How much savings do you have?

[Wiseman1]

You people are full of crap about the property market...talk so much big logic as if you are very smart...but is actually just a big load of garbage talk

The reason for the current bullish demand and crazy prices in the property market in singapore is very straightforward: easy financing from the banks, the government recently introduced tighter financing rules for house purchases which amounted to mosquito measures as far as I am concerned, as long as you dont make people pay 100%cash for their 2nd, 3rd property, the demand would not go down

Sillyporean house buyers are now just acting like monkeys, following the crowd to speculate in bricks and mortar as they are afraid to miss the boat, in the process they happily ignore issues of how to service their mortgages should they lose their jobs or should their businesses fail. They believe there would always be a carrot head foreigner willing to pay them high rental to help them cover the mortgage payments. Low interest rates and easy financing offered by eager bankers hungry to fight for housing loan market share just embolden these clown housing investors...I am not even sure if they can call themselves investors since they dont even know what the hell they are doing, just following the crowd.

When you see uncles and aunties in their fifties having no qualms taking up 20 year bank loans to purchase 2nd, 3rd properties, this would be the turning point to sound the alarm...

Originally Posted by ptader

Hold on there, let’s get the picture straight here before pulling out all those sucker punches. Throwing an offhand statement that the REAL world works differently seems like a blatant attempt to prop up an argument that made no sense.

You started off recommending to others to hold on to cash and wait for 3 years property price to go down then buy. Together with this recommendation, you made several disparaging remarks on forumers who are bullish on property basically saying you’ve got the analysis worked out, investment is more than just buy & hold, good old days are over etc etc.

When challenged to flesh out your so called investment logic to back up your advice that property prices will drop the next few years, you then claimed that you are not into market timing but specifically emphasize to us that you’ve done calculations on the odds and you “play the probabilities” based on your analysis and economic rationale. So this brings me to my post #408 which I specifically asked you to share with us these so called calculations and probabilities.

You responded in #411 with totally ZERO evidence of any calculations on probabilities. Instead you listed down some generic things that everyone knows like interest rate is low, government is trying to cool down, global economic uncertainty etc and then just humtum either “for” or “against”. No numbers, no research, no trend analysis, no residential market insights - just a bunch of “for” and “against” personal judgments followed by a sudden conclusion that the odds are “against” for properties.

In #413, I asked you again the same question – where are the calculations you claim you did before arriving at your recommendation? This brings us to your latest post in #416, a highly condescending personal attack about me being childish don’t know anything about the real world etc. I have asked hard hitting questions on your investment thesis which I think is just as arbitrary and flawed as the buy-and-hold crowd which you condemned earlier, but I have so far not made an form of personal attack against you. I treat this latest tirade as a sign that you got caught swimming naked and now trying to back pedal.

Your excuse on how you cannot calculate probabilities due to the lack of perfect data and predictive model is like – duh!?!?!. I mean, if data and model is perfect, then that’s not called probability, it’s called prophecy. Even if you are unable to arrive at a defined x%, I was hoping at least there’s more thought process and research numbers to demonstrate you at least made an attempt to quantify the odds and a comparison of the expected returns on both alternatives.

Instead we get shaft with a so what attitude of “be my guest -it's your money and it's your life.” Yea we know that, can we have the calculations now please?

Sigh. I don't know what is so difficult to understand.

Statistics 101. If you are in a closed system, like dealing cards, you can assign probabilities easily. But in an open system, there is no way to do so reliably. Assume Real Madrid plays Barcelona, and assume its an even match. If Messi, Barcelona's star gets injured, it is clear Real Madrid has the better odds, but can you reliably put a percentage to it? Now assume Xavi, the other Barcelona star gets injured, how much better does that make Real Madrid's odds?

Even if you assume that we can reliably assign odds to any one event i.e. Messi gets injured means Real has a 10% better chance of winner, or Xavi gets injured means that Real has a 5% better chance. How do you now assign correlation when both Messi and Xavi get injured at the same time?

