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Singapore Property : Bubble brewing?

Posted on 7 Nov 2009 | Comments Off

Caveat emptor: investing in the property market carries high risks, but also equally high rewards.

WITH the recent release of third-quarter real estate data, it may be timely to ask: Is there a real estate bubble, and if so, how bad is it? When the figures were unveiled in the last week of October, private-housing prices were out-of-sync with the rest of the market. Prices and rents were down for the other major sectors – office, retail and industrial. These trends were in line with current economic conditions.

Private-housing prices rebounded sharply by 15.8 per cent, easily the highest quarterly rise in more than 25 years. This is aggravated by the decline of housing rentals. Prices dropped by 2.2 per cent despite the third quarter traditionally being the best in terms of number of leases closed, as this is when many expatriates return from their holidays and sign new rental contracts.

Although the overall housing rental trend is down, rentals in some areas have improved and recorded increases in August and September. These increases could partly be due to the large number of expatriates signing new leases in the third quarter. Overseas managerial staff from the integrated resorts would also have signed on during this period.

Rents will go up for some developments due to competition. There are also signs that some tenants are moving to smaller units. This may also lead to rises in some unit types but declines for others.
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Posted in Property Market / Real Estate, Property Price

Tagged Property Bubble, Singapore Property, Singapore Property Market, Singapore Property Rental

Buffet-table spread of sites for developers

Posted on 7 Nov 2009 | Comments Off

But the jury is out on whether the govt’s release of plots will tame land bids, which have soared wildly at state tenders

THE government is offering developers a platter of residential sites through the confirmed and reserve lists for the next half – including several plots in the vicinities of hot-selling condo launches this year, such as Caspian near Jurong Lake and Alexis near Queenstown MRT Station.

However, the jury is out on how much this will tame land bids, which have soared wildly at recent state tenders.

Four of the eight sites on the confirmed list and at least four reserve list sites are near MRT stations – but there are also many sites not in the vicinity of train stations where more affordable private housing could be built.

A few plots are close to the city while the majority are in typical suburban locations where private condos catering to HDB upgraders are located.

Peter Ow, Knight Frank executive director (residential), said: ‘The government’s main message is that it is taking care of the upgraders’ market. The current release is to tackle and try to moderate prices in the upgraders market which concerns most Singaporeans.’

For new private homes, prices in the mass-market segment have surpassed their 2007 peak levels; whereas for high-end homes, prices have yet to recover to their 2007-highs, he added.

‘Thus, there are no sites in the Core Central Region, which includes the prime districts. The government recognises the fact that not all sectors of the residential market are doing well, especially high-end homes.’ Continue reading →