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Large developer stocks to benefit from a home price rebound

Posted by Singapore Property Launch on 28th January 2017 in Blog
Singapore property

Analysts expect some announcement with regards to the property cooling measures at the upcoming budget speech.

With home prices set to make a comeback, analysts expect the government to signal its intention to review the property cooling measures during the budget speech in February, which could, in turn, boost the city-state’s biggest developer stocks, reported Bloomberg.

Home prices have dropped by 11 percent since 2013, with sales falling to around half of that year’s level, after the government rolled out a slew of cooling measures to curb soaring values. In 2016, however, the city-state witnessed a surge in home sales as developers moved more than 8,000 units, up nine percent from the previous year.

Meanwhile, an equal-weighted index of CapitaLand, CDL and UOL Group – Singapore’s three largest developers by market value – has outperformed the Straits Times Index year-to-date after dropping by 3.6 percent last year.

Credit Suisse analysts revealed that Singapore developers are now trading at a one-year forward price-to-book of 0.7 times, which is an “undemanding” valuation close to its 2008 to 2009 lows.

“We believe the risk-reward to be attractive today, with a potential easing of measures a key upside optionality,” wrote Oversea-Chinese Banking Corp Research Head Carmen Lee, a view also shared by analysts at CIMB Research and Credit Suisse AG.

And between buying stocks and physical property, Lee believes stocks “offer you the liquidity and they are pricing in all the negatives”.

“They may not outperform in the next one to two quarters, but if you ride this out for 18 months or so, you will see better upside,” she noted.

credits: propertyguru

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Finance for newlyweds in Singapore

Posted by Singapore Property Launch on 25th January 2017 in Blog
wedding couple

Financial alignment is key to a better marriage. 

When talking about finances with your partner, it is important to set financial goals and ensure you both are on the same page. It doesn’t matter if you earn different incomes, but couples need to align themselves on issues like housing, among other expenses. 

By Paul Ho 

Scientists may finally be able to shed some light on love. When you fall in love, the initial stages usually comprise romantic feelings and physical attraction. These are caused by hormones released in the brain that are responsible for strengthening emotional attachment.

Nature has a beautiful and complex way of ensuring the continuation of the species, but this may not be enough to keep couples together in an increasingly materialistic world.

Money values – Talk sooner than later

There’s a saying that money is the root of all evil, but the lack of money may be a bigger evil. So young couples should start talking about their finances.

Things to know about your partner

– Are your families of similar economic status?

– Are your incomes vastly different?

Differences in incomes may mean divergent lifestyles. The both of you need to reach a common understanding.

– Do you buy first and save later, or save first and buy later?

Bad financial habits come from bad personal habits.

– Does your partner smoke, gamble or indulge in alcohol? What about expensive hobbies like fast cars, expensive watches, jewellery or handbags? These affect your future financial well-being.

What are the major expenses for young couples?

– Wedding ring, wedding reception and honeymoon.

– Saving for the down payment of a house.

– Furniture and renovation.

– A newborn baby.

Buying a house in Singapore

If you spend too much money on getting married, I doubt you will have enough cash to buy a property.

Younger couples tend to be in junior positions at work and earn less. If they can move in with their parents, they should do so until they can come up with the down payment for a new house.

If you have already bought your place, phase out your furniture purchase or renovation. What use is a beautiful house that becomes the source of your financial worries, or worse, the root cause of your quarrels.

Scenario: Buying an HDB flat worth $350,000

Husband (Age: 30, $3,000/month salary with 13th month bonus)

Wife (Age: 30, $3,000/month salary with 13th month bonus)

The minimum amount of cash needed is around $22,000, while the CPF OA (Ordinary Account) savings need to be around $55,000. It will take about four to five years each to save up the $55,000 based on the $3,000 monthly salary.

In Singapore, banks will lend more money to those looking to buy more expensive condominiums, but they will not lend them as much for HDB flats. This has led to many people buying condominiums instead of HDB flats. Obviously there is a flaw here.

The main reason for this is the MSR (Mortgage Servicing Ratio) of 30 percent for HDB flats while condominiums are set at 60 percent, resulting in higher loans for condos.