There are ways i.e. regression analysis, historical track record etc, but there's too much noise and often too little data points to make statistically significant conclusions.

So, if you cannot assign probability numbers, does it invalidate the conclusion? Well, let's go to basics - what drives up prices ? Liquidity and affordability. There are other factors, but these are fundamental.

Let's look at each factor discretely (and assume I can afford to pay $4000 for mortgage because my salary is $10k):-

1. Buy when interest rates can only go up - today i may get a $1mn mortgage but tomorrow I may only be able to get a $750k mortgage. The impact of interest rates on housing prices is straightforward and hard to dispute.

2. Buy at all time high - prices have gone up 100%+ over past 6 years, while salaries have gone up by 20%. Now median household income in Singapore is $7k and median HDB price is $600+k, 7 to 8x price to annual income ratio. The recommended ratio is 3x and the average ratio in the state just before sub prime was 4x.

3. Buy when record amount of TOP in both private and hdb is due over next 3 yrs - basic supply demand dynamics. rental may fall.

4. Buy when govt is doing everything they can to bring down the market to a soft landing (which is always the target but almost never achieved) - remember, govt has unlimited bullets, and they have already taken away foreign liquidity via the 10% stamp duty. Affordability is reduced by 35y/65 yr old rule, 60% mortgage for 2nd pty.

5. Global uncertainty - if europe crashes, it increases the chance of margin calls which increases the chance of forced sales.

Affordability is adversely affected by 1, 2, 3 and 4. Liquidity is adversely affected by 3, 4 and 5.

How do you see prices go up ? Well the only counter argument is liquidity which could muddy the water, but I think long term, we will see a reversion to fundamentals.

In other words, if you lose Xavi and Messi, and Barcelona's coach is ejected, and your goalkeeper gets a red card, you would think that Real's odds have improved... even if you cannot assign a precise probability to each event discretely, nor can you assign a collective probability to the combination of events.

Or perhaps I should be asking, whatever is making you so confident of property prices going up despite the above?

looks like there are many people wanting to buy property badly, hoping for a crash. hoping for a crash is as bad as hoping for prices to shoot up.

here is what you have to do:

if you are buying for stay, this is a real need and you should not be speculating. dont keep on renting a place, waiting and waiting - you will soon be out of cash. if you have sold and wanting to buy later, it only makes sense if prices drop by more than what you spend on rent. for instance, if you sold a $1 mil condo and then start to rent for two years, and expected to spend $100K, this only makes sense of the same property you sold will drop by more than $100K. the problem is you cannot predict, what if the prices didnt drop and in fact rise? my advice, if you sell, better buy something else immediately.

if you are planning to buy for invest, you are smart enough.

Sigh. I don't know what is so difficult to understand.

Statistics 101. If you are in a closed system, like dealing cards, you can assign probabilities easily. But in an open system, there is no way to do so reliably. Assume Real Madrid plays Barcelona, and assume its an even match. If Messi, Barcelona's star gets injured, it is clear Real Madrid has the better odds, but can you reliably put a percentage to it? Now assume Xavi, the other Barcelona star gets injured, how much better does that make Real Madrid's odds?

Even if you assume that we can reliably assign odds to any one event i.e. Messi gets injured means Real has a 10% better chance of winner, or Xavi gets injured means that Real has a 5% better chance. How do you now assign correlation when both Messi and Xavi get injured at the same time?

There are ways i.e. regression analysis, historical track record etc, but there's too much noise and often too little data points to make statistically significant conclusions.

Has it ever struck you that just because you don’t know how to calculate doesn’t mean it cannot be done? Maybe the problem is because like you say, you are kind of stuck at Statistics 101 instead of 301, that’s why you can’t do it? Going by your logic most M&A & investment activities in the world belong to “open system” (whatever that means), yet everyday thousands of corporations & banks employing millions of professionals are doing statistical and financial modeling to determine all sorts of risk weighted investment decisions. Going by your Statistics 101 cheap football analogy, they should all disband their investment teams, get one guy to sit around list 5 factors and arbitrarily vote “for” or “against” then sum up see if there are more “for” or “against”? This sort of analogy just goes against what is observable in the real world.

