Resale flat prices are alarmingly high. They are at an all time high in fact. Recently I brokered an executive maisonette flat in Bishan for $90,000 above valuation. The valuation was priced at $690,000 and thus the flat was transacted at $780,000. The offer came in during the very first viewing. This actually made me wonder, are flats really that short in supply? Do we really have that serious a supply and demand imbalance? The answer to these questions is an astounding YES!
I had 23 groups of buyers and buyers who were represented by their agents we came to the property. The house was not done up and extensive renovation was required. However, it was one of two executive maisonette flats on sale in Bishan and thus it was rather rare.
As the option was being filled in, I pondered as to what the buyers would have to go through. A 25 year loan for $552,000 (80% of valuation) at 3 % interest would mean a monthly installment of $2,617.61! This would have to run on for the next 25 years. For public housing, I find it ridiculous. Moreover, the buyer has to for out $90,000 cash over valuation, $34,500 in cash down payment and $103,500 in CPF down payment. On top of that the buyers will need an extensive renovation on the property and estimated that it would cost them about $80,000 to do up the place to their liking. Throw in another $10,000 for furnishing and the total cash that the buyer would have to spend on this property is a whopping $214,500!!!
I find having to spend $214,500 worth of cash on public housing is ridiculous...
Let's all please remember, when you buy a HDB, you are owning the lease on the property. When you buy a private property, be it landed or condominium or apartment, you are owning the title of the land either as land itself or in strata title. This is a very big difference and this discussion will be left to a later post.
Now then, our current Minister for National Development has come out to say this....
http://www.channelnewsasia.com/stories/singaporelocalnews/view/1142742/1/.html
and I quote
"National Development Minister Khaw Boon Wan said it will take 3 to 5 years to "substantively resolve" the problem of high resale flat prices and for prices to stabilise."
Why then was this problem not singled out by the previous cabinet? It was already glaring. The asset appreciation policy was never an actual plan. It was conceived as a cover up for a flawed policy. One of lax immigration and poor housing supply planning. The two created a very good mix for escalating flat prices.
I am sorry but I believe that our ministers are and were paid a handsome sum of money to conceive policies that would benefit Singaporeans. Therefore we must have ministers with FORESIGHT, not SHORTSIGHT. I am a flat owner and I would like to say that I do not care if the value of my flat goes up or goes down. This is because I cannot monetise it.
Let's just say that I believe it is mainly this flawed policy that made our Prime Minister Lee Hsien Loong give an apology during the last election.
Let me first state that I believe that PM Lee is perhaps the right person to lead Singapore forward. However, the same cannot be said for some of the policy makers who came up with weird policies in the last 5 years.
All I have to say to the policy makers who made our PM give this apology, shame on you! What have you done?
That was about 2 years ago. Today, flat prices are still higher than ever, suburban condominiums are commanding in excess of $1,000 per square foot for leasehold developments. Banks are offering easy financing with interest rates close to zero, people are spending huge portions of their salaries financing their houses with the belief that Singapore can remain prosperous forever and they can keep their jobs always.
Dearest Minister Khaw, please be someone with foresight. We do not need to see the problem before reacting. We can take evasive measures before it becomes too late. (a HDB flat valued at SGD$1 million soon?)
Do not be a doctor who prescribes medicine for a patient when he is sick. Instead give the patient an inoculation to prevent him from getting the flu in the first place.
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Wednesday, July 27, 2011
Monday, July 25, 2011
Singapore's June inflation up 5.2% on-year
Proves my point entirely.
Buy a saving plan from an insurer and receive about 3% returns on your money. Inflation is 5.2%. The value of your dollar is still falling.
Buy term and invest in properties and stocks when market cools down.
http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1142873/1/.html
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Buy a saving plan from an insurer and receive about 3% returns on your money. Inflation is 5.2%. The value of your dollar is still falling.
Buy term and invest in properties and stocks when market cools down.
http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1142873/1/.html
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Friday, July 22, 2011
Super low interest rates!
I was recently working on a new project launch by Far East Organisation (FEO) in Pasir Ris. It was a mass market leasehold condominium priced at about SGD$850 per square foot on the average. Sales were brisk due to the fact that the price was rather attractive and also, FEO staff are really good sales people!
Anyway I was shocked when I heard of the financing package that the local banks were giving my client. They were offering 0% + the 3 month inter bank offer rate (which at that time was 0.2%). This rate would stay till the project was completed, which in my estimation would be another 3-4 years. Although this super low interest rate assisted me in closing my clients, I really am failing to see how the government is encouraging financial prudence and yet allowing the banks to entice clients with such low rates. Banks themselves are taking on too much risk with such a move. All this for the sake of maintaining loan volume.
Why the reason for such low interest rates?
