Last few years of Sell-One-Buy-Two Huat Big Big scheme create a lot housing loan business for banks….many banks are laughing with big big profits now

[k1976]

Growth for the rest of 2024 and into 2025 should continue to be supported by the ongoing upswing in the global tech cycle, alongside the gradual easing of financial conditions,” the review said. “Although growth in the US and China is expected to moderate in 2025, improved prospects in the Eurozone and several ASEAN economies should provide some countervailing support.”

 

[k1976]

Many uncertainties ahead…sit tight

 

[k1976]

Singapore’s growth should be sustained for the rest of 2024 from ongoing upswing in electronics and trade cycles: MAS​

Felicia Tan & Cherlyn Yeoh Published on Mon, Oct 28, 2024 / 12:00 PM GMT+08 / Updated 4 hours ago

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Singapore should still see growth in the rest of 2024 due to the ongoing upswing in the electronics and trade cycles as well as the easing in global financial conditions, says the Monetary Authority of Singapore (MAS) in its macroeconomic review for October this year.
The review is published twice a year in conjunction with the release of the MAS’s monetary policy statement (MPS).
The statement comes after the Ministry of Trade and Industry (MTI) said that Singapore’s 3Q2024 GDP expanded by 2.1% q-o-q, accelerating from the average of 0.4% in the first half of the year. Based on the MTI’s advanced estimates, Singapore’s economy grew stronger than expected underpinned by a step-up in manufacturing output, particularly in the electronics industry. Activity also picked up in the modern services cluster.
This year, the MAS expects Singapore’s GDP to come in the upper end of its forecast range of 2% to 3%. The negative output gap is expected to close in 2H2024.
At the same time, the global economy is tipped to “expand at a steady pace” as disinflation remains on track.
According to the review, most of Singapore’s key trading partners saw an increase in growth momentum in the second quarter of this year supported by the ongoing recovery in the tech cycle and firmer domestic demand.
See also: Singapore headline inflation grows 2% y-o-y in September while core inflation rises 2.8% y-o-y
“Meanwhile, global disinflation has progressed, with services inflation finally easing meaningfully alongside a moderation in labour cost pressures. The post-pandemic supply-demand imbalances having been broadly resolved in key economies,” the review adds.
As such, it sees that total demand should continue to expand underpinned by firm household spending and business investment, with additional support from near-synchronised monetary policy easing by central banks.
“The last mile of disinflation should remain on track, alongside steady growth across most economies. Nevertheless, there is elevated uncertainty around both growth and inflation, stemming from geopolitical risks,” the report reads.

 

[k1976]

2025 expectations

The Singapore economy has “strengthened decisively” in 3Q2024, underpinned by broadening recovery in the manufacturing sector, increased trading activity in the financial sector and the return of Chinese tourists.

For the remainder of 2024 and leading into 2025, it is expected that growth should continue to be supported by the upswing in the global tech cycle, alongside easing financial conditions.

In 2025, the Singapore economy is expected to expand at close to its potential rate, although the central bank sees “significant uncertainty” around the economic outlook on the back of continuing risks externally.

“A sharp escalation in geopolitical and trade conflicts could exert sizeable drags on global and domestic investment and trade. There is also uncertainty around the pace and impact of global macroeconomic policy easing, and with it, the durability of the electronics upturn,” states the report.

With regards to core inflation, MAS expects core inflation to slow down further for the rest of 2024, reaching around 2% at the end of the year.

In 2025, MAS core inflation and CPI-all items inflation are expected to average 1.5% to 2.5%, a significant decrease from their peaks over the last two years.

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“The disinflationary trend will be anchored by a broadly benign external cost environment and a slower pace of increase in domestic labour costs, the report notes, adding that the transitory effects of the GST increase are likely to fade.

However, upside and downside risks to the inflation outlook remain, arising from growing geopolitical tensions, volatile commodity prices and the impact of global growth outcomes on domestic labour market conditions.

 

[k1976]

S$NEER unchanged

With the stronger-than-expected near-term growth momentum and slightly negative output gap expected to close before the end of this year, the MAS has kept the prevailing rate of appreciation of the Singapore dollar nominal effective exchange rate (S$NEER) policy band in October.

“All in, MAS assesses that the prevailing rate of appreciation of the policy band is for now consistent with medium-term price stability. The balance of risks in 2025 has tilted towards lower growth, amid heightened global uncertainties,” says the central bank, which also kept its S$NEER policy band unchanged in July.

