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Showing posts with label Compare Singapore home loan. Show all posts
Showing posts with label Compare Singapore home loan. Show all posts
Thursday, February 28, 2013
Saturday, January 14, 2012
Property investors hit by Singapore's Additional Buyer Stamp Duty
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.
Monday, June 6, 2011
Why use a Mortgage broker?
Why use a mortgage broker?
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.
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.
Wednesday, September 30, 2009
Singapore Mortgage Refinance Rates and Valuations overview 2006 to 2009
Refinance Home loans - Window of opportunity
http://propertybuyer.com.sg/articles/compare-singapore-home-loans-/singapore-mortgage-refinance-mortgage-rates-and-valuation-overview/
Singapore Mortgage Refinance rates and time-line and Valuation overview from 2006 to 2009
2006 to Q3, 2009 Recap.
The years between 2006 to 2009 have been an eventful ride. We have seen property prices run up from around 2006 onwards to 2007, followed by the blow-up in 2007 of sub-prime housing debt.
In 2008, we see the collapse of near collapse of financial institutions of substantial sizes such as lehman brothers, Bear sterns, Merrill Lynch, AIG, UBS, Citibank and Madoff fraud just to name a few.
Together these financial institutions held assets worth over 4 to 5 trillion US dollars at book value, which if they failed, these assets will be dumped onto the market with no buyers. An apocalypse nearly happened.
US Federal Reserve Set interest rates to almost ZERO in 2009 and China Stimulates its economy
In 2009, US federal reserve set interest rates to nearly 0% while pumping in US$700 billion of funds to rescue the banks. These measures were also matched with the China government committing to pump more than 4 Trillion Yuan (~US$600Bilion) into their own economy over a several year period to maintain worldwide economic stability.
Consequently in Singapore, we are not spared from this roller-coaster ride. Interest rates have fallen from ~3.5% to 0.68% based on the 3 months Singapore Inter-bank borrowing rate (SIBOR – 3months).
What happened to property valuations between 2006 to Q4, 2007
During the year 2006 to end 2007, property valuations in Singapore have reached a feverish pitch. In the year alone in 2007, Singapore population grew by 5.5% (Source: http://www.singstat.gov.sg/stats/keyind.html or www.PropertyBUYER.com.sg) mainly through Singapore in-bound expatriates.
Expats fueled the Singapore Property Yields
This fueled increase in rental yields which in turn fuels property prices. There was a mad rush by Property investors novice or experts to speculate and buy properties in Singapore in which we at www.propertybuyer.com.sg urged caution.
Property prices swing up in 2007
This led to a huge increase in property prices in some locations of over 100% rises, such as Marina Sail, a 99 year leasehold condominium which went from S$900+ psf to more than S$2000 psf. This pattern is repeated across the all Singapore properties with varying degrees of price increases.
Novice property investors were caught out.
Many novice property investors were caught up in the hype. Those novice property investors and speculators who bought properties in the hype ended up buying into very expensive properties.
What happened to property valuations between 2008 to 1Q, 2009
What happened to property valuations between 2008 to 1Q, 2009, property valuations have started to fall. The fall in property valuations in Singapore properties accelerated towards 3Q and 4Q of 2008 with the melt down of financial institutions.
People who bought in 2006 and 2007 end up with high rates and cannot refinance
Many people who bought their properties in 2006, 2007 at high interest rates cannot refinance their properties due to the fall in valuations.
For example, many places whose valuation have fallen 10 to 30% in the very least. Those in Singapore’s District 9, district 10 and district 11 have seen valuations fall equally drastically.
Especially so for those prime areas within District 9, 10 and 11, a lot of our clients called us at 6100 0608 to speak with us, propertybuyer Singapore mortgage consultants, however due to the valuation drop, banks are refusing to lend.
Some Banks stopped lending to District 9, 10 and 11 in Q1, 2009
During this time 2008 to 1Q, 2009, some banks have unofficially stopped lending for properties in District 9, 10 and 11 pending further review.
Some bankers privately disclosed that the banks are no longer able to accurately value properties in these areas as valuation gaps opened up. Sometimes as wide at 20 to 30% difference between the highest valuation and the lowest ones.
Between March 2009 till end Q3 2009
The property prices have enjoyed a revival (although we shall not go into whether that revival is justified, that will be reviewed in another research which we are preparing, but do email us at loans@propertybuyer.com.sg to enquire).
Although the statistics reported sliding valuations and lowered selling prices, some places within District 9, 10 and 11 have enjoyed spectacular revival of property prices and valuations.
Park Infinia Prices Swing
Between January and June alone, as an example, Park Infinia located in Newton area went from around S$1100 per square feet to S$1200 per square feet between January to March 2009. And between March to June 2009, the valuation at Park Infinia in Newton went to S$1400 per square feet. It was easily a 30% increase.
We have seen valuations rising in the Singapore property mass market areas as well.
With a revival of valuations from between 10 to 30% in some districts or for some projects, for those who were unable to refinance due to fallen valuations in January to April 2009, now may be a good time to check valuations again whether they can refinance Singapore properties.
Now is a window of opportunity to refinance since valuations have recovered a bit
Although the singapore property prices have not recovered to pre-crisis levels in 2007 levels, even if some of these Singapore property investors – buyers who cannot meet the valuation levels to qualify for a 80% loan (Loan to valuation), they would nonetheless still be able to refinance their properties at 90% loan.
The current interest rates would still easily beat the previous rates and provide savings to the tune of around 1.5% per year. Over 2 years, Singapore home owners can expect to save around S$30,000 of interest costs or more, based on a loan size of S$1m.
What is the Singapore economic outlook for 2010?
It’s really a tough call, but by all measures the risk of a severe financial system melt-down is much reduced. There are many conflicting economic forecasts, some good and some bad.
None of the so called “Green shoots of recovery” have fully developed into a sustainable trend, but neither are the pessimists having their predictions correct. The economic statistics are flip-flopping from good to bad to good to bad.
So analysts are similarly divided on where the economy is headed.
We are mindful that substantial risks remained, economic fundamentals have not really improved.
Anyway, let us just call these forecasts by economists “analyst opinions”.
Since there are various economic modeling used, and each of these “Analyst opinions” have foundations based on facts and statistics (one way or the other), we can simply aggregate these opinions to get a proxy of the economic directions.
