HK Property Pain ahead...many owners are holding on a negative asset. SG HDBee Hardland Pigeon Hole is still World Number 1, right Boss John?

[k1976]

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.

The stadium at Kai Tak has been delayed until next year; the former runway stretches out into Kowloon Bay.
Photographer: Eugene Lee/SCMP
By Shawna Kwan and Sharon Chau
August 27, 2024 at 7:00 AM GMT+8
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Hong Kong’s Kai Tak Airport was legendary among pilots—who had to thread their way between high-rises to land—and passengers, who gripped their armrests and held their breath as they peered into apartment windows on the way down.

After the new airport at Chek Lap Kok opened in 1998, Kai Tak was handed over to developers, who planned to fill the facility and its former runway stretching out into Kowloon Bay with million-dollar condos and upscale shopping.

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, according to brokerage Jones Lang LaSalle Inc.

 

[k1976]

https://www.google.com/amp/s/amp.sc...x-drops-8-year-low-amid-tepid-property-market

Hong Kong’s July used-home price index drops to 8-year low amid tepid property market​

Hong Kong’s housing industry is mired in a slump, as a huge stock of new homes combines with borrowing costs at a 23-year high

 

[k1976]

The prices of lived-in homes in Hong Kong fell 1.9 per cent in July from the previous month, dragging the official benchmark to its lowest level in nearly eight years, according to data from the Rating and Valuation Department.


The index of second-hand homes fell to 296.8 in July, the lowest level since a September 2016 reading of 296.2, according to the data. It was the third consecutive month of decline.


Hong Kong’s housing market is mired in a slump, as a huge pipeline of upcoming and unsold homes combines with the highest borrowing costs in more than two decades to sap purchasing demand. The slump has extended into the secondary market, where prices of lived-in residential property have already retreated by 4.7 per cent so far this year, erasing brief spurts of euphoria in March and April after the government removed some purchase duties.


The July decline was the largest monthly slide recorded by the index this year. In June, lived-in home prices dipped 1.01 per cent.

 

[k1976]

Singapore property players more optimistic in Q2 on expected interest rate cuts: NUS poll​

Based on the survey, 73.1 per cent of respondents indicate a slowdown in the global economy as the top risk

Samuel Oh​

Published Thu, Aug 29, 2024 · 02:43 PM
IREUS

• More than half of the respondents are expecting a moderately or substantially higher number of units to be launched in the next six months, says Ireus. PHOTO: BT FILE
• More than half of the respondents are expecting a moderately or substantially higher number of units to be launched in the next six months, says Ireus. PHOTO: BT FILE
• More than half of the respondents are expecting a moderately or substantially higher number of units to be launched in the next six months, says Ireus. PHOTO: BT FILE
• More than half of the respondents are expecting a moderately or substantially higher number of units to be launched in the next six months, says Ireus. PHOTO: BT FILE
• More than half of the respondents are expecting a moderately or substantially higher number of units to be launched in the next six months, says Ireus. PHOTO: BT FILE

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).

Market sentiments remained largely stable and cautiously positive as the market anticipates an improvement in economic performance in the second half of the year amid persisting global instability, said Ireus.

“The economic fundamentals here are sound, and in tandem with the upcoming easing of interest rates, we would expect overall market sentiment to improve further over time,” said Ireus’ director Professor Qian Wenlan, citing the 2.9 per cent year-on-year gross domestic product growth in Q2, based on the Ministry of Trade and Industry’s advanced estimates.

The Current Sentiment Index – which follows changes in sentiment over the past six months – bottomed out at 4.2 in Q3 2023, and climbed to hit 4.8 in Q2 this year, up from 4.7 in the preceding quarter.

Notably, the Future Sentiment Index – which tracks sentiment changes in the next six months – remained constant at 5.1 in Q2, reflecting more optimistic sentiment, compared with the 4.5 recorded three quarters earlier.

The Composite Sentiment Index – comprising the Current Sentiment Index and Future Sentiment Index, and serving as a barometer of general prevailing sentiment – remained constant at 4.9 in Q2 2024, which is below the neutral score of 5

 

[k1976]

Top risks​

The survey found that 73.1 per cent of respondents indicated a slowdown in the global economy as the top risk to watch, with another 46.2 per cent of them citing rising construction costs as potential risks that may adversely affect sentiment over the next six months.

Concerns over job losses or declines in the domestic economy and the increased supply of new development land ranked third, cited by 38.5 per cent of respondents.

There is, however, a silver lining amid such a grim landscape, since the US Federal Reserve has reversed its stance on interest rates and indicated that it will likely ease monetary policy,” said Prof Qian.

