Property Soul - a Singapore property owner, buyer and investor

Every time I read this journalist's articles, I have difficulties understanding where he is coming from. In this article, he is suggesting the young people can borrow more and commit to a longer tenure housing loan. Remind me of the 100-year multi-generation mortgage in Japan during the property bubble in the 1980s. After the property market collapsed, the second and third generations are still repaying the home loans of their grandfathers!

I always advise people to borrow less and shorter so that one can clear debts earlier in life. Paying compound interest of mortgage only benefits the bank and CPF. With a large and long housing loan, how to achieve financial freedom or retire early? No wonder Singapore's retirement age has to extend to 69.

Consider letting young Singaporeans borrow more to fund housing dreams BORROWING to buy a dream home? Availability of debt financing is good, and interest rates may come down. However, a myriad of rules govern how much one can borrow. Read more at The Business Times.

If the government can ban the use of asbestos in 1989, why can't they ban the use of formaldehyde in all renovation and furniture right now? It is too late to wait till January 2026 to ban formaldehyde in interior paints only.

askST: My house is slowly killing me. What can I do? Chronic exposure to formaldehyde has been reported to cause obstructive lung disease and impaired lung function. Read more at straitstimes.com.

We are building for the purpose of building, when there is no real demand. Build and let it sit there empty. This is how human beings pollute the environment and destroy the earth.

"Decades of rising prices helped cement that idea, leading some to buy multiple homes. Many now sit empty – one in five homes in Malaysia were unoccupied as of 2020, according to census data.

In recent years, prices have largely plateaued and owners unable to sell their apartments are finding themselves with underwater mortgages. And yet, new buildings keep coming up.

In the commercial sector – where one-third of office space is empty – there also are not enough tenants to fill the supply,

At least half of Kuala Lumpur’s 10 tallest buildings, some of which are still under construction, have some government ties. And a market crash is unlikely, analysts say, because residential owners prefer holding on rather than selling and taking a loss, while many of the bigger office buildings are owned by companies and funds that can weather a multiyear downturn.

Underpinning much of this is Malaysia’s tendency to look to the Middle East as a model ... Buildings become a way of “showing will to power" ... “This mentality of, ‘Mine is bigger’.”"

World’s second-tallest tower tests Malaysia’s skyscraper appetite amid property demand doubts The 678.9m Merdeka 118 will fully open to the public later in 2024. Read more at straitstimes.com.

When I first read this new rule imposed by the property agencies, I already know it won't work. You can't make money from somebody and ask him to pay you too.

Tepid take-up of new guidelines on property agent commissions Agents say buyers are not willing to pay for services they now receive free. Read more at straitstimes.com.

It is a known secret to get a divorce first before declaring bankruptcy. In fact, this is what businessmen do when they know that they are running into financial difficulties. This is the best way to protect the spouse and the children from creditors. Their lifestyle won't be affected because they are no longer related to the bankrupt. This is exactly how Evergrande's founder Xu Jiayin got a "technical divorce" from his wife Ding Yumei. Xu's debts are now personal liability rather than a joint liability.

The perils of using quickie ‘divorces’ to escape debt Such stunts do not work, and couples who do so risk being taken to task for misleading the courts. Read more at straitstimes.com.

https://www.businesstimes.com.sg/property/finland-ban-russians-buying-property

Finland to ban Russians from buying property Finland unveiled plans for a full ban on property acquisitions by some foreign nationals as security concerns surfaced over purchases with links to Russia near critical infrastructure. Read more at The Business Times.

"In neighboring New Zealand, where prices surged over 40% during the COVID-19 pandemic, they were expected to rise only 1%.

In India, demand for luxury properties from cash-rich individuals was expected to drive house prices even higher over the next couple of years. Despite demand coming from a wealthy few in a country of 1.4 billion, that translates into a sizeable market, enough to push average home prices up by around 8% this year and 6% next.

The battered German housing market, where house prices plunged 7.2% last year, was expected to stabilise in the coming months with a 1.4% fall this year, followed by a 2% rise in 2025."

Already expensive global house prices to get modest boost from rate cuts: Reuters poll House prices in most key markets will rise modestly this year and next on expectations mortgage rates will fall further and help to marginally improve affordability of expensive property, a Reuters poll of analysts showed.

I checked this out for my trip this month. Are consumers willing to pay more for a minimalist hotel room (even the breakfast is minimalist style)? Also don't understand why Muji Hotel charges a fixed room rate every day. Why would visitors want to pay a high rate when Muji's competitors and 5-star hotels all slash prices during non-peak season?

Can a no-brand retail store muscle into the brand hotel space? WHEN flint-eyed Clint Eastwood strode out in Sergio Leone’s spaghetti Westerns as the “Man with No Name”, audiences were spellbound. The less he said, the more his fans grew. In 2020, Empire magazine voted the “laconic anti-hero” of the Fistful of Dollars trilogy as the 33rd greatest movie...

GIC still owns 5 percent of Vanke’s Hong Kong shares

China Vanke debt cracks exposed after first loss in 20 years CHINA Vanke faces mounting concerns about its ability to repay debt after posting the first loss in two decades. Read more at The Business Times.

