#17: What does the 2021 Cooling Measures mean for you? | NOTG S2 E17

1[Melvin Lim]
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– Nuggets On The Go.

2[Melvin Lim]
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Dan, can you help me to take more IG story?

3[Melvin Lim]
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Okay, thanks.

4[Melvin Lim]
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Just like wipe, wipe, wipe, left, right, left, right,

5[Melvin Lim]
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up, down, left, right.

6[Melvin Lim]
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Can also ask like Miss Chu or Angeline?

7[Melvin Lim]
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Miss Angeline, can help us to take some IG story?

8[Melvin Lim]
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Like that one, just like different angles.

9[Melvin Lim]
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Thanks.

10[Melvin Lim]
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Alright, welcome back to our next episode

11[Melvin Lim]
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of Nuggets On The Go.

12[Melvin Lim]
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We hope that you enjoyed the last episode

13[Melvin Lim]
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where we talked about the TDSR Quantum effect coming back

14[Melvin Lim]
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and it just so happens, right after we launched the episode,

15[Melvin Lim]
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the cooling measures came out for the new TDSR Measure

16[Melvin Lim]
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coming from 60% dropping down to 55%.

17[Melvin Lim]
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And this episode we’re going to talk about the latest

18[Melvin Lim]
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cooling measures that came out on the 16th December, 2021,

19[Melvin Lim]
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and let’s go.

20[Melvin Lim]
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Cooling measures was released at close to midnight

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on the 15th December, 2021 and it is effective

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16th December, 2021 and we’re going to talk about

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the three things that was being announced.

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The very first thing was the TDSR 60% ratio

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being dropped down to 55% in terms of accessibility

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of a person’s income in order to quantify

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what will be the affordability level

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on the overall loan quantum

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vis-a-vis their age and of course with the weighted average

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of their age and stuff like that,

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plus looking at their debt commitment,

32[Melvin Lim]
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and of course a host of other factors

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which we have talked about,

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the origination of TDSR in the last episode,

35[Melvin Lim]
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so if you have not watched that,

36[Melvin Lim]
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that was a very important episode,

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because that talks about the shift during June 2013,

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ever since the implementation of TDSR,

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just 8 years back, what kind of effect did it cause

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to the market over the several rounds of new launch pricing,

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resale pricing, PSF level and stuff like that.

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8 years later, 2021 right now in December,

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we have all gotten used to TDSR and now there is

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a micro adjustment in terms of the income eligibility level.

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We’re going to talk about the ripple effects of that later on.

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Second thing is of course the Additional Buyer’s Stamp Duty

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in terms of the second and third property

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and the instant increment of foreign investors

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and buyers buying residential properties,

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and of course the third thing will be, will there be an effect

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in terms of HDB loan from 90%

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dropping down to 85% in terms of LTV ratio,

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for HDB loan, for HDB apartments.

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Before we dive into TDSR,

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I want to show you this chart first,

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because this was a continuation of last week,

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talking about the inflation effect

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and the two different inflation effects.

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One is the CPI inflation, consumer price index inflation,

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which is always hovering at about 1%+ to 2%.

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And of course. US has released their inflation numbers,

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the latest one, just about two weeks back,

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and they are hovering now on an inflation level of 6.8%,

64[Melvin Lim]
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which is one of the highest levels. In Singapore,

65[Melvin Lim]
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of course it’s about 1.0% something or 2% averagely,

66[Melvin Lim]
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but last week we talked about the difference

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between real and nominal value when it’s pertaining

68[Melvin Lim]
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to inflation, plus what is the actual cost

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of asset inflation and a lot of it has come from

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quantitative easing the increase of money supply

71[Melvin Lim]
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into the system, and that causes asset prices to increase.

72[Melvin Lim]
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This episode, we’re going to dive in

73[Melvin Lim]
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into District 9, 10 and 11,

74[Melvin Lim]
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because last week when we look at three different districts.

75[Melvin Lim]
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Mainly District 15, District 19 and District 5.

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District 9, 10, 11, is of course the cream of the crop

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in the market, even foreign buyers

78[Melvin Lim]
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they’re always talking about District 9, 10 and 11

79[Melvin Lim]
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when it comes to the residential properties,

80[Melvin Lim]
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because this is the prime of the prime,

81[Melvin Lim]
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it’s the core of the core, central region area.

82[Melvin Lim]
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I’m just going to simplify it a little bit on the yearly

83[Melvin Lim]
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asset inflation prices of the percentages increment

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from January, 2019 all the way to November, 2021,

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over this close to three years’ period.

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So as you can see the red line, this is the District 9

87[Melvin Lim]
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landed property price increment numbers.

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9.2% from January, 2019, to January, 2020,

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and then all the way towards the tail end of 2021

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another 15.7%, so all in over this three years’ period,

91[Melvin Lim]
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we’re looking at 24.9% increase in terms of PSF

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median transaction price for D9 landed property.

93[Melvin Lim]
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And then when we look at yellow colour line in District 11,

94[Melvin Lim]
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totality of *17.9% increase in asset prices

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PSF transacted amount.

96[Melvin Lim]
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And then when we look at D10,

97[Melvin Lim]
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that’s even more, 25.3% increment.

98[Melvin Lim]
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If we come down to the condo prices,

99[Melvin Lim]
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do you see this dip here?

100[Melvin Lim]
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Sometimes this dip is not an actual true reflection

101[Melvin Lim]
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because when we look at the basket of properties

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in the entire, let’s say for D10,

103[Melvin Lim]
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sometimes because larger properties are being launched

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the PSF median transacted range would drop.

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And of course it also depends on the number

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of new launches being transacted,

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vis-a-vis, resale properties being transacted

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because they are all mixed together.