In 2008, economic analyst opinions were almost all negative and doom. Now in Q3, 209, we have quite a few very positive opinions, some moderate and some negative, this is a marked improvement from 2008.
On a balance of probabilities as well as on a fundamental economic basis, the worldwide economy is on the mend.
There is now a higher probability of economic recovery (however slight it may be) and possible inflation.
Going forward, there is a chance that interest rates may rise. Refinancing will then safe you less money.
So now may be the only window of opportunity to refinance Singapore property where the interest rates are still low and the valuations have somewhat recovered. Property Buyer Home loans and Singapore Mortgage Consultants like us do not charge you a fee because the banks pay us directly, therefore there is no cost to you and you have someone to do the work for you.
Why not try to contact us at loans@propertybuyer.com.sg or SMS us at +65 9782 - 8606 for a free valuation check and after that, we can help you compare Singapore home loans or compare refinance home loans.
If refinance interest rates go up or if property valuations fall towards the end of the year, the opportunity is lost.
http://propertybuyer.com.sg/articles/compare-singapore-home-loans-/singapore-mortgage-refinance-mortgage-rates-and-valuation-overview/
Singapore Mortgage Refinance rates and time-line and Valuation overview from 2006 to 2009
2006 to Q3, 2009 Recap.
The years between 2006 to 2009 have been an eventful ride. We have seen property prices run up from around 2006 onwards to 2007, followed by the blow-up in 2007 of sub-prime housing debt.
In 2008, we see the collapse of near collapse of financial institutions of substantial sizes such as lehman brothers, Bear sterns, Merrill Lynch, AIG, UBS, Citibank and Madoff fraud just to name a few.
Together these financial institutions held assets worth over 4 to 5 trillion US dollars at book value, which if they failed, these assets will be dumped onto the market with no buyers. An apocalypse nearly happened.
US Federal Reserve Set interest rates to almost ZERO in 2009 and China Stimulates its economy
In 2009, US federal reserve set interest rates to nearly 0% while pumping in US$700 billion of funds to rescue the banks. These measures were also matched with the China government committing to pump more than 4 Trillion Yuan (~US$600Bilion) into their own economy over a several year period to maintain worldwide economic stability.
Consequently in Singapore, we are not spared from this roller-coaster ride. Interest rates have fallen from ~3.5% to 0.68% based on the 3 months Singapore Inter-bank borrowing rate (SIBOR – 3months).
What happened to property valuations between 2006 to Q4, 2007
During the year 2006 to end 2007, property valuations in Singapore have reached a feverish pitch. In the year alone in 2007, Singapore population grew by 5.5% (Source: http://www.singstat.gov.sg/stats/keyind.html or www.PropertyBUYER.com.sg) mainly through Singapore in-bound expatriates.
Expats fueled the Singapore Property Yields
This fueled increase in rental yields which in turn fuels property prices. There was a mad rush by Property investors novice or experts to speculate and buy properties in Singapore in which we at www.propertybuyer.com.sg urged caution.
Property prices swing up in 2007
This led to a huge increase in property prices in some locations of over 100% rises, such as Marina Sail, a 99 year leasehold condominium which went from S$900+ psf to more than S$2000 psf. This pattern is repeated across the all Singapore properties with varying degrees of price increases.
Novice property investors were caught out.
Many novice property investors were caught up in the hype. Those novice property investors and speculators who bought properties in the hype ended up buying into very expensive properties.
What happened to property valuations between 2008 to 1Q, 2009
What happened to property valuations between 2008 to 1Q, 2009, property valuations have started to fall. The fall in property valuations in Singapore properties accelerated towards 3Q and 4Q of 2008 with the melt down of financial institutions.
People who bought in 2006 and 2007 end up with high rates and cannot refinance
Many people who bought their properties in 2006, 2007 at high interest rates cannot refinance their properties due to the fall in valuations.
For example, many places whose valuation have fallen 10 to 30% in the very least. Those in Singapore’s District 9, district 10 and district 11 have seen valuations fall equally drastically.
Especially so for those prime areas within District 9, 10 and 11, a lot of our clients called us at 6100 0608 to speak with us, propertybuyer Singapore mortgage consultants, however due to the valuation drop, banks are refusing to lend.
Some Banks stopped lending to District 9, 10 and 11 in Q1, 2009
During this time 2008 to 1Q, 2009, some banks have unofficially stopped lending for properties in District 9, 10 and 11 pending further review.
Some bankers privately disclosed that the banks are no longer able to accurately value properties in these areas as valuation gaps opened up. Sometimes as wide at 20 to 30% difference between the highest valuation and the lowest ones.
Between March 2009 till end Q3 2009
The property prices have enjoyed a revival (although we shall not go into whether that revival is justified, that will be reviewed in another research which we are preparing, but do email us at loans@propertybuyer.com.sg to enquire).
Although the statistics reported sliding valuations and lowered selling prices, some places within District 9, 10 and 11 have enjoyed spectacular revival of property prices and valuations.
Park Infinia Prices Swing
Between January and June alone, as an example, Park Infinia located in Newton area went from around S$1100 per square feet to S$1200 per square feet between January to March 2009. And between March to June 2009, the valuation at Park Infinia in Newton went to S$1400 per square feet. It was easily a 30% increase.
We have seen valuations rising in the Singapore property mass market areas as well.
With a revival of valuations from between 10 to 30% in some districts or for some projects, for those who were unable to refinance due to fallen valuations in January to April 2009, now may be a good time to check valuations again whether they can refinance Singapore properties.
Now is a window of opportunity to refinance since valuations have recovered a bit
Although the singapore property prices have not recovered to pre-crisis levels in 2007 levels, even if some of these Singapore property investors – buyers who cannot meet the valuation levels to qualify for a 80% loan (Loan to valuation), they would nonetheless still be able to refinance their properties at 90% loan.
The current interest rates would still easily beat the previous rates and provide savings to the tune of around 1.5% per year. Over 2 years, Singapore home owners can expect to save around S$30,000 of interest costs or more, based on a loan size of S$1m.
What is the Singapore economic outlook for 2010?
It’s really a tough call, but by all measures the risk of a severe financial system melt-down is much reduced. There are many conflicting economic forecasts, some good and some bad.
None of the so called “Green shoots of recovery” have fully developed into a sustainable trend, but neither are the pessimists having their predictions correct. The economic statistics are flip-flopping from good to bad to good to bad.
So analysts are similarly divided on where the economy is headed.
