Property : Hotspots for completed properties in Singapore

THE private housing market in Singapore scaled new heights in 2010 and 2011 as prices escalated past previous peaks, while the volume of new home sales hit fresh highs. Though attention was mostly focused on the primary market, the secondary market was also active with healthy price gains.

Secondary market transactions of private residential property totalled some 16,357 units last year. Although 27.7 per cent lower than the 22,608 units sold in 2010, secondary market transactions still made up more than half of all private home sales for 2011, at 50.7 per cent.
Prices of private homes in the secondary market also strengthened. According to the National University of Singapore's Singapore Residential Price Index Series (SRPI), prices of such properties rose by 25 per cent between end-2009 and end-2011. The SRPI tracks price changes in its basket of completed non-landed private homes.

This outperformed the 24.4 per cent rise for all private residential property types and the 19.2 per cent gain for non-landed private homes, going by the Urban Redevelopment Authority's (URA) price indices over the same period. These URA indices include completed and uncompleted homes.


Hotspots in Singapore
In 2011, buyers who bought from completed non-landed private residential projects at least five years old were particularly keen on five districts. Ranked in terms of transaction volume, they were 15, 23, 16, 10 and 19. Based on caveat records in the URA's Real Estate Information System (Realis) on Jan 30 this year, these districts chalked up the highest transaction volume for secondary market non-landed homes.
Singaporeans accounted for more than 54 per cent of all such transactions in each of these hotspot locations.
Buyers from China were most active in districts 23 (covering areas such as Hillview, Diary Farm, Bukit Panjang and Choa Chu Kang) and 19 (including Serangoon Gardens, Paya Lebar, Hougang and Punggol). They accounted for a significant 31.8 and 27.7 per cent respectively of all foreign purchasers of resale non-landed residential properties in these locations last year.
Homebuyers from India favoured the eastern part of Singapore, where they formed the largest proportion of foreigners who picked up resale non-landed homes in districts 16 and 15 - at 31.7 and 26.7 per cent respectively.
Indonesians were the largest group of foreign buyers in district 10, with a 20.3 per cent share.
District 15: The three most actively transacted developments in the secondary market in district 15 were Costa Rhu, Mandarin Gardens and Water Place. In Costa Rhu, units from 990 square feet to 5,813 sq ft were sold at between $1.18 million and $5.05 million last year. Water Place commanded prices of $1.1 million to $1.94 million for units between 904 sq ft and 1,636 sq ft. At Mandarin Gardens, prices ranged from $700,000 to $1.93 million for units measuring 732 sq ft to 2,034 sq ft.
These three 99-year leasehold developments are sought after for their proximity to the city, the waterfront as well as the green lungs at the Marina Bay Golf Course and the East Coast area. They are also close to established lifestyle and food and beverage haunts in the Katong and Geylang neighbourhoods.
Buyers are also likely to be attracted to the spacious living and dining areas of Costa Rhu units. In Mandarin Gardens, residents get to enjoy an Olympic-sized swimming pool and four tennis courts. Over at Water Place, all apartment blocks are widely spaced out, providing a sense of space.
Buyers are also known to purchase units in these developments for potential capital appreciation and rental income. For instance, those who bought units in Costa Rhu and Water Place in the Tanjong Rhu area in 2010 and sold them in 2011 saw capital gains of 18-19 per cent, according to caveats lodged.
This is before taking into account the seller's stamp duty (SSD) payable on all residential properties bought on or after Feb 20, 2010 and sold within 12 months from the date of purchase. The stamp duty rates applicable are one per cent for the first $180,000 of the sale price, 2 per cent for the next $180,000, and 3 per cent for the balance.
However, prospective investors should note that under the prevailing SSD regime effective Jan 14, 2011, aimed at dampening speculative activity, the holding period for the imposition of SSD has been extended to four years. The SSD rates have also been hiked to 16 per cent, 12 per cent, 8 per cent and 4 per cent of the sale price for residential properties bought on or after Jan 14, 2011, and sold within the first, second, third and fourth year of purchase, respectively.
In the leasing market, units at Costa Rhu and Water Place garnered net rental yields of 2.5 per cent to 4.1 per cent last year. Prices at Mandarin Gardens in Siglap appreciated by about 17 per cent last year and net rental yields ranged from 2.4-3.7 per cent during the year.
District 23: In this district, the three most sought-after developments last year were Regent Heights, Northvale and Palm Gardens. According to caveat records, units measuring 689 sq ft to 2,594 sq ft found in these 99-year leasehold developments changed hands at prices ranging from $705,000 to $1.6 million last year.
Those who bought units in these developments in 2010 and sold them last year enjoyed capital gains of between 11 per cent and 30 per cent. They also reaped rental yields ranging from 2.8-4.5 per cent.
