Singapore and Hong Kong now have identical problem; skyrocketing property prices that is increasingly becoming a social concern. The two similarly, have one common real estate policy - 15 percent levies in place to slow hot foreign money inflow, something that has added fuel to their overheated property markets. Home prices in the Southeast Asian city state has risen by 60 percent since mid-2009 and disgruntled voters handed the ruling party its worst ever electoral performance in the 2011 Singaporean general election.
Singaporean properties are getting out of reach for the ordinary masses
As Singapore continues to battle high property prices, it became the first in Asia to impose curbs on industrial properties, whose prices have doubled in the past three years and outpaced the increase in rents. The government last week imposed as much as 15 percent in stamp duties on sellers of industrial properties such as warehouses and logistics buildings to curb speculation.
“We foresee a substantial short-term impact on the industrial segment,” Priyaranjan Kumar, the Singapore-based regional director of capital markets at Cushman & Wakefield Inc., said in an interview. “Measures targeting the industrial sector are appropriate given very vocal concerns by local small and medium scale industries of being increasingly priced out of the market.”
“Industrial property prices have seen one of the fastest increases in 2012 and the capital values were moving much ahead of the rentals,” said Vijay Natarajan, an analyst at UOB-Kay Hian Pte in Singapore. “The government has to retain its advantage of the cost of setting up business in Singapore and if that keeps escalating, then it’s a problem for the attractiveness of Singapore as a business hub.”
Singapore imposes more measures to prevent property prices going out of control
Most analysts however, are saying that even if the pace of buying slows, the appetite for homes in Hong Kong and Singapore is so strong that prices are expected to stay firm or ease only marginally. “Singapore is like the London of Asia. Many people are not here to flip their properties or sell out in two to three years,” said Knight Frank's head of consultancy and research Png Poh Soon. “There are lots of non-monetary reasons for buying Singapore and also Hong Kong property. In that sense, the demands are real instead of pure speculation.”
The two Asian cities not only compete to be the continent's financial and wealth centers, but also share the issues of astronomical demand, limited space and low mortgage rates that have driven housing prices beyond the reach of many middle-class locals. In Hong Kong, the prices are driven up by wealthy Mainland Chinese investors, while in Singapore, affluent Malaysian and Indonesian investors are responsible for half of its property appreciation, with Mainland Chinese another major buyers.
Both governments want to cool but not collapse the market.
Hong Kong Chief Executive Leung Chun-ying announced policies to tame real estate prices last October. Transaction volumes did plunge in November and December, but have recovered since, and the duration of the measures' impact is getting shorter each time, said Wong Leung-sing of Centaline Property.
“It's like using a miracle drug,” he said. “The first time, it is very effective. The second time, its effectiveness is largely decreased. The third time, there might be no effect at all.”
What drive Hong Kong's property markets is that there are now many real buyers as opposed to flippers. Citigroup estimated 90 percent of recent transactions in Hong Kong were by people intending to live in the properties. That contrasts with 2010, when an estimated 50 percent were end-users, 20 percent speculators, 20 percent long-term investors and 10 percent non-local buyers.
Singapore's newest generation complaining that housing is becoming unaffordable for them
Private home sales in Singapore jumped nearly 30 per cent in December despite the government's repeated attempts to subdue them. Singapore is considering more new levies on home buyers after residential prices and sales climbed to a record in 2012. It is the seventh round of property cooling measures the government has taken since 2009.
Property firms say investors may simply shift their targets somewhere else. Low interest rates and measures on residential properties prompted some investors to shift their focus to higher-yielding warehouses and logistics assets last time. Industrial space in Singapore returned 6.25 percent to 7.5 percent, exceeding the 4 percent for apartments and 5 percent for offices.
“The recent measures (restriction on industrial properties) will most likely lead to increased activity for office and retail strata sales,” Jeremy Lake, Singapore-based executive director of investment properties at CBRE Group Inc., said in an e-mailed response to queries. “The strong fundamentals which kicked off the office and retail strata sales activity 18 months ago remain intact and positive sentiment is further supporting the market now.”
Singaporean property prices, like Hong Kong, has moved beyond the pre-1998 crisis bubble
Almost 98 percent of sellers of strata factories made an average profit of 47 percent or S$263,000 (US$215,000), according to London-based property brokerage Savills Plc. Singaporean industrial properties bought in 2012 and sold in the same year generated a 15 percent return, it said in a report on Jan. 15. The number of industrial strata title transactions in the city state climbed 78 percent last year.
The curbs signaled that Singapore may be trying to shift speculative investments and diverting billions of dollars of hot money to neighboring Malaysia. Malaysia is actively promoting its Malaysia My Second Home program (commonly abbreviated "MM2H"), an international residency scheme enacted by the government to allow foreigners to live in the country on a long-stay visa of up to 10 years.
Across the border, Malaysian property firms welcome the move, saying that Malaysian property developments are expected to benefit from Singapore's latest round of cooling measures.