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So most importantly is that, even in just Jan 2019 alone,

110[Melvin Lim]
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there was a 38.4% increase from the previous year from 2018,

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and all in, we are still looking at about 18.7% increment.

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We’re also looking at 10.1% increment in D9,

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as well as 7.9% in D11.

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So overall to sum it up is that,

115[Melvin Lim]
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while we are looking at CPI inflation of about 2%,

116[Melvin Lim]
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but asset prices is increasing in terms of double-digit

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when we dive down into D9.

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We have not segregated even into new launches and resale,

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and that’s what we will do for you next week.

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But for context of this data is that we are looking at

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asset prices, moving up in strong double-digit growth

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that’s after the 2019, 2020 impact of the pandemic,

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we’re still looking at this amount.

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And so what’s going to be in store for us in 2022.

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We will talk about that,

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but I think that’s one of the core reasons why,

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if let’s say we look at combination of the CCR in terms of

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District 9, 10, 11, landed prices in combination

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has rose by about 25% over these three years’ period.

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And then in terms of condo prices about 7.2%,

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in terms of combination increment.

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I think that’s one of the core reasons why,

133[Melvin Lim]
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when we look at all the cooling measures that has popped up,

134[Melvin Lim]
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it will be fair to say that I think this came

135[Melvin Lim]
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at about the right time before we start on the new year.

136[Melvin Lim]
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My personal observation is that firstly,

137[Melvin Lim]
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this 5% is extremely minute.

138[Melvin Lim]
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This 5% will not have a huge impact in terms of

139[Melvin Lim]
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the purchasing power,

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because after this 5% draw down was being released,

141[Melvin Lim]
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now we’re looking at TDSR 55% down from 60% previously.

142[Melvin Lim]
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When we look at this chart that our data team came up with,

143[Melvin Lim]
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just to look at the impact of before and after.

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It is interesting in a sense that from 2013,

145[Melvin Lim]
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before 2013, in the previous two episodes,

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with an income of $10,000,

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if you are aged 35 years old, tenure of 30 years,

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because it’s calculated from 65 (years) minus 35 (years old),

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it gives you a loan tenure of 30 years,

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if you want to loan 75% from the bank.

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Based on the previous measures in 2013,

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that you can still loan up to LTV of 80%.

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But just have a look,

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if you were earning $10K before 2013,

155[Melvin Lim]
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you can buy a property up to about $2 mil.

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You can loan up to $1.6 mil, but now after 2013,

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all the way until the 15th December, 2021,

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just a couple of days back, or by the time of this filming,

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two weeks back,

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you can only purchase a property at about $1.7 mil.

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So that’s down by about close to maybe about

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just to round it off $300K in terms of affordability.

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And then right now, before 16th December and after 16th December,

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with this draw down of another 5% on TDSR,

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the impact is that you used to be able to buy something

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at about $1.78 mil,

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but now you can only buy something at about $1.633 mil.

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So there’s a draw down of about $150K

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in terms of loan quantum eligibility.

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So what does this mean is that if a buyer is stretching up

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to their max limit of the TDSR, the max affordability level,

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they’re going to see a slight impact in the affordability

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amount of the property that they can purchase.

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Because they used to be able to loan $1.336 mil,

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now they can only loan $1.224 mil

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with their $10K salary

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at the age of 35 and based on 75% loan.

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So will this impact the prices of properties in the market?

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My personal opinion is that it might not because

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that 5% though you’re looking at about $150K quantum,

181[Melvin Lim]
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but that’s pretty minute.

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Not every buyer stretches up to the max limit

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to push towards the max quantum of property

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that they can afford.

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And bearing in mind also that whenever buyer

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purchasing a property, they have 25% down payment,

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which is quite a substantial amount because

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to buy something at $1.78 mil, loan is $1.336 mil,

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they are pumping close to about $450K+

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in terms of down payment plus Buyer’s Stamp Duty,

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which is another 4% that will amount to close to about

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$60K+.

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So they already have about $500K+

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sitting there in the bank plus their CPF in combination.

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And they have this amount of down payment for Buyer’s Stamp Duty

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and the 25% down payment amount.

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So what this means is that they might have excess funding

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in terms of their CPF funds or their cash funding

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for additional amount of differences

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in terms of the down payment.

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So perhaps if they are looking at this property

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that they really like, but is at $1.78 mil,

203[Melvin Lim]
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but now they can only loan $1.224 mil.

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They might look at topping up a little bit.

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Overall, some people are going to be affected definitely,

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because if the buyer is stretching to the max,

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60% limit in the past,

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this would definitely have an impact

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on the overall affordability.

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It might cause a slight knee jerk effect,

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but overall, I think people would then be very fluid.

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00:09:47,960 –> 00:09:48,800
They would then look at properties

213[Melvin Lim]
00:09:48,800 –> 00:09:50,920
that are of a slightly lower quantum,

214[Melvin Lim]
00:09:50,920 –> 00:09:52,960
maybe at a different layout

215[Melvin Lim]
00:09:52,960 –> 00:09:54,680
or slightly smaller square footage,

216[Melvin Lim]
00:09:54,680 –> 00:09:56,720
or maybe another project nearby.

217[Melvin Lim]
00:09:56,720 –> 00:09:59,680
So we shall wait and see, and then we’ll see how it goes.

218[Melvin Lim]
00:09:59,680 –> 00:10:02,480
But I don’t think this is going to cause any dampening

219[Melvin Lim]
00:10:02,480 –> 00:10:03,840
to property prices.

220[Melvin Lim]
00:10:03,840 –> 00:10:07,080
If we are looking at the ABSD, just look at this.

221[Melvin Lim]
00:10:07,080 –> 00:10:09,360
Singaporeans’ first property no change.

