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Quote:

Originally Posted by Unregistered (Post 19012)

Despite the disagreements here, everyone is full of admiration for Oldman. Some admire his foresight in investments, some admire his steady high income.

Has anyone realised that both "foresight" and "steady high income" are actually common attributes of the same type of person?

In contrast, we see here in this forum many people with Oldman's exact opposite attributes, who have only "hindsight" and "steady low income", constantly predicting that the property market is going to crash because of this and that crisis.

In the 1980's, Singapore experienced a very severe recession.

Singapore and the Recession of 1985

While Oldman was deliberating whether to buy his semi-d for $450k, I'm sure there were also the same type of negative people telling him that the property market was going to crash and that he could perhaps buy his semi-d for maybe $350k if he had waited another few years.

Obviously, Oldman, being a high calibre executive of a Fortune 10 oil company with guts made of steel, ignored these naysayers and went ahead with his property purchases.

Look at the piece of news below, do you see amongst the buyers an ambitious young man working in a Fortune 10 oil company?

Straits Times Dec 13, 2011

New private home sales trickling in despite cooling measures
Freehold project near Kovan 80% sold despite market-cooling moves

http://www.straitstimes.com/STI/STIM...GES_ETSING.jpg

SingXpress Land has sold 17 of the 21 units at its Charlton Residences development near Kovan MRT station. The buyers of the freehold houses are all Singaporeans, the firm's executive director said. -- PHOTO: SINGXPRESS LAND

SingXpress Land has sold around 80 percent of its units at Charlton Residences, a 21-unit freehold luxury development in the Kovan area, at an average price of S$2.8 million each (around S$500 psf).

“We are very pleased with the strong sales of Charlton Residences. It demonstrates the demand for housing with quality design and situated at a good location which the project offers,” said Chan Heng Fai, Managing Director of SingXpress Land.

Are u a property agent?

There is no doubt, a good property investment will generate wealth, especially in Singapore. However there is also such a thing as a bad property investment and bad timing. While Oldman and a lot of other Richmen have succeeded and have posted their successes here, this forum hardly ever hears from the Suaymen who bought in 1997.

Quote:

Originally Posted by Unregistered (Post 19015)

Haha well put. In hindsight, the reasons for the spectacular rise in pty prices from 1980 are ad follows:
- rise from 3rd world to 1st
- drop in interest rate from above 10% to the all time lows today
- property was fundamentally affordable back then (hdb price was 20x starting grad income. Now its 80x. Private houses hv gone up even more)
- there was arbitrage opportunities back then (if u work in us or Australia for a couple of yrs, you can get a very nice house here as jobs in first world countries pay 5 to 10x as much as Singapore companies . Now that arbitrage is not there anymore )

Sparing us the old liquidity argument, which stimuli do u still see out there today ?

Quote:

Originally Posted by Unregistered (Post 19015)

There is no doubt, a good property investment will generate wealth, especially in Singapore. However there is also such a thing as a bad property investment and bad timing. While Oldman and a lot of other Richmen have succeeded and have posted their successes here, this forum hardly ever hears from the Suaymen who bought in 1997.

1997 and Bishan 8 condo are often quoted as the case study for the worst possible year and project in property investment.

Even salary.sg had this write up dated July 11th, 2010 "At Property Peaks, Don’t Buy"
"Among the 4 leasehold properties listed in the ST article, the worst performing one is Bishan 8. It is now selling at only $802 psf, which is 27% lower than its $1,100 psf launch price!" At Property Peaks, Don’t Buy | Salary.sg - Your Salary in Singapore

Just an update, Bishan 8 is now back to $1,100 psf as of Q3 2011, so the owners have broken even after 14 years.

Instead of illustrating the weakness of property investment, this case study in fact demonstrates its strength in that even the worst performer has broken even.

What about similarly risky investments like stocks? If we compare apple with apple, the worst performing stock investment like Pan Electric where investors lost all their money, would be equivalent to Bishan 8 selling for $0 psf today.

Haha poor oldman has gone into hiding...

Quote:

Originally Posted by Unregistered (Post 19016)

- property was fundamentally affordable back then

This is one of those statements which remain true throughout history. Even when Oldman was a young man, his $450k semi-d would probably have cost the original owner less than $10k.

Fresh graduate salary should not be used to benchmark private housing affordibility because the only thing that gets printed faster than money is degrees.

Instead, a better gauge of how much income has risen would be to look at the ministerial salary benchmark, which has gone up almost a hundred times.

Most people tend to get very emotional about this and and accuse ministers of overpaying themselves, when in fact they are actually trying very hard to hold down the benchmark.

Every now and then, some data creep into public view like the famous doctor and the fee she charged her royalty client, or some posts in this forum that are accused of being BS, when in fact they are not. These are the real benchmarks.

Quote:

Originally Posted by Unregistered (Post 19036)

Taking 14 years to reach the same psf, is not breaking even at all. Need to factor in the negative equity risk and high interest rates in the past. Yes, property can be a good investment, no question about that. If u can hold long enough through the market cycles, property is almost bao jiak. The question is, how long can u hold, why hold for 14 years just to break even, when if u buy at the trough, u just need to hold for far less than 14 years and make a decent profit?

Also, why buy property NOW, when the situation in 2012 is probably closer to the 1997 situation (peak) than the 2005 or 2009 situation (trough)?

If u are so rich as to not be bothered about a drop in property value, and have long holding power, then no harm can be done to u no matter what. But not everyone is that rich.

I won't bother arguing with the eternal property bulls anymore. Long property is right in the very long run, but timing is crucial. Price does not increase in a straight line, it goes up and down while generally increasing. In between, many things can happen, fortunes can be made and broken. Basically, don't get into trouble by buying property at the wrong time, that is all I am trying to say.

I know of stupid people who sold their property in 2007 and started renting. When prices fell in early 2009, they did not buy because they said prices will fall further. I told them that prices will recover fast but they didn't believe me. Now they are all worried as prices continue to rise. Now they are buying before their cash got burnt out.

I used to earn about $140k as a front office professional in the financial services sector. Now I am only earning about $100k in a lesser role, due to restructuring. I've been in the industry for more than 13 years. Though my salary now is lower, I am not bothered as I have accumulated enough wealth due to my savviness. I have a fully paid 3 storey huge landed property and another investment property. My passive income from investments is about $2k per month. I think I am slightly above average for a 45 years old Singaporean.
Or do you think I have not achieved enough?

Quote:

Originally Posted by Unregistered (Post 19052)

Yours is just typical. Run of the mill. Most salaryman uncles by your age have at least 2 landed, 3 mistresses and 4 Italian sports cars.

50 years old.
Earns a lowly $90k a year.
Owns a fully paid $900k condo.
Savings and investments of $500k.
Thinking of retiring in a 3rd world country.
What do you think?