Lower interest rates and increased credit availability could help reduce business expenses, alleviating current concerns about the rising costs of doing business, she noted.

Other negative factors that may impact market sentiment included excessive supply of new property launches, rising from 26.5 per cent in the previous quarter to 34.6 per cent in Q2. About 30.8 per cent of respondents raised concerns about government intervention to cool the market, increasing from 11.8 per cent who said so in Q1.

The tightening of financing and liquidity in the market and rising inflation and interest rates showed significant declines during the quarter, with the former dropping from 47.1 per cent in Q1 to 19.2 per cent in Q2, and the latter decreased to 19.2 per cent in Q2, down from 50 per cent previously.

Only 7.7 per cent of the respondents said there is a risk of a real estate price bubble increasing in Q2, from 2.9 per cent in the previous quarter.

 

[k1976]

By sector​

In Q2, prime residential and business park/hi-tech space were the worst performing sectors, with a negative net current balance of 42 per cent. In terms of future net balance, prime residential recorded negative 27 per cent while business park/hi-tech space posted negative 23 per cent.

“The slowdown in home sales in the prime private market and the rising vacancy in business parks could be possible causes of the weakening performance of the two sectors,” said Sing Tien Foo, provost’s chair professor of real estate at NUS Business School. He added: “More headwinds will be expected in these sectors, with uncertainty on interest rates and the global economic climate ahead.”

Current and future net balance percentages are used to indicate current and future sentiment. They are based on the difference between the proportion of respondents who selected the positive and negative options in the poll.

The office sector showed a negative 19 per cent for its current net balance, but had the worst performance of negative 38 per cent for future net balance in Q2. “Office and logistics rental growth (are) tepid as economic tardiness is crimping business confidence, while cost concerns remain high on the agenda,” said a respondent.

Others such as suburban residential and industrial/logistics sectors continued to record negative scores in both its current and future net balances in Q2.

In contrast, suburban retail and the hotel/serviced apartments were the only two sectors with positive current net balance and future net balance.

When it came to prime retail’s current net balance, the sector registered a negative 8 per cent while maintaining neutrality in its future net balance score.

 

[k1976]

How the Fed will help Singapore REITs outshine banks​

Bloomberg Published on Thu, Aug 29, 2024 / 04:30 PM GMT+08 / Updated 14 minutes ago

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Singapore property owners have spent a long time languishing in the shadow of the chart-topping performance of the island’s banks. But with US Federal Reserve Chair Jerome Powell signaling the start of monetary easing from next month, the landlords’ day in the sun may not be far away.
Higher-for-longer global interest rates pumped up the profitability of loans at Singapore’s three homegrown banks. Last year, DBS Group Holdings Ltd., Oversea-Chinese Banking Corp. and United Overseas Bank Ltd. distributed a combined $11.3 billion in dividends, double the 2020 payout. This year, too, DBS has been generous in sharing the spoils of high net interest margins with investors. There hasn’t been much reason — yet — for the lenders to make aggressive provisions for loan losses.
Contrast this bounty with the lackluster performance of real-estate investment trusts.
The members of Singapore’s REIT index have together distributed between $5 billion and $5.5 billion annually to unitholders over the past three years, roughly $1 billion more than what they were paying out as they were being hobbled by Covid-19. The elevated interest cost of the post-pandemic era has been a pain point. Property owners have “taken a big hit from asset impairments over the past 12-18 months, especially for their overseas properties,” OCBC Investment Research said in a recent note.
But as interest rates begin to ease, the outlook for both profit and dividend distribution is going to change. Banks will most likely eke out a thinner margin on loans, and they’ll perhaps have to make higher provisions for soured corporate debt, even as REITs get a breather on their cost of financing. Lower expenses will mean more of the rental income flowing to investors. OCBC analysts expect the median Singapore REIT tracked by them to pay 2.9% more per unit next financial year.
From nursing homes in Japan to data centres in Ireland and Trader Joe’s grocery stores in the US, Singapore REITs give investors access to all sorts of rental streams. Even the landlords exposed to the worst segment of all — the US office market — are beginning to see a ray of hope.

 

[k1976]

Rise in private home ownership among those under 35​

By Nur Hikmah Md Ali
/ EdgeProp Singapore |
August 21, 2024 6:55 PM SGT

https://www.edgeprop.sg/property-news/rise-private-home-ownership-among-those-under-35

The number of young private homeowners under 35 is increasing (Photo: Samuel Isaac Chua/EdgeProp Singapore)
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SINGAPORE (EDGEPROP) - Lee Sze Teck, senior director of data analytics at Huttons Asia, observes an increasing trend of younger buyers opting to buy a private condo as their first home.
Huttons estimates that around 30% of buyers of new private homes are 35 and below compared to 20% five years ago. “Private homes are gaining popularity among youths as they offer more flexibility and are less restrictive than an HDB flat or Executive Condo (EC),” says Lee.

