ERA Daily Research - 1 July

Singapore property market not overheated, but authorities watching prices closely: MAS

The Straits Times, 30 Jun 2021, Wed 2:59 pm

By Ovais Subhani

The Monetary Authority of Singapore (MAS) said it would remain vigilant over rising home prices even though the property market was not "overheated".

"No, we do not think the market is overheated right now, because if it is overheated, then we have not done our job well," MAS managing director Ravi Menon said in response to a question at a media briefing on the MAS Annual Report on Wednesday (June 30).

Mr Menon said the property market had been remarkably resilient in the face of the pandemic and recession last year, and continued uncertainty over Covid-19 risks this year.

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MAS says property market not overheated, but it will watch rising prices closely

The Business Times, 30 Jun 2021, Wed 7:01pm

By Vivien Shiao & Lisa Kriwangko

THE Monetary Authority of Singapore (MAS) remains "highly vigilant" to the risk of a sustained increase in housing prices relative to income trends, with a prolonged divergence seen as unsustainable, Monetary Authority of Singapore (MAS) managing director Ravi Menon has said.

In his opening remarks at the launch of the MAS' annual report, he noted that the property market has been "remarkably resilient" in the face of the pandemic. The residential property price index rose by 1.6 per cent in 2020, even as nominal gross domestic product (GDP) contracted 8.2 per cent.

As at the first quarter of 2021, the property price index was 5.6 per cent above its pre-pandemic levels, while nominal GDP was about 4 per cent below, he noted.

When asked by the media, Mr Menon said that the property market is not considered overheated at this juncture.

"We will never tell in advance whether we would implement (property cooling) measures because that defeats the purpose of implementing the measures," he said.

"We hope the market will continue to remain stable and that we don't have to make any moves.

"But we have said many times that we are just as determined to make sure that the market remains stable, and prevent overheating from happening."

On whether there is a possibility of an asset bubble being formed on the back of flush global liquidity, he said that this is a "big issue" for central banks and regulators around the world.

With central banks adopting very highly accommodative monetary policies such as low interest rates, a good part of this liquidity has gone into financial asset markets and real estate markets.

"This is a big problem," he noted.

That being said, Singapore has a comprehensive set of macroprudential policy tools to keep the property market here from over-inflating, and this has resulted in relative stability in the market in the past five years, said Mr Menon.

He added that this is something that MAS will continue to watch closely.

In response, Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, noted that while rumours of cooling measures might have introduced panic buying, Mr Menon’s earlier statement could help to stabilise the market “by providing more clarity and certainty”.

“It appears that the probability of property curbs being implemented in the near future may not be high since they do not deem the market to be overheated,” she said.

Lee Nai Jia, deputy director of the Institute of Real Estate and Urban Studies (​IREUS) at National University of Singapore, added that the possibility of a market correction “should not be ruled out”.

“US economists have anticipated the Fed rate to be raised, even as early as 2022, which will in turn trigger other central banks to raise lending rates. The increased cost of credit may flatten the uptrend on home prices,” he said.

However, if property cooling policies are enacted, he anticipates the measures to be “highly targeted rather than broad and sweeping”.

“Regulations may, for example, target joint-owners who, in a bid to avoid additional buyer’s stamp duty (ABSD), are decoupling to purchase an additional property, and may as a result overextend themselves,” noted Dr Lee.

Sing Tien Foo, director of IREUS, added that it is important for the government to monitor foreign flow of capital, especially into the luxury segment, as it could generate spillover effects into the mass market and HDB resale market. He believes potential cooling measures could reduce the current loan-to-value ratios or increase the ABSD.

“A more stringent measure will be to restrict the demand from foreign buyers, such as barring more than one purchase in private property in the local market,” he said.

That said, Ms Sun added that cooling measures can only help to slow down the pace of price increase temporarily, as prices of homes could continue to rise if demand is persistent, especially in suburban areas.

She noted: “The authorities may want to consider releasing more land parcels, especially in the suburban regions, to better address the supply-demand imbalance that is facing the market now.”

In Q1 2021, private home prices rose 3.3 per cent quarter on quarter, steeper than the 2.1 per cent growth in Q4 2020, say Urban Redevelopment Authority (URA) figures.

This was the fourth consecutive quarter-on-quarter quarter rise. Meanwhile, flash estimates for Q2 2021 private home sales will be released on July 1.