Our Monetary Association of Singapore (MAS) uses our Singapore Exchange rate to regulate inflation. What it means is that if things get too expensive, they will raise the value of the Singapore Dollar to make our imports cheaper and our exports more expensive.
What is the problem then?
I thought about it for a while and then I realised something. The US is now embarking on an exact opposite path as Singapore. They are flooding the market with US dollars and thus the US dollar is dropping in value. If I were a developer I would not want to develop anything in the US. If I built anything, the value of my property will drop in value. If I spent USD$10 million to build a building, I am not sure the value of my building will hold. What if the US government wants to drop the value of the US dollar by another 10-20%? This would mean that my building would be worth much less over time. On the other hand, the Singapore dollar seems to always be going UP. As a developer or investor, I would want to build something in Singapore. In future when the Singapore dollar appreciates, it will add onto the profits that I will already be earning.
I build with cheaper raw materials and sell high because I sell in Singapore dollar and Singapore dollar goes up.
versus
I build with expensive raw materials and sell low because I sell in US dollar and US dollar goes down.
Thus the government is trying to lower inflation but in actual fact it is encouraging more people to demand for Singapore denominated assets because the value of the Singapore dollar is always going up.
How to solve the problem?
MAS has to understand that it cannot only use the exchange rate to fight inflation. It has to regulate the interest rates between banks. Perhaps a change in policy please. Finance minister are you listening?
Some videos to explain a little about what is happening in the US and between banks.
http://video.cnbc.com/gallery/?video=3000026496
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Anyway I was shocked when I heard of the financing package that the local banks were giving my client. They were offering 0% + the 3 month inter bank offer rate (which at that time was 0.2%). This rate would stay till the project was completed, which in my estimation would be another 3-4 years. Although this super low interest rate assisted me in closing my clients, I really am failing to see how the government is encouraging financial prudence and yet allowing the banks to entice clients with such low rates. Banks themselves are taking on too much risk with such a move. All this for the sake of maintaining loan volume.
Why the reason for such low interest rates?
Our Monetary Association of Singapore (MAS) uses our Singapore Exchange rate to regulate inflation. What it means is that if things get too expensive, they will raise the value of the Singapore Dollar to make our imports cheaper and our exports more expensive.
What is the problem then?
I thought about it for a while and then I realised something. The US is now embarking on an exact opposite path as Singapore. They are flooding the market with US dollars and thus the US dollar is dropping in value. If I were a developer I would not want to develop anything in the US. If I built anything, the value of my property will drop in value. If I spent USD$10 million to build a building, I am not sure the value of my building will hold. What if the US government wants to drop the value of the US dollar by another 10-20%? This would mean that my building would be worth much less over time. On the other hand, the Singapore dollar seems to always be going UP. As a developer or investor, I would want to build something in Singapore. In future when the Singapore dollar appreciates, it will add onto the profits that I will already be earning.
I build with cheaper raw materials and sell high because I sell in Singapore dollar and Singapore dollar goes up.
versus
I build with expensive raw materials and sell low because I sell in US dollar and US dollar goes down.
Thus the government is trying to lower inflation but in actual fact it is encouraging more people to demand for Singapore denominated assets because the value of the Singapore dollar is always going up.
How to solve the problem?
MAS has to understand that it cannot only use the exchange rate to fight inflation. It has to regulate the interest rates between banks. Perhaps a change in policy please. Finance minister are you listening?
Some videos to explain a little about what is happening in the US and between banks.
http://video.cnbc.com/gallery/?video=3000026496
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Wednesday, July 20, 2011
Scarce land in Singapore
I do a fair bit of landed property sales and I always get sellers telling me that landed prices will always hold because land is scarce in Singapore. Moreover, I get people who are living in places like Serangoon Gardens telling me that the estate is full of eateries and amenities and thus should command a very high price. I thought about this "landed property is the most valuable form of residential real estate in Singapore" idea for a good few months. I was thinking whether this was true or not. I was driving around Orchard Road a couple of days ago and it finally struck me what sort of property I should aim for when (and not if) prices fall during the next property correction.
The most valuable land is the land in the central region of Singapore! ie. properties in and around Orchard Road.
Let me explain why it is much better to go for a condominium in Orchard Road rather than a landed property in a suburban area.
1) Location is always the key. There will always be a demand for properties in and around the heart of Singapore. Be it the central business district (CBD) or our nation's prime shopping belt. Compare this to a landed property in the far outskirts of Singapore like Loyang, Sembawang , Woodlands or Jurong. There are landed properties in these areas calling for prices of more than SGD$1,000 per square foot for land. This to me does not make any sense. Add up all the land in such areas and compare that to the very scarce amount of land in and around Orchard area. You will realise that properties in and around the heart of Singapore are much more valuable than perhaps a landed property in Loyang.
