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On Margin Call for Property

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  #41 (permalink)  
Old 11-11-2011, 10:23 AM
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Default Keep it civil

Pls keep this discussion civil.

Spitting has absolutely no effect on whether property prices will rise or fall. Neither does name calling.

Ultimately the market will prove who is right or wrong.

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  #42 (permalink)  
Old 11-11-2011, 10:51 AM
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Quote:
Originally Posted by Wiseman1 View Post
You are just one of the many stupid naive idiots here who dance to the tunes of whatever the PAP says....remember.....the PAP government played a large role in driving up the property prices to the ridiculous levels we are seeing today....with their stupid asset enhancement policies starting in the 1990s....making everyone asset rich but cash poor....they have realised long ago that this policy is not sustainable but is too far down the road of no return....what they can only do now is to say things which would prop up property prices as frequently as possible in public.....a drop in property prices which would trigger margin calls by banks on the huge loans taken up by sillyporeans is unthinkable.....but for how long???
Maybe on the day that happens they would have to use the reserves to bail out the banks facing sillyporeans who can no longer service their humongous debts....the alternative is for this place to sink.....
- home ownership encourages people to stay put in Singapore. All that one-sided reporting about how unsafe and unstable it is in US and Europe, also encourages people to stay put in Singapore
- the government is profit driven. This explains the prices of public housing, and many other policies (limited safety net for the unemployed, etc)
- while our government has certainly done a lot of good to bring Singapore to where it is compared to 50 years ago, it always cares more about Singapore as a whole rather than the individual Singaporean. Hence, encouraging young singaporeans to be programmers in the 80s, then engineers in the 90s, then go into the biotech industry around 2000. While at the same time opening floodgates to foreigners and depressing the salaries/ increasing job competition for all the programmers and engineers, and most biotech graduates can't get a career in the field (unless they get a PhD, then they are not doomed to test tube washing).

Conclusion: heed the government at your own risk. They will say and do things to influence the Singaporean to do what is best, not for the individual, but for Singapore. The country is rich, prosperous, safe, runs efficiently. But the average Singaporean, how rich, secure in his job, and happy is he, can he survive the costs of a major illness, does he have enough cash for retirement?

If you are a earning >$2600 a month, you are earning more than an average Singaporean. If you have a second property and profited from the huge increases the past few years, u are certainly not an average Singaporean.

The average guy just wants to be able to buy HDB at a decent price.

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  #43 (permalink)  
Old 11-11-2011, 11:28 AM
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Then again, the government seems to be backtracking a little. Maybe they realize they have a crisis on their hands; that's why they introduced the Progressive Payment Scheme.

But the rapid rise of property prices, starting from '07, was mostly the fault of stock investors diversifying into property. They abused the Deferred Payment Scheme to make quick bucks, and it's traders more than the government that we should blame.

Well, that and the foreign influx...

Exclusive Scoop: Property Insider Reveals the REAL Reasons Why Prices Are Still Rising! | MoneySmart.sg

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  #44 (permalink)  
Old 11-11-2011, 12:30 PM
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Quote:
Originally Posted by UncleScrooge View Post
Then again, the government seems to be backtracking a little. Maybe they realize they have a crisis on their hands; that's why they introduced the Progressive Payment Scheme.

But the rapid rise of property prices, starting from '07, was mostly the fault of stock investors diversifying into property. They abused the Deferred Payment Scheme to make quick bucks, and it's traders more than the government that we should blame.

Well, that and the foreign influx...

Exclusive Scoop: Property Insider Reveals the REAL Reasons Why Prices Are Still Rising! | MoneySmart.sg
Actually, there are no "Real Reasons", but I agreed with his view on the property markets. Buy only within your means. Most importantly, if you are having your HDB flats and intend to upgrade, I would advice you to keep you HDB flats (if fully paid would be much better). The rest of your income can be used to service the new condo. In case, you lose your job, you will still have a HDB over your head.