Asean Countries

Following the US-China trade war, there have been instrumental shifts in global trade patterns, particularly between the US and China.

In 1H2024, bilateral trade between US and China fell by 6% y-o-y, while overall trade between US and the rest of the World grew by more than 40% since 2017.

Asean countries have benefitted from the diversion of electronics trade between the US and China, through increased direct investment inflows.

The region can continue to benefit by specialising in different parts of the value chain, with Singapore leveraging its comparative advantage in producing upstream and midstream electronic components and providing supporting intermediation services to trade.

“Besides trade-related services such as transport and storage, Singapore has a comparative advantage in financial and professional services, which could complement the region’s manufacturing-driven export profile,” the report notes.

 

[k1976]

In the September survey, SMU and DBS also looked at the impact of global economic developments on Singapore’s economic growth and inflation.

One of the findings showed that Singaporean consumers expected a slight negative impact on Singapore’s economic growth over the next 12 months, in response to expanding conflicts in the Middle East and Ukraine, geo-political tensions and an uncertain policy environment.

See also: Singapore headline inflation grows 2% y-o-y in September while core inflation rises 2.8% y-o-y



Additionally, despite a more broad-based stabilisation in inflation expectations in the face of general cost-of-living pressures, Singaporean consumers expect their overall expenses to increase slightly over the next 12 months.

The survey found that Singaporean consumers expect their budget share of expenses for education, recreation and culture, communications, clothing and footwear and miscellaneous goods and services to remain unchanged over the next 12 months.

However, they expect a slight increase in the budget share of expenses in food, transportation, housing and utilities, healthcare and household durables and services over the next 12 months.



“These results indicate that respondents expect their consumption baskets to change over the next 12 months, with a higher budget share on certain components,” the survey notes, adding that this could be due to changes in post-pandemic consumption behaviours such as working from home or ordering groceries online.

Looking ahead, around 44.8% of respondents expect inflation to decline in the medium term of one year, while 44.6% of respondents felt that one-year-ahead inflation will increase.

According to the survey, this shows a “continued cognitive dissonance” and disagreement about inflation, arising from a high level of uncertainty about the global economy and policy environment.

The main reasons cited by respondents who expect a decline in inflation include a slowdown in global growth (37.4%), the role of central banks in keeping interest rates high (30.4%) and the resolution of supply chain disruptions (19.1%).

 

[k1976]

These 3 Top Banks Have Already Lowered Interest Rates After September's Fed Rate Cut​

Published on Oct. 27, 2024

By: Matt Frankel, CFP®
Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrityensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page. APY = Annual Percentage Yield. APYs are subject to change at any time without notice.

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KEY POINTS

• After the Federal Reserve lowered interest rates in September, many of the top banks did the same.
• Some of the top online savings accounts on our radar lowered rates by 0.25% to 0.50%.
• A top online savings account could still be an excellent choice for you -- you can enjoy a much higher rate than average and fewer fees.
• Good old days are ahead , dun give up

 

[k1976]

Job market worsens for retrenched workers, but Singapore’s overall labour market remains robust in Q2​

Fewer residents found re-employment within six months of being axed; MOM expects overall wages and employment to continue growing

Paige Lim​

Published Tue, Sep 17, 2024 · 10:30 AM — Updated Tue, Sep 17, 2024 · 08:53 PM
Singapore Manpower

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• The rate of re-entry for retrenched workers falls to 55 per cent in Q2, down from 59.4 per cent in the previous quarter. PHOTO: BT FILE
• The rate of re-entry for retrenched workers falls to 55 per cent in Q2, down from 59.4 per cent in the previous quarter. PHOTO: BT FILE
• The rate of re-entry for retrenched workers falls to 55 per cent in Q2, down from 59.4 per cent in the previous quarter. PHOTO: BT FILE
• The rate of re-entry for retrenched workers falls to 55 per cent in Q2, down from 59.4 per cent in the previous quarter. PHOTO: BT FILE
• The rate of re-entry for retrenched workers falls to 55 per cent in Q2, down from 59.4 per cent in the previous quarter. PHOTO: BT FILE

SINGAPORE’S job vacancies edged down in the second quarter of 2024, while fewer residents found re-employment within six months of retrenchment, based on the Ministry of Manpower’s (MOM) Labour Market Report on Tuesday (Sep 17).
But overall labour market performance was strong, with total employment growth more than doubling from the previous quarter and unemployment rates improving.
In a media briefing, Manpower Minister Tan See Leng said: “Our labour market continues to remain tight, meaning that, in general, it is easier for people to find and to keep jobs.”

