus rewards for each home loan to match your risk profile and financing needs.

Buying property is a serious affair, we do NOT advocate a Greed or fear based buying approach, we emphasize that you need to check your property home loan affordability. Check out the mortgage calculators or call us so as to do your sums right.

Not Simply Cheap, but what Fits. We Research, You Save!
Tel: 6100 - 0608
SMS: 9782 - 8606
Email: loans@propertyBUYER.com.sg

Invest in The Shore residence and Greenwood terrace

2010-01-27T21:53:00.008+08:00

Invest in THE SHORE residence and Greenwood terrace

Singapore Property Buyer

6100 0608
9782 8606 (SMS)

www.propertyBUYER.com.sg Singapore Mortgage Consultants

In view of the recent few launches such as that of “The Shore residence” and the “Greenwood terraces”, both of which are bought as Free hold land, redeveloped and sold as 103 years lease hold strata title. These are 2 Far East developments which have been launched recently.

Singapore government can release land in various forms, but more likely than not, most land parcels being released are 99 years leasehold land, while very few are freehold or 999 lease hold land. This means that the supply of perpetual land (FH, 999 lease hold) are diminishing all the time.

In land scarce Singapore, this means that in the coming years, Freehold land may become even more scarce.

The recent developments where developers who bought Free Hold land, develop and then subsequently sell it as 99 years lease hold could further accelerate the depletion of Free Hold land to the public.

We look at the implications of such developments

IMPLICATIONS OF DEVELOPERS RETAINING A REVERSIONARY LEASE

Developers may now bid for many Freehold land parcels or take over existing free hold property through en-bloc sales. The Singapore economy is still weak, if you look at the salary census, Singapore’s salary growth has been slower than that of growth of property prices.

In other words, affordability is an issue. Say for instance a couple earning a combined income of $10,000 a month with no financial commitment on a 30 years loan repayment tenure can only afford a $987,000 Singapore property loan with a threshold interest rate of 4.5%.

At 20% downpayment, and a loan of $987,000, the property price that such a property buyer can afford is $1,233,750.

If the property developer who wants to market his property at $1300 psf for a 1,100 sq feet property, the Singapore property developer would need to either reduce prices or reduce size to meet that affordability figure.

Singapore property developer's goal

The developer’s goal is always to maximize profit (There is nothing wrong with it).

Trend of Smaller singapore condominium units

In this scenario, the property developer can choose to reduce the size of unit, thereby meeting the affordability price quantum and achieve superior price per sq feet per plot ratio (psfppr). This could lead to a trend of smaller size condominium units in the future.

FH land becomes Leasehold 99 years land

In another scenario, the property developer opt to maintain the size of the unit, but converts the Free hold land to a 99 years leasehold land. The developer owns the Free Hold land title. This could lead to the gradual disappearance of the Free Hold land titles available to the public.

Overtime, if the law permits, developers could even sell properties on 70 years lease, 50 years and lesser.

Singapore hands power over to the large property developers?

If developers are allowed to hold on to the free hold land titles while developing properties and selling it as a 99 years lease, then this will over a period of time dilute the effectiveness of Singapore Land authority to regulate the market.

Say for instance when the building is 20 years old and run down, the residents opt for selling en-bloc, they can sell en-bloc for the remaining lease of 79 years. Whoever buys this piece of land en-bloc would find it hard to redevelop and sell it again as there is not much lease remaining.

Supposedly in any potential en-bloc deals, the residents are only selling the remainder 79 years lease of the land to another developer.

In order to make this development attractive, a top up of the lease by 20 to 30 years would be required. In the case of topping up of this lease, the property developer that owns the land has the final say on setting the rates. (Not SLA’s Development charge).

So whether you can en-bloc or not depends solely on the goodwill of the property developer. If the property developer sets a high price for the top-up, then that would mean that no other developer would want to bid for it, leading to lower market value for that property.

The final rights then remains in the hands of the developer who owns the master title of the free hold land.

In this case, Far east wold retain the rights and option to develop the land should the residents want to go en-bloc. Far East having a right to set development charges or extract additional fees, will have the first right of refusal in any land parcel development.

As more and more developers do this in the near future, the authority of Singapore land authority could become eroded. There is always a worry that such developers will eventually wield too much power.

DEPRECIATION OF THE CONDOMINIUM BUILDING

Let’s say the building is poorly maintained, the condition becomes worse, over time the value of the building drops. So in such a scenario, even if Far east makes an offer for the land that is giving only a slight premium, the residents will have no choice but to accept the offer and sell back the remaining lease to the developer and lose any potential upside.