You can rent it out of sell it when the price is really "good". I think many people is like me
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  #45 (permalink)  
Old 11-11-2011, 07:02 PM
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Originally Posted by Unregistered View Post
Most importantly, if you are having your HDB flats and intend to upgrade, I would advice you to keep you HDB flats
Absolutely agree! Never never ever sell your HDB flat especially those in mature estates.

Their price will keep going up and up and up because there is no new supply. The new BTO flats are always at some far away places like Punggol or Sengkang maybe next time Pulau Tekong or Ubin.

There is no more new land in mature estates for HDB flats. The only way they can create more flats is to SERS the old flat, and then BINGO!!! you hit another jackpot! So in theory HDB flats are 99-year leasehold but in reality they are freehold. Their price will keep going up and up and up!
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  #46 (permalink)  
Old 11-11-2011, 08:57 PM
hedgie
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Quote:
Originally Posted by Margin call your head View Post
Used saliva to mark? Pui.

30% drop? Come on, you can do better than that with your so called global markets business for 20yrs. You are not even sure in which segments of the properties market will be impact and you dare to put across 30%. Please, don't say that without any justification and analysis. In properties markets, there are few segment which would be impact, but I would think the no. would be hovering around 5% to 8% drop. Those are in the commercial and industrial sectors. Residential sectors (private) would not be affected much except for landed properties at near city location. Suburban leasehold will be able to maintain at present psf.

My advice to already committed owner, to keep your job and continue to service your properties loan, don't rush into such unjustified speculation that was is happening in US and Europe will affect your properties price. Those are just coffee shop uncle speculation.

HDB flats resales price will continue to rise, until 2008. However, if our population reaches 7 million by then, it will continue the momentun.
When the US market crashed, average property price/income was 4 times. In Singapore today, median resale HDB price to median household income is 8 times. Like I said, not sustainable.

You want numbers? Check every fundamental measure or ratio, and you will find that property is not just overpriced, its way, way, way overpriced.

Only compensating factor is liquidity, and that has proven to be a fickle bedmate in every asset class, in every country around the world thru out history.

Believe it or, I leave it up to you. But mark my words, at least 30% within 5-yrs.

I've never been more sure about anything.
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  #47 (permalink)  
Old 11-11-2011, 09:19 PM
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Quote:
Originally Posted by hedgie View Post
When the US market crashed, average property price/income was 4 times. In Singapore today, median resale HDB price to median household income is 8 times. Like I said, not sustainable.

You want numbers? Check every fundamental measure or ratio, and you will find that property is not just overpriced, its way, way, way overpriced.

Only compensating factor is liquidity, and that has proven to be a fickle bedmate in every asset class, in every country around the world thru out history.

Believe it or, I leave it up to you. But mark my words, at least 30% within 5-yrs.

I've never been more sure about anything.
Actually, we do not even have to look into other asset classes, or other countries.

If you simply study the history of the Singapore property market, you will be aware that a 30% drop is not unprecedented.

From late 1990s to 2003, residential property prices fell 50%+ across broad sectors i.e. prime condos, suburban condos, landed etc. Many many young couples went into negative equity then.

Remember the old saying - those who do not learn from history are doomed to repeat it.

But no point for me to preach - I do not gain from convincing anyone here.

Just wanted to plant a warning - take it or not, its up to you. Its your money, and its your life.
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  #48 (permalink)  
Old 11-11-2011, 09:55 PM
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Originally Posted by hedgie View Post
Remember the old saying - those who do not learn from history are doomed to repeat it.
The best way to learn from history is to look at the HDB resale price index, which went up from 33.6 to 187.2, that's 557% in 20 years!

Remember never never ever sell your HDB flat in mature estate. It's a freehold property pretending to be a 99-year leasehold. "Don't sell your HDB flat. The price will go up", says MM.

Those who do not learn from history are doomed to repeat it, again and again, every quarter.