Now don’t get me wrong, I’m not against you personally for only having rudimentary laymen knowledge on finance & investment analytics, after all different people have different skillsets. It’s just that earlier on you made a big show about how others are only blindly buy & hold and espoused others to follow your lead in having probability calculations and investment logic. Now in retrospect it looks thick when you are unable to produce anything substantial and try to get away by simply declaring this is just “Statistic 101” or come up with strange excuses like you do not have perfect data or too much noise.

1. Buy when interest rates can only go up - today i may get a $1mn mortgage but tomorrow I may only be able to get a $750k mortgage. The impact of interest rates on housing prices is straightforward and hard to dispute.

This is not true, interest rates can not only go up or down but also stay constant. This has been demonstrated possible by Japan for nearly 20 years. Remember, your thesis is to hold cash for 3-5 years and wait for property to plunge. Where is the statistical odd calculation that chances of a sharp increase in interest rate is higher than that of staying constant or rising slightly over the next 3 – 5 years?

2. Buy at all time high - prices have gone up 100%+ over past 6 years, while salaries have gone up by 20%. Now median household income in Singapore is $7k and median HDB price is $600+k, 7 to 8x price to annual income ratio. The recommended ratio is 3x and the average ratio in the state just before sub prime was 4x.

You are contradicting yourself. If the recommended ratio is 3x, then when it was 4x, 5x, 6x, 7x, you would have been saying price will go back to 3x. Seeing that it is now 8x, I don’t think any person who followed your advice and missed out buying at 4x, 5x and 6x are too happy about your probabilistic calculations and investment theory.

3. Buy when record amount of TOP in both private and hdb is due over next 3 yrs - basic supply demand dynamics. rental may fall.

Please don’t throw big words like “basic supply demand dynamics” whenever you lack the strength to carry through your case. What about hot money inflows, household formations and projected net adsorption rates? And also rentals may fall, but sometimes this is compensated by falling capitalization rates. So again where are the calculations of odds demonstrating that your scenario after weighting all these options is of higher probability than other scenarios?

4. Buy when govt is doing everything they can to bring down the market to a soft landing (which is always the target but almost never achieved) - remember, govt has unlimited bullets, and they have already taken away foreign liquidity via the 10% stamp duty. Affordability is reduced by 35y/65 yr old rule, 60% mortgage for 2nd pty.

The government’s goals are to stabilize property market and not to cause a price plunge, that I agree. But if they succeed this means a price appreciation that is moderated maybe to the region of GDP growth and general inflation rates or at worst stays flat or falls slightly. This does not gel in with your proposition to hold cash and wait for a property plunge in 3 years.

You did not address this incompatibility between the government’s goals and your own prognosis that there is a high probability of prices plunging in the next 3 years. Instead we are advised that the Singapore government’s target of soft land is “almost never achieved”. Do you have enough case histories of government intervention failure leading to property price plunge in Singapore to arrive at a probabilistic conclusion? Or is it just another off-hand personal opinion of yours that is whacked to us as a fact?

5. Global uncertainty - if europe crashes, it increases the chance of margin calls which increases the chance of forced sales.

This is an overly broad statement that can justify withholding any form of investment.

Or perhaps I should be asking, whatever is making you so confident of property prices going up despite the above?

I personally have never claimed that I am confident of property prices going up. My original post was just a simple one to explain why Sgeans are so into property, i.e. because all the alternatives not attractive. For me I express no opinion the next 3 – 5 years where property will go.

You were the one who jumped in on the need to wait out for property prices to plunge and lecturing other bros that investments should be done like the way you are doing – with business rationale and calculation of the odds and even coined a cute soundbite “play the probabilities”. All I did was invite you to share with us what exactly are the calculations.

So far you demonstrated you neither know nor care much about the subject of calculating probabilities. Instead what we have are broad attempts to brush off anything that does not gel with your conclusion with lines like “This is the real world, not university”, “Just statistic 101”, some kopitiam football betting theory, “basic demand supply” etc.