222[Melvin Lim]
00:10:09,360 –> 00:10:12,200
Definitely, I think there shouldn’t be any changes to

223[Melvin Lim]
00:10:12,200 –> 00:10:14,400
Buyer’s Stamp Duty on the first property purchase

224[Melvin Lim]
00:10:14,400 –> 00:10:16,840
because that’s for a lot of people’s matrimonial home,

225[Melvin Lim]
00:10:16,840 –> 00:10:18,240
it’s for their family needs.

226[Melvin Lim]
00:10:18,240 –> 00:10:23,240
Second property up 5% to 17%, third property up 10% to 25%.

227[Melvin Lim]
00:10:23,720 –> 00:10:26,680
Permanent residents, immediate up of 10%

228[Melvin Lim]
00:10:26,680 –> 00:10:28,280
and another 15% upwards for

229[Melvin Lim]
00:10:28,280 –> 00:10:31,160
second and third property. And of course for foreign buyers,

230[Melvin Lim]
00:10:31,160 –> 00:10:34,200
up another 10%, entities up another 10%.

231[Melvin Lim]
00:10:34,200 –> 00:10:35,800
What is going happen to the property prices

232[Melvin Lim]
00:10:35,800 –> 00:10:38,200
with this higher amount Additional Buyer’s Stamp Duty (ABSD)?

233[Melvin Lim]
00:10:38,200 –> 00:10:39,800
Would there be a huge impact?

234[Melvin Lim]
00:10:39,800 –> 00:10:42,000
I think based on numbers,

235[Melvin Lim]
00:10:42,000 –> 00:10:43,800
a lot of the buyers that are buying on the ground,

236[Melvin Lim]
00:10:43,800 –> 00:10:45,840
they are buying their first property.

237[Melvin Lim]
00:10:45,840 –> 00:10:47,720
They’re buying their first residential property.

238[Melvin Lim]
00:10:47,720 –> 00:10:49,120
And what do I mean by that is that,

239[Melvin Lim]
00:10:49,120 –> 00:10:51,400
they’re either entering into the market for the first time

240[Melvin Lim]
00:10:51,400 –> 00:10:53,840
to buy their first home as a single professional

241[Melvin Lim]
00:10:53,840 –> 00:10:54,680
or matrimonial home,

242[Melvin Lim]
00:10:54,680 –> 00:10:57,800
or they’re switching homes from their current property,

243[Melvin Lim]
00:10:57,800 –> 00:11:01,440
selling and buying at the same time, no ABSD.

244[Melvin Lim]
00:11:01,440 –> 00:11:02,720
This will still go on

245[Melvin Lim]
00:11:02,720 –> 00:11:04,520
because the momentum on the ground is very strong,

246[Melvin Lim]
00:11:04,520 –> 00:11:06,680
close to a high percentage of buyers

247[Melvin Lim]
00:11:06,680 –> 00:11:09,040
on the ground are buying in this sequence.

248[Melvin Lim]
00:11:09,040 –> 00:11:12,200
So they are not affected by any of such changes.

249[Melvin Lim]
00:11:12,200 –> 00:11:14,400
In fact, a lot buyers that are buying landed properties now,

250[Melvin Lim]
00:11:14,400 –> 00:11:16,720
condominiums, they’re either selling their HDB

251[Melvin Lim]
00:11:16,720 –> 00:11:18,880
coming up to condos or selling their condos,

252[Melvin Lim]
00:11:18,880 –> 00:11:19,840
coming up to landed,

253[Melvin Lim]
00:11:19,840 –> 00:11:22,120
or they have already sold their property in the past,

254[Melvin Lim]
00:11:22,120 –> 00:11:24,120
buying back a property, a replacement home.

255[Melvin Lim]
00:11:24,120 –> 00:11:26,480
I don’t think the ABSD will have an impact

256[Melvin Lim]
00:11:26,480 –> 00:11:28,040
on the home buyer situation.

257[Melvin Lim]
00:11:28,040 –> 00:11:30,840
With that data of people buying their second property,

258[Melvin Lim]
00:11:30,840 –> 00:11:32,040
I believe so.

259[Melvin Lim]
00:11:32,040 –> 00:11:34,760
Which is why I think our government is sending this signal

260[Melvin Lim]
00:11:34,760 –> 00:11:39,240
to the market, to ask everybody to act cautiously,

261[Melvin Lim]
00:11:39,240 –> 00:11:41,800
to weed out further speculators in the market,

262[Melvin Lim]
00:11:41,800 –> 00:11:43,640
because there’s a lot of hot money flowing to Singapore.

263[Melvin Lim]
00:11:43,640 –> 00:11:45,560
There’s a lot of liquidity right now.

264[Melvin Lim]
00:11:45,560 –> 00:11:47,680
But what does this mean is that, will this mean that

265[Melvin Lim]
00:11:47,680 –> 00:11:50,240
properties with no ABSD will see higher

266[Melvin Lim]
00:11:50,240 –> 00:11:51,760
and higher amount of uptake?

267[Melvin Lim]
00:11:51,760 –> 00:11:54,960
For example, like shophouses, commercial properties

268[Melvin Lim]
00:11:54,960 –> 00:11:56,640
with no ABSD involved,

269[Melvin Lim]
00:11:56,640 –> 00:11:58,920
industrial properties with no ABSD involved,

270[Melvin Lim]
00:11:58,920 –> 00:12:01,000
because industrial property has Seller’s Stamp Duty involved,

271[Melvin Lim]
00:12:01,000 –> 00:12:02,840
but there’s no entry barrier

272[Melvin Lim]
00:12:02,840 –> 00:12:04,320
in terms of ABSD.

273[Melvin Lim]
00:12:04,320 –> 00:12:05,320
It might happen.

