Singapore Property

06/05/2020

It is indeed a good news for developers and Singaporean couples!

The government granted 6 months extension for:

- Project completion period for residential, commercial and industrial.

- Commencement and completion of residential developments.

- Sale of first residential property for those Singapore couples looking for ABSD remission.

Ministry of National Development

24/04/2020

Owning to the scale of the disruption, many people had expected property prices to fall in China after China eased their lock down restrictions.

Surprisingly, the response for new launches have been massive, prices in major cities rose after the lock down, a sign that buyers have returned to the market, and pent up demand released gradually as the economy and life start to get on track.

When it comes spending power for high-value purchase such as property, the Chinese are very resilient. Why? Because China's gross household saving rates - the total saving as a percentage of household disposable income, is at 35% since 2007.

Singapore is the only country to beat China at saving beside Suriname, at a household saving rate of 55%!

Both are prolific savers.

Our prolific savings rate has a significant implication for Singapore's private residential property market, those intend to buy will stay in the market after circuit breaker is lifted.

A wait-and-see attitude for a price fall may be in vain, for MAS is promoting price stability by offering home homeowner loan deferment until end of the year, fire or distress sales will be few and far between.

The China property market is showing signs of a rebound after the Covid-19 lockdown. And there are parallels that bode well for Singapore.

16/04/2020

Shoppers are slowly returning to the streets, and ready to spend as the coronavirus quarantine measure relax.

The figure is believed to be the highest daily haul for a single luxury boutique in China.

14/04/2020

A friend of mine planned to buy a property for investment recently.

When she applied for a bank loan, to her big surprise, the bank told her that she can't pass the TDSR stress test.

You can fail the TDSR test in 5 ways:

1. Too much liability or too little income
- If you have a sizable car loan, personal loan and credit card loan, you can fail your TDSR test because you have too much liability.

Solution: The short loan tenure of car and personal loans means high monthly repayments. Lower your liability by paying your outstanding car loan and personal loan as much as your can or you will have to settle with a lower loan quantum.

Avoid spending on multiple credit cards as this will affect your TDSR.

You can also increase the home loan amount by pledging your liquid assets such as bank deposits or stocks.

2. You are a multiple-property investor.
- If you own a property with an existing mortgage buying a second property, you are only entitled to 45% loan-to-value. Also, your exiting housing loan will be added to TDSR calculation.

If you own multiple properties, banks recognize only 70% of your rental income. You will also need to show at least 6 months remaining lease in the tenancy agreement.

Solution: Consider decoupling if you have co-owner for current property, this will free you from liability of your existing mortgage, and borrow up to 75%.

For multiple property investors, declare other forms of liquid assets and pledge them with the banks to increase your income. Renew the tenancy agreement in advance before expires.

3. You are self-employed.
- Banks only recognize 70% of your income from your latest IRAS Notice of Assessment if you are a self-employed.

Some business owners tend to declare lower income to maximize tax savings, which affects the results of their TDSR.

Solution: Consider buying or refinancing your property before you leave your fixed income job. Always declare all the income generated from business.

4. Legal problem
- Banks can't approve your mortgage application if you have litigation issues, or undischarged bankrupt.

Solution: Wait till the dust has settled and apply again. Discharged bankrupts need to wait for 5 years before apply for the loan again.

5. Bad credit
- Banks will reject the mortgage application if you had a habit of bot paying your credit card bills on time, or default on payment.

Solution: Start with a clean slate today and clean up outstanding bills. Bank usually need one year of clean repayment history to consider lending you money again.

13/04/2020

It has been of a roller-coaster....

But like a roller-coaster, there are ups and downs.

During the Great Depression, a number of business that made their name are now household icons in the modern day. They achieved this through a readiness and foresight.

But most importantly, they were ready to step up to the plate the moment opportunity arose, because they knew that eventually market would improve, and demand would overwhelm once the floodgates of riches opened.

China’s housing market is staging a revival as more sales offices reopen across the country following a nationwide shutdown, saving home builders from a deeper liquidity crunch.

12/04/2020

In the current coronavirus predicament, it is natural to feel uneasy.

A looming recession, and human's nature to counter loss aversion are some of the reasons why it is tempting to take a short term view on things.

So in time of uncertainty and volatility, it can be helpful to take a step back to adjust your perspective with a long term view.

With this in mind, let's look at an example:

Nassim Mansion is an old grand dame sitting atop Nassim Hill, one of the ultra exclusive locations in Orchard.

All the way back in 2000, this 7,115 sqft penthouse was bought for S$805 psf, at S$5.73 million.

Now, if you are familiar with the Singapore property cycle, you'd know that the Q2 2000 was the peak of the market following the Asia financial crisis in 1997.

It was then sold at a loss in early 2004 at S$5.2 million.

Here's the STUNNER:

It was sold again in 2007 at the next peak of the market for a mind blowing S$16 MILLION - that's more than S$10 million PROFIT for the owner, or almost TRIPLE its original value!!

Imaging ....

How you's feel if you were that guy who sold it for a loss in 2004, only to see it sold for TRIPLE its price in 2007?

A highly profitable deal ... if only he can wait.

One of Warren Buffett's famous sayings is this :

" Our favourite holding period is forever."

What he trying to convey is if you don't feel comfortable owning a stock for 10 years, you shouldn't own it for 10 minutes.

This long term view is one of the reason why he has been so successful, and became the role model for esteemed investors.

If you were to really zoom into the property cycle, you'll see that there are always peaks and dips. When you take a long term view over your property, the higher your chances are of exiting with a profit.

20/11/2019

Diversifying his fashion fortune to preserve his sizeable wealth, the value of the real estate portfolio owned by Mr Ortega's investment holding Pontegadea Inversiones stood at around 10 billion euros (S$15 billion) at the end of last year.

Read more at The Business Times.

12/11/2019

Singapore is now ranked No 1 for real estate investment prospects in terms of price increases in 2020.

[SINGAPORE] The fortunes of two of Asia's hottest property markets are diverging. Read more at The Business Times.