WHAT IS PROPERTYBUYER.com.sg STAND ON THIS?

PropertyBuyer.com.sg is a Singapore mortgage consultants that is research focused, so what we do are to merely to inform the public of these matters. Whether such deals are good deals or not, it is a matter between the buyer and seller. We only state it as it is, the way we understand it.

We have already got in touch with Singapore land authority to enquire about under what circumstances are developers allowed to buy Free Hold land and release it back as 99 years lease hold land.

We are not against property developers maximizing profit. Ultimately it is a matter of buyer power versus seller power. If the seller has the pricing power, it is very obvious that buyers will have to do so on the seller’s terms and the reverse is true as well. Ultimately all profit seeking enterprises are there to make money, and rightly so.

What does this mean for you if you own a FREE HOLD properties?

We are checking with SLA under what statute or circumstances are such arrangements allowed. If this is allowed, wouldn’t you then be able to offer your Free Hold landed property for sale at a slight discount as a 99 years lease hold property?

Imagine, this is really a unique way of passing money and assets to the next generation while retaining a vested option in the land value of the property.
I would say, it has all the UPSIDE and none of the downside.

Stay tuned while we wait for a reply from Singapore land Authority.

Invest in Singapore properties: DBS OCBC Maybank eases credit

2010-01-17T03:40:00.003+08:00

Invest in Singapore properties: DBS OCBC Maybank Eases Credit
Article contributed by: www.PropertyBUYER.com.sg

DBS Singapore term loans - Equity loans (loan to valuation) has been revised from 70% to 80% starting January 2010.

OCBC bank Singapore term loans - equity loans (loan to valuation) has been revised from 70% to 80% starting January 2010.

Maybank has raised the lending limit from 80% to 90% loan to valuation.

Note: Monetary Authority of Singapore allows banks to lend up to 90% of the valuation of a Property, but not all banks offer 90% loans.

Term loans are also known as equity loans. These type of loans allow property owners to take cash out of a property whose valuation have risen by refinancing these properties.

How Singapore Property term - equity loans work

For example (if CPF is not used)

A property which was bought for $1m dollars with an outstanding loan of 800k.

If the property valuation increases to $1.2m, this Singapore property owner can go to a bank to refinance their home loans. At $1.2m valuation and at a Loan to valuation of 80%, the bank can lend you $960,000.

If your new possible loan size is $960,000 that means you will be able to refinance your $800,000 home loan + a term loans (or equity loan) for $160,000.

This immediately avails $160,000 (after 12 weeks) of cash if your income can support $960,000 of loan quantum.

These cash out is not allowed for down payment for another property.

The actual impact or increase in liquidity is likely to be limited. These lending changes are not announced openly, as a result, they are not likely to lead to people suddenly going to the bank to apply to Singapore property buyer with “cash out”.

In Singapore Monetary Authority of Singapore do not make a lot of announcements unlike the federal reserve in the USA.

Therefore if we use DBS as a proxy for the Singapore government's policies, it does possibly infer a credit easing stance, albeit a very minor one. This could mean that credit and financial risks have abated and the climate is more positive for lending or it could be just a minor adjustment to keep Term loan and home loan maximum Loan to valuation cap in-line with home loans loan-to-valuation caps.

Easing of Credit typically fuel property asset prices.

What does it mean for Singapore property investors and buyers alike?

We do not think this is a big tide of change, rather it should be taken as just one more positive signal (out of many other signals) for property buying rather than a definitive BUY signal.

PropertyBuyer.com.sg Mortgage Consultants have a panel of lawyers with whom we work closely with.

However we do NOT take legal fee kick-back (Many property agents refer you to a law firm in return for a fee, the law firms then charge you a higher rate to recoup the illegal commission paid to the Singapore property agents).

But in return for this partnership with the Conveyancing Lawyers which benefits the conveyancing lawyers more than it benefits us, we monitor their performance. We require the Singapore conveyancing lawyers to be expedient, work with integrity and care. These lawyers also have to highlight any risks as soon as they see it. Their charges also must be transparent and in-line with market rates. But you are free to choose your own lawyers.

How do Singapore Mortgage Consultants survive then?

Banks pay us a fee on successful loan transaction as we complement the banks and ease the work load of bankers on the front end. You don't have to pay us an entry fee, exit fee or subsription. It's totally Free and transparent.

We are able to keep our independence because we work with all the major banks.