After a round of layoff this February, the numbers are worse in Q2. PropertyGuru has been in business for 17 years but never managed to make any profit. Anyway, it is expected to be sold to a private investment company in Q4.

PropertyGuru sinks deeper into the red with S$16.1 million Q2 loss PropertyGuru sank deeper into the red in the second quarter ended Jun 30 with a net loss of S$16.1 million, widening from S$6.5 million recorded in the previous corresponding period. Read more at The Business Times.

Lentor Mansion launched in March is 77 percent sold. Lentor Modern Mall to open in 2026 is 41 percent leased. Not sure being the "King of Lentor" is a good strategy of Guocoland buying so many plots of land at the same location.

GuocoLand H2 profit falls 58% to S$62.8 million PROPERTY developer GuocoLand’s net profit for the second half of its 2024 fiscal year ended Jun 30 fell 58 per cent to S$62.8 million, from S$148 million in the same period a year ago. Read more at The Business Times.

Check how you have contributed to Singapore's tax revenue in the last financial year
- Taxes collected rose 17 percent from 68.6 billion to $80,3 billion, the highest growth in the past five years.
- $5.9 billion property tax collected - an increase of 16.5 percent or $800 million from last year.
- Stamp duty collection fell 2.4 percent or $100 million due to lower property transaction volumes.
- Stamp duty and property tax together contributed to 14.6 percent of Singapore's tax revenue.

Singapore tax revenue rises 17% to $80.3 billion amid wage and economic growth Iras audited and probed 9,590 cases in FY2023/24, recovering about $857m in taxes and penalties. Read more at straitstimes.com.

https://www.businesstimes.com.sg/wealth/past-rate-cut-cycles-offer-clues-potential-asset-class-returns

Past rate-cut cycles offer clues to potential asset-class returns THE US Federal Reserve is finally ready to embark on a new trajectory. It will cut the target Fed funds interest rates at its next Federal Open Market Committee on Sep 18, setting rates that will determine the risk-free rate in the financial markets. Read more at The Business Times.

Less need to rent HDB flat as interim housing solution

HDB completes 94% of all pandemic-delayed projects THE Housing and Development Board (HDB) has completed a total of 87, or 94 per cent, of pandemic-delayed projects from October 2020 to end-August 2024. Read more at The Business Times.

This ERA survey is absurd. When you ask people whether they will eventually buy a private home, it is no difference asking car owners whether they will buy a better model next time, or employees or business owners whether they want to have financial freedom one day, despite money pressures.

Many Singaporeans aspire to eventually buy private homes despite money pressures: Survey Three in four respondents are eyeing $1 million to $3 million dream homes. Read more at straitstimes.com.

In Q2, the top risks cited by property players are slowdown in the global economy (73.1 percent), rising construction costs (46.2 percent), job losses or declines in the domestic economy and the increased supply of new development land (38.5 percent). Respondents are most pessimistic about the future of the office sector (-38 percent), prime residential (-27 percent) and business park/hi-tech space (-23 percent).

Singapore property players more optimistic in Q2 on expected interest rate cuts: NUS poll SENTIMENTS in the property market seem to be turning for the better in the second quarter, based on a survey by the Institute of Real Estate and Urban Studies (Ireus) at the National University of Singapore (NUS). Read more at The Business Times.

These days a small project with less than 50 owners asking for $200 to 300 million has a better chance of going through collective sale. However, with asking price raised from $392 million to $420 million, these 45 owners of D’Grove Villas have to ask themselves some questions:
1) Compared with their 1st failed attempt in 2019, is the private residential enbloc market heating up or cooling down?
2) When they say "overall private residential prices have appreciated since 2019", what are the differences or gaps in price appreciation in CCR, RCR and OCR private homes over the past 5 years?
3) Compared 2019 and 2024, are developers more or less enthusiastic acquiring land plots, especially after ABSD being raised to 40 percent?
4) How are the ease of borrowing and interest rates different in 2019 and today?
5) D’Grove Villas is completed in 1992. How much higher is the project maintenance cost now for a 32-year-old project compared with a 29-year-old project five years ago?

D’Grove Villas to launch third collective sale bid at $420 million The first attempt in 2019 failed because of the 2018 cooling measures. Read more at straitstimes.com.

Same as property agents, renovation in Singapore is also a cowboy industry. Licensing and accreditation can only solve part of the problem. For one, most customers are buying a home and renovating it for the first time. Unless their daytime job is managing outside contractors, there is high chance that they lack prior experience in dealing with third party agencies or contractors. Customers get the contact through "referral". They don't know how to check references and compare quotes. There is also no proper payment schedule to protect the customer's interest.

Should interior designers be licensed? Some say regulation needed for renovation industry Even as industry groups push through with their own accreditation programmes, regulations may still be needed to address some long-standing issues within the renovation industry.

I would rather the old lady sold the shophouse early and spent the proceeds living a comfortable life for herself and her loved ones than seeing the greedy grand nieces and nephews fighting in court.

