Category Archives: Property Market / Real Estate

High-end market on a downward spiral?

Posted on 9 May 2012 | Comments Off on High-end market on a downward spiral?

Sluggish demand for high-end homes has lowered developers’ profits of late. If this trend continues, the luxury market could eventually hit rock-bottom in the days to come.

With prices of luxury homes expected to fall by 15 percent this year, foreign demand is expected to dry up due to tightening measures and economic uncertainties.

Early on, property developers are feeling the pinch over this weakening outlook.

Recently, SC Global warned of a S$10 million loss for Q1 2012, following weak profits recorded from its ready-for-occupancy projects. In fact, not even half the units released at The Marq on Paterson Hill and Hilltops were sold.

Ho Bee’s official figures revealed a shocking 71.6 percent plunge in Q1 2012 earnings to S$15.4 million. Its luxury projects, Turquoise and Seascape at Sentosa Cove, have recorded sales at 46 and 28 percent respectively.

The weakening interest in the high-end market may be attributed to the implementation of a 10 percent Additional Buyers’ Stamp Duty (ABSD) in December last year, which deterred foreign buyers.

Foreign buyers contribute significantly to the market, accounting for 40 percent of property transactions last year in prime district 10, which covers the Tanglin and Ardmore areas. Driving foreign buyers from the market will affect locals who have sold their homes to foreigners, as they cannot recycle their capital easily.

Savills Research has predicted that foreign buyers will account for a mere 15 percent of luxury homes sales this year. The ABSD immediately reduces return on investments (ROI) because these fees have to be paid upfront.

Singapore is considered the most expensive market for high-end properties in Asia, with buyers from China, Indonesia, Malaysia and India significantly contributing to the luxury home market.

However, a number of foreign buyers have put off their plans to buy multi-million dollar properties to avoid the ABSD. At the same time, the luxury market will likely see a surge in the supply of new units, putting further pressure on prices.

Even rentals are coming down as a number of expats no longer receive their usual housing allowances.

Moving forward, the luxury segment will likely suffer as the price gap between the mid-tier and luxury segment narrows.

source : PropertyGuru -9 May 2012

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Posted in Luxury Property, Property Market / Real Estate, Property Price

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Cost of living causes Singaporeans to look down under

Posted on 9 May 2012 | Comments Off on Cost of living causes Singaporeans to look down under

Adelaide has reflected South Australia as a whole with its recent population boom and healthy real estate market.

According to a recent press release by Optimizer Capital, South Australia, on a risk adjust basis, represents one of the best property investments of the next 10 years.

Optimizer Capital reported that Singapore is currently at the top of its cycle and is showing a poor market outlook for 2012 and 2013. Real estate analysts forecast a 5 to 10 per cent drop in property prices this year.

Due to Singapore’s property prices at an all time high and rental yields being low, it is suggested that investors could be overpaying for the potential rental income.

The annual average inflation of Singapore since 1980 is about 2.1 per cent and the Consumer Price Index is on an upward trend making it likely that the cost of living will keep increasing.

This increasing cost of living has made finding a place for retirement difficult resulting in many of the countries residents to settle down in neighboring countries, such as to stretch their retirement funds.

Investors can expect that some country’s property markets will be growing while others will be on the decline. Many investors are purchasing properties in Australia to ensure that their investments are not exposed to the risks that different countries face.

In recent years Australia has maintained a stable, diverse, and advanced economy making it one of the most popular places to invest.

South Australia has recently experienced a population boom fueled by mining, defense, infrastructure, wine, industrial growth, and education which is creating an unprecedented need for property development. The increase in population means that by 2030, 620,000 new homes will be required.

“I truly believe I’m going to witness the best property boom in Adelaide that I have seen in my lifetime,” said Adelaide’s property professor Peter Koulizos. “The thing that will drive property is people with money, and the mining industry tends to pay higher wages. As the cheapest capital city in mainland Australia, there’s a lot of focus on Adelaide.”

South Australia has a population of 1.2 million while around 2/3 of the population in South Australia live in the capital, Adelaide. The highest percentage of the population in South Australia is in the 15 30 age bracket that will be entering the housing market over the coming years.

South Australia is also expanding as a leader in natural resources and is rapidly evolving into the third biggest resource state, after Queensland and Western Australia.

The state has already become the national leader in major defense projects, including the Air Warfare Destroyer project and the future submarine fleet project. In addition, it is already the nation’s leader in alternative energy generation, an industry of growing importance.

It is expected that South Australia can expect the same kind of growth Perth saw from 2002-2012 when prices tripled and in Port Headland went up five times.

source – Property Asia 8 May 2012

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Posted in Overseas Property, Property Market / Real Estate

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