Invest in Singapore properties: Housing loans Glossary

2010-01-03T02:50:00.004+08:00

Invest in Singapore properties: Housing loans Glossary

Do you know that in Singapore, the home loans terminology differs from that of the US and elsewhere? Of course there will be common terms. In the US, there are Fico score, in Singapore there is none.

Approval-in-Principle

This process allows the bank to first assess your cash flow and your liabilities and determine how much they would be able to lend to you. Singapore Home loans mortgage consultants can help you to conduct Approval-in-Principle so that you can be assured of a home loan. Please do note that Approval-in-principle are simply that, “approval-in-principle”, while there is much more certainty that the banks can lend you, the bank’s credit department have the final say whether to lend or not after looking at your credit report. Some banks will assess the credit report for an Approval-In-Principle home loans while some banks do not assess the credit report for an Approval-in-Principle, therefore it is best to be honest about your financial situation so that you do not end up with an “approval-in-principle” only for the bank to reject it at the last minute after finding out past credit issues.

Approval-in-principle are only valid for about 1 month.

Amortization

The process of paying off a debt (often from a loan or mortgage) over time through regular payments. The monthly payment is broken down into interest payments and the remaining amount is for principal repayments. In the early years, payments consist largely of interest; as time goes on, principal repayments increases. At the end of the loan tenure, the entire debt will be repaid.

Amortization Schedule

This is basically your home loan repayment schedule showing you the repayment of your principle and your interest over the entire span of your loan amount.

Bridging Loan

The bridging loan is usually a temporary term loan used to pay for the down-payment or part of the down-payment of the new property purchase. The bridging loan is most often collaterised against a current property that the buyer owns, but is in the process of being sold. Or in some cases, the bridging loan is collaterised against a current property that is already sold, but whose sales proceeds have not arrived. Bridging loans are very tricky as timing of execution is of critical essence. Make sure to check with your bank to make doubly sure or else your will end up in a situation where you have no funds to execute a property transaction where you have already exercised the option and entered into a sale and purchase agreement.

Board Rate

Board rate or mortgage rates and many other terminologies were invented by banks to be used as a reference in which to peg their variable rates. For example, if the bank set their “board rate” to 4.25% and the variable rate you pay is 2%. That would mean it is (Board rate – 2.25%). In case the bank modifies the board rate, it would affect your interest rates.

Building Under Construction (BUC)

Building under construction are buildings which have the permit to launch for sale but are still being constructed. This applies mostly to new development such as Condominiums whose Temporary Occupation Permit (TOP) is still some time away. Banks treat BUC and completed properties differently.

Cancellation Fees

The penalty that banks charge, usually a percentage of the loan amount (or a percentage of an un-disbursed amount), if you were to cancel your housing loan after you have accepted the Letter of Offer but before the housing loan is disbursed or cancel the home loan after partial funds have been disbursed but the others are not.

If you re-finance your home loan when the funds have not been fully disbursed, it would be considered a cancellation and cancellation fees would apply.

Cashback or Cash incentive Housing Loan

The lender refunds a percentage of the housing loan the cashback and you are usually tied into the loan for a number of years in which a penalty is applicable if the loan is redeemed. This type of loans is also usually useful for home owners who are contemplating redeeming a loan which is still in penalty period.

Combo Housing Loan

A combo or hybrid housing loan can be sub-divided into different parts for a single property. Each part can be treated as a separate housing loan so you can choose a package for each division. In other words, if you borrow $1m for a Singapore property, you can opt to have $500,000 under a fixed rate regime and another $500,000 under a Sibor rate package. Both loans are collaterised against the same property.

Claw-back Period

If you are to fully redeem your mortgage within the claw-back period, the lender will reclaim most of the subsidies given to you. These would usually be the legal subsidy and may include valuation fees, fire insurance premiums, cash incentive, etc.

Certificate of Statutory Completion (CSC)

The Commissioner of Building Control will issue the Certificate of Statutory Completion to a building project when it is completed. The building can only be occupied when a Certificate of Statutory Completion (CSC) or Temporary Occupancy Permit (TOP) is granted.

Fixed Rate Housing Loan

Fixed rate housing loans provide you the stability and ease of planning your cash flow. However Fixed rate housing loans usually comes with a lock-in period which correspond to the duration where the loan is fixed.

Floating or Variable Rate Housing Loan

The interest rate can rise or fall throughout the tenure of the loan. Lenders usually give at least one months notice when adjustments are made to the interest rate. Most lenders allow partial prepayments for this type of loan, making this a good package if you intend to repay a significant portion of your housing loan in the initial few years.

