With inflation, China’s reopening and US’ possible recession with the recent Fed pivot, what else can we expect from 2023? Picking up where we left off last episode, Melvin Lim from PropertyLimBrothers lists 7 property trends that might evolve in 2023. In a year of new launches, questioning the trend of rental rates and the effect of Federal Reserve changes, where is 2023 heading? Get up to speed on what you can look forward to and avoid this year!
Melvin Lim
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Welcome back to Nuggets On The Go Season 3, Episode 2.
Melvin Lim
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We’re right now in 2023, and we’re gonna talk about Part 2
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of where we left off in Episode 1.
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So if you have not watched Episode 1, do head back to
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click on this link and that will bring you to
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the onset of our discussion on 2023 Property Crash or Shift.
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So for today’s episode we’re gonna talk about
Melvin Lim
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seven property trends that we think
Melvin Lim
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might evolve right now in the year 2023. Let’s go.
Melvin Lim
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So for Part 2, I’m gonna dive straight into
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some of the key highlights of property news
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that have sprouted over the last two to three months.
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So let’s have a look at this very first news,
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which is talking about the rental rate,
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in terms of volume that happened in December.
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And later we’re gonna talk about one of the trending
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because this is a hot topic for this year
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because rental rates have burst through the roof.
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And of course that has been favourable for landlords,
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but unfavourable for tenants.
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And we’re gonna talk about what will likely
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be trending in the next 12 to 24 months.
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Will rental rates continue to rise,
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in conjunction with what’s gonna happen now?
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So this news just came out yesterday
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talking about record employment in the whole year of 2022.
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And though 2022 was the year of the black swan
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with Ukraine war, with crypto crash, with stock crashing,
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with tax stocks crashing, as well as interest rate rising
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for seven rounds by Federal Reserve.
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And of course Singapore’s interest rate right now
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averages is at about 4% to 4.2%.
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This of course came as a surprising news
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that our unemployment rates have dipped.
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And employment is actually
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in a very healthy range right now.
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And of course we do see condo resale volumes
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drop 14% in December.
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However, this is something to do with
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probably what we call a revenge traveling kind of trending
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that came out over the last quarter of last year
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because everybody was so busy traveling.
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If you look at your social media feed,
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everything is about your friends traveling to Korea,
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to Japan, to Taiwan, to like, you know,
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Switzerland, and everybody was busy traveling
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over the last season.
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And I think that has contributed to a drop in
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the volume itself.
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But of course I think the key thing was
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because of the rising mortgage interest rates
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has caused probably fear among property buyers
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that want to wait on the sidelines to time the market.
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Now this has also been a hot topic because
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our government is currently in the season
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whereby they need to talk about
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the affordability of public housing,
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the cost of constructing BTOs,
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and this of course will go on for the next couple of months.
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Let’s wait and see on what is the expected
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kind of debate on this.
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Home prices on the whole of Q4 still went up by 8.6%
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and of course this was the hot topic
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that I talked about in Part 1,
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about the holding power and behaviour
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kind of changes and mindset of existing people
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that are holding onto properties,
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whether do they hold one, two?
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Or for example foreign investors
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holding three to four properties.
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What is going through their mindset now,
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and what is their thinking about
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whether should they fire-sale the property?
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Is there a need to even do that,
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or what is actually their threshold
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for holding on to their properties?
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And of course I’ve answered that in Part 1
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whereby there’s technically no need for people
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to fire-sale their property
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because their mindset has been so different
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with so many round of cooling measures
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already pre-built in the pricing.
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Everybody has technically very high holding power.
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They enter into a property with a mindset
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that they will hold for mid to long-term
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and they have already locked in rates
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last time with probably 2% rates or 3% interest rates
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and there’s no need for them to fire-sale their property.
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Unless we have a very prolonged recession in Singapore,
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which technically there’s currently,
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we’re not even in a recession at all.
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And even in the US, technically, although a lot of people say that
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they are already in a recession,
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but you need two negative quarters of GDP growth
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to be technically called a technical recession,
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but it’s still not happening yet.
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Inflation, China’s reopening, US’ possible recession
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might define what will happen this year.