2) To the people living in places like Serangoon Gardens. Such an environment can be replicated. The shops, the eateries, the banks, the cafes, all these were planted in the estate. The intrinsic value of the property is still not about location. Getting to the CBD is still a chore thanks to the constant jam on the CTE expressway. Basically the environment is man made. I would say that the establishment of Orchard Road and Raffles Place is more organic. Where else to place the headquarters of banks, companies, our best eateries, top hotels, flagship stores but in the heart of our nation?
My point is that places like Orchard Road are valuable because they are in the heart of a bustling Singapore. The fastest growing economy in Asia. (Though this may change after the last round of economic data just released). Few in Singapore will find getting to a place like Orchard Road as inconvenient but the people staying in Jurong may find getting to places like Hougang rather out of the way and vice versa.
While this happens in "ulu" places like Loyang
http://singaporeseen.stomp.com.sg/stomp/3552/4124/199852
Let us answer the question of where is the most valuable property in Singapore. (Notice I did not mention the type of property.)
It is right at the heart of Singapore!
I would much rather own a 2-3 bedroom apartment in District 9 than to fork out in excess of SGD$2 million for a landed property in the outskirts of Singapore! (Note: You can find a 2-3 bedroom apartment for about the same price as a landed property in the suburban area of Singapore)
Now why then are people paying about $1,000 per square foot for leasehold properties in places like Hougang?
Weird...
If they are willing to buy as these prices, as a real estate agent, my clients are willing to sell...
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
The most valuable land is the land in the central region of Singapore! ie. properties in and around Orchard Road.
Let me explain why it is much better to go for a condominium in Orchard Road rather than a landed property in a suburban area.
1) Location is always the key. There will always be a demand for properties in and around the heart of Singapore. Be it the central business district (CBD) or our nation's prime shopping belt. Compare this to a landed property in the far outskirts of Singapore like Loyang, Sembawang , Woodlands or Jurong. There are landed properties in these areas calling for prices of more than SGD$1,000 per square foot for land. This to me does not make any sense. Add up all the land in such areas and compare that to the very scarce amount of land in and around Orchard area. You will realise that properties in and around the heart of Singapore are much more valuable than perhaps a landed property in Loyang.
2) To the people living in places like Serangoon Gardens. Such an environment can be replicated. The shops, the eateries, the banks, the cafes, all these were planted in the estate. The intrinsic value of the property is still not about location. Getting to the CBD is still a chore thanks to the constant jam on the CTE expressway. Basically the environment is man made. I would say that the establishment of Orchard Road and Raffles Place is more organic. Where else to place the headquarters of banks, companies, our best eateries, top hotels, flagship stores but in the heart of our nation?
My point is that places like Orchard Road are valuable because they are in the heart of a bustling Singapore. The fastest growing economy in Asia. (Though this may change after the last round of economic data just released). Few in Singapore will find getting to a place like Orchard Road as inconvenient but the people staying in Jurong may find getting to places like Hougang rather out of the way and vice versa.
While this happens in "ulu" places like Loyang
http://singaporeseen.stomp.com.sg/stomp/3552/4124/199852
Let us answer the question of where is the most valuable property in Singapore. (Notice I did not mention the type of property.)
It is right at the heart of Singapore!
I would much rather own a 2-3 bedroom apartment in District 9 than to fork out in excess of SGD$2 million for a landed property in the outskirts of Singapore! (Note: You can find a 2-3 bedroom apartment for about the same price as a landed property in the suburban area of Singapore)
Now why then are people paying about $1,000 per square foot for leasehold properties in places like Hougang?
Weird...
If they are willing to buy as these prices, as a real estate agent, my clients are willing to sell...
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Tuesday, July 19, 2011
S’pore property crash: When and how serious?
Interesting article on Yahoo
http://sg.news.yahoo.com/blogs/singaporescene/pore-property-crash-serious-095330844.html
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
http://sg.news.yahoo.com/blogs/singaporescene/pore-property-crash-serious-095330844.html
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Sunday, July 17, 2011
This policy makes a whole load of sense...
"Khaw elaborates on BTO exercise"
http://www.channelnewsasia.com/stories/singaporelocalnews/view/1141421/1/.html
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
http://www.channelnewsasia.com/stories/singaporelocalnews/view/1141421/1/.html
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Saturday, July 16, 2011
Life insurance as a form of savings?
Well... the answer to this would be NOT to buy a policy to have forced savings. I studied the investment rate of returns of most life plans and found out that they give you a rate of about 3% per annum. Inflation tends to be higher than the rate of return given by the insurance companies. In fact, you are WORSE OFF by forcing yourself to contribute to a policy. Your money is getting weaker everyday.
Solution: Buy a term policy. It is cheap, does the job of covering you in the event of unfortunate circumstances.
So why do insurance agents push life policies? Simple: It pays the highest commission. In some instances about half of the premium paid actually goes into the agent's pocket. (If you pay $200 worth of premiums a month, some companies pay up as high as $100 to the agent! This is before his bonus and incentives.) Moreover, companies need to earn their fair share as well. Where do you think they get the money to place huge bus adverts which go around Singapore everyday?