In public housing, HDB resale prices rose 1.2 per cent in May 2021 from the previous month, making it the 11th straight month of price growth, says flash data from real estate portal SRX Property.

Year on year, the overall price increase for HDB resale flats grew 12 per cent in May, although it remained 2.6 per cent lower than the peak in April 2013.


Stage 2 of Thomson-East Coast MRT Line to open on Aug 28

The Straits Times, 1 July 2021, Thu   

By Christopher Tan

The long-awaited second stage of the Thomson-East Coast MRT Line will start running on Aug 28.

Transport Minister S. Iswaran on Wednesday (June 30) said the new six-station stretch - connecting Springleaf, Lentor, Mayflower, Bright Hill, Upper Thomson and Caldecott stations - "would not have been possible without the hard work, adaptability and personal sacrifices of our technicians, engineers and ground staff".

Delayed in part by the Covid-19 pandemic, TEL2 will have two interchanges - Caldecott with the Circle Line and Bright Hill with the future Cross Island Line.

Mr Iswaran said the TEL will enhance the resilience of the rail network. When fully opened in the latter half of the decade, the TEL will interchange with five existing MRT lines (North-south, East-west, North-east, Circle and Downtown) as well as the Cross Island Line.

When TEL is fully completed, more than 240,000 current and future households will be within a 10-minute walk from a station along the line, he added.

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Secretlab gaming chair co-founder Ian Ang snaps up GCB, penthouse for $51m

The Straits Times, 30 Jun 2021, Wed 6:49 pm

By Grace Leong

The 28-year-old co-founder of the Secretlab gaming chair firm has splashed out $51 million in just a week on two luxury properties - a good class bungalow in Caldecott Hill and a penthouse near the Botanic Gardens.

Mr Ian Ang, who is the chief executive of the ergonomic chair retailer, was granted an option to purchase the $36 million bungalow in Olive Road on June 14 by Mr Danny Yong Ming Chong, according to documents seen by The Straits Times.

Mr Yong is the founding partner and chief executive of Singapore investment manager Dymon Asia Capital, which manages about US$5 billion (S$6.7 billion).

He had a net worth of $590 million, according to Forbes' 50 Richest Singaporeans in 2019.

The option was exercised by Mr Ang on June 24.

Mr Ang, the youngest ever winner of the EY Entrepreneur of the Year title, and Mr Yong have both declined to comment.

The $36 million price tag translates to $1,537 per square foot (psf) based on the 23,424 sq ft site - exceeding the last transacted price of $744 psf or about $20 million for a bungalow in Andrew Road last November.

"This is a record psf price for the Caldecott Hill good class bungalow (GCB) area," said Mr Samuel Eyo, managing director of Lighthouse Property Consultants.

"With this transaction, it will raise the psf price for GCBs in this area by at least 10 per cent.

"The (bungalow) is on high ground and offers unblocked views of the Singapore Polo Club and greenery in the Mount Pleasant area."

The caveat for the second freehold property, a 7,007 sq ft, five-bedroom triplex penthouse at Leedon Residence off Farrer Road, was lodged for $15 million on Monday (June 28).

The 381-unit project developed by GuocoLand has 12 penthouses ranging from 5,694 to 7,718 sq ft, 24 five-bedroom apartments of 4,704 sq ft on other levels and six duplex garden homes ranging from 6,566 to 8,051 sq ft.

Mr Stephen Ho, vice-president of residential at CBRE, represented Mr Ang in both transactions. He told The Straits Times on Wednesday that the purchases were made after a two-year search and "careful consideration".

"The main draw of the GCB is the land size and the unblocked view of the greenery and skyline, as well as the serenity and privacy the locale provides," he said.

Mr Ang plans to live at the Leedon Residence penthouse while the bungalow is being torn down and rebuilt, Mr Ho added, noting: "The penthouse is also an investment property. Its views and privacy are plus points."

Mr Ang and business partner Alaric Choo, 32, founded Secretlab in 2015. The company now employs about 200 staff making about one million chairs a year that are sold to 60 or so countries.

Last year was a banner one for the company thanks to work-from-home arrangements generating new demand from non-gamers.

The firm deals directly with consumers, with operations almost entirely online. It sold its millionth chair last year and has grown 30-fold from three years ago.


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