Again, where are the calculations which you claimed you did earlier?

Originally Posted by ptader

Has it ever struck you that just because you don’t know how to calculate doesn’t mean it cannot be done? Maybe the problem is because like you say, you are kind of stuck at Statistics 101 instead of 301, that’s why you can’t do it? Going by your logic most M&A & investment activities in the world belong to “open system” (whatever that means), yet everyday thousands of corporations & banks employing millions of professionals are doing statistical and financial modeling to determine all sorts of risk weighted investment decisions. Going by your Statistics 101 cheap football analogy, they should all disband their investment teams, get one guy to sit around list 5 factors and arbitrarily vote “for” or “against” then sum up see if there are more “for” or “against”? This sort of analogy just goes against what is observable in the real world.

Now don’t get me wrong, I’m not against you personally for only having rudimentary laymen knowledge on finance & investment analytics, after all different people have different skillsets. It’s just that earlier on you made a big show about how others are only blindly buy & hold and espoused others to follow your lead in having probability calculations and investment logic. Now in retrospect it looks thick when you are unable to produce anything substantial and try to get away by simply declaring this is just “Statistic 101” or come up with strange excuses like you do not have perfect data or too much noise.



This is not true, interest rates can not only go up or down but also stay constant. This has been demonstrated possible by Japan for nearly 20 years. Remember, your thesis is to hold cash for 3-5 years and wait for property to plunge. Where is the statistical odd calculation that chances of a sharp increase in interest rate is higher than that of staying constant or rising slightly over the next 3 – 5


You are contradicting yourself. If the recommended ratio is 3x, then when it was 4x, 5x, 6x, 7x, you would have been saying price will go back to 3x. Seeing that it is now 8x, I don’t think any person who followed your advice and missed out buying at 4x, 5x and 6x are too happy about your probabilistic calculations and investment theory.



Please don’t throw big words like “basic supply demand dynamics” whenever you lack the strength to carry through your case. What about hot money inflows, household formations and projected net adsorption rates? And also rentals may fall, but sometimes this is compensated by falling capitalization rates. So again where are the calculations of odds demonstrating that your scenario after weighting all these options is of higher probability than other scenarios?



The government’s goals are to stabilize property market and not to cause a price plunge, that I agree. But if they succeed this means a price appreciation that is moderated maybe to the region of GDP growth and general inflation rates or at worst stays flat or falls slightly. This does not gel in with your proposition to hold cash and wait for a property plunge in 3 years.

You did not address this incompatibility between the government’s goals and your own prognosis that there is a high probability of prices plunging in the next 3 years. Instead we are advised that the Singapore government’s target of soft land is “almost never achieved”. Do you have enough case histories of government intervention failure leading to property price plunge in Singapore to arrive at a probabilistic conclusion? Or is it just another off-hand personal opinion of yours that is whacked to us as a fact?



This is an overly broad statement that can justify withholding any form of investment.



I personally have never claimed that I am confident of property prices going up. My original post was just a simple one to explain why Sgeans are so into property, i.e. because all the alternatives not attractive. For me I express no opinion the next 3 – 5 years where property will go.

You were the one who jumped in on the need to wait out for property prices to plunge and lecturing other bros that investments should be done like the way you are doing – with business rationale and calculation of the odds and even coined a cute soundbite “play the probabilities”. All I did was invite you to share with us what exactly are the calculations.

So far you demonstrated you neither know nor care much about the subject of calculating probabilities. Instead what we have are broad attempts to brush off anything that does not gel with your conclusion with lines like “This is the real world, not university”, “Just statistic 101”, some kopitiam football betting theory, “basic demand supply” etc.

Again, where are the calculations which you claimed you did earlier?

Bro you win. Good luck with your investments.

Poor guy getting pwn badly again. @_@

My personal thought is it is more important to diversify among different assets like properties, shares, bonds and gold. Those who think they are very smart to analyze the market or speculate the odds of going up or down usually end up losing in the long run.

