Quote:
Originally Posted by Unregistered
Quote:
Originally Posted by scholar
i disagree.
fundamental analysis is based on income ratios - if people cannot afford to pay for a flat with their income, then flat prices are constrained. and as hedgie has said, the fundamental ratios are alot higher today than they were in the past. hence, as one of the earlier posters have mentioned, fundamental analysis is a probability play and the probability of a 1996 situation is much much higher than a 1990 situation.
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you are assuming income ratio is relevant. you are only partly correct.
it's now very apparent that singapore is moving toward a pro-business elites-only global city. income of citizens is now IRRELEVANT. as long as the rich can afford it, prices will continue to go up. citizens are irrelevant. if they can't pay, they can always move to johor. |
Yes that's right. Income ratio is just one of many factors that determine affordability. There are myriad other factors like the inheritance effect and the foreign transfer effect.
Singapore has reached its 46th year of independence. The first generation is passing on and the second generation is about to inherit substantial wealth.
Imagine for example a middle-aged technician called Li Ah Long's father suddenly leaves him a terrace house worth $2 million. Even though Li Ah Long is a technican earning only $30k per year and stays in an
HDB 4-room flat, he is suddenly able to pay off his entire
HDB loan with spare cash to buy a suburban condo for investment.
So he sells his inherited terrace house to an aesthetic doctor called Dr. Sally Lam who already owns 100 other properties. Dr. Sally Lam charges clients like the Prince of Arabia $20,000 for each pimple removed. As the Prince is an adolescent who keeps growing pimples non-stop, there is only one way for ridiculous priced houses to go - and that is up.