274[Melvin Lim]
00:12:05,320 –> 00:12:07,840
We will look at some statistics in the next three months

275[Melvin Lim]
00:12:07,840 –> 00:12:10,400
to see whether there’s any changes in terms of uptakes.

276[Melvin Lim]
00:12:10,400 –> 00:12:12,840
This might also mean that previously,

277[Melvin Lim]
00:12:12,840 –> 00:12:14,680
if any Singaporeans have already gotten used

278[Melvin Lim]
00:12:14,680 –> 00:12:17,440
to paying a 12% ABSD on their second property,

279[Melvin Lim]
00:12:17,440 –> 00:12:18,520
they might take a step back.

280[Melvin Lim]
00:12:18,520 –> 00:12:20,760
And then they might think of alternatives on how to

281[Melvin Lim]
00:12:20,760 –> 00:12:22,560
invest in different kinds of assets

282[Melvin Lim]
00:12:22,560 –> 00:12:24,520
or maybe how to utilise their capital.

283[Melvin Lim]
00:12:24,520 –> 00:12:27,840
So I think there might be a slight knee jerk,

284[Melvin Lim]
00:12:27,840 –> 00:12:29,080
but it’s not high,

285[Melvin Lim]
00:12:29,080 –> 00:12:32,400
it’s not great because firstly in combination, TDSR,

286[Melvin Lim]
00:12:32,400 –> 00:12:34,200
I don’t think it will cause a lot of impact.

287[Melvin Lim]
00:12:34,200 –> 00:12:35,800
A lot of people are buying their first home,

288[Melvin Lim]
00:12:35,800 –> 00:12:37,360
not a lot of impact as well.

289[Melvin Lim]
00:12:37,360 –> 00:12:38,960
And then last but not least the third one,

290[Melvin Lim]
00:12:38,960 –> 00:12:41,720
HDB loans will be lowered from 90% to 85%.

291[Melvin Lim]
00:12:41,720 –> 00:12:44,280
I think not a lot of impact as well because

292[Melvin Lim]
00:12:44,280 –> 00:12:46,120
buyers on the ground, a huge percentage

293[Melvin Lim]
00:12:46,120 –> 00:12:48,280
also taking bank loans for their HDB properties,

294[Melvin Lim]
00:12:48,280 –> 00:12:51,080
if they can afford a 5% cash, 20% CPF.

295[Melvin Lim]
00:12:51,080 –> 00:12:52,800
Families, they are taking HLE.

296[Melvin Lim]
00:12:52,800 –> 00:12:55,760
They might want to be a little bit cautious on this

297[Melvin Lim]
00:12:55,760 –> 00:12:58,120
group of families because the government don’t want to

298[Melvin Lim]
00:12:58,120 –> 00:12:59,160
overstretch as well.

299[Melvin Lim]
00:12:59,160 –> 00:13:01,680
But looking at the amount of grants available,

300[Melvin Lim]
00:13:01,680 –> 00:13:03,040
if you look at the resale HDB,

301[Melvin Lim]
00:13:03,040 –> 00:13:05,480
they have grants up to $160K,

302[Melvin Lim]
00:13:05,480 –> 00:13:06,840
depending on income level,

303[Melvin Lim]
00:13:06,840 –> 00:13:09,720
but averagely, couples earning about $4K to $5k,

304[Melvin Lim][Melvin Lim]
00:13:09,720 –> 00:13:12,640
they should be able to get close to about $80K to $100K

305[Melvin Lim]
00:13:12,640 –> 00:13:14,080
of resale grant

306[Melvin Lim]
00:13:14,080 –> 00:13:16,360
with a combination of the extended family grant

307[Melvin Lim]
00:13:16,360 –> 00:13:17,840
plus the first timer grant.

308[Melvin Lim]
00:13:17,840 –> 00:13:19,240
Most of the time, just imagine if let’s say,

309[Melvin Lim]
00:13:19,240 –> 00:13:20,640
you’re young couple,

310[Melvin Lim]
00:13:20,640 –> 00:13:22,280
you’re buying your first resale property

311[Melvin Lim]
00:13:22,280 –> 00:13:24,640
and then you get $100K grant

312[Melvin Lim]
00:13:24,640 –> 00:13:26,680
and you’re buying something at $500K.

313[Melvin Lim]
00:13:26,680 –> 00:13:31,320
Although you can loan up to 85% and you have to down pay 15%

314[Melvin Lim]
00:13:31,320 –> 00:13:36,040
with your CPF, that 15% will translate to about $75K,

315[Melvin Lim]
00:13:36,040 –> 00:13:38,760
but it’s not going to come from your pocket,

316[Melvin Lim]
00:13:38,760 –> 00:13:40,200
it’s not going to come from CPF,

317[Melvin Lim]
00:13:40,200 –> 00:13:42,640
it’s basically coming from the CPF housing grant

318[Melvin Lim]
00:13:42,640 –> 00:13:45,520
that you’re receiving and that $100K of grant

319[Melvin Lim]
00:13:45,520 –> 00:13:47,560
will be used to offset the down payment that is needed.

320[Melvin Lim]
00:13:47,560 –> 00:13:50,600
The amount in your CPF existingly will also be absorbed

321[Melvin Lim]
00:13:50,600 –> 00:13:53,080
as well to pay down on the loan.

322[Melvin Lim]
00:13:53,080 –> 00:13:55,640
So I think this is more like a signal,

323[Melvin Lim]
00:13:55,640 –> 00:13:58,640
but I don’t think it will cause a huge impact as well.

324[Melvin Lim]
00:13:58,640 –> 00:14:00,160
And of course, straight after this,

325[Melvin Lim]
00:14:00,160 –> 00:14:03,960
this came after two weeks that MAS has flagged that

326[Melvin Lim]
00:14:03,960 –> 00:14:06,640
in terms of the household debt that has increased

327[Melvin Lim]
00:14:06,640 –> 00:14:09,520
over the past year at 6.8%, it’s an alarming factor.