Originally Posted by ptader

Has it ever struck you that just because you don’t know how to calculate doesn’t mean it cannot be done? Maybe the problem is because like you say, you are kind of stuck at Statistics 101 instead of 301, that’s why you can’t do it? Going by your logic most M&A & investment activities in the world belong to “open system” (whatever that means), yet everyday thousands of corporations & banks employing millions of professionals are doing statistical and financial modeling to determine all sorts of risk weighted investment decisions. Going by your Statistics 101 cheap football analogy, they should all disband their investment teams, get one guy to sit around list 5 factors and arbitrarily vote “for” or “against” then sum up see if there are more “for” or “against”? This sort of analogy just goes against what is observable in the real world.

Now don’t get me wrong, I’m not against you personally for only having rudimentary laymen knowledge on finance & investment analytics, after all different people have different skillsets. It’s just that earlier on you made a big show about how others are only blindly buy & hold and espoused others to follow your lead in having probability calculations and investment logic. Now in retrospect it looks thick when you are unable to produce anything substantial and try to get away by simply declaring this is just “Statistic 101” or come up with strange excuses like you do not have perfect data or too much noise.



This is not true, interest rates can not only go up or down but also stay constant. This has been demonstrated possible by Japan for nearly 20 years. Remember, your thesis is to hold cash for 3-5 years and wait for property to plunge. Where is the statistical odd calculation that chances of a sharp increase in interest rate is higher than that of staying constant or rising slightly over the next 3 – 5 years?



You are contradicting yourself. If the recommended ratio is 3x, then when it was 4x, 5x, 6x, 7x, you would have been saying price will go back to 3x. Seeing that it is now 8x, I don’t think any person who followed your advice and missed out buying at 4x, 5x and 6x are too happy about your probabilistic calculations and investment theory.



Please don’t throw big words like “basic supply demand dynamics” whenever you lack the strength to carry through your case. What about hot money inflows, household formations and projected net adsorption rates? And also rentals may fall, but sometimes this is compensated by falling capitalization rates. So again where are the calculations of odds demonstrating that your scenario after weighting all these options is of higher probability than other scenarios?



The government’s goals are to stabilize property market and not to cause a price plunge, that I agree. But if they succeed this means a price appreciation that is moderated maybe to the region of GDP growth and general inflation rates or at worst stays flat or falls slightly. This does not gel in with your proposition to hold cash and wait for a property plunge in 3 years.

You did not address this incompatibility between the government’s goals and your own prognosis that there is a high probability of prices plunging in the next 3 years. Instead we are advised that the Singapore government’s target of soft land is “almost never achieved”. Do you have enough case histories of government intervention failure leading to property price plunge in Singapore to arrive at a probabilistic conclusion? Or is it just another off-hand personal opinion of yours that is whacked to us as a fact?



This is an overly broad statement that can justify withholding any form of investment.



I personally have never claimed that I am confident of property prices going up. My original post was just a simple one to explain why Sgeans are so into property, i.e. because all the alternatives not attractive. For me I express no opinion the next 3 – 5 years where property will go.

You were the one who jumped in on the need to wait out for property prices to plunge and lecturing other bros that investments should be done like the way you are doing – with business rationale and calculation of the odds and even coined a cute soundbite “play the probabilities”. All I did was invite you to share with us what exactly are the calculations.

So far you demonstrated you neither know nor care much about the subject of calculating probabilities. Instead what we have are broad attempts to brush off anything that does not gel with your conclusion with lines like “This is the real world, not university”, “Just statistic 101”, some kopitiam football betting theory, “basic demand supply” etc.

Again, where are the calculations which you claimed you did earlier?