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And at the same time, confusing news is that
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we are at a 15-year low in terms of our
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unsold housing stock.
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At the same time you also see prices still creeping up
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on a month-to-month, quarter-to-quarter basis.
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SGD being the most resilient currency.
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And then last but not least,
Melvin Lim
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there’s gonna be quite a fair bit of new launches
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that will happen this year,
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possibly about 47 different new launches.
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And I’m gonna move on to this first graph
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before I head on to the seven property trends for 2023
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that we think will happen this year.
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Stay tuned with all our upcoming episode
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for how it’s gonna go, because for 2023 we’re gonna ramp up
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as well, in terms of our episodes
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and I think you’re gonna see at least
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two to three episodes per month.
Melvin Lim
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And this is my passion to talk to you about
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what is gonna happen in the next 12 to 24 months
Melvin Lim
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because I myself am very excited on the trendings
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that might possibly happen.
Melvin Lim
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So the first graph is to look at this.
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Why is there this upward movement
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even though we had this slight glitch of recession
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that happened during the COVID season.
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And of course for the past two rounds of recession,
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depicted by this period of recession orange graph here,
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we had a dip of about 6% to 10%.
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There was this even sharper dip on 19% to 26%
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during this period.
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But something to note during this two seasons is that
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when we look at price dips in Singapore,
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we have to see whether did cooling measures
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come in during that season?
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So I talk about this in a lot of episodes before is that,
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three things to note.
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When we see this during a period of recession,
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in the past, during the dot-com bubble,
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during the Lehman Brothers crisis,
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how many cooling measures were there
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in our Singapore property price index?
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Because ever since 2009 until now,
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we are close to about 14 rounds of cooling measures
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compared to the past where there were almost like
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no cooling measures at all.
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Secondly, is to note that during this period right here,
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what is the volume of transactions during that season?
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Because in Singapore we have to note that
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our property price behaviour is very different
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from what happens globally.
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Singaporeans have 90% homeownership rates
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as long as they can service their monthly mortgage,
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as long as they have jobs to pay for the monthly instalment.
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And let me just share with you,
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a lot of you have very different kind of perspectives
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in terms of holding onto the property.
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If times are bad, homeowners sometimes they’ll tell me that
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they can always rent out one room, or two rooms
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to room tenants just to support
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the mortgage a little bit.
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When times are bad, they’ll take another 6
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to maybe 12 months to find a job,
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but they have some level of savings in their CPF.
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And sometimes when you look at
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different kinds of perspectives, you tend to understand that
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it is because 90% of Singaporeans own their own homes.
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That is why there is actually much less motivation
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for them to fire-sale their property,
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unless both husband and wife are in
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a jobless situation for a very, very long time.
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So when we track back to this graph, October 2008 season,
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you’ll notice that this is the volume graph.
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Volume tends to be low during the recession period
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when prices dip at that time.
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Now this is correlated to the behaviour
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of existing homeowners in the market.
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Because naturally speaking,
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if you currently have two properties
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and if you are in no need to sell,
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you will only sell your property
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and make tweaks to your current property portfolio
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when prices are going up.
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So the human tendency of property owners
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and property investors that have properties is that
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they will only sell when prices are going up,
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or if they think that the price has peaked.
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And then they’ll wanna exit and buy something else,
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exit and reinvest into other bigger or more properties,
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or maybe divest and invest in other kinds of
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assets and equities.
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When prices are going down,
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the natural behaviour of human beings is that
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we will then pull ourselves out of the market.
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If I have a couple of properties that I’m holding on,
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I’ll just continue to rent them until times become better.
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This is a natural human kind of inclination
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is that people will only sell when prices are good.
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People who sell during this season have two behaviour flows.
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Number one, is that they are really in need of selling.
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Number two, is that they saw something that is bigger
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and better in terms of property asset
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and they think that it is okay for them to exit
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their current property in order to enjoy a bigger gain
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by switching their property in a down season
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like this period, during the Lehman Brothers crisis
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that season.