District 16: In this district in the east, buyers in the secondary market last year were mostly keen on The Bayshore, Costa Del Sol and Bayshore Park. These 99-year leasehold developments are close to established housing estates such as Bedok and Marine Parade as well as the airport. They also boast impressive views of the nearby East Coast Park and the sea.
Buyers of apartments at Costa Del Sol are also likely to have been attracted to the large living and dining areas of the units as well as the functional and regular layout of the rooms.
In 2011, units in these developments were transacted at prices ranging from $580,000 to $3.6 million for units measuring 624 sq ft to 3,800 sq ft. Those who bought units in The Bayshore and Bayshore Park in 2010 and disposed of them in 2011 realised capital gains of about 8 per cent to 20 per cent.
Those at Costa Del Sol saw a price increase of about 17 per cent to 30 per cent. Rental yields for the three projects ranged from 3-5 per cent in 2011.
District 10: Valley Park, The Tessarina and Duchess Crest were the three most transacted developments in the coveted district 10 last year. Units measuring 753 sq ft to 1,808 sq ft in the 999-year leasehold Valley Park in River Valley Road were transacted at prices ranging from $960,000 to $2.77 million in 2011.
At the freehold Tessarina on Wilby Road, buyers bought units ranging from 969 sq ft to 1,367 sq ft, at prices ranging from $1.31 million to $2 million last year. At Duchess Crest, a 99-year leasehold condominium on Duchess Avenue, buyers bought units of 936 sq ft to 2,088 sq ft at prices ranging from $1.14 million to $2.63 million in the same year.
Valley Park is popular as it is conveniently located next to Valley Point Shopping Centre and is close to Great World City. Units in the project also have large living and dining areas as well as service yards. Similarly, units at The Tessarina have large bedrooms and good layouts.
Those who bought units at Valley Park and The Tessarina in 2010 and sold them last year saw capital gains of between 10 and 20 per cent. In Duchess Crest, price gains in the same time frame were higher - between 25 and 29 per cent. Units in these three developments provided rental yields of 2.1-3.7 per cent in 2011.
District 19: Secondary market buyers in this district mostly opted for Kovan Melody, Rio Vista and Compass Heights last year. These 99-year leasehold developments are popular largely for their attractive locations. Kovan Melody, for instance, is adjacent to the Kovan MRT station. Units measuring 872 sq ft to 1,518 sq ft in size were transacted at prices ranging from $845,000 to $1.51 million last year. Investors in such units achieved rental yields of 3.1-3.8 per cent.
Compass Heights is integrated with the Compass Point mall, the Sengkang MRT station and the Sengkang bus interchange. Such integrated developments have proven to be popular. In 2011, Compass Heights commanded prices ranging from $675,000 to $1.68 million, for units between 667 sq ft and 2,519 sq ft. Rental yields for this development were in the range of 2-3.9 per cent.
Meanwhile, those who bought units in Kovan Melody and Compass Heights in 2010 and sold them a year later reaped capital gains of 13 per cent to 33 per cent.
Rio Vista is situated adjacent to Sungei Serangoon, the Serangoon bicycle track and park connector, and is close to Punggol Park. The location offers residents a green and park-like living environment. Units in the development also offer large service yards and private enclosed spaces. In 2011, units measuring 1,055 sq ft to 2,573 sq ft were sold at prices ranging from $785,000 to $1.8 million. Prices of units at the development appreciated by about 14 per cent in 2011 and rental yields ranged from 3-3.9 per cent.
Prospective buyers, however, need to be clear about the pros and cons of buying homes in the secondary market and assess if the available options meet their needs.
Those who buy such properties will have the advantage of occupying the property immediately or getting immediate rental returns. Another draw of buying into an older project is the availability of larger units compared with what's on offer at most new launches these days. In addition, buying a completed unit allows one to visually assess the unit as compared to buying an uncompleted unit off the plan. The downside, particularly with older units, is dealing with potential problems with electrical fittings and plumbing and general wear and tear. There may be a need for extensive renovations in some cases.
Some buyers may be put off by the higher initial monthly repayments required for resale homes compared with progress payments for uncompleted units. Another drawback could be the more stringent rules for financing properties whose leases are running low. For such properties, there are limitations on the withdrawal of funds from the Central Provident Fund as well as for financing loans.
Overall, options abound in the secondary market and the hotspot locations highlighted here can point potential homebuyers and investors to some attractive choices.
The writer is director, research & advisory, Colliers International

Divergence between Dow Transports and S&P500 Is A Big 'Warning Sign'

Everyone keeps wondering when this Teflon market is finally going to crack.