Elderly woman wins case to cancel transfer of $7.8m shophouse; lawyer’s conduct under scrutiny The court had doubts whether the woman understood the nature and effect of the transfer. Read more at straitstimes.com.

https://www.scmp.com/business/article/3276182/hong-kongs-july-used-home-price-index-drops-8-year-low-amid-tepid-property-market

Hong Kong’s July used-home prices fall to the lowest in 8 years Hong Kong’s housing industry remains mired in a slump, as a huge pipeline of coming and unsold homes combines with the highest borrowing costs in more than two decades to sap demand.

"Big reductions in benchmark borrowing costs can be really bad for equities and riskier bonds. .... there are 14 full Fed cycles in modern financial history. While markets had different reactions to rate cuts during different periods, there are some clear trends that emerge ... The main conclusion: The market did worse when the Fed cut rates rapidly versus gradually."

Traders’ Dreams of Deep Fed Rate Cuts Look Misguided The market doesn’t do so well after big policy reductions

Since the Hong Kong old airport had been relocated to Chep Lap Kok in 1998, there was so much hype about developing this prime plot of land.. "For the better part of a decade, the area has generated record-breaking sales at land auctions and attracted eager buyers. About 14,000 units have been built there, more than 8% of the city’s total new supply since 2014." Now property prices have fallen 25 percent (and still counting) from the peak of the market 3 years back. Lesson learned: There is no advantage for homebuyers paying a premium for a promising new district. They are only benefiting the developers,, agents and banks.

Hong Kong’s Old Airport Becomes Symbol of City’s Property Pain Kai Tak was one of the city’s hottest addresses, but with prices falling fast, many homeowners owe more than they could get by selling their property.

Owner holding District 10 project for 11 years still suffered $417,000 or 13 percent loss. The 3-bedroom unit at Mon Jervois was sold for $1,871 psf only.

Is it a Good Deal?: Seller of a 3-bedder in D10 lost $417,000 on the 1,496-sq ft unit The unit was sold for $2.8 million earlier this month.

https://www.bnnbloomberg.ca/business/company-news/2024/08/29/risks-to-us-job-market-start-to-emerge-in-regional-fed-surveys/

Risks to US Job Market Start to Emerge in Regional Fed Surveys Employment gauges in a fresh batch of regional Federal Reserve bank surveys are emblematic of the risks to the US job market prompting the central bank’s turn toward interest-rate reductions.

Remind me the story of two elderly men in heaven. The Asian old man said he has worked hard all his life and managed to pay off his house before he died. He has no regret. The western old man said he has managed to rent every house he dreamed of living there before he died. He has no regret. Which path are you taking in your life?

With rising resale prices, is HDB's lease buyback scheme a good option for seniors? For seniors with older or smaller homes, the lease buyback scheme may be a better option than selling their flat, an SUSS associate professor says.

https://www.businesstimes.com.sg/property/relevance-real-estate-agent-table

The relevance of a real estate agent is on the table Less than two months ago, Joanne Cleaver sold her home in a suburb of Charlotte, North Carolina, for US$725,000 in an unusual way: Facebook Marketplace. Read more at The Business Times.

The increasing cost-conscious consumers is the result of the shrinking pool of both cash-rich local diners and crazy rich Asian tourists

Singapore’s fine-dining scene in dire straits; more closures expected before year end BY OCTOBER, one-Michelin-starred Sommer will be no more. Former star Beni recently shuttered without a word. Popular fine-dining favourite Voyage is also set to close at the end of December. Longstanding Bam! Restaurant served its last meal on Aug 15. They are just the latest stark reminders that ta...

2024 Great Singapore Sales with Good Class Bungalow sold at 8.8 percent or S$3.8 million discount

Convicted Singapore tycoon’s mansion sold at $3 million discount A convicted oil tycoon’s mansion is being sold for nearly S$4 million off its original asking price, in a sign of the pressure on valuations in Singapore’s high-end market despite a recovery in sales.

Interesting comment from this BT article: "The six industrial S-Reits have an average aggregate leverage ratio of 37 per cent, below the S-Reit sector’s average of 39.1 per cent and well below regulatory limits of up to 50 per cent."

Recently, MAS has to extend the aggregate ratio limit from 45 percent to 50 percent to save the S-Reits. Also, should we be happy about 89 percent occupation rate? In contrast, Asia's largest Reit Link Reit only has an aggregate leverage ratio of 19.5 percent. Malls of Link Reit has an occupation rate of 98 percent.

Industrial Reits maintain resilience despite sector’s slowdown IN JTC’s latest market report for the second quarter of 2024, it noted that industrial rents rose 1 per cent quarter on quarter, recording the slowest rate of increase since Q1 2022 following the Covid-pandemic recovery. On a year-on-year (yoy) basis, industrial rents are still up 6.6 per cent. Ov...

Jurong Lake District is a long-term development project. CapitaLand was the sole developer to commit to it because they have government backing for a project with really very long-term on return on investment. Also, it was 3 years back when the real estate market and interest rate environment are very different from now.

CapitaLand’s big home bet is Jurong Lake District The project is set to become Singapore’s largest business district outside the CBD. Read more at straitstimes.com.