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So let’s come back to this season is that now we are here,
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and if we look at 2020 where there was a slight recession
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but prices was still going up,
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look back at our previous episode where we talk about the fact
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that Singapore is currently now a safe haven,
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plus there are so many cooling measures
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pre-built into the price.
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And that will then bring us to this first trend that
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we wanna discuss in this episode.
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So seven trends that might happen in 2023
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in our private residential property market.
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So take note, therefore, today’s focus, we’ll talk about
Melvin Lim
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private residential property market and
Melvin Lim
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we’ll focus more on condos and apartments.
Melvin Lim
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We’ll not talk about HDB apartments.
Melvin Lim
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We’ll not talk about HDB properties today.
Melvin Lim
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We will not talk about landed residential today.
Melvin Lim
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So trend number one is that there will be
Melvin Lim
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plus-minus about 26 different properties,
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in terms of condos and apartments,
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that will hit their completion date this year.
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That means, in short,
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is that they will receive their temporary occupation permit,
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we call it the TOP date.
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So there will be likely of a plus-minus 26 projects
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that will TOP this year.
Melvin Lim
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And what might happen is that some of these owners
Melvin Lim
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that have bought into these properties about three years ago
Melvin Lim
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because take note that some of these properties
Melvin Lim
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being launched in the 2019, 2020 season,
Melvin Lim
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and of course some properties have
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a little bit of delayed completion because of the COVID period.
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So a lot of all these owners
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actually bought into the properties in around 2019,
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and then 2020, and now it has TOP-ed.
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And naturally all these owners, most of them,
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if they’re not buying the balance inventory,
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say last year or the year before,
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most of them to a certain extent,
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and I will say that is a very high percentage,
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they have already completed their three years
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Seller’s Stamp Duty.
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So what will happen is that,
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if they were to put this property in the market,
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they will definitely ask for high prices.
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And high prices in this context is that
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they will not ask for the same price
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that they bought into last time.
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So for example, if you look at Stirling Residences,
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on average, everybody bought into the property
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at $1,600 PSF, $1,800 PSF.
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It TOP-ed just a couple months ago.
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And now everybody is asking this current pricing.
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And then this is what I deem as they’ll ask for high prices
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in the sense that they’ll ask for a higher price than what
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they have entered in the past.
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So how much are Stirling Residences’ owners asking for?
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And now they’re asking for between $2,200+ PSF,
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all the way to $2,500 PSF.
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And that is what I categorise as high prices
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in the sense that they will definitely ask for higher prices
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than the PSF that they entered
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because it doesn’t make sense for them to sell back
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at $1,700 PSF, $1,800 PSF,
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or even at $2,000 PSF.
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A lot of owners are finding that
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it doesn’t make sense for them to exit.
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They might as well just rent it out, or they might just
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continue to live in this brand new beautiful property
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that has just completed.
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And they’ve waited for so long
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within the last three years.
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This is trend number one.
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It means that if you’re hunting for a property
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in the market, you don’t wanna go for new launches,
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you don’t wanna go for resale,
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you wanna go for this hybrid category,
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which is what we call TOP-ed projects.
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Because these properties are fresh out of the oven,
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they have just been completed, nobody has lived in them before.
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They’re brand new, brand new.
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It’s just that you will be the second owner
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because you’re buying from the first owner
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to have waited for three years.
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You’ll definitely need to pay for the TOP prices
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because this is in exchange for the time and opportunity
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cost that the first owner has waited beforehand.
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So this is what we call, and thus
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this is the trend number one is that there will be
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around 26 projects that will hit the market.
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This is a fresh level of inventory
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that’s available for buyers to choose from.
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And naturally the owners that have bought in the past,
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because they have bought in the previous benchmark pricing
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of new launches,
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they are not gonna sell back at those kind of pricing.
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They’ll ask for this new range of price
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which will all be in the $2,000+ PSF range
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for RCR projects.
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And if you wanna have a look at this article
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there’s this very nice article that came out
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on PropertyGuru.
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So I’ll attach the link right below for you as well.
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And if you were to look at this chart
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that will also give you an indication
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of roughly how many units will TOP in the year 2024.
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Because if you look at 2023,
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this entire chart talks about the number of condos and ECs
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that will be completed on a year-to-year basis.