328[Melvin Lim]
00:14:09,520 –> 00:14:11,560
They’re cautioning that interest rate might increase.

329[Melvin Lim]
00:14:11,560 –> 00:14:12,400
Just in December.

330[Melvin Lim]
00:14:12,400 –> 00:14:15,960
Fed in US announced that they might possibly

331[Melvin Lim]
00:14:15,960 –> 00:14:18,840
increase the interest rate for about three rounds

332[Melvin Lim]
00:14:18,840 –> 00:14:21,120
in the next year, and the key word is might.

333[Melvin Lim]
00:14:21,120 –> 00:14:22,720
So there is might or might not.

334[Melvin Lim]
00:14:22,720 –> 00:14:24,800
So it might not happen, it might happen.

335[Melvin Lim]
00:14:24,800 –> 00:14:27,000
Of course now the trend is that when that news came out,

336[Melvin Lim]
00:14:27,000 –> 00:14:28,400
a lot of people, I mean in fact

337[Melvin Lim]
00:14:28,400 –> 00:14:29,600
we were just interviewing Redbrick (Mortgage)

338[Melvin Lim]
00:14:29,600 –> 00:14:30,840
just a couple of hours back.

339[Melvin Lim]
00:14:30,840 –> 00:14:32,920
They were saying that a lot of buyers now are preferring

340[Melvin Lim]
00:14:32,920 –> 00:14:35,360
to go for a fixed kind of interest rates

341[Melvin Lim]
00:14:35,360 –> 00:14:37,640
when they purchase homes for two years, three years,

342[Melvin Lim]
00:14:37,640 –> 00:14:39,760
four years or even up to five years from certain banks,

343[Melvin Lim]
00:14:39,760 –> 00:14:41,160
so something that you might want to take note.

344[Melvin Lim]
00:14:41,160 –> 00:14:42,720
We have two articles that came up

345[Melvin Lim]
00:14:42,720 –> 00:14:44,960
in our PLB Insights editorial, head on to

346[Melvin Lim]
00:14:44,960 –> 00:14:46,480
propertylimbrothers.com/insights.

347[Melvin Lim]
00:14:46,480 –> 00:14:47,920
One of the articles is talking about

348[Melvin Lim]
00:14:47,920 –> 00:14:51,000
the news that MAS has released over

349[Melvin Lim]
00:14:51,000 –> 00:14:52,280
the increase in the household debt,

350[Melvin Lim]
00:14:52,280 –> 00:14:54,400
the other article is summarising for you,

351[Melvin Lim]
00:14:54,400 –> 00:14:57,560
our opinions on the latest cooling measures on the 16th December.

352[Melvin Lim]
00:14:57,560 –> 00:14:59,320
So head on to our Insights channel to have a look.

353[Melvin Lim]
00:14:59,320 –> 00:15:01,600
There was then a series of other articles

354[Melvin Lim]
00:15:01,600 –> 00:15:05,720
that came out as well on 13 plots of land being released

355[Melvin Lim]
00:15:05,720 –> 00:15:06,920
in government land sales.

356[Melvin Lim]
00:15:06,920 –> 00:15:09,200
And of course, another 23,000 of BTOs

357[Melvin Lim]
00:15:09,200 –> 00:15:10,440
to be released as well.

358[Melvin Lim]
00:15:10,440 –> 00:15:13,400
So I think this is a very good kind of so-called

359[Melvin Lim]
00:15:13,400 –> 00:15:15,600
strategic planning by our government is that,

360[Melvin Lim]
00:15:15,600 –> 00:15:18,800
firstly, the three different kinds of cooling measures

361[Melvin Lim]
00:15:18,800 –> 00:15:21,520
that came out basically is to tackle

362[Melvin Lim]
00:15:21,520 –> 00:15:23,280
the demand side of things.

363[Melvin Lim]
00:15:23,280 –> 00:15:27,440
That means ABSD increase, TDSR lowering some families

364[Melvin Lim]
00:15:27,440 –> 00:15:30,080
affordability 90% to 80% on HDB loans.

365[Melvin Lim]
00:15:30,080 –> 00:15:32,840
These three measures are to tackle the demand side.

366[Melvin Lim]
00:15:32,840 –> 00:15:35,440
Supply side is to increase the supply,

367[Melvin Lim]
00:15:35,440 –> 00:15:38,240
coming out with 13 plots of land for developers

368[Melvin Lim]
00:15:38,240 –> 00:15:39,840
who are hungry for land banks right now

369[Melvin Lim]
00:15:39,840 –> 00:15:43,200
to bid for more land and then also to increase the BTOs

370[Melvin Lim]
00:15:43,200 –> 00:15:45,280
so that they can cool off some pressure.

371[Melvin Lim]
00:15:45,280 –> 00:15:48,280
There’s heating up in the resale market of the HDB market

372[Melvin Lim]
00:15:48,280 –> 00:15:50,000
to tell all the buyers that, hey you know,

373[Melvin Lim]
00:15:50,000 –> 00:15:51,560
there’s more BTOs coming out.

374[Melvin Lim]
00:15:51,560 –> 00:15:53,240
You can start to ballot here.

375[Melvin Lim]
00:15:53,240 –> 00:15:55,440
You don’t have to really go and fight in the resale market,

376[Melvin Lim]
00:15:55,440 –> 00:15:58,240
you don’t have bid over cash over valuation

377[Melvin Lim]
00:15:58,240 –> 00:15:59,080
and things like that,

378[Melvin Lim]
00:15:59,080 –> 00:16:01,000
which is happening very rampantly right now.

379[Melvin Lim]
00:16:01,000 –> 00:16:04,520
So both sides of policies to tackle, demand and supply.