What to do with the extra money? Buy a property if you can! Property prices track inflation closely. Rentals are even bench marked closer to the economy and inflation. If you have sufficient cash on hand, you can pay off the property and live on the rental. In time the property should appreciate as well. I don't think you can pay off your life policy and then your policy value will keep on growing. If I am 30 years old I cannot tell my insurance company that I want to pay future premiums till the day I die.
I completed my Certified Financial Planner (CFP) course in 2010 and I know what I am talking about. Sorry to all insurance agents out there. Real estate is a much safer bet.
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Solution: Buy a term policy. It is cheap, does the job of covering you in the event of unfortunate circumstances.
So why do insurance agents push life policies? Simple: It pays the highest commission. In some instances about half of the premium paid actually goes into the agent's pocket. (If you pay $200 worth of premiums a month, some companies pay up as high as $100 to the agent! This is before his bonus and incentives.) Moreover, companies need to earn their fair share as well. Where do you think they get the money to place huge bus adverts which go around Singapore everyday?
What to do with the extra money? Buy a property if you can! Property prices track inflation closely. Rentals are even bench marked closer to the economy and inflation. If you have sufficient cash on hand, you can pay off the property and live on the rental. In time the property should appreciate as well. I don't think you can pay off your life policy and then your policy value will keep on growing. If I am 30 years old I cannot tell my insurance company that I want to pay future premiums till the day I die.
I completed my Certified Financial Planner (CFP) course in 2010 and I know what I am talking about. Sorry to all insurance agents out there. Real estate is a much safer bet.
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Thursday, July 14, 2011
HDB launches 7 BTO projects offering 3,600 new flats
This is a good move by Mr Khaw. Often every BTO is oversubscribed. This is usually because the launches are small and the demand is high. Small launches cause the large amount of buyers to have to "fight" over the small number of flats available. By combining the launches, they are trying to match the demand with an equal supply.
http://www.channelnewsasia.com/stories/singaporelocalnews/view/1140817/1/.html
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
http://www.channelnewsasia.com/stories/singaporelocalnews/view/1140817/1/.html
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
The best place to buy property
Recently someone posted the question of where is a good place (globally) to purchase property. Immediately, I answered, "Singapore. Definitely!" He felt shocked that even after all the criticisms I have for the Singapore property market I will still hold Singapore in such high regard.
1) Singapore is really safe!
This is perhaps the most important quality about buying a property in Singapore. Singapore has very low crime rate and yet has one of the lowest policeman to population ratio in the world. This is due to our very strict laws. Where else can you go out in the middle of the night and not think about getting robbed all the time. Where else can you actually flaunt your wealth openly without constantly worrying about getting into trouble. Whether for investment or for own stay, buying a property in a safe and lawful country is important. It is much easier to rent out and when you do you will fetch a good rent.
2) Singapore is really exciting!
Not too long ago we could say that Singapore was nothing exciting. Not much night life, not many things to see, not many things to do. Currently there are many nightspots available. With the opening of the integrated resorts there are casinos and even a Universal Theme park right in the heart of Singapore. The best thing for a racing fan like myself is the annual Singapore Formula 1 GP. To me it is the best race on the Formula 1 race calender and places like Monaco and Abu Dhabi have to fight it out to take second spot. Last but not least. Food is really everywhere. Please remember, all this is packed in our very tiny island. You do not have to travel long distances to get from one destination to the next.
3) Singapore welcomes everyone!
To me this is not good news for the locals but it it very good for the foreigners and permanent residents. Singapore does not restrict the purchasing of private properties, with the exception of landed properties, for foreigners. For any foreigner wanting to invest in Singapore, you and I get just about the same terms. Only thing is that you cannot buy public housing or own land in Singapore. When foreigners sell and make a profit, they are free to take the money back home. There is no property gains tax at the moment though there is a seller's stamp duty which was recently introduced.
4) Singapore has a stable and non-corrupt government!
Political turmoil is really unsettling for a country and Singapore is perhaps the most stable place politically in the region. The PAP government has ruled the country very much since Singapore obtained independence and recently has turned to a slightly more accommodating stance towards it's citizens. Our prime minister is capable and well liked (in the recent general election his ward garnered a higher percentage of votes than the last election. Almost all PAP wards fared worse than the previous elections) and the country takes corruption rather seriously.
5) Singapore is beautiful!
The quality of housing is impeccable. Finishing in even mid-end condominiums rival high end projects in places like Bangkok, Malaysia. We have come to a point whereby condominiums are selling a lifestyle, marble flooring is something expected of in a new development, condominium facilities are comprehensive. Pollution is low compared to almost every major city in Asia. Thus the air is fresh, the views are spectacular. There is no place that is this clean and this well maintained.