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And of course don’t be deceived by this graph line.
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And why do I say that there’s no need to be deceived
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because this is not the price index,
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this is basically the number of condos and ECs
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that will be completed.
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So when you look at this,
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these two years have one of the most numbers of properties
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that will be completed in terms of
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number of properties that will TOP.
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And what does this mean is that
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there’s gonna be a fresh supply hitting the resale market.
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This means that buyers can have a little bit more choices
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to look at TOP-ed projects,
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but provided you’re comfortable to go for the pricing.
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But these are also home buyers that wants to buy
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properties that nobody has lived in before.
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So with that, that will bring us to trend number two
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because maybe a lot of you are asking
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what is gonna happen to the high exorbitant rental rates
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that have happened over the past 12 months.
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Right now rental rates are extremely, extremely crazy.
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And of course it’s good for landlords
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because your rental use is gonna be high.
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But landlords are also battling with
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higher mortgage interest rates, right?
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If they happen to have just refinanced,
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they’ll have to refinance at maybe 4%
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for the next one year or two years.
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And of course a lot of tenants are asking,
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will rental rates continue to be this high
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for the next 24 months?
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Based on this tool,
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there’s likely going to be about 30,000 units
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hitting the resale market
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because these are properties that will TOP.
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And that might mean that rental rates will come down
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in 2024.
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So I don’t think it will happen in 2023,
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I think it will start to happen in 2024.
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But I don’t think it will drop below previous baselines.
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That means we will be at a new range of rental rates,
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but it will taper off to a more stable level
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in the sense that it will be slightly easier
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for tenants to look for private residential condo rentals.
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But also have to factor in that this new TOP-ed projects
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will also have a high percentage of
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owners moving into the projects.
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Because they’ve waited for three years,
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they actually bought these properties for own stay
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and they might wanna move in and live in those properties.
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But there will be a category, for example,
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maybe 1- or 2-bedders,
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that will purchase for investment and
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these homeowners that have bought into new launches
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in this category might want to rent it out.
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That might also mean that existing owners,
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that are currently renting,
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while waiting for these projects to hit TOP,
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will then end their leases once it expires.
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Maybe they have signed a 1-, 2-, or 3-year lease
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and once it ends, they will then collect their keys,
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move into these properties after they’ve renovated,
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and those units that they were occupying previously,
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will then be available.
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So in combination,
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people who have been renting for 1-2, or 3 years,
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moving into their TOP-ed projects,
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these units will then be freed up in the market
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for- to satisfy a little bit more rental demand.
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TOP-ed projects over 2022, 2023,
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will also have a little bit more fresh supply
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in terms of rental,
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will then satisfy a little bit more demand.
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In task, we think that in totality,
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rental rates will start to taper off to a more stable level.
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But I don’t think it will drop drastically,
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I just think that you will be a little bit more affordable.
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Trend number three is that this is the year of new launches.
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Now just have a look at this graph again.
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This graph tells us the appetite of developers.
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That was why in 2021, 2022, you saw en bloc happening,
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you saw more aggressive bidding for land.
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And that is why in the first half of 2023,
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government has released a little bit more
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government land sales to satisfy the demand
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because our government cannot allow excessive bidding
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for lower supply of land
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because that will then jack up the price of GLS too much.
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So they have to come in with more land
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to satisfy the demand of developers.
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And a lot of these projects that were bidded
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over 2021, 2022,
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are going to be launched in this and next year.
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And of course developers have five years to complete selling
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their properties before they’re taxed with ABSD.
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And thus these two years is considered
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the year of the new launches.
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So take a look at this article from EdgeProp is that
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there’s approximately plus-minus about 40-over projects
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that will be launched likely this year.
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00:14:52,000 –> 00:14:53,760
And I think it is a very exciting year
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because if you are somebody that loves to buy new launches,
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you’re gonna have a lot more choices to choose from.
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00:14:58,440 –> 00:15:01,360
However, we also need to move to trend number four,
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is that new launches is in a new five year season.
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And we have to get used to the new
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new launch benchmark pricing.
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And what is this five year season?