We are mindful that substantial risks remained, economic fundamentals have not really improved.
Anyway, let us just call these forecasts by economists “analyst opinions”.
Since there are various economic modeling used, and each of these “Analyst opinions” have foundations based on facts and statistics (one way or the other), we can simply aggregate these opinions to get a proxy of the economic directions.
In 2008, economic analyst opinions were almost all negative and doom. Now in Q3, 209, we have quite a few very positive opinions, some moderate and some negative, this is a marked improvement from 2008.
On a balance of probabilities as well as on a fundamental economic basis, the worldwide economy is on the mend.
There is now a higher probability of economic recovery (however slight it may be) and possible inflation.
Going forward, there is a chance that interest rates may rise. Refinancing will then safe you less money.
So now may be the only window of opportunity to refinance Singapore property where the interest rates are still low and the valuations have somewhat recovered. Property Buyer Home loans and Singapore Mortgage Consultants like us do not charge you a fee because the banks pay us directly, therefore there is no cost to you and you have someone to do the work for you.
Why not try to contact us at loans@propertybuyer.com.sg or SMS us at +65 9782 - 8606 for a free valuation check and after that, we can help you compare Singapore home loans or compare refinance home loans.
If refinance interest rates go up or if property valuations fall towards the end of the year, the opportunity is lost.
Saturday, September 5, 2009
Invest in Singapore property using CPF
Singapore Property Investor and CPF funds for second property
CPF is abbreviation for Central Providend fund. It is similar to the American 301k plan. CPF funds are supposed to be saved for retirement.
Every Singaporean must contribute 20% of their income into CPF. Therefore Singapore’s CPF has billions of dollars of funds. Singapore property investor and Singapore property buyer also have lots of fund and liquidity, unlike other markets. The Singapore market is more about confidence than about liquidity.
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 refinancing, 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 based buying approach, we emphasize that you need to check your affordability and do your sums right. If you are unsure, we are happy to help you check.
Not Simply Cheap, but what Fits. We Research, You Save!
Tel: 6100 - 0608
SMS: 9782 - 8606
loans@propertyBUYER.com.sg
CPF causes you to overpay?
Singapore government likes to get maximum value for its land. If too many people can afford Housing, it is time to raise prices. In other circumstances, we can say it’s market forces or free market as supply and demand are determined by private enterprise. But not in this case.
HDB Government Housing market is Not a free market
But in Singapore’s case, government housing (HDB) is a controlled market, www.propertybuyer.com.sg is often critical of the way some policies are dished out, to the disadvantaged of the Singapore property buyers.
Many people along with us also see the setting of prices as arbitrary, because the government controls much the state land and there is no question of supply, but rather that of demand and affordability. The government can freely control supply to set prices.
CPF funds adds to affordability
Allowing the use of CPF funds for HDB and property in general raises the affordability.
With this new found liquidity, the government can then raise the selling prices of HDB, by putting in more frills and of course enhancing the construction industry producing more value add.
Of course, ultimately the home buyers and the Singapore property investors are the ones that pay for it through sapping up their retirement funds in CPF.
Raising prices of HDB flats is a means to sap liquidity out of the individual’s CPF account into the government coffers through land sales.
Since the Singapore property investor – buyer may have limited cash, the Singapore government allows the use of individual’s CPF funds to pay for their government “subsidized” housing. As a result properties become more and more expensive, effectively becoming an indirect tax.
Coupled with more funds (through the use of CPF) money, plus low interest rate environment, many Singapore banks cannot reduce rates much more rather they start to come out with newer terminology and features. Comparing Singapore Home loan has become much more tedious exercise, it is prudent to engage www.PropertyBUYER.com.sg mortgage consultants to help. They can be contacted at +65-6100-0608.
Refinancing home loan can also be tedious.
Singaporeans have lesser and lesser CPF money for retirement
Singaporeans have lesser and lesser CPF monies left for their retirement as they pay for ever more expensive properties. At some stage, we have to say, “Mr. Government, stop eying our CPF money!!!”
Since so many people are resigned to the fact that they will never really see their CPF money as cash as more and more rules are put in place to tap into their CPF.
Even after retirement age at 55 years, there is the minimum sum that you have to set aside. Currently (as at 2009) the minimum sum is $117,000 for retirement. This is the minimum sum that a person must have in the account. You can only withdraw any CPF funds in excess of the minimum sum upon retirement age.
Many Singaporeans have already given up on hoping to see their CPF money. As a result, many Singaporeans and PR used CPF to buy their second property before 1st July, 2006.
Can I use my CPF to purchase more than one property?
(Source: www.cpf.gov.sg)
Yes, you may use your CPF to purchase more than one property.
However, if you already own a property (HDB flat or private property) bought with your CPF savings and wishes to buy another property with CPF savings from 1 July 2006, you will be able to do so only after setting aside in your Ordinary and Special Accounts (including the amount used for investment from the Special Account) the prevailing Minimum Sum cash component if you are below 55 years, or the Minimum Sum cash component shortfall if you are aged 55 and above.
If you currently own more than one property bought with CPF savings before 1 July 2006, you need not set aside the prevailing Minimum Sum cash component unless you subsequently buy another property using your CPF savings on or after 1 July 2006.
Please note that this is not applicable if you are applying to use your CPF to purchase a second or subsequent property with non-related singles. Non-related singles can only jointly use their CPF to purchase their one and only property (private property or HDB flat).
Your first property can be used as a pledge for half the monies required under the Minimum sum. This means that if you with to use CPF for your second property (as at 2009), you must have at least $58,500 ($117,000 x 50%). Any CPF above $58,500 can be used for your second property.
Is Singapore Market over Leveraged?
Although Singapore is no where near as dangerous as other markets where there are plentiful “no cash down” home loans. With CPF being allowed to make up the 15% down-payment on the purchase price and only 5% is cash down-payment, we at www.PropertyBUYER.com.sg would consider the Singapore market rather leveraged compared to the early say 5 years ago or pre-2000.
The current property boom in 2009 lacks fundamentals (Refer to Property Buyer update July 2009 in the article section of www.PropertyBUYER.com.sg/articles/article.php) as its underpinnings, so it is still hard to say whether sentiments will change the economic fundamentals or economic fundamentals will eventually bring the sentiments back in line.
There are good and bad deals in every property cycle, please exercise your own good judgement.