 

[k1976]

Why Property Agents Are No Longer Pushing You “Sell One, Buy Two” In 2023​

• 
  Ryan J
• NOVEMBER 9, 2023
• 7 MIN READ
• LEAVE COMMENT

1.6kShares

The “sell one, buy two” strategy has been in the property playbook for some time now, going back to at least the last property dip in 2016. But it’s a term we’ve heard less often these past year or so, and more than one property agent has told us they hesitate to recommend it these days. We took a look at what’s happened to this “time-tested” way to avoid the stamp duties, and whether it has a future going forward:

The significance of “Sell One, Buy Two” over the past decade​

We weren’t able to pinpoint who originated the term and the strategy, but we do recall it surfacing sometime in 2016/17 (let us know if this is wrong). At the time, the strategy was a response to HDB preventing decoupling among flat owners. It was also during a dip in the property market when units were more affordable but the market was moving quite slowly.

The idea is for a couple to sell their current property (usually but not always an HDB flat) and have each spouse take a separate mortgage for a separate property. As neither spouse would have a property count of greater than one, there would be no Additional Buyers Stamp Duty (ABSD) applicable.
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In most of these scenarios, the recommendation would be for the higher-income spouse to get a larger unit (the family home), while the other spouse would buy a small rental asset (typically a shoebox unit, or a two-bedder).
Over the past few years, this has been the go-to approach for more affluent, investment-minded buyers. But despite ABSD rates being higher in 2023, we notice few realtors have mentioned the strategy to buyers. In fact, some have opined that it’s no longer safe or practical for many clients.

 

[k1976]

Why is “Sell One, Buy Two” losing popularity?​

To illustrate this, let’s consider two scenarios:

Scenario #1 – A couple buys a 4-room flat in Waterway Banks in 2014.

Scenario #2 – A couple buys a 4-room flat in Matilda Edge in 2017.

Both developments were chosen for their similar purchase prices, location, and year when they would do the “Sell 1 Buy 2” strategy (2020 and 2023 respectively).

First, let’s look at the cash remaining in scenario #1

Info	Detail
4 Room Purchase Price	$308,000
Selling Price In 2020 (average)	$433,000
10% Downpayment Made (Full Cash)	$30,800
Loan Amount (Paid In Cash)	$277,200
Balance After 5 Years	$234,405
Cash After Sale	$198,595
Cash After 2%+GST Agent Fees	$189,328

Now here’s the cash remaining in scenario #2

Info	Detail
4 Room Purchase Price	$311,000
Selling Price In 2023 (average)	$571,000
10% Downpayment Made (Full Cash)	$31,100
Loan Amount (Paid In Cash)	$279,900
Balance After 5 Years	$236,689
Cash After Sale	$334,312
Cash After 2%+GST Agent Fees	$322,092

Notice how the cash left in scenario #2 is way higher? Well, that’s because we haven’t factored in the increase in housing prices since 2020.






So let’s take a look at the difference in downpayment amount once we factor that in.

Downpayment required in scenario #1

Info	3BR (Own Stay)	1BR (Investment)
Purchase Price (2020)	$1,500,000	$650,000
Downpayment	$375,000	$162,500
Total Downpayment Required (25%)	$537,500
Difference ($537,500 – $189,328)	$348,172

Downpayment required in scenario #2

Info	3BR (Own Stay)	1BR (Investment)
Purchase Price (2023)	$1,905,000	$825,500
Downpayment	$476,250	$206,375
Total Downpayment Required (25%)	$682,625
Difference	$360,533

Note: Purchase prices were increased by 27% from 2020 based on the Property Price Index increase from OCR properties between Q2 2020 and Q2 2023.
If you look at the difference in cash top-up, you’ll find that it’s quite similar. So while property prices did go up, so did the existing property which helped cover the increased downpayment required.

However, the price increase between 2020 and 2023 would still have discouraged many from doing the sell 1 buy 2 strategy. Why? This is due to the 2 cooling measures that were introduced in 2021 and 2022:

1) TDSR was tightened for housing loans by MAS from 60% to 55% (Dec 2021)
2) Medium-term floor rate was increased from 3.5% to 4% in calculating TDSR (Sep 2022)

These numbers may not look big, but they make a significant dent in who can do this strategy – particularly HDB upgraders.