Seriously there's no other place i will want to live in. There is serious chatter on the ground that in time to come Singaporeans will have to consider living in neighbouring places like Johor Bahru as it will be too expensive to afford a place in Singapore. Something like how people in Hong Kong buy apartments in neighbouring Shenzhen as it is much cheaper. I do not buy into that idea. I believe that there is a prevailing property bubble thanks to the US government flooding the market with easy money and low interest rates. Singapore is an awesome place to buy a property. Just not at today's ridiculous prices.
A spot of patriotism before I end this post!
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
1) Singapore is really safe!
This is perhaps the most important quality about buying a property in Singapore. Singapore has very low crime rate and yet has one of the lowest policeman to population ratio in the world. This is due to our very strict laws. Where else can you go out in the middle of the night and not think about getting robbed all the time. Where else can you actually flaunt your wealth openly without constantly worrying about getting into trouble. Whether for investment or for own stay, buying a property in a safe and lawful country is important. It is much easier to rent out and when you do you will fetch a good rent.
2) Singapore is really exciting!
Not too long ago we could say that Singapore was nothing exciting. Not much night life, not many things to see, not many things to do. Currently there are many nightspots available. With the opening of the integrated resorts there are casinos and even a Universal Theme park right in the heart of Singapore. The best thing for a racing fan like myself is the annual Singapore Formula 1 GP. To me it is the best race on the Formula 1 race calender and places like Monaco and Abu Dhabi have to fight it out to take second spot. Last but not least. Food is really everywhere. Please remember, all this is packed in our very tiny island. You do not have to travel long distances to get from one destination to the next.
3) Singapore welcomes everyone!
To me this is not good news for the locals but it it very good for the foreigners and permanent residents. Singapore does not restrict the purchasing of private properties, with the exception of landed properties, for foreigners. For any foreigner wanting to invest in Singapore, you and I get just about the same terms. Only thing is that you cannot buy public housing or own land in Singapore. When foreigners sell and make a profit, they are free to take the money back home. There is no property gains tax at the moment though there is a seller's stamp duty which was recently introduced.
4) Singapore has a stable and non-corrupt government!
Political turmoil is really unsettling for a country and Singapore is perhaps the most stable place politically in the region. The PAP government has ruled the country very much since Singapore obtained independence and recently has turned to a slightly more accommodating stance towards it's citizens. Our prime minister is capable and well liked (in the recent general election his ward garnered a higher percentage of votes than the last election. Almost all PAP wards fared worse than the previous elections) and the country takes corruption rather seriously.
5) Singapore is beautiful!
The quality of housing is impeccable. Finishing in even mid-end condominiums rival high end projects in places like Bangkok, Malaysia. We have come to a point whereby condominiums are selling a lifestyle, marble flooring is something expected of in a new development, condominium facilities are comprehensive. Pollution is low compared to almost every major city in Asia. Thus the air is fresh, the views are spectacular. There is no place that is this clean and this well maintained.
Seriously there's no other place i will want to live in. There is serious chatter on the ground that in time to come Singaporeans will have to consider living in neighbouring places like Johor Bahru as it will be too expensive to afford a place in Singapore. Something like how people in Hong Kong buy apartments in neighbouring Shenzhen as it is much cheaper. I do not buy into that idea. I believe that there is a prevailing property bubble thanks to the US government flooding the market with easy money and low interest rates. Singapore is an awesome place to buy a property. Just not at today's ridiculous prices.
A spot of patriotism before I end this post!
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Singapore's growth slows down
To me this is good for our country. Let's not overheat...
http://www.channelnewsasia.com/stories/singaporelocalnews/view/1140801/1/.html
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
http://www.channelnewsasia.com/stories/singaporelocalnews/view/1140801/1/.html
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Wednesday, July 13, 2011
The property market in China is booming?
What happens when you mix a nation which has endured decades of socialist policies with the desire to maintain economic growth?
China has been running up great growth figures. It is considered an economic powerhouse and is slated to take over from the United States of America as the world's largest economy in a couple of decades. However, things do not always seem as rosy as they seem. Growth is measured in the form of gross domestic product of GDP. Loosely explained, GDP refers to the market value of all final goods and services produced within a country in a given period. It is often considered an indicator of a country's standard of living.
Well what is the problem then? Let's take a company like Apple then. I am sure many people have heard of Apple products like the iPhone, iPad, iPod and their Mac computer systems. What companies like Apple are doing is producing innovative products that people around the globe want to buy and use. Often there are massive shortages. In Singapore, there was a period of time whereby people had to queue in the mornings just to get hold of an iPhone at the telecos' outlets. Apple products are always in demand and goods are always being shipped to end users. Apple produces about USD$25 billion of revenue a quarter. This goes into the calculation for the GDP of the United States of America. This is what I call quality GDP.
