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Property Prices Have Crashed (see graph)

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  #71 (permalink)  
Old 17-08-2011, 02:06 PM
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The best instrument to effect this strategy, provided you really like the stock and are comfortable buying it over 1 year, is the accumulater (also dubbed "i kill u later" by disillusioned investors). It's a good instrument if applied selectively.

But personally, as long as the European debt crisis stays unresolved, I'd like to stay cash heavy. The effect of the Lehman crisis was a massive transfer of leverage from private sector to public sector (from govt bailing out their financial institutions).

The public debt saga we are seeing now has not fully played out yet. We've only seen nibbling at the edges of the problem ie central banks agreeing to support Italy and spain by buying their bonds. The fundamental problem of high debt to gdp, persistent deficits, has not been solved. And there is no simple answer, as Italy and Spain's economies are stagnant and there is little political will to raise taxes un a democracy.

So we are still operating in pretty choppy waters, and I'd be careful.
given the repeated saga we have been witnessing, could it be a chance that the things we are seeing and hearing are as according to what the policticans want us to see and hear? ie, things are actually not so bad, but are magnified by media upon influenced or instructed by the interest-vested ones.

After all, the officials at the eye of the euro crsis would want things to play in their way and why should the crisis spread? It's in no one's interests, particularly, theirs.

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  #72 (permalink)  
Old 17-08-2011, 05:40 PM
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Hi, I found your graph very useful. do you think you can update it with the current stock market too? Thanks
Please see:
Property Crash Coming? (See Graph) | Salary.sg - Your Salary in Singapore

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  #73 (permalink)  
Old 17-08-2011, 08:13 PM
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Originally Posted by xtrasaver View Post
given the repeated saga we have been witnessing, could it be a chance that the things we are seeing and hearing are as according to what the policticans want us to see and hear? ie, things are actually not so bad, but are magnified by media upon influenced or instructed by the interest-vested ones.

After all, the officials at the eye of the euro crsis would want things to play in their way and why should the crisis spread? It's in no one's interests, particularly, theirs.
You are right in that its in no ones interest to have things blow up. But the question is : who's going to stump up the bail out money to ensure things don't blow up? Can u imagine German and French politicians telling voters : " sorry I have to raise your taxes but we have to bail out the Greeks, Italians and the Spanish. " very tricky sell.

And on the contrary, its in the politicians interest to play down the issues as much as possible instead of playing it up. You play it down and Italian and Spanish bond prices stay stable and they have no problem selling more bonds, and the game goes on. You raise the alarm, and Italy and Spain are shut out of the market and suddenly Germany gets a call to bail them out to save the eu, and the politician that says yes gets voted out by German voters .

So that's the scary part - all this negative stuff is coming out despite best efforts of everyone involved to play it down. Like I said, we are not out of the woods yet in regards to the public debt saga.

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  #74 (permalink)  
Old 18-08-2011, 07:45 AM
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Interesting article ...

S?pore property crash: When and how serious? | SingaporeScene - Yahoo!
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  #75 (permalink)  
Old 18-08-2011, 10:44 AM
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I see many dark clouds coming

- for 2010-2012, 18k+25k+25k=68k of BTO flats are released, and now couples up to 10k/mth salary can apply for one. This means these 80th percentile household who book at BTO flats will be locked out of private market for 5 years (at least til 2018) when they collect the keys.
- same goes for ECs - couple with earning power up to 12k/mth will be locked too from private property for 5 years.
- the differential pricing between HDB and suburban condos are at it widest. Government is doing all its best to stabilize HDB prices by releasing 50k supply BTO flats. The HDB household who wish to upgrade to condos will see the HDB +ve equity stabilizing, so sub-urban condo prices will not be raising anymore as most buyers are upgraders
- Government are controlling firms on hiring foreigners in the mid-level positions. MoM said that the foreigners share will remain at 1/3 of the workforce. This means new foreigners intake will increase at the rate of Singapore national population.
- Current government policy of 40% downpayment of 2nd property has gradually locked up Singaporeans from buying more properties. A 1000 sq feet condo in non-central region already cost 1.2m, and coughing out half a million cash to buy one is not easy for a average Singapore household.
- Current interest rate at the lowest, unemployment at the lowest, and annual wage increase at its highest are supportive of current property prices. All these could change if the US and Europe structural soverign debt issues lead to world contagion. Singapore will not be spared.

If you are buying private property for investment rather than self-occupancy, be advised that you have holding power of at least the next 5 years, or be prepared for some potential shocks.
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  #76 (permalink)  
Old 18-08-2011, 10:31 PM
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Just sit tight and put on your seat belt, the real estate fall has just begun and there will be blood in the street - more than 100% rise in past 5 years does not reflect the fundamentals anymore - dont buy now, buy when it drop so much that the government has to intervene to prop the market.

(E.g. in 2005, government lowered the downpayment to 10% to bolster the market which started the property bull market in 2006, MAS: MAS Issues Revised Housing Loan Rules)
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  #77 (permalink)  
Old 19-08-2011, 12:31 AM
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Just sit tight and put on your seat belt, the real estate fall has just begun and there will be blood in the street - more than 100% rise in past 5 years does not reflect the fundamentals anymore - dont buy now, buy when it drop so much that the government has to intervene to prop the market.
You are preaching to the converted in this forum.
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Old 19-08-2011, 07:40 AM
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You are preaching to the converted in this forum.
haha, quite a turnaround... whatever happened to all the "long property!" jokers strenuously arguing their case earlier?

swamped by logic I suppose
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  #79 (permalink)  
Old 19-08-2011, 10:22 AM
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I'm still long property. Read the Straits Times today. Chinamen are still buying. Their money has no where to go. Inflation in China is rampant, so the rich will park their money here, not in cash but in property.

We'll see who's correct.
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Old 21-08-2011, 11:36 AM
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I'm still long property. Read the Straits Times today. Chinamen are still buying. Their money has no where to go. Inflation in China is rampant, so the rich will park their money here, not in cash but in property.

We'll see who's correct.
There's no point talking about seeing who's correct when folks are taking a buy and hold mindset. These folks think that they are correct if they buy today and sell in 10 years time at 10 percent profit - conveniently choosing to forget that they have paid considerable fictional and transaction costs ie (i) interest of 1-4 percent for 10 years, (ii) inflation of 3-5 percent pa for 10 years (iii) agent commission of 3% (1% to buy and 2% to sell) (iv) renovation cost of $30k to 100k (v) stamp duty.

The simple question is : do you think there is 20 percent upside within 5 years. If yes, please go ahead. If no, then no point going in now (cos with the new stamp duties, you cannot flip).
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