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 refinancing, 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 based buying approach, we emphasize that you need to check your affordability and do your sums right. If you are unsure, we are happy to help you check.
Not Simply Cheap, but what Fits. We Research, You Save!
Tel: 6100 - 0608
SMS: 9782 - 8606
loans@propertyBUYER.com.sg
CPF is abbreviation for Central Providend fund. It is similar to the American 301k plan. CPF funds are supposed to be saved for retirement.
Every Singaporean must contribute 20% of their income into CPF. Therefore Singapore’s CPF has billions of dollars of funds. Singapore property investor and Singapore property buyer also have lots of fund and liquidity, unlike other markets. The Singapore market is more about confidence than about liquidity.
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 refinancing, 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 based buying approach, we emphasize that you need to check your affordability and do your sums right. If you are unsure, we are happy to help you check.
Not Simply Cheap, but what Fits. We Research, You Save!
Tel: 6100 - 0608
SMS: 9782 - 8606
loans@propertyBUYER.com.sg
CPF causes you to overpay?
Singapore government likes to get maximum value for its land. If too many people can afford Housing, it is time to raise prices. In other circumstances, we can say it’s market forces or free market as supply and demand are determined by private enterprise. But not in this case.
HDB Government Housing market is Not a free market
But in Singapore’s case, government housing (HDB) is a controlled market, www.propertybuyer.com.sg is often critical of the way some policies are dished out, to the disadvantaged of the Singapore property buyers.
Many people along with us also see the setting of prices as arbitrary, because the government controls much the state land and there is no question of supply, but rather that of demand and affordability. The government can freely control supply to set prices.
CPF funds adds to affordability
Allowing the use of CPF funds for HDB and property in general raises the affordability.
With this new found liquidity, the government can then raise the selling prices of HDB, by putting in more frills and of course enhancing the construction industry producing more value add.
Of course, ultimately the home buyers and the Singapore property investors are the ones that pay for it through sapping up their retirement funds in CPF.
Raising prices of HDB flats is a means to sap liquidity out of the individual’s CPF account into the government coffers through land sales.
Since the Singapore property investor – buyer may have limited cash, the Singapore government allows the use of individual’s CPF funds to pay for their government “subsidized” housing. As a result properties become more and more expensive, effectively becoming an indirect tax.
Coupled with more funds (through the use of CPF) money, plus low interest rate environment, many Singapore banks cannot reduce rates much more rather they start to come out with newer terminology and features. Comparing Singapore Home loan has become much more tedious exercise, it is prudent to engage www.PropertyBUYER.com.sg mortgage consultants to help. They can be contacted at +65-6100-0608.
Refinancing home loan can also be tedious.
Singaporeans have lesser and lesser CPF money for retirement
Singaporeans have lesser and lesser CPF monies left for their retirement as they pay for ever more expensive properties. At some stage, we have to say, “Mr. Government, stop eying our CPF money!!!”
Since so many people are resigned to the fact that they will never really see their CPF money as cash as more and more rules are put in place to tap into their CPF.
Even after retirement age at 55 years, there is the minimum sum that you have to set aside. Currently (as at 2009) the minimum sum is $117,000 for retirement. This is the minimum sum that a person must have in the account. You can only withdraw any CPF funds in excess of the minimum sum upon retirement age.
Many Singaporeans have already given up on hoping to see their CPF money. As a result, many Singaporeans and PR used CPF to buy their second property before 1st July, 2006.
Can I use my CPF to purchase more than one property?
(Source: www.cpf.gov.sg)
Yes, you may use your CPF to purchase more than one property.
However, if you already own a property (HDB flat or private property) bought with your CPF savings and wishes to buy another property with CPF savings from 1 July 2006, you will be able to do so only after setting aside in your Ordinary and Special Accounts (including the amount used for investment from the Special Account) the prevailing Minimum Sum cash component if you are below 55 years, or the Minimum Sum cash component shortfall if you are aged 55 and above.
If you currently own more than one property bought with CPF savings before 1 July 2006, you need not set aside the prevailing Minimum Sum cash component unless you subsequently buy another property using your CPF savings on or after 1 July 2006.
Please note that this is not applicable if you are applying to use your CPF to purchase a second or subsequent property with non-related singles. Non-related singles can only jointly use their CPF to purchase their one and only property (private property or HDB flat).
Your first property can be used as a pledge for half the monies required under the Minimum sum. This means that if you with to use CPF for your second property (as at 2009), you must have at least $58,500 ($117,000 x 50%). Any CPF above $58,500 can be used for your second property.
Is Singapore Market over Leveraged?
Although Singapore is no where near as dangerous as other markets where there are plentiful “no cash down” home loans. With CPF being allowed to make up the 15% down-payment on the purchase price and only 5% is cash down-payment, we at www.PropertyBUYER.com.sg would consider the Singapore market rather leveraged compared to the early say 5 years ago or pre-2000.
The current property boom in 2009 lacks fundamentals (Refer to Property Buyer update July 2009 in the article section of www.PropertyBUYER.com.sg/articles/article.php) as its underpinnings, so it is still hard to say whether sentiments will change the economic fundamentals or economic fundamentals will eventually bring the sentiments back in line.
There are good and bad deals in every property cycle, please exercise your own good judgement.
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 refinancing, 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 based buying approach, we emphasize that you need to check your affordability and do your sums right. If you are unsure, we are happy to help you check.
Not Simply Cheap, but what Fits. We Research, You Save!
Tel: 6100 - 0608
SMS: 9782 - 8606
loans@propertyBUYER.com.sg
Tuesday, August 25, 2009
Invest in Singapore Property: Building under construction payment schedule
Payment Schedule of BUC properties
The below is a typical payment schedule for the Singapore Property Buyer. (This is not indicative of all cases)
1% of the purchase price
Option to purchase.
4% of the purchase price – 14 days after Option to purchase.
Exercise option
Payment of Stamp Duty (~3%)
28 days from option to purchase
15% of the purchase price
12 weeks after exercising option to purchase.
If the property that you bought is an uncompleted Condominium, then you will have to pay progressively as the building achieves various milestones.
10% of purchase price – Timing depends on speed of construction
Notice of foundation work completion.
10% of purchase price
Notice that reinforced Concrete framework of the unit has been completed.
5% of the Purchase Price
Notice that the brick walls of the unit have been completed
5% of the purchase price
Notice that the ceiling of the Unit has been completed.