380[Melvin Lim]
00:16:04,520 –> 00:16:07,800
That is our take on the cooling measure part.

381[Melvin Lim]
00:16:07,800 –> 00:16:10,400
And I want to talk to you about some of the trends as well,

382[Melvin Lim]
00:16:10,400 –> 00:16:13,840
overall in the RCR, CCR and OCR area.

383[Melvin Lim]
00:16:13,840 –> 00:16:15,520
So firstly, we want to look at

384[Melvin Lim]
00:16:15,520 –> 00:16:17,160
different segments of market first.

385[Melvin Lim]
00:16:17,160 –> 00:16:19,040
So when we look at the blue line,

386[Melvin Lim]
00:16:19,040 –> 00:16:22,640
the blue line is the overall price index movement

387[Melvin Lim]
00:16:22,640 –> 00:16:24,000
of private residential,

388[Melvin Lim]
00:16:24,000 –> 00:16:26,160
non-landed, it does not include landed property,

389[Melvin Lim]
00:16:26,160 –> 00:16:30,400
as you can see we have already surpassed our last peak in 2013

390[Melvin Lim]
00:16:30,400 –> 00:16:33,760
and we already surpassed our last peak in 2019 as well.

391[Melvin Lim]
00:16:33,760 –> 00:16:39,120
We are at a new point right now at 159.9% index point.

392[Melvin Lim]
00:16:39,120 –> 00:16:41,800
We also want to look at CCR.

393[Melvin Lim]
00:16:41,800 –> 00:16:44,040
CCR is definitely more of the blue chip factor.

394[Melvin Lim]
00:16:44,040 –> 00:16:47,040
But of course we need to monitor now because the ABSD

395[Melvin Lim]
00:16:47,040 –> 00:16:50,080
for foreign buyers has increased by about 10%.

396[Melvin Lim]
00:16:50,080 –> 00:16:52,040
Therein next week, we’re going to show some data

397[Melvin Lim]
00:16:52,040 –> 00:16:54,280
to see who are the nationalities

398[Melvin Lim]
00:16:54,280 –> 00:16:55,720
that are buying CCR properties.

399[Melvin Lim]
00:16:55,720 –> 00:16:58,480
And then I believe just by looking at the trend,

400[Melvin Lim]
00:16:58,480 –> 00:17:00,360
although I don’t have the data with me right now is that,

401[Melvin Lim]
00:17:00,360 –> 00:17:03,160
a lot of Singaporeans are actually buying the CCR property.

402[Melvin Lim]
00:17:03,160 –> 00:17:04,840
So we’ll have a look at that to see whether,

403[Melvin Lim]
00:17:04,840 –> 00:17:08,040
really does the ABSD have any impact on that or not.

404[Melvin Lim]
00:17:08,040 –> 00:17:10,680
So in terms of CCR, we sort of

405[Melvin Lim]
00:17:10,680 –> 00:17:13,160
haven’t really crossed the last peak in 2013.

406[Melvin Lim]
00:17:13,160 –> 00:17:17,080
And now we’re still around this level at about 135.8.

407[Melvin Lim]
00:17:17,080 –> 00:17:18,920
The last peak was about 141.

408[Melvin Lim]
00:17:18,920 –> 00:17:22,520
We look at OCR way past the last peak in 2013,

409[Melvin Lim]
00:17:22,520 –> 00:17:25,120
there was 170 points index.

410[Melvin Lim]
00:17:25,120 –> 00:17:27,080
Now we are at 189 points.

411[Melvin Lim]
00:17:27,080 –> 00:17:29,840
And then when we look at the RCR also way past,

412[Melvin Lim]
00:17:29,840 –> 00:17:33,680
now we are at about 175, last peak we’re at 155.

413[Melvin Lim]
00:17:33,680 –> 00:17:36,360
I think that CCR is still in its prime time

414[Melvin Lim]
00:17:36,360 –> 00:17:38,120
because a lot of properties

415[Melvin Lim]
00:17:38,120 –> 00:17:40,480
sometimes it doesn’t make sense, because some of the properties

416[Melvin Lim]
00:17:40,480 –> 00:17:45,000
in the RCR is actually very close in PSF to CCR prices.

417[Melvin Lim]
00:17:45,000 –> 00:17:46,000
So I think CCR,

418[Melvin Lim]
00:17:46,000 –> 00:17:48,560
there are a lot of gems in the resale market.

419[Melvin Lim]
00:17:48,560 –> 00:17:50,160
There are also couples of gems if you are

420[Melvin Lim]
00:17:50,160 –> 00:17:51,720
only hunting for new launches.

421[Melvin Lim]
00:17:51,720 –> 00:17:54,040
Some of the balance units, their price PSF

422[Melvin Lim]
00:17:54,040 –> 00:17:56,040
is still at a previous launch price

423[Melvin Lim]
00:17:56,040 –> 00:17:58,240
compared to what is going to come out in 2022.

424[Melvin Lim]
00:17:58,240 –> 00:18:00,320
I think even in new launch’s market,

425[Melvin Lim]
00:18:00,320 –> 00:18:02,360
there’s gonna be something that will hit

426[Melvin Lim]
00:18:02,360 –> 00:18:04,960
the right sweet spot for you, if you hunt deep enough.

427[Melvin Lim]
00:18:04,960 –> 00:18:06,640
Of course if you want to have a little bit more advice,

428[Melvin Lim]
00:18:06,640 –> 00:18:08,720
you can also check in with our Buyer Consult Team,

429[Melvin Lim]
00:18:08,720 –> 00:18:11,000
at PropertyLimBrothers, we’ll be very happy to sit down

430[Melvin Lim]
00:18:11,000 –> 00:18:13,520
over a Zoom session or the meetup with you in our office

431[Melvin Lim]
00:18:13,520 –> 00:18:15,680
or in your home just to chat over a cup of coffee

432[Melvin Lim]
00:18:15,680 –> 00:18:16,960
on some of the plans that you have.