Nonetheless couples should avoid buying a condominium unless they have very strong financial backing, from say their parents. Taking out a large loan from day one also means a heavy interest cost payment and a slow rate of paying down the principal.

In this case, couples earning $3,000 each would be able to secure an HDB flat, and they would not have to worry about mortgage repayment as there is no cash outlay. In fact, their CPF OA can still accumulate if they hold on to their jobs.

Wedding expenses

Spend too much on the wedding of your dreams and you may have to deal with the loans, overdrafts and credit card bills over the next few years.

It is important to spend within your means. Some parents may push for a large wedding, but are they paying for it? Ultimately, you must strike a balance on making them happy and the cost involved.

The cost of a table at a posh hotel will easily set you back $1,000. Don’t forget that you need to allocate half of the tables for each side of the family, so discuss this first before booking the venue.

A “simple” wedding dinner could easily set you back $20,000 to $50,000. That would take between 20 months to 50 months to repay the principal.

Financial planning for the future

Plan for the future by having some basic insurance cover such as hospitalisation cover in case of major illness, mortgage insurance (which will be covered under the HPS) or term insurance, and perhaps a savings plan for a future child. It is okay to have an interim plan and modify it as you go along. It is probably too early to plan for retirement, but there’s no harm talking about retirement goals and the lifestyles you would both like to have, so that you are on the same page.

credits: propertyguru

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UOL to acquire freehold site at 45 Amber Road for S$156mil

Posted by Singapore Property Launch on 24th January 2017 in Blog
Amber Road

Amber Road (Photo: Christopher Chitty)

UOL Group has been granted by Sin Lian Huat Co an option to purchase a freehold site at 45 Amber Road for S$156 million.

Located in District 15, the 69,858 sq ft site has a plot ratio of 2.10 and is within walking distance to the upcoming Tanjong Katong and Marine Parade MRT stations, both of which are expected to be completed in 2023.

UOL has two weeks to exercise the option, during which it will pay S$6.24 million. Thereafter, it will have 12 weeks to complete the sale and purchase of the property.

In an SGX filing, UOL revealed that the “proposed acquisition are in the ordinary course of the group’s business, and would enable the group to replenish its land bank for residential developments in Singapore”.

It noted that the acquisition will be financed via external borrowings and internal resources.

UOL does not expect the acquisition to materially affect the net tangible assets or earnings per share of the group for the financial year ending 31 December 2017.

“The company will make further announcements in relation to the option and proposed acquisition, as and when there are material developments,” it added.

credits: propertyguru

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Kallang River, Sungei Whampoa gets upgrade

Posted by Singapore Property Launch on 23rd January 2017 in Blog
ABC Waters by PUB

The ABC Waters programme brings a rich vibrancy to the areas around the Kallang River (Photo: PUB)

Residents along Kallang River and Sungei Whampoa will now have more spaces to relax. These areas have been spruced up with new spaces and viewing decks, as part of national water agency PUB’s Active, Beautiful and Clean (ABC) Waters programme.

The first ABC project to be opened in 2017, the S$3.8 million upgrading works at Kallang River involved the widening of the promenade from three to 15 m to allow both cyclists and pedestrians to enjoy the recreational space together, reported Channel News Asia.

A ramp has been added to give wheelchair-bound individuals access to the upgraded promenade. Shelters that mimic the masts of vessels that sailed along the Kallang River in the 19th century have also been built, to add a touch of nostalgia to the surroundings.

The area also features rain gardens, which come with specially-selected plants and soil to cleanse rainwater from the promenade before flowing into the river.

Officially opened on Sunday (22 January) by Communications and Information Minister Yaacob Ibrahim, the project targets to bring the community closer to the city-state’s waters.

Its first adopter, Kong Hwa School, for instance, is planning a learning trail for its students.

“The ABC Waters design features, such as the rain gardens, coupled with the tradition and significance of the Kallang neighbourhood, make for great learning opportunities and reinforce character and citizenship education beyond the classroom,” said Jerry Yang, a teacher.

Meanwhile, the S$1.8 million upgrade at Sungei Whampoa saw the rise of lookout decks and a rain garden along the 450-metre stretch of the river. Efforts to green the canal walls have also been made.

The project at Sungei Whampoa will be officially opened in February.

“ABC Waters @ Kallang River and Sungei Whampoa are really about building for the future. Both projects were planned to be integrated with upcoming development works in the vicinity,” said Tan Nguan Sen, Chief Sustainability Officer at PUB.

“As both Kallang River and Sungei Whampoa flow into the Marina Reservoir – a source of water supply, we hope residents will help to play their part in keeping the waters free from litter so that all of us can enjoy cleaner, clearer waters and a better living environment,” added Tan.

credits: propertyguru

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Singapore to benefit from Hong Kong tax hike

Posted by Singapore Property Launch on 20th January 2017 in Blog
Singapore's Skyline

Lower stamp duties in Singapore has made the city-state more attractive for Chinese investors.  

Singapore may benefit from Hong Kong’s recent increase in stamp duty for overseas property buyers, reported Bloomberg.

According to Cushman & Wakefield, Singapore’s three-year slump in house prices could end this year as foreign investors in Hong Kong are expected to divert their attention to Singapore instead.

“The fallout from the stamp duty could be beneficial for Singapore,” said Sigrid Zialcita, Managing Director for Asia Pacific Research at Cushman & Wakefield.

“Singapore is always seen as a place where you can preserve capital and we are expecting interest from foreign nationals to come back.”

Last November, Hong Kong raised its stamp duty for overseas buyers to 30 percent, making Singapore’s 18 percent rate more favourable, especially to mainland Chinese who are looking for overseas investments to protect them from a weakening yuan.

With this, analysts expect property values in Singapore to dip by just 1.5 percent this year, while secondary home prices in Hong Kong are forecast to drop by eight percent.

Desmond Sim, CBRE’s Research Head for Singapore and Southeast Asia, expects prices to stay flat or dip by up to two percent. Savills, on the other hand, has forecast a one percent increase in average home prices.

The city-state has seen housing prices fall by 11 percent since 2013, when the government rolled out its strictest property cooling measures.

credits: propertyguru

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Knight Frank: S’pore prime home prices to increase 2%

Posted by Singapore Property Launch on 19th January 2017 in Blog
Costa Rhu condominium

The recent hike in Hong Kong’s stamp duty may divert home buying interest to Singapore. (Photo: William Cho, Wikimedia Commons)  

Prime residential prices in Singapore are expected to increase by two percent in 2017, according to property consultancy Knight Frank and reported the Financial Times.

This comes as the recent hike in Hong Kong’s stamp duty may divert home buying interest to the city-state.

“With strong economic fundamentals and a stable political climate, Singapore is expected to retain its status as a haven investment destination for both individual and institutional global investors,” said Liam Bailey, Knight Frank’s Global Research Head.

Prime residential prices are expected to hold firm in London, New York and Hong Kong, while Sydney and Paris are expected to post five percent and two percent growth, respectively.

Miami, on the other hand, will see prime residential prices drop by five percent.

Bailey believes the most important factor affecting the prime property market this year will be their domestic economic performance. There will also be a shift in the cost of money and currency, with a gradual transition from record low interest rates to be led by the US.

“The strength of the dollar is also expected to encourage dollar-pegged investors to consider UK or European investment options,” he said.

Bailey noted that tax has also emerged as a growing influence on market performance. In fact, a number of rules targeted at controlling the destination of investment flows have been introduced over the last 12 months.

Australia, for instance, saw three states – Queensland, New South Wales and Victoria – roll out a stamp duty surcharge for foreign home buyers. This is on top of a new 10 percent withholding tax on the sale of high-end Australian property by foreign residents.

Meanwhile, New Zealand introduced a capital gains tax for short-term property investments, while the UK and Vancouver implemented an additional rate of stamp duty on luxury property purchases and an empty-homes tax, respectively.

“Clearly the expansion of so-called cooling measures to control international wealth flows into property shows no sign of easing,” said Bailey.

credits: propertyguru

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