5% of the purchase price
Notice that the door and window frames are installed and the wiring and plastering have been completed.
5% of the purchase price
Notice that the car park, roads and drains serving the housing project have
been completed.
25% of the purchase price
Payable 14 days after notice of vacant possession and the Temporary Occupation Permit of Certificate of Statutory Completion n respect of the unit (or a certified copy thereof)
A certificate by the qualified person engaged by the vendor that the building and all roads and drainage and sewerage works serving the Housing project have been completed and that the water and electricity supplies, and gas supplies (if any) have been connected to the unit.
15% of the purchase price
On Completion date. Of which 2% is payable to the vendor (i.e. the developer) and 13% is payable to the Singapore Academy of law as stakeholder.
Whether you can afford the condominium or not, buying a condominium under construction can be a good way to gradually put up the cash for buying a property.
Smoothing out Funding of a Private property
In the case where you have the earning capacity, but you will need some time to recover after the initial 20% downpayment. The Singapore home loan installment will be lesser at the earlier stages, this enables you to save up and build up your cash reserves as there may be many other costs associated with owning a private property.
If you are Singapore property investor, if your view is that the property market will pick up in a few years, buying a property under construction is similar to buying shares on “Contra”, except that this “contra” gives you several years of holding “option”.
Many speculators like this feature which gives them the chance to finance a property cheaply and flip the property for a profit.
Genuine Home Buyers can get burnt buying a Property Under Construction
Due to the ease of financing, holding on to a Building under construction during the early stages can be rather cheap. This means that speculators can easily get in and bid up the prices for genuine buyers, creating a squeeze on the prices.
This means that such buyers will tend to end up paying a higher price due to cheap singapore home loans.
How to profit from Property Under Construction?
Due to the presence of speculators, when the pressure mounts and when they cannot turn a profit flipping the property and cannot lease the property out and starts to default. You can then stand on the side lines to punish these greedy speculators and pick up the properties cheaply.
The below is a typical payment schedule for the Singapore Property Buyer. (This is not indicative of all cases)
1% of the purchase price
Option to purchase.
4% of the purchase price – 14 days after Option to purchase.
Exercise option
Payment of Stamp Duty (~3%)
28 days from option to purchase
15% of the purchase price
12 weeks after exercising option to purchase.
If the property that you bought is an uncompleted Condominium, then you will have to pay progressively as the building achieves various milestones.
10% of purchase price – Timing depends on speed of construction
Notice of foundation work completion.
10% of purchase price
Notice that reinforced Concrete framework of the unit has been completed.
5% of the Purchase Price
Notice that the brick walls of the unit have been completed
5% of the purchase price
Notice that the ceiling of the Unit has been completed.
5% of the purchase price
Notice that the door and window frames are installed and the wiring and plastering have been completed.
5% of the purchase price
Notice that the car park, roads and drains serving the housing project have
been completed.
25% of the purchase price
Payable 14 days after notice of vacant possession and the Temporary Occupation Permit of Certificate of Statutory Completion n respect of the unit (or a certified copy thereof)
A certificate by the qualified person engaged by the vendor that the building and all roads and drainage and sewerage works serving the Housing project have been completed and that the water and electricity supplies, and gas supplies (if any) have been connected to the unit.
15% of the purchase price
On Completion date. Of which 2% is payable to the vendor (i.e. the developer) and 13% is payable to the Singapore Academy of law as stakeholder.
Whether you can afford the condominium or not, buying a condominium under construction can be a good way to gradually put up the cash for buying a property.
Smoothing out Funding of a Private property
In the case where you have the earning capacity, but you will need some time to recover after the initial 20% downpayment. The Singapore home loan installment will be lesser at the earlier stages, this enables you to save up and build up your cash reserves as there may be many other costs associated with owning a private property.
If you are Singapore property investor, if your view is that the property market will pick up in a few years, buying a property under construction is similar to buying shares on “Contra”, except that this “contra” gives you several years of holding “option”.
Many speculators like this feature which gives them the chance to finance a property cheaply and flip the property for a profit.
Genuine Home Buyers can get burnt buying a Property Under Construction
Due to the ease of financing, holding on to a Building under construction during the early stages can be rather cheap. This means that speculators can easily get in and bid up the prices for genuine buyers, creating a squeeze on the prices.
This means that such buyers will tend to end up paying a higher price due to cheap singapore home loans.
How to profit from Property Under Construction?
Due to the presence of speculators, when the pressure mounts and when they cannot turn a profit flipping the property and cannot lease the property out and starts to default. You can then stand on the side lines to punish these greedy speculators and pick up the properties cheaply.
Friday, August 21, 2009
Invest in Singapore Property: Sibor and Inflation
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Invest in Singapore Property: Sibor and inflation
Property Buyer Home Loan
Many people say that, what happens if the interest rates go up?
What will happen to my home loan installment? When interest rates go up, your loan repayment becomes more expensive.
Does Rising Sibor really hurt you?
The common answer is yes, it hurts you due to more expensive loan. However many people do NOT get hurt by Sibor rising.
The reason for this is because during times when interest rates are high, Inflation(CPI) is also high. If you have a
house, a job, shares and other assets, those values tend to rise as well. It is mostly a zero-sum game.
In some cases, those asset values rise faster than CPI rate or it could rise even more than the cost of your housing mortgage.
BANKS CANNOT LEND YOU AT LESS THAN THE CPI
The point is, banks cannot lend you money at a rate that is less than the CPI, otherwise their money will lose its value as those same money will only be able to Afford less goods and services.
WHEN DO BANKS REALLY MAKE MONEY?
Some say that in 2006 and 2007 banks make a lot of money. While they probably did make money, charging you 5% for your home loans, but CPI was at 6.5%, that means that their money is depreciating. In fact they are losing money
doing that. This is a very rare event in History.
SO DOES INFLATION AFFECT INTEREST RATES?
Absolutely YES!!! Inflation is the base line. If Inflation rises, everything rises along with it. Due to Inflation rises, Sibor or SOR will have to rise along side. If SIBOR or SOR rises, there is NO DOUBT that the bank’s floating rates will also have
to rise.
How fast they raise rates will depend on how benevolent the banks are. So what do you think the banks do?
Are banks benevolent? I think you know the answer.
Contact Property Buyer
www.PropertyBUYER.com.sg
We are a Research-focused Singapore Mortgage Consultant which helps you compare Home loans either for new loans or refinancing, we balance risks versus rewards for each loan to match your risk profile and financing needs.