Property website group PropertyGuru said investors could shift their buying from Singapore to Malaysia on the back of additional property cooling measures by the Singaporean government, which came into effect on Jan 12, 2013. These included a hike in stamp duties by between 3% and 8%.
Swhengtee International Sdn Bhd founder and president Gavin Tee foresees that Singapore's cooling will slow down its property market. “This is good news to the Malaysian property boom, as a wave of investors into Malaysia can be expected.”
“In the past 10 years, actually there have not been many foreign investments in Malaysia compared with neighboring Southeast Asian countries. We are still being challenged as countries such as Myanmar, the Philippines and Jakarta are actively competing with us to bring in foreign investors including for properties, but this may be about to change.”
Malaysian property prices expected to rise further
Datuk FD Iskandar, deputy president for the Real Estate and Housing Developers’ Association of Malaysia, says the Malaysian real estate industry is poised for significant growth. “With the implementation of the Economic Transformation Programme and the Greater Kuala Lumpur, the real estate sector is set to experience skyrocketing demand in the coming years,” he said in an interview.
Property prices in Malaysia remain attractively cheap. Compared to Jakarta, the price for a prime residential property in Kuala Lumpur is about 15 percent lower. With the property curbs in Singapore, buyers from China and Indonesia are showing increasing interest in Malaysian properties. Indonesian and Chinese buyers generally go for properties priced between RM600,000 and RM1.5 million in Johor and Kuala Lumpur, or homes that are priced at RM1 million and above in Penang.
Henry Butcher Marketing chief operating officer Tang Chee Meng said the firm had recently set up a property show gallery in Beijing to showcase residential properties from Klang Valley, Malacca, and Penang. “Investors from China are big-time property purchasers in Singapore. With the stamp duty introduced, Malaysian developers are now trying to attract them.”
Source:
http://www.reuters.com/article/2013/01/14/us-singapore-property-stocks-idUSBRE90D04F20130114
http://articles.chicagotribune.com/2013-01-16/business/sns-rt-us-singapore-hongkong-propertybre90f0ah-20130115_1_centaline-property-hong-kong-property-markets
http://www.bloomberg.com/news/2013-01-16/singapore-curbs-to-cut-industrial-property-sales-southeast-asia.html
http://www.scmp.com/business/economy/article/1129769/singapore-hits-property-buyers-hong-kong-style-tax
http://www.property-report.com/singaporean-government-introduces-seventh-round-of-cooling-measures-27105
http://my.news.yahoo.com/blogs/home-guru/rising-kl-property-prices-drive-investors-away-axis-074202637.html
credit to mevotex @ miricommunity.net
Singaporean properties are getting out of reach for the ordinary masses
As Singapore continues to battle high property prices, it became the first in Asia to impose curbs on industrial properties, whose prices have doubled in the past three years and outpaced the increase in rents. The government last week imposed as much as 15 percent in stamp duties on sellers of industrial properties such as warehouses and logistics buildings to curb speculation.
“We foresee a substantial short-term impact on the industrial segment,” Priyaranjan Kumar, the Singapore-based regional director of capital markets at Cushman & Wakefield Inc., said in an interview. “Measures targeting the industrial sector are appropriate given very vocal concerns by local small and medium scale industries of being increasingly priced out of the market.”
“Industrial property prices have seen one of the fastest increases in 2012 and the capital values were moving much ahead of the rentals,” said Vijay Natarajan, an analyst at UOB-Kay Hian Pte in Singapore. “The government has to retain its advantage of the cost of setting up business in Singapore and if that keeps escalating, then it’s a problem for the attractiveness of Singapore as a business hub.”
Singapore imposes more measures to prevent property prices going out of control
Most analysts however, are saying that even if the pace of buying slows, the appetite for homes in Hong Kong and Singapore is so strong that prices are expected to stay firm or ease only marginally. “Singapore is like the London of Asia. Many people are not here to flip their properties or sell out in two to three years,” said Knight Frank's head of consultancy and research Png Poh Soon. “There are lots of non-monetary reasons for buying Singapore and also Hong Kong property. In that sense, the demands are real instead of pure speculation.”
The two Asian cities not only compete to be the continent's financial and wealth centers, but also share the issues of astronomical demand, limited space and low mortgage rates that have driven housing prices beyond the reach of many middle-class locals. In Hong Kong, the prices are driven up by wealthy Mainland Chinese investors, while in Singapore, affluent Malaysian and Indonesian investors are responsible for half of its property appreciation, with Mainland Chinese another major buyers.
Both governments want to cool but not collapse the market.
Hong Kong Chief Executive Leung Chun-ying announced policies to tame real estate prices last October. Transaction volumes did plunge in November and December, but have recovered since, and the duration of the measures' impact is getting shorter each time, said Wong Leung-sing of Centaline Property.