Here's one chart, via Doug Kass, that more and more people are paying attention to.

It's the S&P 500 (red line) vs. the ratio of the Dow Transports vs. the S&P 500 (blue line).

The idea among some "Dow Theorists" is that when the Transports get very weak (relatively) it's a sign that the market as a whole is doomed to fall.

It is pretty stark the gap that's opened up this year. At a minimum it at least shows that some parts of the market are getting roughed up by the rise in oil prices.

Read more: http://www.businessinsider.com/chart-of-the-day-doug-kass-this-divergence-is-a-big-warning-sign-2012-2#ixzz1nPb47SRu

A Major Warning Sign From Small-Cap Stocks

The resilience of the markets continues to be pretty impressive. Despite the uber-fast runup over the last couple of months, there's been almost no appetite to sell... at least when you look from a headline perspective.

That being said, there are signs that underneath the surface risk-aversion is starting to steep in.

Yesterday we brought you a Chart Of The Day from Doug Kass, who pointed to the divergence between the S&P 500 (which is holding up) and the Dow Jones Transports Index, which is breaking down. But arguably transport weakness can be blamed on oil prices.

The problem is that the weakness isn't just in transports.

Today's chart gets at a similar idea from Waverly Advisors, but this time it focuses on the ratio between the Russell 2000 and the S&P 500.

And once again, we see a breakdown, whereby the small-cap, riskier, Russell 2000 index is starting to dive vs. the broader market.

In this chart, the dotted, black line is the ratio, and the orange line is the 20-day moving average.In itself it doesn't confirm anything, but taken as part of a broader trend whereby the riskiest of the risk assets are starting to sell off (and that includes other exotic areas, like Italian banks, and Greek equities) you're starting to see the base erode.

Read more: http://www.businessinsider.com/chart-of-the-day-a-major-warning-sign-from-small-cap-stocks-2012-2#ixzz1nPa2rXJm

Jim Rogers : If you get your investment advise from any Government you will go broke

Jim Roger's comments on low interest rates and the impact of savings / investments of common folks. Without capital investment there is no economy growth. Drawing parallel to how Japan kept rates low and as a result their stock market is 80pct lower than what is was 80 years ago. Ultimately, huge distortions/imbalance in world economy, more inflation and currency turmoil. Everyone else admits there is inflation except the US. Constantly devaluing currency has not worked for any economy in the long term, short term yes.

For more , video attached -

 

The Mother Of All Head And Shoulders

Source : Business Insider 

Attached two charts which seems to suggest that an imminent crash may occur in the stock markets. 

For technical analysis to have any use, it can't just be based on moving averages which any old computer could identify, but rather it requires human observation.And to that end, he sent us this chart, which shows that not only is the market currently in a mini "head and shoulders" pattern, this head and shoulders pattern is in itself the second shoulder in a larger pattern, which apparently means the market is doubly doomed! Or not!

Property : SG Private property prices and rentals at standstill

Source : Business Times

Q4 data hints that market may have peaked; secondary-market volumes are slowing down