What is China doing? They are essentially a socialist economy. They measure success by the number of cities that are built. Not by the number of properties which are consumed. Since building is also an economic activity, they attribute the millions of empty apartments built as FINAL GOODS and thus calculate the market value of these goods into the calculation of their GDP. This is what I call rubbish GDP.
Perhaps this very informative video by NBC: Dateline can illustrate my point.
It makes my point as to why a free market economy like Singapore works. Demand and supply fundamentals are always important. Socialism does not work.
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
China has been running up great growth figures. It is considered an economic powerhouse and is slated to take over from the United States of America as the world's largest economy in a couple of decades. However, things do not always seem as rosy as they seem. Growth is measured in the form of gross domestic product of GDP. Loosely explained, GDP refers to the market value of all final goods and services produced within a country in a given period. It is often considered an indicator of a country's standard of living.
Well what is the problem then? Let's take a company like Apple then. I am sure many people have heard of Apple products like the iPhone, iPad, iPod and their Mac computer systems. What companies like Apple are doing is producing innovative products that people around the globe want to buy and use. Often there are massive shortages. In Singapore, there was a period of time whereby people had to queue in the mornings just to get hold of an iPhone at the telecos' outlets. Apple products are always in demand and goods are always being shipped to end users. Apple produces about USD$25 billion of revenue a quarter. This goes into the calculation for the GDP of the United States of America. This is what I call quality GDP.
What is China doing? They are essentially a socialist economy. They measure success by the number of cities that are built. Not by the number of properties which are consumed. Since building is also an economic activity, they attribute the millions of empty apartments built as FINAL GOODS and thus calculate the market value of these goods into the calculation of their GDP. This is what I call rubbish GDP.
Perhaps this very informative video by NBC: Dateline can illustrate my point.
It makes my point as to why a free market economy like Singapore works. Demand and supply fundamentals are always important. Socialism does not work.
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Tuesday, July 12, 2011
Financial literacy needed
It may shock many to know that there are rates as low as 0.2% per annum being offered at certain project showrooms. Many do not realise that rates cannot stay so low forever.
Example:
A $1,000,000 loan for a period of 30 years at 0.2% interest rate will mean a monthly installment of $2,862.38
However,
A $1,000,000 loan for a period of 30 years at 3% interest rate will mean a monthly installment of $4,215.98
Not to say that everyone buying properties in Singapore is reckless. Just saying that there are a few that do not think about what may come when interest rates start rising. Also, they expect the rental market to go strong always.
0.2% interest rate a little too amazing? It's happening in Singapore!
http://www.straitstimes.com/BreakingNews/Money/Story/STIStory_689737.html
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Example:
A $1,000,000 loan for a period of 30 years at 0.2% interest rate will mean a monthly installment of $2,862.38
However,
A $1,000,000 loan for a period of 30 years at 3% interest rate will mean a monthly installment of $4,215.98
Not to say that everyone buying properties in Singapore is reckless. Just saying that there are a few that do not think about what may come when interest rates start rising. Also, they expect the rental market to go strong always.
0.2% interest rate a little too amazing? It's happening in Singapore!
http://www.straitstimes.com/BreakingNews/Money/Story/STIStory_689737.html
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Singapore is getting richer = Singaporeans getting richer?
The news reports state that Singapore is going through unprecedented growth. The economy is booming, people are getting richer. Yet as a property agent I get to meet some sellers who need to sell their houses to clear their debts. This scenario is getting alarmingly common. I was curious as to how the impact of the casinos would impact our society and thus I did a casual search and I found this article on CNBC.
http://www.cnbc.com/id/43628943?slide=10
It lists the "World's Biggest Gambling Nations" and behold!
[extracted from www.cnbc.com]
2. Singapore
Gaming Losses Per Adult: $1,174
Singapore opened its first casino a little over a year ago but it’s already the world’s third largest-gaming center after Macau and Las Vegas and it’s set to overtake Vegas this year.
The decision to allow casinos to be built in the city-state has created plenty of worries that Singaporeans may end up getting hooked to gambling. The government has tried to discourage local gamblers by imposing an entry fee of S$100 ($80.50) for citizens who want to enter a casino.
Authorities have also implemented a "Family Exclusion Order," that allows a family to ban relatives from visiting casinos.
But the measures have done little to dampen enthusiasm for gambling. Frank Fahrenkopf, president of the American Gaming Association, has forecast that Singapore's gaming revenue could hit $6.4 billion in 2011, outpacing Las Vegas, which earned $5.8 billion in 2010.
Gaming losses per adult was a whopping $1,174!!! This is calculated in US dollars I presume. Assuming that about a quarter of the people in Singapore is not adults, That would still mean that there were approximately 3.8 million adults each losing UDS$1,174 per annum to the casinos in Singapore.