433[Melvin Lim]
00:18:16,960 –> 00:18:19,040
Now let’s have a look at the private residential market

434[Melvin Lim]
00:18:19,040 –> 00:18:21,000
vis a vis the HDB market.

435[Melvin Lim]
00:18:21,000 –> 00:18:23,640
HDB definitely surpassed its last peak.

436[Melvin Lim]
00:18:23,640 –> 00:18:28,000
Have a look we’re at about 150.6, last peak was 148.

437[Melvin Lim]
00:18:28,000 –> 00:18:33,280
We already went past the last peak in the year 2013.

438[Melvin Lim]
00:18:33,280 –> 00:18:35,880
There again, a lot of things happened from 2013

439[Melvin Lim]
00:18:35,880 –> 00:18:37,800
because 2013 was the year

440[Melvin Lim]
00:18:37,800 –> 00:18:40,120
of the ultimatum of cooling measures,

441[Melvin Lim]
00:18:40,120 –> 00:18:44,680
TDSR, MSR limit, as well as ABSD part two,

442[Melvin Lim]
00:18:44,680 –> 00:18:47,600
LTV all came out in the same year,

443[Melvin Lim]
00:18:47,600 –> 00:18:49,920
which is why the market couldn’t take it,

444[Melvin Lim]
00:18:49,920 –> 00:18:52,120
and everything started adjusting downwards.

445[Melvin Lim]
00:18:52,120 –> 00:18:54,360
Now we’ve gotten used to it, eight years later,

446[Melvin Lim]
00:18:54,360 –> 00:18:58,080
the types of properties has also changed in terms of sizes.

447[Melvin Lim]
00:18:58,080 –> 00:18:59,440
Check out the previous two episodes.

448[Melvin Lim]
00:18:59,440 –> 00:19:00,640
You really have to have a look at that.

449[Melvin Lim]
00:19:00,640 –> 00:19:04,880
Private residential price index, 159 surpasses its peak of 148.

450[Melvin Lim]
00:19:04,880 –> 00:19:06,480
That’s where we are right now.

451[Melvin Lim]
00:19:06,480 –> 00:19:09,360
If you notice the two of them sort of move in tandem.

452[Melvin Lim]
00:19:09,360 –> 00:19:10,160
Why?

453[Melvin Lim]
00:19:10,160 –> 00:19:12,880
Because in terms of human behaviour is that when I see,

454[Melvin Lim]
00:19:12,880 –> 00:19:14,720
for example, let’s say if a family is living

455[Melvin Lim]
00:19:14,720 –> 00:19:16,360
in the HDB apartment for 10 years,

456[Melvin Lim]
00:19:16,360 –> 00:19:18,200
and finally they’re seeing that the HDB prices

457[Melvin Lim]
00:19:18,200 –> 00:19:19,400
are moving upwards.

458[Melvin Lim]
00:19:19,400 –> 00:19:22,480
Maybe they would have bought around the 2013 era

459[Melvin Lim]
00:19:22,480 –> 00:19:25,080
and they have seen their price decline for a little while.

460[Melvin Lim]
00:19:25,080 –> 00:19:27,320
And now it hits back up, then they might be

461[Melvin Lim]
00:19:27,320 –> 00:19:30,320
very, very motivated to exit from their HDB apartment

462[Melvin Lim]
00:19:30,320 –> 00:19:32,200
to switch to a private property.

463[Melvin Lim]
00:19:32,200 –> 00:19:35,120
So you will see there’s always like a correlation

464[Melvin Lim]
00:19:35,120 –> 00:19:37,240
when HDB prices moves up.

465[Melvin Lim]
00:19:37,240 –> 00:19:40,240
Most of the time it is because the private residential prices

466[Melvin Lim]
00:19:40,240 –> 00:19:41,080
have moved up.

467[Melvin Lim]
00:19:41,080 –> 00:19:43,480
The private residential price always leads

468[Melvin Lim]
00:19:43,480 –> 00:19:46,320
the price movement of HDB prices as well.

469[Melvin Lim]
00:19:46,320 –> 00:19:49,160
So if the private residential price is too close

470[Melvin Lim]
00:19:49,160 –> 00:19:50,280
to the HDB pricing,

471[Melvin Lim]
00:19:50,280 –> 00:19:52,520
definitely they will start to move away from each other

472[Melvin Lim]
00:19:52,520 –> 00:19:55,440
because based on normal human behaviour is that,

473[Melvin Lim]
00:19:55,440 –> 00:19:56,680
I will say that, hey you know,

474[Melvin Lim]
00:19:56,680 –> 00:19:58,760
the private property price is actually quite affordable,

475[Melvin Lim]
00:19:58,760 –> 00:20:00,520
I think I want to switch over there first.

476[Melvin Lim]
00:20:00,520 –> 00:20:02,680
And if we look at the price movement

477[Melvin Lim]
00:20:02,680 –> 00:20:05,400
usually they are quite in tandem in the sense that

478[Melvin Lim]
00:20:05,400 –> 00:20:08,000
sometimes there’s the disparity effect and substitute

479[Melvin Lim]
00:20:08,000 –> 00:20:09,720
effect coming in, in the sense that

480[Melvin Lim]
00:20:09,720 –> 00:20:12,920
private residential prices might be way too far out of reach

481[Melvin Lim]
00:20:12,920 –> 00:20:15,000
for most families. And thus,

482[Melvin Lim]
00:20:15,000 –> 00:20:18,760
they fall back on going into the HDB resale apartment,

483[Melvin Lim]
00:20:18,760 –> 00:20:19,760
kind of properties.