Floating rate packages comes in 3 main forms: -

* Bank’s variable rate packages which are pegged to the bank’s internal reference.
* Sibor pegged housing loans.
* Sor pegged housing loans.

Full Redemption Penalty

The amount that banks charge, usually a percentage of the loan amount, if you were to fully repay your housing loan within a lock-in period.

Interest-offset housing loan features

This feature allows you to offset your housing loan interest with funds deposited into an account designated by the bank. For example, your housing loan may be $1m and you also have $300,000 cash which you do not intend to pay down the loan. You could put this $300,000 cash into the designated account to offset against housing loan interest payable, (i.e. your effective loan is ($1m - $300,000 = $700,000) and you will only interest on $700,000 rather than $1m in case this is a 1-for-1 interest offset. For example, if the interest cost is 3%, the bank will charge you interest of 3% on the $m and give you interest of 3% on $300,000. In case it is a 2/3 offset, for a 3% interest rates, the bank will charge you 3% for your $1m loan and give you 2% interest for your $300,000 cash.

Many business people like this package as it allows them the flexibility to incur less interest costs if they do not use their funds, while still giving them the choice to use the funds like a current account.

If the housing loan is paid down, then this option of using cash in case of an emergency would disappear.

Interest-only Housing Loan

Monthly payments consist entirely of the interest due on your loan so that the balance you owe is not reduced during the term.

Letter of Offer (LO)

A contract between the borrower(s) and the bank stating the terms of the housing loan package.

Loan Quantum

The loan quantum or principal is the amount of money that you borrow.

Loan Tenure

The period of time that you will take to fully repay your loan.

Loan to Value (LTV)

A percentage figure indicating the size of the housing loan on a property in relation to its value. Thus, a house worth S$500 000 with a mortgage of S$400 000 would have a loan to value of 80%. Most banks and financial institutions have better housing loan deals for LTV 80% and below. The maximum LTV that lenders can legally go to in Singapore is 90%. This is mandated by the Monetary Authority of Singapore (MAS).

Lock-in Period

The number of years that you are tied to your lender. If you fully redeem your loan within this period, there will be a full redemption penalty that is equal to a percentage of your loan quantum. Lenders may also charge a penalty for making partial payments within this period.

Option to Purchase - OTP

This is a contract which compels the property owner to sell you the property at an agreed price if you give a 1% deposit. The Option to Purchase (OTP) usually gives a 14 day period in which to exercise the option. The law society gives certain guides on how an Option to Purchase should be drafted. However we have also seen many Option to Purchase contracts which are drafted by the Seller’s Property agents or property agencies which are unfair to the Property Buyer.

It is therefore our advice that when a deal is imminent, ask the property agent to send you a draft of the Option to purchase for you to first go through with your lawyer. If you do not have a Lawyer and would like us to help you take a quick look, you can email us at loans@propertyBUYER.com.sg, either us or our panel of lawyers can take a quick look at it and give you some comments. But do not, although we are generally more conservative in our approach, we cannot guarantee to be able to spot all errors or omissions and you promise not to hold us accountable to it.

Partial Redemption Penalty

The amount that mortgage lenders charge, usually a percentage of the loan amount, if you were to prepay your housing loan within a lock-in period.

Payment Holiday Housing Loan

A relatively new type of mortgage in the Singapore market. You take a break towards paying of your interest or monthly installment at certain periods during your loan tenure. This takes many forms, there is also a beautiful Sunday package which gives the borrowing 1 day free interest rate, which amounts to 1/7 reduction in actual interest rates.

Prepayment

Payments that you make in addition to the monthly installments.

Refinancing

Switching from one housing loan package to another, usually to get better rates or terms and condition.

Re-pricing

Switching from one housing loan package to another deal with the same lender.

Singapore Inter-bank Offered Rate (SIBOR)

Singapore Inter-bank Offered Rate is published by the Association of Banks in Singapore. This market is almost equivalent to the Federal Reserve funds market. Banks lend excess funds to each other at the Association of Banks in Singapore. The rates will be determined by the demand of funds and the availability of funds. During times of extreme financial stress where banks view other banks with suspicion, funds become scarce and monetary authority of Singapore is known to intervene by pumping funds into this market.

