Thursday, 3 January 2013

D' Leedon

I went to view the D'Leedon showflat at Farrer road on Sunday. It was the site of the previous HUDC enbloc. As you know, Singapore property prices ended 2012 with a big bang and at record prices. The news article is here.

I thought this was one of the few condo that are still exhibiting "good value" under current market conditions. If you ask me to buy ECO (district 16) at $1,300 to $1,400 psf or the Sky Habitat (district 20) at $1,500 to $1,600 psf or Foreseque Residence at $1,100 to $1,200 psf (district 23), i would rather buy a unit of D Leedon at around $1,400 psf (after 8% discount), which is in District 10 and within 1km of good primary school like Nanyang Primary.

However, to get to $1,398 psf, the units on sale are typically bigger (around 1,400 square foot) and on the lower floors (below 12th floors) out of a height of 36 floors. And you will need to check off the criteria that will allow you to receive around 6%-8% discount off the listing price. Personally i don't like the gimmicks of "tiered discounts". If you ask me to buy something now, I would probably get an investment unit at D'Leedon if the smaller ones (around 1,000-1,200 square foot) are selling below $1,400 psf on the higher floors. hahaha.... A small unit on level 25 with a size of 635 square foot was sold for $1.3m that weekend. That translate into a psf of more than $2,000. 

If you are wondering why SC Global wants to privatize itself, that is because its still has many high end condos not sold yet and it is going to run foul of its deadline and have to pay for extension charges. The news is here. As such, many developers will want to avoid this predicament and try to move units by lowering its prices and that is probably one reason why the developer of D'Leedon is giving out discounts now to 'move the units' as it is a huge development with more than 1,600 units and as of Nov, still 60% unsold based on (see graph below). 

I will probably give it a miss and play the waiting game with developers who are facing the pressure to slash prices. If the prices continue to edge upwards, the government will probably need to step in again.  

Happy investing.  


Anonymous said...

but wat if the property mkt is going to hit the bottom already?

Anonymous said...

Well, MrIPO, you said it yourself :

Singapore property prices ended 2012 with a big bang and at record prices.

But yet .....

many high end condos not sold yet and it is going to run foul of its deadline and have to pay for extension charges.

And with .....

gimmicks of "tiered discounts".

Seriously, is this a game that adults should be playing?

High property prices only damage your competitiveness.

Mr. IPO said...

Hi, Not sure what you meant by "game" or competitiveness.

The gist of what I am saying is consider your options if you want to buy a property now. Some good locations are selling cheaper than the outskirts.

This is not a game to me. No one knows where the market is heading in the next 5 years. I am looking for a property can generate passive income to me...

Anonymous said...

The game I'm talking about is all this relentless, yes, games, developers and buyers are playing with each other.

The competitiveness I'm talking about is the overall competitiveness of the economy which is reduced when property prices, be they residential or commercial or industrial, become "too high".

Left to their own devices, developers and buyers tend to run amuck. And have to be given a serious slapping down.

And when even existing property owners themselves cannot quite believe the prices that are being set, then I think there is something in this.

After all, bear in mind, existing property owners may themselves wish to buy more property. If so, what is the benefit of having to chase the market against themselves.

Borrowing more and more money against supposedly increasing property "values" is not a sound game.

The property that can be purchased gets more expensive, and gets smaller and smaller. OK, there is a tennis court, OK there is a small swimming pool, but so what?

One day, the bubble would pop, and there will be chaos all round.

Not something we want.

These government cooling measures are much welcome, and are much welcome.

As I said, when even existing property owners think this, well, there is something in it.

Anonymous said...

"These government cooling measures are much welcome, and are much welcome."

These government cooling measures are much welcome, and are long overdue.

Anonymous said...

Let me give an example of what I mean. With some dollars and cents figures. Let's look at what sense there is in the figures.

Say I collect $12,000 in rent / passive income / whatever you wish to call it.

If property prices are $600 per sq foot (psf), my rent buys me 200 sq foot of additional property a month.

If property prices are $1200 per sq foot, even with swimming pool, BBQ pit / sauna /and various nonsense like that, my rent only buys me 100 sq foot of additional property a month.

So, what's the sense in that?

People may say to me : Oh, your existing property has gone up in price! How wonderful!

But, I think : yes, you probably are deluded.

When I buy property for passive income, I really mean passive income for me. For me.

What I do not want is to borrow from the bank, and to provide passive income for the bank as well. So there is a difference.

~Further more, I know that if somebody pays me $12,000 per month, it means they are paying me.

But can they afford this rent? Will it cause a problem later on down the line?

When I want passive income, I mean I want passive income that is troublefree, and troublefree for a long time.

What I don't want is high rent paid by others who cannot afford it. Or high rent that will only increase their costs.

Which causes problems for them later on, and thereby for me eventually.

Whenever I see property prices rising like this, I don't think : oh, I have a fortune.

I tend to think : oh, there may be a problem on its way, its just a question of time.

As I said, I think the government has done a good job of slapping down the property developers and some of their buyers.

So, that's my little contribution to the debate. I hope to have added more dimension to the "passive income" debate.

It is some dimension that "newer" property buyers do not always initially see.

I should thank Mr IPO for setting up this blog. I think it is generous-spirited of Mr IPO.

Mr. IPO said...

Thanks for the comments and taking the time to explain what you mean.

The government has a big balancing act to do. Cool the market with crashing it.

Some govt are printing $$ irresponsibly and that inevitably will result in a global asset inflation.

I don't want to sound "heartless" but it is usually when there is a bubble (and subsequent burst), then there are bargains to be found.

Under current market conditions, it is tough to find bargains. The days of hefty capital gains are probably over and everyone is currently "equally poor"....

Let's see how the story unfold in the coming years. The question is "are you prepared for that inevitable day?"

Anonymous said...

re : MR IPO : Let's see how the story unfold in the coming years. The question is "are you prepared for that inevitable day?"


Let's see how to deal with this question.

a. If property prices rise by another 10% in 2013, then the economy will have another extra boost of only 0.5%pts, and inflation will be say 5-6%. These are estimates.

b. But if property prices fall by 10% instead, apparently, all chaos will break loose.

The economy will supposedly collapse.

The developers will urge the government to "take measures".

The property buyers will grumble and complain and decide not to vote for the government, all sorts of stupid things, etc etc.

In short, this is no way to run an economy. The risk-reward ratio is lousy.

b. As for me, yes, of course I'm prepared for price falls.

Paradoxically, if everyone is prepared for price falls, then the fall will not be too great.

c. I see that people in singapore and asia generally, may have been generally unprepared for a surge of liquidity.

Liquidity that came in from outside asia (yes, you know the money printing central banks!), as well as internally generated loans and liquidity.

Is Singapore and Asia generally now prepared for a capital outflow?

d. I'd leave the last word, for now, with Norman Chan. He may be right about something.


Hong Kong Monetary Authority Chief Executive Norman Chan

"Yet, since such increases are not supported by economic fundamentals, any increase in wealth will be seen as transient... (and asset prices might drop sharply and remain volatile). As a result, households are unwilling to increase spending and in the end, the real economy fails to rebound"

Sumit said...


odin said...

Neat and tidy blog of urs

kei said...

Gd post you have here. Did you do it by yourself? Do share more with us, thks.

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