 

[k1976]

To illustrate this, let’s look at the same two scenarios:

Scenario #1

Income needed in 2020	3BR (Own Stay)	1BR (Investment)
Purchase Price (2020)	$1,500,000	$650,000
Loan Amount (75%)	$1,125,000	$487,500
Mortgage (Based on 3.5% floor rate, 30 year tenure)	$5,052	$2,189
Min income needed (Based on 60% TDSR)	$8,420	$3,648

Here, you see that with a 3.5% floor rate and a 60% TDSR back in 2020, you’ll need $8,420 per month and $3,648 per month to do this strategy.

Scenario #2

Income needed in 2023	3BR (Own Stay)	1BR (Investment)
Purchase Price (2023)	$1,905,000	$825,500
Loan Amount (75%)	$1,428,750	$619,125
Mortgage (Based on 4% floor rate, 30-year tenure)	$6,821	$2,956
Min income needed (Based on 55% TDSR)	$12,402	$5,374
Difference	47.3%	47.3%

With the increased rate from 3.5% to 4% and a reduction in TDSR from 60% to 55%, the same couple now needs to earn at least $12,402 and $5,374 based on the increased prices and increased cooling measures.

This resulted in an increase in income required of 47.3% which is much higher than the nominal increase in median wages between 2020 to 2023.

But rental prices went up during this time, prompting some to ask whether or not the investment portion of the sell 1 buy 2 still makes sense.

Here’s the difference if you had secured a 3-year rental contract and loan agreement in 2020 versus 2023.

Info	2020	2023
Purchase Price (1BR Investment)	$650,000	$825,500
Loan Amount	$487,500	$619,125
Monthly Rent (Source: SRI)	$2,387	$3,621
Annual Rent (Lock in 3 Years)	$85,932	$130,356
Less Agent Fees (1 Month)	$2,387	$3,621
Less Interest Expense (Lock in 3 Years at 1.3% vs 3.5%)	$18,247	$36,928
Cashflow	$65,298	$89,807

If we’re purely looking at the rental property, the increase in rent does outweigh the increase in interest rates. Thus, the investment portion still makes sense, provided you can still afford the property.

 

[k1976]

More distressed commercial, industrial assets likely to surface at auctions this year: Knight Frank​

Mia Pei​

Published Mon, Jan 29, 2024 · 03:00 PM

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• Residential properties made up 64.2 per cent of the total mortgagee listings in 2023, with a majority being non-landed properties, says Knight Frank. PHOTO: BT FILE
• Residential properties made up 64.2 per cent of the total mortgagee listings in 2023, with a majority being non-landed properties, says Knight Frank. PHOTO: BT FILE
• Residential properties made up 64.2 per cent of the total mortgagee listings in 2023, with a majority being non-landed properties, says Knight Frank. PHOTO: BT FILE
• Residential properties made up 64.2 per cent of the total mortgagee listings in 2023, with a majority being non-landed properties, says Knight Frank. PHOTO: BT FILE
• Residential properties made up 64.2 per cent of the total mortgagee listings in 2023, with a majority being non-landed properties, says Knight Frank. PHOTO: BT FILE

THE poor business climate in 2023 is likely to materialise in 2024 in the form of mortgagee listings, given the time lag for economic distress to be reflected in the auction market, said Knight Frank on Monday (Jan 29).
The real estate consultancy expects more listings from the commercial and industrial sectors as investors and owners seek to dispose of underperforming assets for recycled capital to catch better investment opportunities.
“Therefore, owner listings as well as under-stress properties that did not make the listings in 2023 are likely to appear on the auction platform in 2024,” said Knight Frank. It projects a success rate of between 5 and 7 per cent, with more listings expected for the whole of 2024.

 

[k1976]

In the fourth quarter of 2023, auction listings fell 2.9 per cent on the quarter to 99, but were unchanged from Q4 2022. These rounded off the year with a total of 360 listings, according to Knight Frank’s market update.

Mortgagee sale listings rose 6.9 per cent to 31 in the last quarter, comprising of 22 residential and nine non-residential listings.

For the whole year, residential properties made up 64.2 per cent of the total mortgagee listings, with a majority being non-landed properties. “Most of the non-landed listings sold were one- to two-bedroom apartments located in the fringe and suburban regions, suggesting that private homes in these areas continued to offer a more palatable entry price,” noted Knight Frank.

 

[joemartini]

what about that Iquadrant thing?? that Germaine chow.