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00:15:10,120 –> 00:15:13,400
So we talk about this during the early part of 2022,
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I released an episode to share with our audience
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00:15:16,600 –> 00:15:19,760
to go and buy up all the balance inventory
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of the balanced stock of new launches
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that was launched pre-2022.
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00:15:24,440 –> 00:15:26,160
If you have seen that episode, you would then understand
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00:15:26,160 –> 00:15:27,480
what I was talking about previously,
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because in my opinion at the start of 2022,
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just about 12 months back,
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00:15:30,480 –> 00:15:32,280
I shared that all these balanced units
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will be cleared off very, very soon.
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00:15:34,200 –> 00:15:36,120
And the rationale was because back then,
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last year in 2022 and the previous year in 2021,
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we were at a starting phase of this new five year season.
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00:15:44,000 –> 00:15:46,640
There seems to be this five years kind of movement
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00:15:46,640 –> 00:15:49,160
in my own opinion, and every five year,
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00:15:49,160 –> 00:15:51,680
this cycle push up the new launch PSF pricing
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00:15:51,680 –> 00:15:54,200
by about $400 PSF to $500 PSF.
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00:15:54,200 –> 00:15:56,040
That is of course a combination of reasons
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00:15:56,040 –> 00:16:00,200
and one of the reasons is because developers tend to
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have a little bit more cash on hand.
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00:16:02,080 –> 00:16:03,720
When you see seasons like this,
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in the sense that they’re going to hand over
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a lot of the projects that are going to complete.
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00:16:07,840 –> 00:16:09,960
And thus, they have more buying power
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00:16:09,960 –> 00:16:12,360
and they become more hungry to bid up new land.
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00:16:12,360 –> 00:16:14,640
Developers of course have to keep bidding for land
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00:16:14,640 –> 00:16:16,680
and to create new products for the market,
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00:16:16,680 –> 00:16:18,480
and they cannot just not bid for land.
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00:16:18,480 –> 00:16:21,000
And thus, whenever you see trending like this going upwards.
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00:16:21,000 –> 00:16:22,840
It shows that developers are going to complete
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00:16:22,840 –> 00:16:23,680
most of the projects,
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00:16:23,680 –> 00:16:25,080
and when the project is being completed,
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00:16:25,080 –> 00:16:26,880
developers will call for progressive payment
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00:16:26,880 –> 00:16:27,800
towards the last stage,
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00:16:27,800 –> 00:16:29,360
and that means that they have more buffer
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00:16:29,360 –> 00:16:30,640
within their cash holdings,
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00:16:30,640 –> 00:16:33,040
and then they’ll then bid for more land
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00:16:33,040 –> 00:16:36,040
in anticipation of their land bank depleting.
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00:16:36,040 –> 00:16:37,320
So coming back to trend number four,
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00:16:37,320 –> 00:16:38,640
before I sidetrack even further,
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00:16:38,640 –> 00:16:41,760
this five years trending tells us that
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there is a movement possibly
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00:16:44,280 –> 00:16:46,160
based on a lot of underlying factors,
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00:16:46,160 –> 00:16:48,720
developers’ appetite to bid for new land.
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00:16:48,720 –> 00:16:52,080
And because land cost is always increasing year-on-year,
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00:16:52,080 –> 00:16:53,960
and with inflation, construction costs,
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00:16:53,960 –> 00:16:57,000
there’s gonna be more cost price into
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00:16:57,000 –> 00:16:58,200
the government land sales,
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00:16:58,200 –> 00:17:01,040
as well as the final bidding price plus the final
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output of PSF that will be translated
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00:17:03,800 –> 00:17:06,480
into the actual new launch pricing for consumers.
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00:17:06,480 –> 00:17:08,880
This shows us where we are at right now.
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00:17:08,880 –> 00:17:11,520
So for 2023 we are in this price bracket,
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00:17:11,520 –> 00:17:14,200
and we have to unfortunately get use to this new level.
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00:17:14,200 –> 00:17:15,560
And of course, just have a look at the
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00:17:15,560 –> 00:17:18,280
last transacted pricing at Lentor Modern has done very well.
