Quote:
Originally Posted by Unregistered
1997 and Bishan 8 condo are often quoted as the case study for the worst possible year and project in property investment.
Even salary.sg had this write up dated July 11th, 2010 "At Property Peaks, Don’t Buy"
"Among the 4 leasehold properties listed in the ST article, the worst performing one is Bishan 8. It is now selling at only $802 psf, which is 27% lower than its $1,100 psf launch price!" At Property Peaks, Don’t Buy | Salary.sg - Your Salary in Singapore
Just an update, Bishan 8 is now back to $1,100 psf as of Q3 2011, so the owners have broken even after 14 years.
Instead of illustrating the weakness of property investment, this case study in fact demonstrates its strength in that even the worst performer has broken even.
What about similarly risky investments like stocks? If we compare apple with apple, the worst performing stock investment like Pan Electric where investors lost all their money, would be equivalent to Bishan 8 selling for $0 psf today. |
Taking 14 years to reach the same psf, is not breaking even at all. Need to factor in the negative equity risk and high interest rates in the past. Yes, property can be a good investment, no question about that. If u can hold long enough through the market cycles, property is almost bao jiak. The question is, how long can u hold, why hold for 14 years just to break even, when if u buy at the trough, u just need to hold for far less than 14 years and make a decent profit?
Also, why buy property NOW, when the situation in 2012 is probably closer to the 1997 situation (peak) than the 2005 or 2009 situation (trough)?
If u are so rich as to not be bothered about a drop in property value, and have long holding power, then no harm can be done to u no matter what. But not everyone is that rich.
I won't bother arguing with the eternal property bulls anymore. Long property is right in the very long run, but timing is crucial. Price does not increase in a straight line, it goes up and down while generally increasing. In between, many things can happen, fortunes can be made and broken. Basically, don't get into trouble by buying property at the wrong time, that is all I am trying to say.