484[Melvin Lim]
00:20:19,760 –> 00:20:22,480
There’s a like dual funneling in terms of demand level

485[Melvin Lim]
00:20:22,480 –> 00:20:24,720
for both, because private prices moved up,

486[Melvin Lim]
00:20:24,720 –> 00:20:27,800
it has then become more unaffordable for more people.

487[Melvin Lim]
00:20:27,800 –> 00:20:29,760
Then people fall back on HDB properties

488[Melvin Lim]
00:20:29,760 –> 00:20:31,840
and then HDB properties start to inch up as well

489[Melvin Lim]
00:20:31,840 –> 00:20:33,760
because more people are then buying HDB properties.

490[Melvin Lim]
00:20:33,760 –> 00:20:35,880
So there’s always like a dual effect,

491[Melvin Lim]
00:20:35,880 –> 00:20:37,960
but this time round it’s also a bit different

492[Melvin Lim]
00:20:37,960 –> 00:20:41,600
because this climb here was also caused by the fact of

493[Melvin Lim]
00:20:41,600 –> 00:20:44,000
BTO’s delay because of the pandemic.

494[Melvin Lim]
00:20:44,000 –> 00:20:45,600
And thus, a lot of people were thinking,

495[Melvin Lim]
00:20:45,600 –> 00:20:47,440
“hey, I need to wait five, six years for my BTO,

496[Melvin Lim]
00:20:47,440 –> 00:20:49,280
I might as well just go to a resale property because,

497[Melvin Lim]
00:20:49,280 –> 00:20:51,800
I need to wait for one year for balloting

498[Melvin Lim]
00:20:51,800 –> 00:20:53,720
and I have to, based on my luck,

499[Melvin Lim]
00:20:53,720 –> 00:20:55,920
to see how and what kind of area can I get

500[Melvin Lim]
00:20:55,920 –> 00:20:56,880
from my balloting?”

501[Melvin Lim]
00:20:56,880 –> 00:20:58,960
Wait another five years, provided

502[Melvin Lim]
00:20:58,960 –> 00:21:00,560
and hopefully there’s no more delays.

503[Melvin Lim]
00:21:00,560 –> 00:21:02,560
And then we wait another five before I can move on

504[Melvin Lim]
00:21:02,560 –> 00:21:03,720
to my next private property.

505[Melvin Lim]
00:21:03,720 –> 00:21:05,640
That’s a total of 11 years.

506[Melvin Lim]
00:21:05,640 –> 00:21:08,560
And of course, when that happens, opportunity cost is high,

507[Melvin Lim]
00:21:08,560 –> 00:21:09,760
which is why people might think of

508[Melvin Lim]
00:21:09,760 –> 00:21:11,320
going to resale HDB apartment,

509[Melvin Lim]
00:21:11,320 –> 00:21:13,560
or just might as well just go to private properties.

510[Melvin Lim]
00:21:13,560 –> 00:21:16,920
All in. what we’re going to do next few weeks is that,

511[Melvin Lim]
00:21:16,920 –> 00:21:19,320
next week, we’re firstly going to talk about

512[Melvin Lim]
00:21:19,320 –> 00:21:22,480
some very interesting data that we’ll present to you,

513[Melvin Lim]
00:21:22,480 –> 00:21:25,080
just to share with you in-depth on how’s the market.

514[Melvin Lim]
00:21:25,080 –> 00:21:28,480
We’re also gonna talk about some topics in advance.

515[Melvin Lim]
00:21:28,480 –> 00:21:29,880
Let me just draw it for you.

516[Melvin Lim]
00:21:29,880 –> 00:21:33,400
So we’re going to look at some data from 2011 to 2021,

517[Melvin Lim]
00:21:33,400 –> 00:21:36,400
and look at what are some of the new launch condos

518[Melvin Lim]
00:21:36,400 –> 00:21:38,240
that were launched over this past 10 years,

519[Melvin Lim]
00:21:38,240 –> 00:21:41,400
which of them has the most capital appreciation?

520[Melvin Lim]
00:21:41,400 –> 00:21:44,920
And we’re gonna track the new launch condo prices till today

521[Melvin Lim]
00:21:44,920 –> 00:21:47,160
and see who are some of the winners for this project.

522[Melvin Lim]
00:21:47,160 –> 00:21:48,440
And then now of course in January,

523[Melvin Lim]
00:21:48,440 –> 00:21:50,080
we’re going to talk about en bloc as well as

524[Melvin Lim]
00:21:50,080 –> 00:21:51,360
some other interesting topics.

525[Melvin Lim]
00:21:51,360 –> 00:21:53,200
Thanks for staying with us on Nuggets On The Go.

526[Melvin Lim]
00:21:53,200 –> 00:21:55,200
My name is Melvin Lim, PropertyLimBrothers, as always

527[Melvin Lim]
00:21:55,200 –> 00:21:56,520
thank you for staying tuned with us.

528[Melvin Lim]
00:21:56,520 –> 00:21:59,200
You can also listen to this on the go,

529[Melvin Lim]
00:21:59,200 –> 00:22:01,800
on Spotify and Apple podcasts if you’re on the road,

530[Melvin Lim]
00:22:01,800 –> 00:22:03,080
we hope that we’ll see you soon.

531[Melvin Lim]
00:22:03,080 –> 00:22:05,600
And thank you for the support over the past year.

532[Melvin Lim]
00:22:05,600 –> 00:22:08,440
We’re very thankful to have our audiences and fans

533[Melvin Lim]
00:22:08,440 –> 00:22:10,200
following us at PLB channel.

534[Melvin Lim]
00:22:10,200 –> 00:22:12,040
So, in the meantime, take care, cheers.