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00:17:18,280 –> 00:17:19,560
We are at this level.
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00:17:19,560 –> 00:17:22,600
so RCR is at a range of $2,200 PSF to $2,800 PSF.
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00:17:22,600 –> 00:17:24,320
OCR is at at $1,800 PSF to $2,200 PSF,
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00:17:24,320 –> 00:17:27,120
or maybe even slightly higher towards the end of the year.
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00:17:27,120 –> 00:17:29,960
CCR is between $2,600 PSF all the way towards $3,500 PSF
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00:17:29,960 –> 00:17:32,400
or maybe even $3,600 PSF and $3,800 PSF in the future.
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00:17:32,400 –> 00:17:35,880
And we have already moved past this pricing
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00:17:35,880 –> 00:17:39,560
from 2015 to 2020, and we have to get used to the fact that
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00:17:39,560 –> 00:17:41,120
right now when you look at new launches,
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00:17:41,120 –> 00:17:42,600
it’s all at this level.
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00:17:42,600 –> 00:17:45,360
Sooner or later, everything is above $2,000 PSF
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00:17:45,360 –> 00:17:46,800
and then $2,500 PSF.
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00:17:46,800 –> 00:17:47,920
We have to get used to it because
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00:17:47,920 –> 00:17:49,880
Singapore is right now a global city.
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00:17:49,880 –> 00:17:52,600
There’s a lot of liquidity flooding into the market
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00:17:52,600 –> 00:17:55,680
from foreign investors because we are seen as a safe haven.
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00:17:55,680 –> 00:17:58,160
Based on what is happening in the ASEAN region,
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00:17:58,160 –> 00:17:59,960
a lot of people favour Singapore.
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00:17:59,960 –> 00:18:04,200
This is an entire deck of 2023’s upcoming new launch pricing
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00:18:04,200 –> 00:18:08,880
with an estimated launch price, estimated breakeven price.
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00:18:08,880 –> 00:18:13,240
And we also inputted the land PPR PSF right here as well.
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00:18:13,240 –> 00:18:14,680
So there’s three colour codings,
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00:18:14,680 –> 00:18:17,280
and this has been faithfully done by our PLB Research Team
Melvin Lim
00:18:17,280 –> 00:18:19,880
and this is made available, if you’re watching this episode,
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00:18:19,880 –> 00:18:21,640
you just need to click on the link right down below.
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00:18:21,640 –> 00:18:23,400
Also, if you like what we are doing,
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00:18:23,400 –> 00:18:24,720
in terms of our work in real estate,
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00:18:24,720 –> 00:18:26,280
give us a thumbs up on this video
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00:18:26,280 –> 00:18:28,160
as well as leave us a comment to encourage us,
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00:18:28,160 –> 00:18:30,560
or maybe to give us improvement to improve as well.
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00:18:30,560 –> 00:18:32,760
Or to just type in some of the key topics
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00:18:32,760 –> 00:18:34,560
that you wanna hear for the rest of 2023,
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00:18:34,560 –> 00:18:36,200
and I’ll do my best to create the content
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00:18:36,200 –> 00:18:38,040
in order to share and discuss here with you.
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00:18:38,040 –> 00:18:38,840
And of course, do remember
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00:18:38,840 –> 00:18:40,760
to subscribe to our YouTube channel if you have not done so.
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00:18:40,760 –> 00:18:42,160
Now just click on the link down below.
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00:18:42,160 –> 00:18:43,720
You’ll be brought to a page where you just need to
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00:18:43,720 –> 00:18:45,120
key in your name and email address
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00:18:45,120 –> 00:18:47,080
and then you will be able to download this
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00:18:47,080 –> 00:18:49,360
in high resolution just for your own reference,
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00:18:49,360 –> 00:18:52,000
in case you are hunting for a new launch in the market.
Melvin Lim
00:18:52,000 –> 00:18:53,120
Now, trend number five is that,
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00:18:53,120 –> 00:18:54,240
properties that are 3- or 4-bedders
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00:18:54,240 –> 00:18:56,560
that are below $2 mil the resale market,
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00:18:56,560 –> 00:18:59,240
I believe they will be snapped up very, very quickly
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00:18:59,240 –> 00:19:01,040
for the rest of 2023.