Buying property is a serious affair, we do NOT advocate a Greed based buying approach, we emphasize that you need to check your affordability and do your sums right. If you are unsure, we are happy to help you check.
Tel: 6100 - 0608
SMS: 9782 - 8606
loans@propertyBUYER.com.sg
Read more of Property Buyer's articles
Sunday, July 19, 2009
Invest in Singapore Property: Singapore Property Investor Update
Singapore Property Investor - Buyer Update July 2009 and Re-emergence of Dishonest Singapore property agent
www.PropertyBUYER.com.sg (We Research, you Save)
Refinance Home Loan Mortgage or Get Home Loan
Contacts: -
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
http://www.propertybuyer.com.sg/contactus.php
OUR READERS ASK US TO WRITE MORE ON PROPERTY INVESTOR UPDATES
Since the last time we wrote about the property market coming back to life.
The press has been flushed with lots of positive news. All these news of
property market coming back to life is fueling latent demand. Singapore is
one of those rare markets where there is ample liquidity in the market. The
liquidity is not evenly spread out.
What this means is that, the lower end of the condominium market is
supported by affordability and pricing while towards the Mid-luxury and
luxury segment, it is supported more by sentiment and investment yields.
Are Developers taking this chance to clear stock?
“Developer sales of new private homes in June hit 1,825 units - topping the
previous peak of 1,723 units homes sold in August 2007 at the property
market peak.” (Source: The Business Times, http://business.asiaone.com/Business
/My%2BMoney/Property/Story/A1Story20090716-155174.html)
There is still ample property supply in the pipeline, developers are using this
opportunity to try to clear as much stock as possible.
Is this the lowest point?
Some market analysts are positive that the market has reached it’s lowest
point while some pointed out that external demand is still not picking up fast
enough. There is indication that the Singapore government is doing all it can
to stimulate the Singapore economy. Just in January 2009 alone, M1 money
supply increased by 6 billion dollars to around 82 billion dollars.
Singapore Dishonest Property Agents are again active
The market is red hot, some property agents are again touting En-BLOC as
bait. The 2nd more common trick is. It's near the MRT, got rental potential.
This appeals to greed in property buyers. These dishonest property
agents are also trying to raise the prices at the last minute even after prices
have been agreed with the property buyer. Be careful not to let greed dictate
your decisions, talk to many agents, not just 1 or 2 and cross correlate their
stories.
BE CAREFUL OF SUB-SALE ACTIVITIES
And also be careful of sub-sale activities. If you are seller, you must also be
careful and keep tabs on the market. Agents are making this change to press the seller and sell them low and re-sell to you at
high prices.
How to avoid this?
The best is to also post your own advertisements on a free property listing site such as ours at
(http://www.PropertyBUYER.com.sg), it's totally free. When buyers come in, you can also
try to establish the market price and not simply belief what the agent tells
you.
How Dishonest Property Agent trick the Property Buyers
They typically try to create a sense of urgency. They may arrange for group
viewings to create the impression that a property is HOT. These are just
some of the many ways in which they cheat.
Then they agree on lower prices and then once you agree on the prices,
then they raise the prices. They claim that the seller wants to raise rates.
COMMON REASONS FOR CHANGING SELLING PRICE: -
• The seller really changed their minds and raised the price. (Not so
common)
• The agent hasn’t yet met the Seller’s asking price that you agreed with
the agent.
o The agent tries a lower price to tempt you so as to know
your BASELINE price.
o Then the agent tells you a story about the seller wanting
more to try and get you to raise prices.
• The agent pushes for a higher price than what the seller wants. Tells the
seller he will try to maximize prices for the seller.
o In fact, the agent already got you to bite. Then he/she goes to
the seller and ask for more commission, because you agree to
higher prices.
• The agent pushes you for a higher price. For example Seller wants
$900,000, agent asks you for $980,000. Then Agent asks his friend to
buy from owner at $900,000 and immediately re-sell to you at $980,000.
The agent makes $80,000 just like that.
What we at www.PropertyBUYER.com.sg think on recent developments?
We still maintain a cautious outlook. Despite all the huff and puff,
Singapore’s unemployment rate is expected to get worst in 2009.
The
resident population employment is at 4.8% in Mar 2009 and getting higher
while the overall unemployment is 3.3% in Mar 2009.
(Source: Singstat.gov.sg)
While the Unemployment is going to hit different segments of the property
market in different magnitude, when we have an unemployment rate hitting
4.8% (for residents. Meaning Singaporeans + PR) and looking to get worst
at least in 1 or 2 quarters. We cannot be so sure it will not impact on the
general market.
Even expatriates and other non residents, they are not spared from the
recession with the unemployment rate of 3.3% in Mar 2009 and steeply
rising.
External Demand – Via US Economy
Singapore's external demand is still unstable at best. Many of Singapore’s
exports go to the USA. And US consumers make up 70% of the US
economic consumption.
Even while US Federal Reserve bank of New york's Timothy Geithner has
indicated that the US is out of the Financial crisis, but unemployment figures
are still high. Jobless rates are about 9.5% in June 2009, an increase of 7.2
million from Dec 2007.
(Source: Bureau of labour statistics, USA.)
The US unemployment is still looking to breach the 10% mark. This means
that until the US unemployment rate recovers, Singapore’s exports are
not going to see drastic recovery.
Will China replace US as the economic locomotive of the world?
The China (2008 estimated) GDP figures in USD (by CIA factbook) is
US$4.222 trillion. This is in contrast to the (2008 estimated) US GDP figures
of US$14.33 Trillion. The US consumers make up US$10.031 trillion of the
US GDP. The Chinese consumers meanwhile makes up less than half of
China’s GDP of US$4.222 Trillion.
Even while China is producing headlines after headlines of robust GDP
growth, China’s consumption is not going to pull us out of recession as it is
small compared to the overall global trade. Moreover, most of China’s GDP
is still export oriented, and exported to the USA.
According to Bureau of labour statistics (http://www.bls.gov/news.release
/empsit.nr0.htm)
“The number of unemployed persons (14.7 million) and the unemployment
rate (9.5 percent) were little changed in June. Since the start of the
recession in December 2007, the number of unemployed persons has increas-
ed by 7.2 million, and the unemployment rate has risen by 4.6 percentage
points.”
