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Expect the Worst Recession in Singapore History and Property Will Crash

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  #11 (permalink)  
Old 04-02-2009, 01:35 PM
Observer--
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Default 3977

Dear flaw, stocks and shares are more prone to speculation than property...that's one of the reasons for the lag difference. People who hold stocks and shares with a long-term view are also likely to be people with holding power. These are the ones who would not sell. Unfortunately, as I've said, there are a lot more speculators in the stocks and shares market. Thus, price fall is more drastic in this instance. Ultimately, comparing property prices to stock and shares is like comparing apples to oranges...the comparison is not quite equitable.

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  #12 (permalink)  
Old 04-02-2009, 01:50 PM
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Default 3978

Incidentally, holding power SUBSUMES things like income, bankruptcies, failed invetments, etc. For instance, if you lose your job, you lose your income, you no longer have as much, if any, holding power. You might then have to sell your property. So, the fundamental and crucial factor, IS holding power...in economics-speak, this is the most parsimonious explanation, all things being equal. Also, I did NOT dispute the fact that property prices will fall...I only cautioned the use of extreme words like "crash"...to me "crash" means a total decimination of value... property prices have to reach near $0psf...while stocks and shares can reach close to $0...like $0.10...property prices are unlikely to be likewise...if anything, the government wouldn't let it... But I'd agree that property prices can dip to relatively low psf...perhaps for prime condos that had been >$1000psf...the price would go down

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  #13 (permalink)  
Old 04-02-2009, 03:44 PM
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Default 3980

Dear Observer, I think you are wrong about property being less prone to speculation. There are many speculators and specuvestors or whatever you call them. And many of them buy on MARGIN (think DPS). Unlike contra traders in shares, these speculators take a longer time to unwind their failed investments. Anyway, let's agree to disagree. Time will tell whether the property market will crash like it crashed in the late nineties.

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  #14 (permalink)  
Old 04-02-2009, 04:32 PM
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Default 3981

Dear Flaw, property speculation involves more initial outlay than share/stock speculation, especially since the government has taken to removing DPS. I do agree that those who had speculated using DPS are more vulnerable to the downturn, especially if they have no holding power. Again, I'd agree that if they are caught in this downturn, and they want to get rid of their property, the turn-around time is going to be longer than stocks/shares, which are typically more immediate. So again, it all comes down to holding power - some speculators can, some can't; and because of the latter, property prices will go down. I think you and I agree on this. The only question is "by how much". Our disagreement I guess is on the usage of the term "crash" - I take this to mean that properties will become virtually valueless, close to $0psf while you obviously take it to mean something else. But like you said, it doesn't matter - everyone sees things differently, even when it comes to term usage and definition. Cheers!
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  #15 (permalink)  
Old 04-02-2009, 05:13 PM
adiemuso--
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Default 3982

4 most expensive words..."this time is different"
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  #16 (permalink)  
Old 04-02-2009, 11:19 PM
flaw--
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Dear Observer, I go by the conventional definition of "crash". For example, our stock market has crashed 50-60%. But for property, a 40% drop would suffice for me.
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  #17 (permalink)  
Old 05-02-2009, 09:12 AM
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Dear Flaw, I'm not sure if that's a conventional definition...which is the problem of the word "crash"...it is relatively subjective - different people define it differently. Personally, I prefer to use the term "bottoming out"...it's less extreme and possibly more objective....in any case, your point is taken. Cheers!
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  #18 (permalink)  
Old 09-02-2009, 11:09 AM
hotdog--
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Default 4041

evil thought: those who were too bullish and have bought property during the red-hot days, but have just lost their jobs in recent weeks, they'd be doing fire sales, that's when prices can drop, yummy!


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  #19 (permalink)  
Old 09-02-2009, 12:23 PM
retrenched--
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No house, no job... and you are talking *... Have a heart man...
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  #20 (permalink)  
Old 09-02-2009, 04:54 PM
sm--
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Default 4043

anybody can suggest, should the property come down, which area should consider good investment?
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