Disclaimer






"I am a BLOGGER NOT an expert. This is a BLOG not a 'go-to' website for official information. I represent no one's view save my own. I have neither legal nor financial training, nor do I have anything to do with the real estate industry. My understanding of the Collective Sale Process is from a layman's position only. My calculations, computations and tables are homespun and may contain errors. Please note that nothing in this blog constitutes any legal or financial advice to anyone reading it. You should refer to your lawyer, CSC or financial adviser for expert advice before making any decision. This disclaimer is applicable to every post and comment on the blog. Read at your own risk."
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There is one thing worse than an Enbloc ----- and that is an Enbloc done badly. Since the majority have the necessary mandate to sell, then they owe it to all SPs to make a success of it. Minority SPs can only watch and wait, if they sell then lets pray it's at a price we can move on with, if they don't sell, then we are happy to stay for a few more years.

Property Sector Review

Singapore Property Sector
SECTOR REVIEW
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Vacant real(i)ty
We believe the Singapore residential property sector could see a bursting of a bubble that has been created from exuberant expectations and liquidity over the past two years. With a potential economic slowdown that may last through 2009, and historically high supply looming, we turn more negative on this cyclical sector, which has seen price declines of 40% and stocks trading at up to 70% discounts to RNAVs in previous down-cycles.
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Housing prices have started falling
Though declines are still not widespread due to trickling transactions and developers resistance, secondary transactions reflected prices of like-for-like units down 5-25% frompeak. Our previous zero growth assumption seems to be too optimistic. We now expect physical prices to correct as much as 30% from end-2007 levels over 2008 and 2009, with the high end the most vulnerable. As prices of some properties have doubled or tripled over the past two years, even with a 30% correction, prices would still be at least 40% higher than early-2006 levels for most prime properties.
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Prices could come off 40%
While developers in general have better balance sheets and thus better holding power than during the last cycle, and the environment still looks supportive with negative real rates, still-high rents and the positive vibe stemming from various factors (e.g., F1 race, Integrated Resorts, 2010 Youth Olympics), we believe that these high prices are unsustainable amid the worsening global economy. We believe a price correction will be triggered by:
1) withdrawal of the liquidity that drove up prices over the past two years (en bloc, Deferred Payment Scheme, foreign capital);
2) dumping by marginal speculators who have no means to hold and need to pay up this year and next;
3) potential price cuts by small developers with high gearing that are under pressure to increase cash flow; 4) rising vacancies with rising supply;
4) deterioration of the local employment situation. Singapore is one of the most vulnerable economies to a G3 slowdown, and if foreigner influx slows substantially, new demand may not be able to absorb supply at current price levels. We have revisited our housing supply-demand model, bearing in mind that not all supply pipeline will come through due to construction bottlenecks. It still suggests that the vacancy rate may rise from the current 5-6% to 9.8-19% in our base and worst cases. This could trigger rent and price declines of more than 40%, based on historical trends, in our opinion.
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Source - Credit Suisse

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