According to BEA, http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm
The economy is still somewhat in the doldrums.
GDP in Q1, 2009 is still decreasing although at a slower rate.
“Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 5.5 percent in the first quarter of 2009, (that is, from the fourth quarter to the first quarter), according to final estimates released by the
Bureau of Economic Analysis. In the fourth quarter, real GDP decreased 6.3 percent.” (Source: Bureau of Economic Analysis)
However Personal consumption is increasing again.
Personal consumption is running down the inventory stock. But production is
still not increasing yet and therefore it has not yet contributed to GDP
growth.
“The real change in private inventories subtracted 2.20 percentage points from the first-quarter
change in real GDP, after subtracting 0.11 percentage point from the fourth-quarter change. Private
businesses decreased inventories $87.1 billion in the first quarter, following a decrease of $25.8 billion
in the fourth quarter and a decrease of $29.6 billion in the third.”
(Source: Bureau of Economic Analysis, USA)
This run down in inventory level is led by reduced production (Less GDP
output) and a slight increase in personal consumption.
“Real personal consumption expenditures increased 1.4 percent in the first
quarter, in contrast to a decrease of 4.3 percent in the fourth. Real
nonresidential fixed investment decreased 37.3 percent, compared with a decrease of 21.7 percent. Nonresidential structures decreased 42.9 percent, compared with a decrease of 9.4 percent. Equipment and software decreased 33.7 percent, compared with a
decrease of 28.1 percent. Real residential fixed investment decreased 38.8 percent, compared with a decrease of 22.8 percent."
(Source: Bureau of Economic Analysis, USA)
BANKS MUST DO IT RIGHT THIS TIME ROUND!!!
This month the banks are so busy that they hardly have time to entertain
Approval-in-principle. The banks are responding mostly if you have an
Option to purchase before they will process your applications.
While we understand the reasons because the market is booming and banks
are over-stretched due to staffing reasons.
But by reducing rates and then forcing the home buyers into buying first and
then getting the loan later has started to create upward price pressures.
If they lend indiscriminately when the market picks up, then the banks will be
accomplices in creating another property bubble.
This bubble is going to come haunt all of us again.
So this time, we urge all banks to act responsibly and not add fuel to fire.
Though we are still really doubtful that this is it.
Redundancy is still accelerating
WORST SCENARIO
In case this is not yet the turning point, then many people would be caught
buying into expensive property developer launches. When the market reality
sets in, banks will again over-react with some banks freezing lending
completely choking off the market. This is when home buyers get hurt again.
WHAT DO WE RECOMMEND FOR SINGAPORE PROPERTY INVESTOR?
We have no opinion about buying or not buying. People buy properties for
various reasons. There are good deals in all cycles of the property market as
well as bad deals.
Exercise your own caution and decide what fits your finances the best.
The economy is still not out of the woods, job vacancies are still dropping.
Those retrenched are still not finding work fast enough.
Singapore Unemployment Rate by Age and Education
(Source: Singstat)
Singapore Job Vacancies have dropped
This means that those who lost their jobs will take longer to find another job.
(Source: Singstat)
You can only get tricked or cheated if you become greedy. If you can control
your emotions and exercise best judgement, you will be able to protect
yourself. In case you want to refinance your home loan, or get home loan,
you can come to us.
ABOUT US Contact us
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
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Refinance Home Loan Mortgage or Get Home Loan
Contacts: -
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
http://www.propertybuyer.com.sg/contactus.php
OUR READERS ASK US TO WRITE MORE ON PROPERTY INVESTOR UPDATES
Since the last time we wrote about the property market coming back to life.
The press has been flushed with lots of positive news. All these news of
property market coming back to life is fueling latent demand. Singapore is
one of those rare markets where there is ample liquidity in the market. The
liquidity is not evenly spread out.
What this means is that, the lower end of the condominium market is
supported by affordability and pricing while towards the Mid-luxury and
luxury segment, it is supported more by sentiment and investment yields.
Are Developers taking this chance to clear stock?
“Developer sales of new private homes in June hit 1,825 units - topping the
previous peak of 1,723 units homes sold in August 2007 at the property
market peak.” (Source: The Business Times, http://business.asiaone.com/Business
/My%2BMoney/Property/Story/A1Story20090716-155174.html)
There is still ample property supply in the pipeline, developers are using this
opportunity to try to clear as much stock as possible.
Is this the lowest point?
Some market analysts are positive that the market has reached it’s lowest
point while some pointed out that external demand is still not picking up fast
enough. There is indication that the Singapore government is doing all it can
to stimulate the Singapore economy. Just in January 2009 alone, M1 money
supply increased by 6 billion dollars to around 82 billion dollars.
Singapore Dishonest Property Agents are again active
The market is red hot, some property agents are again touting En-BLOC as
bait. The 2nd more common trick is. It's near the MRT, got rental potential.
This appeals to greed in property buyers. These dishonest property
agents are also trying to raise the prices at the last minute even after prices
have been agreed with the property buyer. Be careful not to let greed dictate
your decisions, talk to many agents, not just 1 or 2 and cross correlate their
stories.
BE CAREFUL OF SUB-SALE ACTIVITIES
And also be careful of sub-sale activities. If you are seller, you must also be
careful and keep tabs on the market. Agents are making this change to press the seller and sell them low and re-sell to you at
high prices.
How to avoid this?
The best is to also post your own advertisements on a free property listing site such as ours at
(http://www.PropertyBUYER.com.sg), it's totally free. When buyers come in, you can also
try to establish the market price and not simply belief what the agent tells
you.
How Dishonest Property Agent trick the Property Buyers
They typically try to create a sense of urgency. They may arrange for group
viewings to create the impression that a property is HOT. These are just
some of the many ways in which they cheat.
Then they agree on lower prices and then once you agree on the prices,
then they raise the prices. They claim that the seller wants to raise rates.
COMMON REASONS FOR CHANGING SELLING PRICE: -
• The seller really changed their minds and raised the price. (Not so
common)
• The agent hasn’t yet met the Seller’s asking price that you agreed with
the agent.
o The agent tries a lower price to tempt you so as to know
your BASELINE price.
o Then the agent tells you a story about the seller wanting
more to try and get you to raise prices.
• The agent pushes for a higher price than what the seller wants. Tells the
seller he will try to maximize prices for the seller.
o In fact, the agent already got you to bite. Then he/she goes to
the seller and ask for more commission, because you agree to
higher prices.