Additionally, Lee points out that the potential gains from the sale of a private home are higher than those from an HDB flat. Between 2009 and 2Q2024, private non-landed prices in the Outside Central Region (OCR) increased by 149.1%, while HDB resale prices increased by 87.9%.

Read also: Homeownership, desire to upgrade still strong among youths: ERA survey

The Department of Statistics figures show that the number of young residents (under 35) staying in private homes has risen steadily since 2011. In 2023, there were 380,459 private housing residents under 35, an increase from 375,651 in 2022.
“The attractiveness of facilities, lifestyle and exclusivity, as well as investment opportunities offered by private homes, are strong pull factors for youths to aspire to,” says Christine Sun, chief researcher and strategist at OrangeTee Group.

Can young people afford to upgrade to a condo?​

Housing affordability has improved against median household incomes in 1H2024, says Huttons’ Lee. In 2023, the median household income was $10,689 per month. “With rising income among the younger generation, the aim of buying a private home is achievable,” he adds.
For younger buyers who want to purchase a private home — and typically have a budget of around $1.2 million to $2 million — Lee suggests buying a two-bedroom unit. “This requires at least five years’ savings of at least $10,000 to $20,000 a year,” he says. “Together with their CPF contributions, they will be able to cover part of the downpayment for the private home.”

Chart: URA, HDB, Singstat, Huttons Data Analytics (as of July 15)

OrangeTee’s Sun notes that those with additional savings, financial assistance from their parents, or the ability to sell their existing flats for a good price have a better chance of affording a private condo.
However, she cautions against overspending on housing while underestimating other costs, especially for those with children, such as childcare fees and other expenses, leaving very little for other necessities. “It is important to purchase a home within one’s financial means and refrain from overleveraging, thus avoiding financial strain caused by excessive debt,” Sun adds.

 

[k1976]

Are Middle-Class HDB Homebuyers Losing Out After The Latest HDB Loan Restrictions?​

• 
  Ryan J
• August 28, 2024
• 6 min read
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The latest cooling measures on 20th August 2024 had a target: to slow the rising prices of HDB flats. To this end, the maximum Loan To Value (LTV) ratio for HDB loans has now decreased to 75 per cent, down from 80 per cent previously.
But how much of a difference does five percentage points really make? And from the word on the ground, there were some suggestions that the middle class is being marginalised in more ways than one: with lower-income brackets getting more generous grants while the loans they can take will fall, essentially being the most affected. How true is all of this?

Are middle-class buyers being ignored?​

The most common argument is that the lower-income groups get bigger subsidies, and the higher-income groups have no problems paying existing prices – but the sandwiched people in the middle, especially the *lower-*middle, feel they’re getting little to no help.
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But how dire is their situation?
Let’s look at a range of earnings up to $14,000 per month (if you earn more than that you can’t get an HDB loan anyway, so this would be irrelevant to you).
The first thing to consider is the increased Enhanced Housing Grant (EHG) which has been ramped up to a maximum potential of $120,000 (up from $80,000). The amount of the EHG you get is based on income, among other factors:

Note that for those who are in the earnings range of $8,000+ per month, the recent changes don’t provide any benefits to them.

Who is the middle class?​

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Middle-class is admittedly a vague term; and it gets tougher when you want to define a lower and upper middle. But to be as fair as possible, let’s try to quantify it a bit:

So who should we exclude from our study?

1. Those above the 60th percentile. The 60th percentile is near the HDB loan limit ($14,000), so we’ll consider affordability up to $13,399.
2. Those below the 30th percentile. The numbers show that below this household income, there aren’t that many options when it comes to HDBs. The middle class are those who have options. For example, at the 20th percentile, the budget is only at $300k+ which leaves very few 3-room flat options to begin with.

As such, the middle class we’re looking at have a household income of around $6,708 to $13,399.
Next, let’s look at how much each of these income groups can afford. Affordability varies greatly among different households as different people wish to take up different loan amounts or have varying levels of cash/CPF. So we’ll have to make a few assumptions:

1. The household will maximise their Mortgage Servicing Ratio (MSR). For HDBs, this is 30%.
2. The household will take a full loan if possible. Prior to 20th August 2024, this was 80%.
3. The HDB price is determined by the above 2 assumptions. If the loan plus the grants they have is not more than the flat price, the shortfall will be topped up with cash/CPF.