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00:19:01,040 –> 00:19:01,880
And why is that so?
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00:19:01,880 –> 00:19:03,240
It’s because if you were to look at
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00:19:03,240 –> 00:19:06,080
the new launch average transacted pricing for 2022,
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00:19:06,080 –> 00:19:09,800
OCR is at $1,893 PSF on average
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00:19:09,800 –> 00:19:12,120
in terms of median PSF transacted,
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00:19:12,120 –> 00:19:14,880
we’re talking about transacted for the last 12 months.
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00:19:14,880 –> 00:19:16,880
RCR is at $2,336 PSF.
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00:19:16,880 –> 00:19:18,560
CCR is at $2,876 PSF.
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00:19:19,440 –> 00:19:22,320
However, when you look at resale, OCR new launches
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00:19:22,320 –> 00:19:24,720
was averagely done at $1,800+ PSF,
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00:19:24,720 –> 00:19:27,240
but OCR resale was averagely done
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00:19:27,240 –> 00:19:28,800
at about $1,300+ PSF.
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00:19:28,800 –> 00:19:31,400
So there’s a disparity of close to about $500 PSF here.
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00:19:31,400 –> 00:19:34,840
RCR averagely done at about $2,300+ PSF,
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00:19:34,840 –> 00:19:37,360
resale RCR, $1,600+ PSF.
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00:19:37,360 –> 00:19:39,960
Another $600 PSF to $700 PSF disparity in between.
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00:19:39,960 –> 00:19:43,720
CCR averagely done at about $2,800 PSF for new launch,
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00:19:43,720 –> 00:19:47,160
resale averagely done at about $2,180-over PSF.
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00:19:47,160 –> 00:19:49,280
Averagely, $600 PSF to $700 PSF disparity.
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00:19:49,280 –> 00:19:53,160
This disparity will translate in a heavier fashion
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00:19:53,160 –> 00:19:55,640
in the OCR market, in my perspective.
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00:19:55,640 –> 00:19:57,480
The rationale is because in the OCR market,
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00:19:57,480 –> 00:20:01,400
in this island map, OCR is out of central region.
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00:20:01,400 –> 00:20:06,000
It also has the largest population of HDB housing estates
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00:20:06,000 –> 00:20:07,840
and that means that it has the largest population
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00:20:07,840 –> 00:20:09,960
of HDB upgrading families.
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00:20:09,960 –> 00:20:11,200
And HDB upgrading families
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00:20:11,200 –> 00:20:13,320
that are aspiring to move from their HDB properties,
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00:20:13,320 –> 00:20:15,640
that has made them a positive return
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00:20:15,640 –> 00:20:17,400
into the private residential market.
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00:20:17,400 –> 00:20:19,080
They will have a very high demand
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00:20:19,080 –> 00:20:21,120
for at least a 3-bedroom, or 4-bedroom,
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00:20:21,120 –> 00:20:23,440
or even bigger than a 4-bedder like a penthouse.
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00:20:23,440 –> 00:20:26,680
So what I forecast, in my personal opinion,
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00:20:26,680 –> 00:20:28,120
of course when you watch our Nuggets On The Go,
Melvin Lim
00:20:28,120 –> 00:20:30,520
we always put this disclaimer at the top bar here
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00:20:30,520 –> 00:20:31,520
just to share with you that
Melvin Lim
00:20:31,520 –> 00:20:33,000
property investment is a huge investment.
Melvin Lim
00:20:33,000 –> 00:20:34,560
Do talk to your consultant. Of course,
Melvin Lim
00:20:34,560 –> 00:20:36,000
you can come to PropertyLimBrothers
Melvin Lim
00:20:36,000 –> 00:20:38,080
and have a consult session with us as well.
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00:20:38,080 –> 00:20:41,120
Just click on the link right here to key in your name
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00:20:41,120 –> 00:20:43,320
for a consult session, and our team will contact you.