• The agent pushes you for a higher price. For example Seller wants
$900,000, agent asks you for $980,000. Then Agent asks his friend to
buy from owner at $900,000 and immediately re-sell to you at $980,000.
The agent makes $80,000 just like that.
What we at www.PropertyBUYER.com.sg think on recent developments?
We still maintain a cautious outlook. Despite all the huff and puff,
Singapore’s unemployment rate is expected to get worst in 2009.
The
resident population employment is at 4.8% in Mar 2009 and getting higher
while the overall unemployment is 3.3% in Mar 2009.
(Source: Singstat.gov.sg)
While the Unemployment is going to hit different segments of the property
market in different magnitude, when we have an unemployment rate hitting
4.8% (for residents. Meaning Singaporeans + PR) and looking to get worst
at least in 1 or 2 quarters. We cannot be so sure it will not impact on the
general market.
Even expatriates and other non residents, they are not spared from the
recession with the unemployment rate of 3.3% in Mar 2009 and steeply
rising.
External Demand – Via US Economy
Singapore's external demand is still unstable at best. Many of Singapore’s
exports go to the USA. And US consumers make up 70% of the US
economic consumption.
Even while US Federal Reserve bank of New york's Timothy Geithner has
indicated that the US is out of the Financial crisis, but unemployment figures
are still high. Jobless rates are about 9.5% in June 2009, an increase of 7.2
million from Dec 2007.
(Source: Bureau of labour statistics, USA.)
The US unemployment is still looking to breach the 10% mark. This means
that until the US unemployment rate recovers, Singapore’s exports are
not going to see drastic recovery.
Will China replace US as the economic locomotive of the world?
The China (2008 estimated) GDP figures in USD (by CIA factbook) is
US$4.222 trillion. This is in contrast to the (2008 estimated) US GDP figures
of US$14.33 Trillion. The US consumers make up US$10.031 trillion of the
US GDP. The Chinese consumers meanwhile makes up less than half of
China’s GDP of US$4.222 Trillion.
Even while China is producing headlines after headlines of robust GDP
growth, China’s consumption is not going to pull us out of recession as it is
small compared to the overall global trade. Moreover, most of China’s GDP
is still export oriented, and exported to the USA.
According to Bureau of labour statistics (http://www.bls.gov/news.release
/empsit.nr0.htm)
“The number of unemployed persons (14.7 million) and the unemployment
rate (9.5 percent) were little changed in June. Since the start of the
recession in December 2007, the number of unemployed persons has increas-
ed by 7.2 million, and the unemployment rate has risen by 4.6 percentage
points.”
According to BEA, http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm
The economy is still somewhat in the doldrums.
GDP in Q1, 2009 is still decreasing although at a slower rate.
“Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 5.5 percent in the first quarter of 2009, (that is, from the fourth quarter to the first quarter), according to final estimates released by the
Bureau of Economic Analysis. In the fourth quarter, real GDP decreased 6.3 percent.” (Source: Bureau of Economic Analysis)
However Personal consumption is increasing again.
Personal consumption is running down the inventory stock. But production is
still not increasing yet and therefore it has not yet contributed to GDP
growth.
“The real change in private inventories subtracted 2.20 percentage points from the first-quarter
change in real GDP, after subtracting 0.11 percentage point from the fourth-quarter change. Private
businesses decreased inventories $87.1 billion in the first quarter, following a decrease of $25.8 billion
in the fourth quarter and a decrease of $29.6 billion in the third.”
(Source: Bureau of Economic Analysis, USA)
This run down in inventory level is led by reduced production (Less GDP
output) and a slight increase in personal consumption.
“Real personal consumption expenditures increased 1.4 percent in the first
quarter, in contrast to a decrease of 4.3 percent in the fourth. Real
nonresidential fixed investment decreased 37.3 percent, compared with a decrease of 21.7 percent. Nonresidential structures decreased 42.9 percent, compared with a decrease of 9.4 percent. Equipment and software decreased 33.7 percent, compared with a
decrease of 28.1 percent. Real residential fixed investment decreased 38.8 percent, compared with a decrease of 22.8 percent."
(Source: Bureau of Economic Analysis, USA)
BANKS MUST DO IT RIGHT THIS TIME ROUND!!!
This month the banks are so busy that they hardly have time to entertain
Approval-in-principle. The banks are responding mostly if you have an
Option to purchase before they will process your applications.
While we understand the reasons because the market is booming and banks
are over-stretched due to staffing reasons.
But by reducing rates and then forcing the home buyers into buying first and
then getting the loan later has started to create upward price pressures.
If they lend indiscriminately when the market picks up, then the banks will be
accomplices in creating another property bubble.
This bubble is going to come haunt all of us again.
So this time, we urge all banks to act responsibly and not add fuel to fire.
Though we are still really doubtful that this is it.
Redundancy is still accelerating
WORST SCENARIO
In case this is not yet the turning point, then many people would be caught
buying into expensive property developer launches. When the market reality
sets in, banks will again over-react with some banks freezing lending
completely choking off the market. This is when home buyers get hurt again.
WHAT DO WE RECOMMEND FOR SINGAPORE PROPERTY INVESTOR?
We have no opinion about buying or not buying. People buy properties for
various reasons. There are good deals in all cycles of the property market as
well as bad deals.
Exercise your own caution and decide what fits your finances the best.
The economy is still not out of the woods, job vacancies are still dropping.
Those retrenched are still not finding work fast enough.
Singapore Unemployment Rate by Age and Education
(Source: Singstat)
Singapore Job Vacancies have dropped
This means that those who lost their jobs will take longer to find another job.
(Source: Singstat)
You can only get tricked or cheated if you become greedy. If you can control
your emotions and exercise best judgement, you will be able to protect
yourself. In case you want to refinance your home loan, or get home loan,
you can come to us.
ABOUT US Contact us
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
Contact us
http://www.propertybuyer.com.sg/contactus.php
Property Checklist / Guide (Kiasu Property Checklist)
http://www.propertybuyer.com.sg/viewnews.php?article=39
Read More articles
http://www.propertyBUYER.com.sg/articlesnews.php
Understand Property Investing and Sub-prime
http://astore.amazon.com/httpwwwpro0ad-20?%5Fencoding=UTF8&node=55
Refinance and Mortgages DIY steps
http://www.squidoo.com/Singapore-homeloan
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