HDB prices to maintain at the existing level
HDB prices to decrease by 20% or lesser
HDB prices to decrease by more than 20%
HDB prices to increase by up to 20%
HDB prices to increase by more than 20%
Nope, I respectfully agree that your point is proved by the contrary result that if prices are artificially depressed, market price is still the market.
If the govt and SBS decides to raise bus fares to S$10, 10 is now market price notwithstanding the fact that it is inflated. Taxi fares will rise accordingly (lets say S$25) because no idiot is going to drive a taxi for S$5 when a bus (considered lower end) is S$10. Hence, if I come up with a taxi service, I'll price it at S$25, notwithstanding the fact that I believe that the bus fares are artificially inflated and overpriced and propping up the taxi prices artificially.
Yup, unfortunately, the problem now is way too out of hand to correct anymore; reduce will no longer work; maybe slow down rise can work; ie instead of always pricing to the latest resale -X%, where X is fixed, slowly increase the amount of X until prices resstablise again; but then again; I'm not paid millions to come up with the solution.
ITs the same as the stop at two policy gone bad; that has gone way too bad for rectification now; so whats the solution? FOreign workers. That will also be a timebomb in the making.
These policies were created to make more and more money; with the policy makers cashing out before the timebomb explodes; ala the banks style.
Last edited by vince123123; 23rd September 2009 at 12:22 PM.
Loosely, an investment is defined as something that will appreciate over time. It is generally accepted that property is something that can be considered as an investment, so when one buys his first property, whether to live in or rent out, I would call that an investment. And this is proven true historically because a HDB flat bot in the 80's or the 90's have appreciated in value.
When u talk about sub-prime, u must understand how the sub-prime crisis in the US came about. It would also be best to know the underlying causes of sub-prime phenomenon .. how do people get classified as sub-primers. Without understanding the mechanics of the sub-prime crisis, it would be difficult to appreciate the differences between that and what is happening in Singapore.
When u are looking to buy a property, some of the factors to consider are
a) do i absolutely need a property now
b) if i wait, what are my options - rent / stay with parents
c) if i am renting, what is my cash outflow in terms of renting compared to buyin now
d) if the market too high, is there going to be a correction and how long b4 it takes place and how far down
there are a lot more factors to consider ... so u really have to do your homework
historically, i can tell u that prices in most cities all over the world have gone up over the long term despite corrections, so as long as u think u have holding power, it is always a good time to buy
but i can also tell u that in runaway market situations, like in japan for instance, when the market collapses, it will take a super long time for it to go back up .. which i dont think the japanese market have done at all (but i could be wrong)
Last edited by zero o; 23rd September 2009 at 01:09 PM.
I guess it wouldn't be fair to refer to SG situation as a sub-prime, no, not my original intention, just tounge in cheek on my part, but the 'underlying' risks are the same, you have people who own something beyond their means is pretty similar. With lower interest rate and Interest Absorption Scheme, pay nothing til TOP is no different from encouraging someone to take up cheap loans to buy their properties which they have no sustainable means to own and fully paid up, whether they buy it for 'investment' or 'speculation' reasons do not change the fact a bubble would be in the making, no?When u talk about sub-prime, .. it would be difficult to appreciate the differences between that and what is happening in Singapore.
this I agree and my guiding principle in such investments I practice for the past 22 yearshistorically, i can tell u that prices in most cities all over the world have gone up over the long term despite corrections, so as long as u think u have holding power, it is always a good time to buy..
Hahaha .. going by your grasping of stuff like interest absorption scheme and low interest rates as part driver for the present situation in the property market, as well as the fact that you have been guided in part by the ability to hold as a principle in long term investments for the past 22 years - surely you dont need me to explain speculation vs investment
Like what they say .. can take profit, take profit la .. cannot take profit then consider as long term investment
As to a bubble in the making, i would say that yes, there is a possibility, but i also think that the present run up in property prices, especially private is fueled by people who have money tucked away, who are merely taking advantage of stuff like low interest rate and interest absortion scheme to leverage their purchases. There are also speculators who have made money in the past who are ploughing back their profits into new purchases. I also have to acknowledge that there are also risk takers who are leveraging up their their eyeballs to try and emulate those who have made money, but i would think that the last group is small in comparison to the other 2 groups.
Short version - going by the number of new cars on the roads, the record breaking expenditure @ COMEX / PC shows as well as NATAS travel fair, Singaporeans have deeper pockets than we all think. Look at these threads on property prices, other than the few active participants, the bulk of CS members have kept quiet, so i would assume that many are sitting pretty and any escalation in property prices will only benefit them
Many Singaporeans have made handsome profits from the recent finanical turmoil. Stock market has risen over 1,000 over points from Mar 09 low. Gold has also crossed the 1,000 mark. Oil also risen from US$36 to US$70. Currencies too such as Australia $, British pound, etc. With such hot money on hand, they will in turn translate into consumption of luxury and non-luxury goods. Like what you have quoted the recent COMEX / NATAS, cars sales, etc.
Practically the impact of recession is just too insignificant.
However, looking at a bigger picture, to illustrate what NineElven had mentioned in his view which can be found here: http://www.clubsnap.com/forums/showp...&postcount=293, "My concern is as what many are. How can our young afford their 1st home here? So, as a parent, I'm working harder to help them by buying more to invest. Vicious cycle isn't it?"
Just food for thought.
I guess we have all been brought up in Singapore to be more self centered rather than thinking about the big picture. perhaps even our children count as "others" or too far away to really care. But I suspect most are not even aware of the impact and see the current gains as being good.
btw, anyone got good bank to recommend if i need a loan? i am getting a flat very soon. since this is my 1st time, i know nut about it....
Yup ... almost the whole population of Singapore is laughing or at least smiling to the bank by way of the appreciation of their property. Kudos to the home ownership scheme i say.
As to the next generation ... yes, it is a concern.
If we think that our kid is going to have a problem with future property ownership, there are 3 things we can do
1. dont have kid
2. have kid but let him fend for himself, come what may
3. do whatever we can today, make sacrifices etc so that your kid can have a leg up as far as property ownership is concerned
Consider this, the phenomenon of escalating property prices is a necessary evil for any growing economy, especially one that has enjoyed the kind of growth that Singapore has in the past few decades. Singapore is no different from NY, London, HK, Seoul etc. Unless you are prepared to uproot and move away from Singapore, the fact remains .. u are in the system - the system is not going to change anytime soon - so get with the program or be prepared to lose out. Harsh reality but thats life !
Last edited by zero o; 23rd September 2009 at 08:31 PM.