Singapore Swap Offer Rate (SOR)

Swaps are a form of financial derivatives. Swaps in Singapore are contracts of US$ versus S$ contracts which banks use to avoid converting their currency so as to incur the losses from bid and spread. As banks trade these Swap contracts within the Association of Banks of Singapore (ABS), the rates move in tandem with supply and demand. Swap Offer Rate is the rate that the banks will lend to each other at a pre-determined rate.

Temporary Occupancy Permit (TOP)

The Commissioner of Building Control will issue the Temporary Occupation Permit to a building project when it is completed. The building can only be occupied when a Certificate of Statutory Completion (CSC) or TOP is granted. A TOP, unlike a CSC, is not compulsory, but is usually obtained before a CSC as requirements for a TOP is less stringent.

Term Loan (Cash out)

For properties which has equity a term loan is possible. A Term loan is usually more strict and is contingent on many things such as equity value, remainder lease on the land, CPF property withdrawal and accrued usage and cash flow.

Contact Property Buyer Mortgage Consultants at: -

(sms) +65 - 9782 - 8606

(email) loans@propertyBUYER.com.sg

Invest in Singapore Property carefully and avoid "Buyer" representation

2009-12-22T02:22:00.004+08:00

Invest in Singapore property Carefully

by www.PropertyBUYER.com.sg Mortgage Consultants

Sometimes, it is often the sweetest of smiles that kills and the most beautiful faces that stabs you from behind.

We are glad that the Ministry of Home Affairs has finally appointed someone to regulate the Singapore property market. As it stands, Singapore property buyers do need some protection against unscrupulous Singapore property agents.

Many agents or agencies are openly claiming to be the Singapore buyer representatives. On the other hand, just click another link on their website, they will explain why they are also the best seller representatives.

Whether you are a first time property buyer or an experienced property buyer, it is good to know that your real estate agent has your best interests in mind as you select a home. You save all the hassle of going through the classifieds daily or surf the internet. This is a very common statement that property agents profess. Then the next moment, they are claiming to be seller representative and how they will get you the best selling prices.

But how do property agents perform?
• Do the Singapore property agents find you the best match?
• Do the Singapore property agents always seemed so positive about the ever rising property market and that the market will never fall? You feel so good about buying!
• Do the Singapore property agents say that there is en-bloc opportunity and that property is a good investment?
• How do they select the properties? From their stock of unsold properties?
• Do the property agents help you by showing you the option to purchase (OTP)? Do the agents tell you the unfair clauses in the Option to purchase (OTP) are standard clauses and that you needn’t worry?

Whose side are the property agents standing on? The seller side or your side?

Well, You can always draft your own Option to purchase (OTP) and tell the agent not to worry, just use yours.

Now, where are the facts? We would often ask them to show us the facts that property prices always appreciate and we can show you many that do not.

Do you want to know how property agents stage a nice show for you?

This is what we heard in the industry, not sure how many people other than Mr. Lim fell to this trick.

Mr. Lim found on the internet and called up a sweet looking property agent. She looked so sincere and innocent and very senior in position. After gaining his trust, she went to show him properties. After learning his needs and choice, she brought him to view properties.

Mr. Lim was surprised that so many properties that he saw, they were not ideal and did not meet his requirement. He saw 5 to 10 properties, but they were all not ideal. Then she brought out her trump card, the property she wanted to move.

Mr. Lim saw the property and Bingo. That was the closest match, maybe 80% match, it didn’t match everything, but the property agent convinced Mr. Lim that that unit is one of the best units available.

What Mr. Lim didn’t know was, what the property agent did, she kept a number of units and didn’t show it to Mr. Lim. Mr. Lim found out after accidentally calling up a few more agents out of curiosity. Surprisingly, Mr. Lim went for viewing and found much better units for cheaper price.

So what did the charming lady Property agent do to deceive Mr. Lim? Why did she do it?

The seller for the unit which was inferior was willing to pay 2% commission to the agent and it was not co-broke unit.

She only used the other other properties to show case and move her own 2% big fat commission property.

So now, the picture is fairly clear isn’t it?

We are eagerly looking forward to Institute of Estate Agents (IEA) to regulate the industry and set some ground rules.

Buying and selling agents must be separated and licensed on an individual basis, so that agents are careful not to be in cahoots with each other. Singapore Property Buyers can be more at ease if regulations are more comprehensive. Nonetheless Property buyers must always be vigilant, Buyers beware.

Propertybuyer.com.sg mortgage consultants and buyer advisors can be contacted at: -

6100 0608
sms 9782 8606

Contact PropertyBuyer.com.sg mortgage consultants