I though ptader hv liao write super long book ... at the end also no opinon

Relax la life is short

Originally Posted by Wiseman1

You people are full of crap about the property market...talk so much big logic as if you are very smart...but is actually just a big load of garbage talk

The reason for the current bullish demand and crazy prices in the property market in singapore is very straightforward: easy financing from the banks, the government recently introduced tighter financing rules for house purchases which amounted to mosquito measures as far as I am concerned, as long as you dont make people pay 100%cash for their 2nd, 3rd property, the demand would not go down

Sillyporean house buyers are now just acting like monkeys, following the crowd to speculate in bricks and mortar as they are afraid to miss the boat, in the process they happily ignore issues of how to service their mortgages should they lose their jobs or should their businesses fail. They believe there would always be a carrot head foreigner willing to pay them high rental to help them cover the mortgage payments. Low interest rates and easy financing offered by eager bankers hungry to fight for housing loan market share just embolden these clown housing investors...I am not even sure if they can call themselves investors since they dont even know what the hell they are doing, just following the crowd.

When you see uncles and aunties in their fifties having no qualms taking up 20 year bank loans to purchase 2nd, 3rd properties, this would be the turning point to sound the alarm...

Chanced upon this thread. Here's my two cents worth.

Wiseman1 : If your advice is that we should only buy when the govt makes people pay 100% for their second, third and fourth property, I think you are effectively saying that people should never buy because this will never happen.

Unregistered bear: I agree with your points, you make sense. But like others have said, I would not have made money by buying in 09 if I used price to income as a guide.

Ptader: you have some valid points (and a number of very leaky arguments) but you are trying too hard. You would be more convincing if you had a point of view.

Personally, I think that things are a bit toppish, and personally wouldnt buy for investment, but if you need a place to stay I think there are still bargains to be had ie anchorage at $1200 psf near queens town, freehold, (nearby alexis going for $2k psf) or mutiara condos near great world city going for $1300+ psf, freehold (nearby latitude going for $2.2k psf). You probably won't see prices go down too much there.

[Wiseman1]

Originally Posted by Unregistered

Chanced upon this thread. Here's my two cents worth.

Wiseman1 : If your advice is that we should only buy when the govt makes people pay 100% for their second, third and fourth property, I think you are effectively saying that people should never buy because this will never happen.

Unregistered bear: I agree with your points, you make sense. But like others have said, I would not have made money by buying in 09 if I used price to income as a guide.

Ptader: you have some valid points (and a number of very leaky arguments) but you are trying too hard. You would be more convincing if you had a point of view.

Personally, I think that things are a bit toppish, and personally wouldnt buy for investment, but if you need a place to stay I think there are still bargains to be had ie anchorage at $1200 psf near queens town, freehold, (nearby alexis going for $2k psf) or mutiara condos near great world city going for $1300+ psf, freehold (nearby latitude going for $2.2k psf). You probably won't see prices go down too much there.

What is the problem with making house buyers pay 100% cash for their 2nd or 3rd properties?? In other countries, it is unheard of for people to be holding so multiple mortgages all at the same time. It is basically courting the financial grave.

In fact, that is the only way to tame the current irrational demand for properties which contributed to the ever spiralling prices. If you cant afford to pay cash for investment properties, then you should not be buying in the first place. Dont pretend to be rich when you are not!!

Originally Posted by Unregistered

Chanced upon this thread. Here's my two cents worth.

Wiseman1 : If your advice is that we should only buy when the govt makes people pay 100% for their second, third and fourth property, I think you are effectively saying that people should never buy because this will never happen.

Unregistered bear: I agree with your points, you make sense. But like others have said, I would not have made money by buying in 09 if I used price to income as a guide.

Ptader: you have some valid points (and a number of very leaky arguments) but you are trying too hard. You would be more convincing if you had a point of view.

Personally, I think that things are a bit toppish, and personally wouldnt buy for investment, but if you need a place to stay I think there are still bargains to be had ie anchorage at $1200 psf near queens town, freehold, (nearby alexis going for $2k psf) or mutiara condos near great world city going for $1300+ psf, freehold (nearby latitude going for $2.2k psf). You probably won't see prices go down too much there.

Another csb guy comment on others and act like expert ask people to buy this buy that. Sometimes I wonder how many people here even own a 4-rm HDB w/o mortgage.