We "donate" USD$4,461,200,000 to the casinos every year!!!
I personally do not feel richer. Wealth is perceived. Inflation is eroding away our money.
Hmmm... now where has my $2 chicken rice gone to?
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
http://www.cnbc.com/id/43628943?slide=10
It lists the "World's Biggest Gambling Nations" and behold!
[extracted from www.cnbc.com]
2. Singapore
Gaming Losses Per Adult: $1,174
Singapore opened its first casino a little over a year ago but it’s already the world’s third largest-gaming center after Macau and Las Vegas and it’s set to overtake Vegas this year.
The decision to allow casinos to be built in the city-state has created plenty of worries that Singaporeans may end up getting hooked to gambling. The government has tried to discourage local gamblers by imposing an entry fee of S$100 ($80.50) for citizens who want to enter a casino.
Authorities have also implemented a "Family Exclusion Order," that allows a family to ban relatives from visiting casinos.
But the measures have done little to dampen enthusiasm for gambling. Frank Fahrenkopf, president of the American Gaming Association, has forecast that Singapore's gaming revenue could hit $6.4 billion in 2011, outpacing Las Vegas, which earned $5.8 billion in 2010.
Gaming losses per adult was a whopping $1,174!!! This is calculated in US dollars I presume. Assuming that about a quarter of the people in Singapore is not adults, That would still mean that there were approximately 3.8 million adults each losing UDS$1,174 per annum to the casinos in Singapore.
We "donate" USD$4,461,200,000 to the casinos every year!!!
I personally do not feel richer. Wealth is perceived. Inflation is eroding away our money.
Hmmm... now where has my $2 chicken rice gone to?
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Monday, July 11, 2011
A good report on the property outlook in Singapore
Thanks to my very good friend "codename: ET" for this awesome article. You really are someone I respect and I am waiting for you to come on board full time to the real estate industry.
Please click on the images to view them in their original (and larger) size.
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Please click on the images to view them in their original (and larger) size.
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Let's play fair - Centrale 8 ain't that fantastic after all
Interesting to be back blogging. Just a simple and useful tool to keep in touch with friends, family and clients.
The recent displeasure with the prices of the DBSS (Design, Build and Sell Scheme) project in Tampines by Sim Lian Group, Centrale 8, has caused our recently appointed Minister for National Development Khaw Boon Wan to state that DBSS flats are not HDB flats.
http://www.temasekreview.com/2011/06/19/khaw-boon-wan-dbss-is-not-hdb/
Let me then make it clear as to why I disagree with this notion.
The DBSS scheme was designed by his predecessor, Mah Bow Tan, to boost building activity during the perceived housing and construction slump in and around 2006. The pilot DBSS project was The Premiere in Tampines. It was awarded, ironically, to Sim Lian in January 2006. This was at a time when our housing prices were still affordable and we have yet to open the floodgates to the mass of foreigners that would flood our beloved Singapore for the next few years.
Let's get this straight, DBSS is still a HDB flat. We buy it under HDB schemes, we cannot rent it out immediately and have to fulfill our minimum occupation period (MOP) and we cannot resell it to foreigners. When the MOP is up and the owners can sell the flat, there isn't a classified section that states "DBSS Flats For Sale - Tampines". Where do we advertise it in? We market it as a HDB. To me, it is way more a HDB than it is not. So I would politely remind Mr Khaw to kindly weigh the facts before making such a statement.
Why then do Singaporeans still go for DBSS projects?
Simple, DBSS flats come with furnishings. The whole flat is done up. The flooring is laid, cabinets are built, the finishing is classy. All this is included in the price. Since there is no cash over value (COV) for such flats and there is no cash to be spent on renovation, Singaporeans find it a great deal to buy a DBSS as they can literally include the renovation cost into their loan quantum. For couples with little or no cash, but with little financial sense, this is a great thing for them! If they buy a flat in the open market, they will have to pay a hefty sum for the COV and then fork up $40,000-$50,000 for renovation. With a DBSS flat, they can include such costs into the repayments! Little do they know that they are just kicking the problem down the road.
Should there be a correction in the property market? Is there a property bubble? To me, yes there definitely is one. Let's please realise that many Singaporeans do not benefit from Mr Mah's asset enhancement scheme. So what if our houses increase in value? We cannot monetise it! The only people who can are the PRs who bought at a low, sold at a high (at times to Singaporeans), and then return to their country with the profit. Asset enhancement scheme is a failure. We should then realise that if we cool prices, ie. depreciate prices, it will also not have an effect to the majority of Singaporeans who did not do anything during the recent property boom of the last few years. For example, in 2005, a family stays in a 3 room flat in Ang Mo Kio which is valued at $160,000. Today in 2011 they can sell the flat for about $320,000. However, they do not sell the flat. If 3 years down the road the price falls back to $160,000, it would not affect them at all. This is because they never did anything to the property which they needed to consume and thus could not monetise it. Do we really want a property market whereby public housing will cost more than a million Singapore dollars? Yet the government embarks on this policy of asset appreciation and then asks the young Singaporeans why they do not want to start a family.
