| Latest Forum Topics / Others |
 Post Reply
|
|
Property stocks - sharp correction on Monday ?
|
|
|
Pinnacle
Master |
29-Oct-2007 09:21
|
|
x 0
x 0 Alert Admin |
OCBC - Property: Will the government's hat-trick intervention work? The Singapore government has intervened in the Singapore residential market again by banning the Defer Payment Scheme (DPS). This latest measure was introduced with the release of the latest property index which showed that prices rose 8.3% QoQ but 28% YoY. More importantly it seems that speculation has not relented with about 34% of properties bought from developers in 3Q07 being resold within the quarter. This churning rate is similar to the 35% in 2Q07 and this was despite sub-prime woes that had hit sentiment in the financial market.The current government move is actually the third intervention since end 2006. The initial soft measures imposed include the withdrawal of the concession to defer the 3% stamp duty on property purchases, the increase in development charges as well as the increase in the tax rate for development charge. The DPS or the "buy now pay later" method meant that only 10% of the purchase price was needed with the balance to be paid upon physical completion of the property which could take up to 3 years. The DPS had a huge leveraging effect for speculators that tantamount to an ability to buy 10 properties with the affordability of 1. The significance of the current government move is that it is targeting at the demand side of the equation while previous measures were mainly supply side (i.e. increase supply and taxing land value). More importantly, is the fact that demand side measures historically tend to have severe repercussions on demand and hence pricing. We thus see the latest action (and subsequent action if speculation continues) to be negative on the residential sector. The latest move is inline with our warning that government intervention risk to be high with the rampant speculation taking place. Finally, for stock selection we continue to prefer the defensive developers with locked in earnings growth. We have a NEUTRAL weighting on the sector and our preferred developer remains City Development. |
| Useful To Me Not Useful To Me | |
|
idesa168
Elite |
28-Oct-2007 17:12
|
|
x 0
x 0 Alert Admin |
As far as the bubble does not burst, I dun see people will complain about high property price. Just like stock mkt, if the price keep going up people who buy high will sell higher. I never see people coming out to complain that they sold their property higher then they had bought. |
| Useful To Me Not Useful To Me | |
|
|
|
|
EastonBay
Master |
28-Oct-2007 17:02
|
|
x 0
x 0 Alert Admin |
my opinion is that govt is more concerned about Singapore losing it's competitiveness with rising property prices. It has been highlighted again and again on complaints by expatriates how crazy property prices are now... |
| Useful To Me Not Useful To Me | |
|
singaporegal
Supreme |
27-Oct-2007 22:59
Yells: "Female TA nut" |
|
x 0
x 0 Alert Admin |
I agree with idesa168. A property bubble has been growing for some time and if the government didn't do anything about it, it may have dire consequences for our economy. |
| Useful To Me Not Useful To Me | |
|
idesa168
Elite |
27-Oct-2007 10:43
|
|
x 0
x 0 Alert Admin |
After hearing the news and seeing all experts and guru's discussion on this matter, I felt that withdrawal of DPS is a good thing in the long term. 2 kinds of buyers in the mkt, genuine buyers and speculators. This move will curb the speculators who will rise the euphoria but will also burst the bubble sooner. The mkt might not react to this piece of news comes Monday. For the mkt had already in anticipation of this move from garment and that will only confirm on the uncertainty. Friday run up of property counters were due to healthy numbers coming out from the Q3 property sector. Hence my believe is that the buy up is fundamental, not chasing up the share price. In fact, I am more incline to see the mkt pushing up higher on Monday as the move will basically kill all potential bubbles in the making. With Friday DOW closed higher overnight, I am sure Bank counters will open higher on Monday. Banks and Property counters are always closely watch together by the mkt. It is "unlikely" to see banks UP but the property DOWN with big gap. Hence my bet is that, the withdrawal of Differred Payment Scheme will be a NON-EVENT comes Monday. It will be a bonus to those vested if the mkt inch up higher. |
| Useful To Me Not Useful To Me | |
|
|
|
|
01101749
Member |
27-Oct-2007 10:34
|
|
x 0
x 0 Alert Admin |
if u look at capitaland chart, property and bank chart shows failure of correction recovery. buyer well aware and did not buy higher also temasek dump cap share. expect bear market comming. |
| Useful To Me Not Useful To Me | |
|
waterfalls
Senior |
27-Oct-2007 10:22
Yells: "Investing is calculated risk, patience n luck" |
|
x 0
x 0 Alert Admin |
Will there be a big impact on property share prices ? The market has been anticipating this move so it is not unexpected. |
| Useful To Me Not Useful To Me | |
|
smltimer
Senior |
27-Oct-2007 00:27
Yells: "So what does the crystal ball say ......." |
|
x 0
x 0 Alert Admin |
govt oso scared we hav sub-prime loan issue? taking precaution |
| Useful To Me Not Useful To Me | |
|
|
|
|
chew8888
Member |
26-Oct-2007 23:42
|
|
x 0
x 0 Alert Admin |
The prices will likely to go down, as there will "lesser" potential buyers. |
| Useful To Me Not Useful To Me | |
|
waterfalls
Senior |
26-Oct-2007 23:20
Yells: "Investing is calculated risk, patience n luck" |
|
x 1
x 0 Alert Admin |
How will property stock prices be affected by the withdrawal of the deferred payment scheme ? |
| Useful To Me Not Useful To Me | |