2011 III 187.2 3.8% II 180.3 3.1% I 174.8 1.6%
2010 IV 172.0 2.5% III 167.8 4.0% II 161.3 4.1% I 155.0 2.8%
2009 IV 150.8 3.9% III 145.2 3.6% II 140.2 1.4% I 138.3 -0.8%
2008 IV 139.4 1.4% III 137.5 4.2% II 131.9 4.5% I 126.2 3.7%
2007 IV 121.7 5.7% III 115.1 6.6% II 108.0 3.0% I 104.9 1.3%
2006 IV 103.6 1.0% III 102.6 -0.2% II 102.8 1.0% I 101.8 0.2%
2005 IV 101.6 0.4% III 101.2 -0.4% II 101.6 -4.8% I 106.7 0.1%
2004 IV 106.6 1.0% III 105.5 0.1% II 105.4 1.2% I 104.1 0.2%
2003 IV 103.9 1.2% III 102.7 2.4% II 100.3 2.1% I 98.2 1.6%
2002 IV 96.7 0.0% III 96.7 1.0% II 95.7 0.2% I 95.5 -0.8%
2001 IV 96.3 -1.4% III 97.7 -2.0% II 99.7 -1.6% I 101.3 -3.4%
2000 IV 104.9 -2.2% III 107.3 -2.2% II 109.7 -1.3% I 111.1 0.6%
1999 IV 110.4 2.2% III 108.0 8.1% II 99.9 1.4% I 98.5 -1.5%
1998 IV 100.0 -3.5% III 103.6 -4.3% II 108.3 -4.2% I 113.0 -7.1%
1997 IV 121.7 -6.0% III 129.4 -4.1% II 134.9 -1.0% I 136.3 -0.4%
1996 IV 136.9 2.7% III 133.3 6.0% II 125.7 12.8% I 111.4 9.3%
1995 IV 101.9 8.9% III 93.6 5.9% II 88.4 11.6% I 79.2 4.5%
1994 IV 75.8 0.4% III 75.5 5.6% II 71.5 2.6% I 69.7 2.8%
1993 IV 67.8 2.9% III 65.9 20.3% II 54.8 31.1% I 41.8 5.6%
1992 IV 39.6 2.3% III 38.7 2.1% II 37.9 6.2% I 35.7 2.9%
1991 IV 34.7 -0.6% III 34.9 -0.9% II 35.2 2.0% I 34.5 1.2%
1990 IV 34.1 -1.4% III 34.6 2.4% II 33.8 0.6% I 33.6
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  #49 (permalink)  
Old 11-11-2011, 10:51 PM
hedgie
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Quote:
Originally Posted by Unregistered View Post
The best way to learn from history is to look at the HDB resale price index, which went up from 33.6 to 187.2, that's 557% in 20 years!

Remember never never ever sell your HDB flat in mature estate. It's a freehold property pretending to be a 99-year leasehold. "Don't sell your HDB flat. The price will go up", says MM.

Those who do not learn from history are doomed to repeat it, again and again, every quarter.