Simple answer: MONEY NO ENOUGH.
You spend a huge chunk of your money paying for your public housing, where are the young couples to find the money to start a family? Incomes do not rise as fast as housing prices my dear government.
You have got to read Colin Tan's take on this DBSS fiasco
http://www.todayonline.com/Business/Property/EDC110708-0000112/Its-all-about-the-where
Last but not least, let's make sure the last DBSS does not go out with a bang. This will let the government and developers know that us Singaporeans are not fools. To those who have gone for Centrale 8, good luck to you financially in the long run. You will have to work your life away to pay for your flats. When the ceilings start spalding, the tiles lose their shine and your cabinets start to fall apart, you will realise that what you have bought is EXACTLY a HDB.
http://www.channelnewsasia.com/stories/singaporelocalnews/view/1140077/1/.html
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
The recent displeasure with the prices of the DBSS (Design, Build and Sell Scheme) project in Tampines by Sim Lian Group, Centrale 8, has caused our recently appointed Minister for National Development Khaw Boon Wan to state that DBSS flats are not HDB flats.
http://www.temasekreview.com/2011/06/19/khaw-boon-wan-dbss-is-not-hdb/
Let me then make it clear as to why I disagree with this notion.
The DBSS scheme was designed by his predecessor, Mah Bow Tan, to boost building activity during the perceived housing and construction slump in and around 2006. The pilot DBSS project was The Premiere in Tampines. It was awarded, ironically, to Sim Lian in January 2006. This was at a time when our housing prices were still affordable and we have yet to open the floodgates to the mass of foreigners that would flood our beloved Singapore for the next few years.
Let's get this straight, DBSS is still a HDB flat. We buy it under HDB schemes, we cannot rent it out immediately and have to fulfill our minimum occupation period (MOP) and we cannot resell it to foreigners. When the MOP is up and the owners can sell the flat, there isn't a classified section that states "DBSS Flats For Sale - Tampines". Where do we advertise it in? We market it as a HDB. To me, it is way more a HDB than it is not. So I would politely remind Mr Khaw to kindly weigh the facts before making such a statement.
Why then do Singaporeans still go for DBSS projects?
Simple, DBSS flats come with furnishings. The whole flat is done up. The flooring is laid, cabinets are built, the finishing is classy. All this is included in the price. Since there is no cash over value (COV) for such flats and there is no cash to be spent on renovation, Singaporeans find it a great deal to buy a DBSS as they can literally include the renovation cost into their loan quantum. For couples with little or no cash, but with little financial sense, this is a great thing for them! If they buy a flat in the open market, they will have to pay a hefty sum for the COV and then fork up $40,000-$50,000 for renovation. With a DBSS flat, they can include such costs into the repayments! Little do they know that they are just kicking the problem down the road.
Should there be a correction in the property market? Is there a property bubble? To me, yes there definitely is one. Let's please realise that many Singaporeans do not benefit from Mr Mah's asset enhancement scheme. So what if our houses increase in value? We cannot monetise it! The only people who can are the PRs who bought at a low, sold at a high (at times to Singaporeans), and then return to their country with the profit. Asset enhancement scheme is a failure. We should then realise that if we cool prices, ie. depreciate prices, it will also not have an effect to the majority of Singaporeans who did not do anything during the recent property boom of the last few years. For example, in 2005, a family stays in a 3 room flat in Ang Mo Kio which is valued at $160,000. Today in 2011 they can sell the flat for about $320,000. However, they do not sell the flat. If 3 years down the road the price falls back to $160,000, it would not affect them at all. This is because they never did anything to the property which they needed to consume and thus could not monetise it. Do we really want a property market whereby public housing will cost more than a million Singapore dollars? Yet the government embarks on this policy of asset appreciation and then asks the young Singaporeans why they do not want to start a family.
Simple answer: MONEY NO ENOUGH.
You spend a huge chunk of your money paying for your public housing, where are the young couples to find the money to start a family? Incomes do not rise as fast as housing prices my dear government.
You have got to read Colin Tan's take on this DBSS fiasco
http://www.todayonline.com/Business/Property/EDC110708-0000112/Its-all-about-the-where
Last but not least, let's make sure the last DBSS does not go out with a bang. This will let the government and developers know that us Singaporeans are not fools. To those who have gone for Centrale 8, good luck to you financially in the long run. You will have to work your life away to pay for your flats. When the ceilings start spalding, the tiles lose their shine and your cabinets start to fall apart, you will realise that what you have bought is EXACTLY a HDB.
http://www.channelnewsasia.com/stories/singaporelocalnews/view/1140077/1/.html
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
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