Irresponsible stupid fool. We need prudence in our financial matters.
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Are you currently employed? Do you know how economies work? Do you know how businesses are started?
It is because people dared dream big and take loans to start businesses that ordinary people like you are employed. Same goes for people who buy properties whether for own stay or investment. Very few can afford to buy a home outright, loans in this case are essential. All these help oil the economy and keep people employed. And one more thing, when you want to argue, argue with facts and words. Shallow insults don't add to knowledge sharing. Quote:
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Am inclined towards the argument that I may not be able to get such leverage again, so may hold on to the loans. (Not to mention the new tax regime on things like SSD and ADSD). Of course, the key risk is that those assets against which the loans were taken could depreciate in bad times, so gotta make sure I have holding power. (So, yes, even the guy who says I am in deep s**t does have a point, even if not made elegantly). Thanks, again. Will have to mull over this carefully. Cheers, Average Joe |
Hi Average Joe,
You are already in deep ****. Propery prices are sliding. Soon you will receive a call from the banker. Wish you luck! |
Depends, you have not revealed a very critical part and that is your overall net worth.
I won't go to exact figures but my level of debt is slightly more then yours and I have savings which amount to half the debt. My salary level is the roughly the same as yours. So if I portrayed it as you did it would seem that I am in some serious doo doo However my assets which the debt is secured against enough to pay the debt of 2x over. So without revealing your asset worth its hard to make a decent judgement on your situation. Anyone who makes a judgement prior to knowing that is merely making an assumption. Quote:
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Average Joe,
Honestly, you're DOOMED. You better deleverage now! Don't say we gurus never warn you. Deleverage now before everyone rushing out. We have too much oversupply, don't know why there is this big miscalculation of the demand and supply situation. Property prices will crash if we do not bring in lots of FTs to rent the empty condo blocks. Also, there are those who illegally rent out their BTO flats. |
Go sit in a corner and suck thumb. Idi**
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Hi,
I am a multi-millionaire. If I may, let me share with you my life experience of becoming rich. It is all about hard work and wisdom. I was and still am conservative when it comes to my finances. I have seen many lower class people who overleverage because they dream to strike it rich. When the tide turns, they are all naked and ended up staying in rented 2 room HDB flats for the destitute. Looking at your case, I think you are borrowing way beyond your means. When the tide turns, you will definitely be standing naked. You may also lose your job and passive income. Your properties and stocks will all crash in value by 50% or more. Quote:
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Something to think about.
The gahmen has pointed out that the population is facing double whammy of decline and aging. If the current trend continues and without infusion of younger people and talents, the economy will collapse and the country will not progress. Your insurance, CPF money, investments may also disappear if no new members join and contribute. They then tell you they need to increase birth rate, but not successful in convincing the locals. So they have no choice but to look outside. They tested water by telling you (through white paper) that the population will grow to 6.9 mil, counting both citizens and FTs. People protested, and they keep low profile. Then you see and read news that the gahmen keeps releasing land for both HDB and private residences. The new master plan identified more new town centers catering for thousands of new homes. Mind you, each time the land tender cost is higher than the previous ones. Also the cost of materials, and labour to build these new homes keep going up. You ask yourself, are the trends pointing to lower home prices? Doesn't look like it does it? But more fundamentally, why the gahmen keep releasing more land for homes? After losing a GRC in the last GE, the gahmen also controlled the rise of the HDB prices. Now more people are home owners. You ask yourself, do you think the new home owners want their home prices to go up or go down? People who aspired to stay in private homes also complained that their dreams of enjoying the upper middle class lifestyle is getting out of their reach. Then 7 cooling measures were introduced, and the TDSR. All these artificial controls slowed down purchases locally, so more people can buy their condos. Do you think these new owners want to see their new home prices depreciate? Don't think so. The CM also made rich investors take their money outside and buy properties in UK, M'sia and Oz. The gahmen also don't want that. As long as the world (especially the US) economy is not floundering, and there is no big retrenchment, any property price movements locally will be artificially controlled by the gahmen through the CM and TDSR. And it is definitely not to the gahmen's benefit to see property price collapsing. They have the option to tighten or loosen the controls to adjust accordingly. The gahmen is already feeling the negative consequence of "neglecting" the landed property owners, do you think they would want to make the many more thousands of condo owners unhappy by allowing their property prices to collapse? They could lose more than 1 GRC! |
I want the property prices to collapse.
I have just sold my BTO flat, after the MOP. I am now staying in my parent's landed house. I made a lot of profit and now need to buy a condo. I want the condo prices to collapse so that I can afford a Bukit Timah condo. Can or not? Quote:
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I share your frustrations. I also waited quite long already, hoping to buy my 3rd condo.
I believe the gahmen's plan is not to crash the property but to control the price increase to something reasonable like 3% a year instead of 3% per quarter. Quote:
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Only thing we need to do is: sign a legal contract that if you dont pay me according to the terms below I will confiscate the property and it will be mine. 1. Tenure: Pay every day for ONLY 30 days. 2. First day: Pay me ONLY $2. 3. Next day: Pay me ONLY two times of previous day. 4. Cycle: Repeat point 3 for remaining 28 days ONLY. Condition: If you default paying on any single day, you will be thrown out of the house and it will belong to me. |
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since you didnt state the currency, someone can choose to nominate it. For anyone whom is keen, try Zimbabwean dollar. The Financial Services Club's Blog: Zimbabwe's currency crisis and the 100 trillion dollar note |
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Assets at current value are worth about 2.4 mil. Assuming they depreciate by half to 1.2 mil, I still won't be in negative equity. Of course it would wipe out my life savings. Hence the question AJ |
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Me, 38. Wife, 36. We live in a $450k flat, with o/s mortgage of $150k. We are the process of saving more cash before we upgrade to a $1m condo. Our plan is to sell our flat and get net cash proceeds of $300k and pay down another $300k in cash so that our loan is only $400k. I think this is prudent as our combined income is not much, only about $120k pa. We don't dare to take up so much loan, we have seen relatives got into big trouble when they took so much loan and when they suddenly lost their jobs, they had to move from a condo back to a 3 room flat. They might as well did not upgrade in the first place. Big loss of face.