2011 III 187.2 3.8% II 180.3 3.1% I 174.8 1.6%
2010 IV 172.0 2.5% III 167.8 4.0% II 161.3 4.1% I 155.0 2.8%
2009 IV 150.8 3.9% III 145.2 3.6% II 140.2 1.4% I 138.3 -0.8%
2008 IV 139.4 1.4% III 137.5 4.2% II 131.9 4.5% I 126.2 3.7%
2007 IV 121.7 5.7% III 115.1 6.6% II 108.0 3.0% I 104.9 1.3%
2006 IV 103.6 1.0% III 102.6 -0.2% II 102.8 1.0% I 101.8 0.2%
2005 IV 101.6 0.4% III 101.2 -0.4% II 101.6 -4.8% I 106.7 0.1%
2004 IV 106.6 1.0% III 105.5 0.1% II 105.4 1.2% I 104.1 0.2%
2003 IV 103.9 1.2% III 102.7 2.4% II 100.3 2.1% I 98.2 1.6%
2002 IV 96.7 0.0% III 96.7 1.0% II 95.7 0.2% I 95.5 -0.8%
2001 IV 96.3 -1.4% III 97.7 -2.0% II 99.7 -1.6% I 101.3 -3.4%
2000 IV 104.9 -2.2% III 107.3 -2.2% II 109.7 -1.3% I 111.1 0.6%
1999 IV 110.4 2.2% III 108.0 8.1% II 99.9 1.4% I 98.5 -1.5%
1998 IV 100.0 -3.5% III 103.6 -4.3% II 108.3 -4.2% I 113.0 -7.1%
1997 IV 121.7 -6.0% III 129.4 -4.1% II 134.9 -1.0% I 136.3 -0.4%
1996 IV 136.9 2.7% III 133.3 6.0% II 125.7 12.8% I 111.4 9.3%
1995 IV 101.9 8.9% III 93.6 5.9% II 88.4 11.6% I 79.2 4.5%
1994 IV 75.8 0.4% III 75.5 5.6% II 71.5 2.6% I 69.7 2.8%
1993 IV 67.8 2.9% III 65.9 20.3% II 54.8 31.1% I 41.8 5.6%
1992 IV 39.6 2.3% III 38.7 2.1% II 37.9 6.2% I 35.7 2.9%
1991 IV 34.7 -0.6% III 34.9 -0.9% II 35.2 2.0% I 34.5 1.2%
1990 IV 34.1 -1.4% III 34.6 2.4% II 33.8 0.6% I 33.6
Nice. I like working with numbers.

Well let's evaluate the numbers a little more closely:-

1996 IV 136.9

2002 I 95.5 (down 30%)

It took the index until Q3 2008 before it exceeded 136.9 again, a full 12 years. And that's assuming no inflation.

Assuming 3% inflation p.a., the equivalent index number to achieve breakeven today is 136.9 X (1.03^15) = 213.

2 points here:-
1) If we bought a HDB flat in 1996, we would still not have achieved breakeven in real terms after 15 years (assuming a very conservative 3% p.a. inflation - we saw 4-6 % last couple of years).

2) Even if you don't care about inflation adjusted return, and only care about absolute returns, then you would have been underwater for a full 12 years if you bought a flat in 1996.

So, things are not as cut and dry as they seem, no? Take into account 2% agent commission when you sell, loss of renovation cost etc, and the picture becomes even more muddied.

Cutting a long story short, timing is everything here i.e. its better to buy in 2002 than it is to buy in 1996. And looking at all the fundamentals, I venture we are closer to a 1996 situation now than a 2002 situation.
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  #50 (permalink)  
Old 12-11-2011, 12:23 AM
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Originally Posted by hedgie View Post
Assuming 3% inflation p.a., the equivalent index number to achieve breakeven today is 136.9 X (1.03^15) = 213.

2 points here:-
1) If we bought a HDB flat in 1996, we would still not have achieved breakeven in real terms after 15 years (assuming a very conservative 3% p.a. inflation - we saw 4-6 % last couple of years).
Talking about inflation, if you had put the money in the bank to earn interest, then your return in real terms will be negative. Hence HDB flats are still superior investments!

Which bank pays your 3% interest or more to help you beat inflation, other than the one below? You want to buy? 5.25% beats inflation and very credit worthy some more with minimum rating -A!

Pinnacle Notes Series 2
12 Oct 2006

Yield: 5.25% pa
Tenor: 5.5 yrs (maturing in 16 May 2012)
Credit linked basket: PRC, Korea, Msia, DBS, Bank of China, Korea Dev Bank and Malayan Banking.
Credit rating: Minimum -A.
Denomination: S$5000
Callable option: Yes

On the other hand, if you had bought the other Pinnacle ... the one @Duxton ... hehehe ...
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