 

[k1976]

Here’s a chart to paint a clearer picture:

Here we looked at the maximum loan that can be taken based on the household income. Then we look at the remaining downpayment and how much can be helped with the CPF Housing Grant and Enhanced Housing Grant.

Next, we added the Buyer Stamp Duty (BSD). The remaining downpayment that cannot be covered by grants and the BSD makes up the “top-up” that each household has saved and is willing to commit to the purchase.

This top-up is important because the new LTV affects how much more the household has to put up to purchase an HDB of the same price. If they cannot do the top-up, then their affordability is drastically reduced.

 

[k1976]

As we’ve shown in “difference in top up”, some groups will need to raise the top up amount after the lower LTV. You can see that this is quite proportional, with the upper end of the spectrum having to top up more.

Here’s what it looks like visualised:

You can’t see the difference here as the flat price is the same, however, the top-up amount is now different. Due to the lower LTV, households across the board now have to cough up more cash/CPF to buy the same home. Here’s a side-by-side comparison of those earning a median income of $10,869:

Before 20th August 2024, those earning the median household income had to top up $112,286 to afford an HDB costing $859,506.

Since the new LTV ruling, this is now $155,262, a difference of $42,975.

For those who have $42,975 squirrelled away in fixed deposits or investments that can be readily liquidated to meet this new change, bravo! Nothing has changed for you as you’ve merely reallocated your cash/investment into real estate.

But not everyone is able to do so. If you are in urgent need of housing and have already saved up just enough to afford that dream home worth $800k+, this could spell a setback of a couple more months of saving to meet this requirement or buying something cheaper.

How much lower would you have to go though? On the surface, you may think your affordability has dropped by just $42,975. This isn’t quite true.

 

[k1976]

This happens because you’re restricted by your downpayment, not by your income.​

So what does the drop in affordability look like across our middle-income groups? In this case, we’ll use the cash/CPF available as a top-up plus the grants available to form the deposit. For simplicity, we’ve excluded the BSD as some of it would still be needed to pay down the new HDB price anyway.

Those earning the median income of $10,869 now see a drop of around $170k in affordability. This is a big difference

 

[millim6868]

Soon sg pigeon holes will be in these state,lol

 

[syed putra]

Anything xi jinping touch turns to dust.

 

[k1976]

 

[k1976]

Where Public Housing Apartments Can Go for More Than $1 Million​

Singapore’s public housing system has been a great success and a key factor in the nation’s development. But in recent years, rising prices have raised questions about affordability.

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By Sui-Lee Wee
Photographs by Chang W. Lee
Sui-Lee Wee was raised in a public housing apartment in Singapore.

• Published May 24, 2024Updated May 29, 2024

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Six decades ago, when Singapore was emerging as an independent nation, three out of four residents lived in overcrowded and filthy slums. The ramshackle houses had tin walls and were known as squatters.
Today, Singapore is a wealthy, modern city where roughly half of its 6 million people live in well-constructed high-rise apartments that were built by the government. These subsidized apartments are typically bright and airy, and defy most perceptions of public housing projects. Most are effectively owned by their occupants, a testament to their affordability.
But over the past 15 years, prices in the secondary market have soared 80 percent. As of early May, 54 of these apartments have sold for more than 1.35 million Singaporean dollars, or $1 million. They are sought after because they are spacious, in good locations, and are still cheaper than private condominiums of a similar size.


https://www.nytimes.com/2024/05/24/world/asia/singapore-public-housing-program.html

 

[k1976]

M-shaped Society — The Wealth Defense Battle Faced by the Middle Class​

Walk In The Clouds
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Dec 21, 2023

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Photo by krakenimages on Unsplash
The term “M-shaped society” is a concept used in the context of social structure. It refers to a society where the middle class is shrinking, resulting in a greater economic disparity between the rich and the poor. This term is often used to describe a social phenomenon where the income and wealth gaps widen, leading to a less balanced social structure with a weakened middle class. The concept is not unique to any specific country and has been discussed in the context of various societies.
The main characteristic of an M-shaped society is the collapse of the middle class, where the rich become richer, and the poor become poorer, leading to a significant reduction in the original middle class. After entering an M-shaped society, the United States experienced a 10-year Great Depression, and Japan experienced 20 years of stagnation. The question arises whether China has also entered the M-shaped social structure.

Understanding the M-shaped Society​

During the prolonged recession from the 1990s to the present, Japan’s social structure underwent significant changes. The previously largest middle class, apart from a small portion entering the high-income upper class, mostly fell into the middle to low-income or even low-income strata.

 

[k1976]