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That is unfortunate to have to downgrade like that. Depending on when they bought and sold their condo, they might have made a handsome profit in the process.
Don't look down on them, as they may yet pick themselves up and move into a better condo in the future. It has happened to people I know. People are resilient. Quote:
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Sad, but life goes on..
My colleague picked up a condo during a "fire sale" at $580k for a 1570 sf condo 10 yrs ago. That condo now worth $1.6m. As he moved up the career ladder, he has bought another condo for investment. And he is not yet 40. I think it is a zero sum game. One loses, another one wins. Quote:
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1) At least 6-12 months of contingency funds set aside to pay for daily expenses in case both of you lose your source of income 2) > 2 years worth of monthly repayment set aside in liquid asset ($72K if monthly is $3K)which should gives you decent return of 1-4% depending on what is it. 3) Able to service the monthly loan and save every month even if interest rate were to increase from current 1% to 3%. 4) If you still have excess savings, then invest wisely. You should be able to get at least 3-4% return in safe assets.....do not use all your savings to pay down the loan. You should take advantage of the low interest rate now |
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Hi again,
So it seems is not that bad, your properties must have been purchased around 2009/2010 I guess. The question should be if from a strategic investment perspective if you think its time to let go of your properties because market has peaked? Or does the area have benefit in the future you see it worthwhile holding on too? I guess your properties are tenanted out which results in the 80K Passive income, 1.2 Million loan would be about 4.5K repayment assuming 30 years on 2%. Plus property tax and MCST lets say its 5.5K per month which is about 66K per annum that your rental covers which puts you in a decent position (even half the rental if need be and some top up if desperate) If you want to hold, take a defensive play and lock in your loans for fixed interest rates and try to get the tenants to lock in as long as possible on contract. From there you can calculate how much holding power you have assuming no tenants. (personally I send greeting cards and gift certs to the tenants to encourage renewal when the time comes) Of course if you think market has peaked then sell, no need for strategy here. As for outlook I find it funny how some forum users here predicting market crash immediately have a magical 50% number on it, I wish that would happen too then we can buy properties in bulk. We have come a long way since 1997 and the market is awash with cash from all the QE printing. In 97 we didn't have hordes of cash rich PRC and Indians buying delux properties all along orchard road. Not to mention inflation, in 90's my friend family built a 15,0000 sq feet house for 1.5 Million. Today the same amount of money will likely just rebuilt a terrace house or corner terrace. No need to even compare salary differences and all the rich bankers in town which was lacking in 97. So you decide your strategy and plan accordingly, you are in no immediate risk I can see and have about a 2 year holding power. And of course if markets did fall 50% imagine all the new HDB buyers who paid 600K - 700K for their flats would do to the government. We can't plan for everything, we plan for what we logically anticipate. Quote:
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Thanks very much for your analysis and advice - very insightful. (And your estimates on my numbers are pretty spot on.) Guess you pointed out the crux of the matter - where do I think the market is headed? I can't tell, I suppose. (Unlike the many other prophets on this forum!). And I suppose you're saying that I'm sufficiently hedged, so even if it goes down , I should be OK. Thanks again! AJ |
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Property investments at right timing have made people wealthy. See this: How an Average Earner Can Become a Multi-Millionaire Property Investor - Yahoo Singapore Finance
Just be sure you have holding power Quote:
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My wife and I don't earn much. We are in our forties but we only earn $100k pa in total. We can only afford to buy a 4 room HDB flat. Our flat is now worth $500k, we bought it from HDB at a very low price many years ago and the mortgage is almost paid up. We hope to retire at 65 years old. We will sell our flat and stay with one of our children. We will have about $1m in cash after we sell our flat.
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Beware of property market crash.
We have oversupply of BTOs, condos. Market will crash if we don't resolve the property glut situation. We must bring in FTs by a million to prevent property crash now. There are now many empty condo blocks with no tenants. |
As long as world economy is not crashing, and local employment is still healthy, the local property prices will not crash. There may be a drop of 10% but will not crash.
The gahmen already slowing down new BTO release. Land sales may also be slowed. People here still have a lot of money. Many are waiting on the side wanting to jump in to grab if property price collapse. Evidence is the many people buying M'sian, UK, Australian, NZ and other properties because of the CM and TDSR. Those who bought have holding power as the loan interest rate is very low (some as low as 1%) and if they are working, they dont even need rental income to sustain the loan repayment. Dont forget the gahmen can always remove the CM and TDSR - to spur the market if needed. We definitely need FTs, but not for the purpose of soaking up the new homes, but to keep the economy going, and population young. That is fundamental. Without that, your CPF money, insurance and other investments will be worthless. Quote:
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When you see so much exuberance in the property market, as seen displayed by the many forumers here, plus the incoming property glut, this is recipe for disaster. The property market is now at the turning point to crash.
If you see people over leveraging due to extreme over confidence, as displayed by a foolish forumer here, this is a good signal the market will crash. The property supply miscalculation will surely crash the market, unless we open up the gates for more FTs to flow in. |
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You really think our gahmen so screwed as to miscalculate the housing supply and demand by so much meh? Suspect they positioning for population growth to 6.9m first then to 8m in the longer term.
If there is any property price fall, quickly go in and grab some before it shoots up again. Quote:
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