Cov Dropping Does Not Means Price Is Decreasing..

[Jgal 0]

COV is less , just means that the increase in prices is slower.

Only when COV is negative , then prices decreases. Correct me if i am wrong there.

http://business.asiaone.com/Business/My%2B...2-235201/2.html

I find it quite strange why he say that based of past and current trends that price will drop 10-20%.

What are the trends that he is talking about ? Is it when there was a asia-crisis ?

If he say that demand for rental is still strong , then why buy/sell price will drop ?

Since rental is always pegged to purchase price. when rental is good, purchase price increase. When rental is bad, purchase price goes down?

[forgotten 1]

"How much will prices fall by?

Based on past and current trends, prices will fall about 10 per cent this year, and 20 per cent next year."

His claim of 30% drop in price = a market crash leh LOL!

[marshmallow 0]

actually 10% drop is not so difficult depending on how you calculate if the baseline is low, 10% is easy to achieve.

say a 4-rm flat is at $350k and seller now are asking 70k COV. If later seller ask for 30k COV, already a drop in more than 10% but the same drop in COV for EM is only 5-8% drop in price?

after taking national average across all flat types, they probably can get some decent numbers

[Warrior88 0]

What trend ? which market ? Writer is trying to stir panic thus create more transactions.

I don't see any facts anf figures. Just the writer paranoid thinking. Good writer would have break the trend into different phases.

Rental good=true, supply is limited, new flats not for immediate possession. Besides, with HDB ruling not everybody is entitle to New ones.

Rental demand base on supply & purchase price. Tenant weights the cost of opportunity of rental fees vs purchase price.

No such thing as rental good, purchase price increase. It is the other way round. Purchase price increase, rental fees goes up.

Purchase price is to do with the economy and supply/demand thingy.

By the way for resale HDB to drop, all category must also adjust, BTO,DBSS,EC,Pte...etc.

If resale gap close to BTO, resale HDB demand picks up again due to location and amenity.

So, is BTO price coming down ?

[Jgal 0]

actually 10% drop is not so difficult depending on how you calculate if the baseline is low, 10% is easy to achieve.

say a 4-rm flat is at $350k and seller now are asking 70k COV. If later seller ask for 30k COV, already a drop in more than 10% but the same drop in COV for EM is only 5-8% drop in price?

after taking national average across all flat types, they probably can get some decent numbers

1.Valuation is current price i.e. 350k. COV is the cash over valuation (i.e. Current price)

If in Q1 , transaction price for similar unit is $350k. Then valuation is 350k in Q2

So in Q2, seller demands 50k cov and sells at 400k..then valuation in Q3 is 400k

So no drop in price, just less cov i.e. increase slower.

2. Price drop when. COV is -ve.

If in Q1 , transaction price for similar unit is $350k. Then valuation is 350k in Q2

So in Q2, seller demands -50k cov and sells at 300k.. then valuation in Q3 is 300k.

then , price drop to 300k in Q3

Edited September 14, 2010 by Jgal

[Jgal 0]

Rental good=true, supply is limited, new flats not for immediate possession. Besides, with HDB ruling not everybody is entitle to New ones.

Rental demand base on supply & purchase price. Tenant weights the cost of opportunity of rental fees vs purchase price.

No such thing as rental good, purchase price increase. It is the other way round. Purchase price increase, rental fees goes up.

Rental goes up, more viable to invest. Purchase price will go up. They are dependent on each other. Not only 1 way.

Original OneAmber buyers paid only 700psf but they rent the same as the new buyers. Why? because there is demand. New buyer come in because ? rental is high/good returns.

[chronograph 0]

So, is BTO price coming down ?

this one swee.......

come out from garment ex, go into resale ex as well.

[marshmallow 0]

the article has a lot of contradiction... on one hand they said it's buyer's market, on the other hand they ask pple not to sell their HDB now

the demand for resale flat is real at least for now... even when many BTOs are coming out, there are still :-

• pple who can't wait
• pple who wants better locations
• PRs
• sandwich class that cannot get new flats (like those combined income 8.5k pple)

.......... etc.

[Warrior88 0]

this one swee.......

come out from garment ex, go into resale ex as well.

Yishun BTO, ratio 3 in 1, below expectation. PPl still wait and see, hoping for resale price to drop.

Bottom line, ppl still prefer resale HDB cos of the location and amenities. Chicken and Egg issues.

Built amenities to bring in ppl ? white elephant issues ? or built amenities only when dwellers grow.

Sengkang so long liao, amenities still an issue.

[Jgal 0]

Yishun BTO, ratio 3 in 1, below expectation. PPl still wait and see, hoping for resale price to drop.

Bottom line, ppl still prefer resale HDB cos of the location and amenities. Chicken and Egg issues.

Built amenities to bring in ppl ? white elephant issues ? or built amenities only when dwellers grow.

Sengkang so long liao, amenities still an issue.

Last time wis for redhill 4:1 already consider ver hot Liao. Now 3:1 at yishun . Demand still very high despite many people wait and see.

[forgotten 1]

the article has a lot of contradiction... on one hand they said it's buyer's market, on the other hand they ask pple not to sell their HDB now

the demand for resale flat is real at least for now... even when many BTOs are coming out, there are still :-

• pple who can't wait
• pple who wants better locations
• PRs
• sandwich class that cannot get new flats (like those combined income 8.5k pple)

.......... etc.

Singles are inside the list too. They can't buy direct from HDB.

[forgotten 1]

Yishun BTO, ratio 3 in 1, below expectation. PPl still wait and see, hoping for resale price to drop.

Bottom line, ppl still prefer resale HDB cos of the location and amenities. Chicken and Egg issues.

Built amenities to bring in ppl ? white elephant issues ? or built amenities only when dwellers grow.

Sengkang so long liao, amenities still an issue.

Yeah more people are looking at the resale market, plus people are placing their lots in the Balance of Sale box instead of BTO box this month. The current Yishun BTO also has a foreign worker domitary opposite the road, some people may not like it. Those who don't strike lucky in this Balance of Sale will probably place their lots in next month's BTO box.

BTOs released by govt aren't that cheap. The high floor units for 4 room are >300K.

Edited September 14, 2010 by forgotten

[forgotten 1]

I'm curious why 25% of the applicants gave up their chances to book units for Dawson BTO? I thought it was a very hot BTO.

[Always Happy 0]

I'm curious why 25% of the applicants gave up their chances to book units for Dawson BTO? I thought it was a very hot BTO.

My thoughts,

They just gave up their balloting chances, not as if they dropping the units.

25% still need to fight against the remaining 75%. Alot of them maybe just trying their luck.

When other BTO started, they may be attracted by the lower prices and hence left.

Its really expensive for a start. My friend got a unit at 8th floor(second floor to be exact), is already $560K for 5rm.

They have to take up a 500k loan, meaning $2400 per mth for 30yrs.

I think its pretty daunting for 1st timer buyer/couples, and maybe some dropped after meticulous calculation

But hey, i want a unit there...

[Jgal 0]

Reasons for drop out for dawson bto

1. left only < 4 flr

2. high price for non-ideal units. if your friends pays $560k for 8th flr.. 2 flr is probably going for $530k ... duh.. dun think i will take also. Resale units also going ard that price , downside is that its older but.. it's ready.

3. chinese quota closed