“It's like using a miracle drug,” he said. “The first time, it is very effective. The second time, its effectiveness is largely decreased. The third time, there might be no effect at all.”
What drive Hong Kong's property markets is that there are now many real buyers as opposed to flippers. Citigroup estimated 90 percent of recent transactions in Hong Kong were by people intending to live in the properties. That contrasts with 2010, when an estimated 50 percent were end-users, 20 percent speculators, 20 percent long-term investors and 10 percent non-local buyers.
Singapore's newest generation complaining that housing is becoming unaffordable for them
Private home sales in Singapore jumped nearly 30 per cent in December despite the government's repeated attempts to subdue them. Singapore is considering more new levies on home buyers after residential prices and sales climbed to a record in 2012. It is the seventh round of property cooling measures the government has taken since 2009.
Property firms say investors may simply shift their targets somewhere else. Low interest rates and measures on residential properties prompted some investors to shift their focus to higher-yielding warehouses and logistics assets last time. Industrial space in Singapore returned 6.25 percent to 7.5 percent, exceeding the 4 percent for apartments and 5 percent for offices.
“The recent measures (restriction on industrial properties) will most likely lead to increased activity for office and retail strata sales,” Jeremy Lake, Singapore-based executive director of investment properties at CBRE Group Inc., said in an e-mailed response to queries. “The strong fundamentals which kicked off the office and retail strata sales activity 18 months ago remain intact and positive sentiment is further supporting the market now.”
Singaporean property prices, like Hong Kong, has moved beyond the pre-1998 crisis bubble
Almost 98 percent of sellers of strata factories made an average profit of 47 percent or S$263,000 (US$215,000), according to London-based property brokerage Savills Plc. Singaporean industrial properties bought in 2012 and sold in the same year generated a 15 percent return, it said in a report on Jan. 15. The number of industrial strata title transactions in the city state climbed 78 percent last year.
The curbs signaled that Singapore may be trying to shift speculative investments and diverting billions of dollars of hot money to neighboring Malaysia. Malaysia is actively promoting its Malaysia My Second Home program (commonly abbreviated "MM2H"), an international residency scheme enacted by the government to allow foreigners to live in the country on a long-stay visa of up to 10 years.
Across the border, Malaysian property firms welcome the move, saying that Malaysian property developments are expected to benefit from Singapore's latest round of cooling measures.
Property website group PropertyGuru said investors could shift their buying from Singapore to Malaysia on the back of additional property cooling measures by the Singaporean government, which came into effect on Jan 12, 2013. These included a hike in stamp duties by between 3% and 8%.
Swhengtee International Sdn Bhd founder and president Gavin Tee foresees that Singapore's cooling will slow down its property market. “This is good news to the Malaysian property boom, as a wave of investors into Malaysia can be expected.”
“In the past 10 years, actually there have not been many foreign investments in Malaysia compared with neighboring Southeast Asian countries. We are still being challenged as countries such as Myanmar, the Philippines and Jakarta are actively competing with us to bring in foreign investors including for properties, but this may be about to change.”
Malaysian property prices expected to rise further
Datuk FD Iskandar, deputy president for the Real Estate and Housing Developers’ Association of Malaysia, says the Malaysian real estate industry is poised for significant growth. “With the implementation of the Economic Transformation Programme and the Greater Kuala Lumpur, the real estate sector is set to experience skyrocketing demand in the coming years,” he said in an interview.
Property prices in Malaysia remain attractively cheap. Compared to Jakarta, the price for a prime residential property in Kuala Lumpur is about 15 percent lower. With the property curbs in Singapore, buyers from China and Indonesia are showing increasing interest in Malaysian properties. Indonesian and Chinese buyers generally go for properties priced between RM600,000 and RM1.5 million in Johor and Kuala Lumpur, or homes that are priced at RM1 million and above in Penang.
Henry Butcher Marketing chief operating officer Tang Chee Meng said the firm had recently set up a property show gallery in Beijing to showcase residential properties from Klang Valley, Malacca, and Penang. “Investors from China are big-time property purchasers in Singapore. With the stamp duty introduced, Malaysian developers are now trying to attract them.”
Source:
http://www.reuters.com/article/2013/01/14/us-singapore-property-stocks-idUSBRE90D04F20130114
http://articles.chicagotribune.com/2013-01-16/business/sns-rt-us-singapore-hongkong-propertybre90f0ah-20130115_1_centaline-property-hong-kong-property-markets
http://www.bloomberg.com/news/2013-01-16/singapore-curbs-to-cut-industrial-property-sales-southeast-asia.html
http://www.scmp.com/business/economy/article/1129769/singapore-hits-property-buyers-hong-kong-style-tax
http://www.property-report.com/singaporean-government-introduces-seventh-round-of-cooling-measures-27105
http://my.news.yahoo.com/blogs/home-guru/rising-kl-property-prices-drive-investors-away-axis-074202637.html
credit to mevotex @ miricommunity.net