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00:20:43,320 –> 00:20:45,120
So for a non-obligation consult session
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00:20:45,120 –> 00:20:47,120
to strategise your property portfolio
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00:20:47,120 –> 00:20:49,280
and also to give you advice on purchase and sale as well.
Melvin Lim
00:20:49,280 –> 00:20:53,040
So coming back is that, this disparity is going to create
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00:20:53,040 –> 00:20:55,720
a demand in the OCR market for 3- and 4-bedders.
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00:20:55,720 –> 00:20:59,480
So anything that is below $2 mil will be heavily demanded
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00:20:59,480 –> 00:21:01,960
over the next 12 to 18 months.
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00:21:01,960 –> 00:21:04,200
And we think that this category of properties
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00:21:04,200 –> 00:21:06,720
are gonna move very fast and are going to happen.
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00:21:06,720 –> 00:21:10,120
And what is the likely outlook in 18 months’ time is that
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00:21:10,120 –> 00:21:12,360
when you search on the property portals,
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00:21:12,360 –> 00:21:14,520
you might find that it’s increasingly difficult
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00:21:14,520 –> 00:21:17,440
to find properties below $2 mil in OCR
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00:21:17,440 –> 00:21:18,760
that are 3- and 4-bedders.
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00:21:18,760 –> 00:21:20,080
This is something that might happen.
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00:21:20,080 –> 00:21:23,280
And trend number six is that, if Fed in US
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00:21:23,280 –> 00:21:26,160
does reduce interest rates in 2024,
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00:21:26,160 –> 00:21:27,520
what do you think will happen
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00:21:27,520 –> 00:21:29,880
to our property prices in 2024?
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00:21:29,880 –> 00:21:32,320
And of course if you look at some of the trending,
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00:21:32,320 –> 00:21:34,040
some of the projections and news as well,
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00:21:34,040 –> 00:21:37,160
very likely a lot of analysts are forecasting that
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00:21:37,160 –> 00:21:38,880
Fed is gonna bring down the interest rate
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00:21:38,880 –> 00:21:41,320
during 2024 season and 2025 season.
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00:21:41,320 –> 00:21:42,840
And if that does happen,
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00:21:42,840 –> 00:21:45,800
naturally, our mortgage rates in Singapore
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00:21:45,800 –> 00:21:47,400
is gonna adjust accordingly, as well.
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00:21:47,400 –> 00:21:49,400
Because we pack our rates very closely
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00:21:49,400 –> 00:21:51,000
to the US federal funds rate.
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00:21:51,000 –> 00:21:52,520
And if that happens,
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00:21:52,520 –> 00:21:54,360
what do you think is gonna happen to our property prices?
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00:21:54,360 –> 00:21:57,400
Naturally, developers, existing homeowners,
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00:21:57,400 –> 00:22:00,480
that intend to sell, they will not sell low.
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00:22:00,480 –> 00:22:02,840
They will definitely raise their asking prices
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00:22:02,840 –> 00:22:05,760
because they now know that buyers have more buying power.
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00:22:05,760 –> 00:22:07,480
And of course there’s a lot of couple of articles
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00:22:07,480 –> 00:22:09,040
that you can search online that
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00:22:09,040 –> 00:22:12,120
a lot of people are expecting rates to come down in 2024.
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00:22:12,120 –> 00:22:13,680
And that means that it might happen
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00:22:13,680 –> 00:22:14,720
in the next 12 months.
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00:22:14,720 –> 00:22:17,040
And thus, it will also mean that
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00:22:17,040 –> 00:22:18,920
if somebody’s waiting at the sidelines down,
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00:22:18,920 –> 00:22:20,440
and you already know that rates are gonna come down
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00:22:20,440 –> 00:22:21,360
in 12 months time,
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00:22:21,360 –> 00:22:23,520
then if rates are gonna come in 12 months time,
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00:22:23,520 –> 00:22:25,160
and prices are gonna start going upwards
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00:22:25,160 –> 00:22:26,680
in terms of seller’s expectation,
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00:22:26,680 –> 00:22:29,040
then does it make sense to continue to wait out
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00:22:29,040 –> 00:22:31,680
until next year to purchase next year?
Melvin Lim
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