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  #996 (permalink)  
Old 28-11-2011, 05:10 PM
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Property is just another asset class. If the FSSTI move in cycles, why not property prices?

URA publishes a private property price index (commonly called the URA PPI). If you plot the PPI vs FSSTI, you will note a strong historical correlation plus a lagging effect. PPI trails the FSSTI by 3-6 quarters.

FSSTI has already corrected sharply in recent months to 1600+ levels. PPI curve is showing a plateau. In 2009 we saw a sharp correction in private property prices. What is different now versus 2009? Foreigners still make up a large proportion of the SG private market then and now. In addition, our MND have been set a KPI to cap price increases. We had already adjusted our S-Pass policies post election. This shows that our government is feeling the heat from Singaporeans on issues such as housing & immigration. Recently, the papers reported a rise in CN buying up SG property. This is the sort of news info that will cause unhappiness amongst Singaporeans. The SG Govt have already revised the GDP outlook for 2012. Recent reports have indicated various sectors cutting back on staff. If property prices continue to inch up, you still think the MND will not do anything more drastic policy wise? BTO supply is ramping up. Private condo completions are concentrated in 2012-2013. Rents of recently completed units are already falling. Prices are flattening. The major brokerage houses are calling for 20-30% mass market price correction 2012-2014. Better be safe than sorry. Stop speculating.

Originally Posted by Unregistered View Post
You are too logical. The market is sentiment driven, and politics has a big part to play too.

ECB will print lots of money and we will have another 10 more good years. More good years.

As we speak, ECB is already buying up loads of Italian bonds.

Printing money is easy, so they will surely do it. It's a magic bullet they will use time and again. Everyone wins.
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