(Singapore)
PRICE rises for private homes almost ground to a halt last quarter while rental increases also tapered off. The latest official data has sparked a discussion in property circles on whether the market has peaked.
Most observers say that either the peak has already been touched, or will be touched very soon.
The Urban Redevelopment Authority's benchmark private home price index inched up just 0.2 per cent quarter on quarter (q-o-q) in Q4 last year, its ninth consecutive quarter of moderation. For the full year, the index's 5.9 per cent rise was a third of the 17.6 per cent gain registered in 2010. The figures were identical to flash estimates released on Jan 3.
And for the first time since Q3 2009, the increase in URA's landed property sub-index was lower than that for the non-landed property sub-index. The landed sub-index rose just 0.1 per cent q-o-q in Q4 2011, compared with 0.3 per cent for the non-landed sub-index. In fact, for semi-detached houses, the price index actually fell 0.6 per cent q-o-q in Q4.
'In that quarter, prices of semi-detached houses in the east fell 1.6 per cent while those in the north-east softened by 1.3 per cent. This shows that some segments of the landed market are facing stronger price resistance,' says Credo Real Estate executive director Ong Teck Hui. 'However, landed prices have risen 80 per cent from the market trough in Q2 2009, outperforming the 48 per cent increase for non-landed for the same period.'
URA's overall rental index for private homes rose 0.4 per cent q-o-q in Q4, or half the 0.8 per cent rise it had posted in Q3. Full year 2011, the index was up 3.8 per cent - a fraction of the 17.9 per cent gain it had put on in 2010.
The outlook for private home prices looks bleak. CBRE predicts a price drop of 5-15 per cent this year, with luxury/prime properties taking the bigger hit and mass-market homes being the least affected.
Credo's Mr Ong says: 'It's difficult for prices to regain momentum as the recently imposed ABSD (additional buyer's stamp duty) and the economic slowdown could ease demand. Sustained supply and competition among sellers will also keep a lid on prices.'
Giving a different take, Savills Singapore research head Alan Cheong said: 'We still believe it's difficult to conclude if we've reached an inflexion point, if any at all.'
Mr Cheong cites the oligopolistic nature of the Singapore residential property market, with large developers with deep pockets who're likely to resist any price cut. 'A cocktail of low interest rates till at least late-2014 (as pledged by the US Federal Reserve) and higher inflation will in due course reignite another round of interest in the residential market as it's deemed a good hedge against inflation,' he said.
Credo's Mr Ong paints two scenarios. 'In the best-case scenario, if the economic slowdown is milder than expected, then buying sentiment may remain positive, translating to sustained buying activity which will help to keep prices stable amid the build-up in supply. In the worst-case scenario, if there's a recession, we can expect demand to slacken, creating downward pressure on prices.'
Lamenting the difficulty in making accurate predictions, Knight Frank chairman Tan Tiong Cheng said: 'Each time after the government has announced cooling measures in the past two years, I thought the measures would be sufficient to cool the market. But things have turned out to be otherwise.'
He admits that the ABSD will have some effect in curbing investment and foreign demand for private homes. 'Prices will come down - but to what degree before they go up again? What's the alternative for people with savings? Where should they put their money? If you believe in the longer term, property is as good a bet as any. After all, interest rates are expected to stay low for the next couple of years.'
Price declines could be exacerbated by the secondary market, where volumes have slowed down more sharply than in the primary market (that is, developer sales). The number of units (excluding executive condos, or ECs) sold by developers fell 2.4 per cent from 16,292 units in 2010 to 15,904 units in 2011. However, the number of homes sold in the secondary market (resales and subsales combined) slipped 27.6 per cent, from 22,608 in 2010 to 16,357 in 2011.
Developers are wooing buyers with nice showflats and appealing ad pitches. The ease of stretching out progress payments over a few years - compared with having to pay the full price upfront when buying a completed home in the secondary market - is another reason to buy a home directly from a developer.
DTZ's Asia Pacific research head Chua Chor Hoon said: 'When secondary volumes come down, eventually it will affect prices. If demand slows down and sellers find it hard to sell after a few months hanging on to their prices, some owners will start to reduce prices. There will be more bargaining power for buyers as well as occupiers as rents start to ease.'
URA stats also show that developers completed 12,469 private homes (excluding ECs), up 19.9 per cent from the 10,399 in 2010. This has begun to weigh on residential rents, which are rising at a slower rate.
Savills Singapore expects a 'mild correction' of 5 per cent in rentals this year as more new apartments come on stream in the months ahead. It also expects the number of private residential leasing deals (excluding ECs) to hover around 45,000 in 2012, after hitting an all-time high of 45,062 leases last year. The figure for 2010 was 41,573.
'The strong 2011 showing may be attributed to Singapore becoming the preferred location among MNCs for their regional HQs. This has also attracted more senior and top executives to relocate here,' said Savills' residential leasing head Patrick Lai.
DTZ's Ms Chua said rental pressure is greater in Core Central Region but this is likely to shift to Outside Central Region in three to four years due to expected completion of projects in suburban areas arising from the ramp-up in Government Land Sales since the second half of 2010.

Apple Is Now Twice As Valuable As Google

Source : Business Insider 

With Apple's stock surging, and Google's fading, Apple is now twice as valuable as Google, when measured by market cap.

In February 2009, Google was bigger than Apple, but since then, the two companies have diverged. No wonder Larry Page bought Motorola. He's drooling over Apple's business.

Natural Gas : Price Lowest in Ten Years Due to Winter Effects

Source : Business Insider 

Natural gas prices have fallen to their lowest levels in 10 years.  Traders who have been long natural gas have been feeling the heat.

But it has in fact been warmer than usual for all of us.  This is bad news for the natural gas companies who would hope we'd crank up our natural gas heaters each winter.

Last week, Citi's Robert Morris slashed his 2012 natural gas price target to $3.25/MMBtu from $3.85/MMBtu.

Among other things, he notes that we're experiencing one of the warmest winters in a decade.  Here's some of what he had to say:

Temperatures winter-to-date (November 1st through January 5th) have now been ~10% warmer-than-normal (i.e., ten-year average), with November, December and the first week of January accounting for ~41% of a normal winter’s total customer-weighted gas-home heating degree days (HDDs). Consequently, last week ended with a 356 Bcf year-over-year storage surplus. We estimate that if temperatures for the remainder of this winter just match the ten-year average, then the full winter would end up ~4% warmer than-normal. However, most forecasts are calling for continued mild temperatures through February. Meanwhile, last winter was ~6% colder-than-normal. The unusually warm progression of this winter has resulted in ~3.2 Bcf/d lower demand in the residential and commercial sectors through the end of December versus a normal winter...

That brings us to Chart 2 in his report.  It captures winter temperatures as measured in heating degree days (HDDs).  The baseline represents the 10-year average.  As you can see from the 2011-2012 winter-to-date, it has been 9.6% warmer than usual.

Gold : Global Supply / Demand of Gold

Source : Business Insider 

Morgan Stanley has made it no secret that they're bearish on stocks and the economy. However, in this backdrop, they've also made it very clear that they favor gold.
But what is it about gold? Where does it come from? Where does it go? You certainly can't eat it.

Below is a chart from Morgan Stanley's Global Metals Playbook. And it answers all questions.

Morgan Stanley

Even after it recently fell below its critical 200-day moving average, Morgan's not concerned.  Here's their take;

Gold prices have fallen sharply since reaching a new all-time intraday high of US$1,925/oz on September 6, 2011, and a closing high of US$1,889.7/oz on 22 August. The retreat to US$1,541/oz on December 29 represented a 18.5% decline from the record peak on a closing basis. In the process, the spot price trend broke the 200-day moving average in mid-December, raising fears that the ten-year bull market in gold was coming to an end.

We have a different view. Such corrective price movements, while less aggressive than that in 2H 2011, have been evident throughout the 2001-2011 bull market, especially since the acceleration in the uptrend from 2009. Moreover, the timing of the sell-off, especially to the sell-off low in late December, suggests strong selling pressure linked to year-end book squaring, portfolio adjustments and commodity index reweighting. Furthermore, the sell-off also coincided with an especially sharp rally in the TWI of the USD, a strong headwind for gold given its USD pricing and quasi-currency function.

US Trade Gap Comes In WIDER Than Expected, Spiking 10% To -$47.8 Billion

Source : Business Insider 

The trade gap came in wider than expected at $47.8 billion.
This is a big jump from the $43.3 billion gap from October.
Analysts had expected a $45 billion gap.

Also from the report, some commentary about trade with some of our major partners.

• The goods deficit with Canada increased from $2.2 billion in October to $3.0 billion in November. Exports decreased $1.3 billion (primarily automobiles, parts, and accessories and other household goods) to $23.3 billion, while imports decreased $0.5 billion (primarily nonmonetary gold, civilian aircraft, and other precious metals) to $26.3 billion.

• The goods deficit with China decreased from $28.1 billion in October to $26.9 billion in November. Exports increased $0.2 billion (primarily civilian aircraft, engines, equipment, and parts; corn; and passenger cars) to $9.9 billion, while imports decreased $1.0 billion (primarily household goods and apparel) to $36.8 billion.
• The goods deficit with European Union increased from $8.0 billion in October to $9.7 billion in November. Exports decreased $1.4 billion (primarily fuel oil, drilling and oilfield equipment, and nonmonetary gold) to $22.0 billion, while imports increased $0.4 billion (primarily petroleum products, passenger cars, and household goods) to $31.7 billion.

Performance of every Asset Class in 2011

The last of the major global financial markets will close for the year in just a few hours.  The S&P 500 started the year at 1,257, and it's trading right around that level now.

So does this mean nothing happened in the financial markets this year?

Of course, not.  Perhaps the most surprising asset class of 2011 was US Treasuries.  Between QE2 ending and the US credit rating getting downgraded, most bond experts thought Treasuries would collapse.  But the exact opposite happened.

From Reuters chart guru Scott Barber, here's a quick look at how the world's major financial asset classes performed this year: