View Full Version : Before you go out to buy that property NOW
The Euro crisis is a serious one and the fall of any economy there will have a domino effect with the weaker economies falling one after another. The best and worst case scenarios had already been discussed but the market is still not really to face the reality that it is coming its way. With Europe in recession, China's exports will be badly hurt on top of their own domestic slowdown. The exposure of US, China and Asia with Europe cannot be under-estimated.
With cheap money now available in the global market, the Dec 7 cooling measure was to prevent foreigners from parking their excess funds onto our shore and safe guard our property market from over heating. The challenge for the government now is how to prevent the locals from over investment in property.
Just like foreigners with excess cash, the locals with some cash and cheap loans are taking advantage of the market now to buy into properties probably also because there isn't many investment options open to them.
Fortunately, with only 60% LTV allowed for second loan, many locals will not be ask to top up by banks when the crisis comes our way. However, the crisis will bring with us many related problems.
Even though our loans may be safe, finding tenant may be very difficult with rent so low that cannot even cover the interest payments. The crisis could bring with it a credit crunch and result in interest hike and many will not be able to service even the cheap loans.
It is a very real problem just waiting to happen. For those who have little buffer should stay away from property for now. Even if you think you may "miss out" ( possibly 15% gain as someone suggested in this forum) in the near term, you are still better off when the crisis hits. Of course to those who have the buffer, any crisis will not affect you much; you only feel less rich.
Before you go and buy that property NOW, ask yourself which category you belong to; with or without buffer?
Please do not take offense those who think otherwise. I am merely stating what seem to me quite obvious.
The Euro crisis is a serious one and the fall of any economy there will have a domino effect with the weaker economies falling one after another. The best and worst case scenarios had already been discussed but the market is still not really to face the reality that it is coming its way. With Europe in recession, China's exports will be badly hurt on top of their own domestic slowdown. The exposure of US, China and Asia with Europe cannot be under-estimated.
With cheap money now available in the global market, the Dec 7 cooling measure was to prevent foreigners from parking their excess funds onto our shore and safe guard our property market from over heating. The challenge for the government now is how to prevent the locals from over investment in property.
Just like foreigners with excess cash, the locals with some cash and cheap loans are taking advantage of the market now to buy into properties probably also because there isn't many investment options open to them.
Fortunately, with only 60% LTV allowed for second loan, many locals will not be ask to top up by banks when the crisis comes our way. However, the crisis will bring with us problems.
Even though our loans may be safe, finding tenant may be very difficult with rent so low that cannot even cover the interest payments. The crisis could bring with it a credit crunch and result in interest hike and many will not be able to service even the cheap loans.
It is a very real problem just waiting to happen. For those who have little buffer should stay away from property for now. Even if you think you may "miss out" ( possibly 15% gain as someone suggested in this forum) in the near term, you are still better off when the crisis hits. Of course to those who have the buffer, any crisis will not affect you much; you only feel less rich.
Before you go and buy that property NOW, ask yourself which category you belong to; with or without buffer?
Please do not take offense those who think otherwise. I am merely stating what seem to me quite obvious.
I actually think the Asia countries will be able to weather the storm quite well because of the very prudent government policies we have in place since the last financial crisis. SE Asia economy seems to be doing pretty well, so it China, and to a certain extend Japan
Actually the trouble in Europe will actually push more Europeans to some Singapore to look for job, so rental might not be that bad.
I actually think the Asia countries will be able to weather the storm quite well because of the very prudent government policies we have in place since the last financial crisis. SE Asia economy seems to be doing pretty well, so it China, and to a certain extend Japan
Actually the trouble in Europe will actually push more Europeans to some Singapore to look for job, so rental might not be that bad.
China cannot do well with less exports to Europe and US. Singapore is more vulnerable than any SE Asia countries when crisis hits. More job loss is likely in Singapore than any SE Asia countries when crisis hits. When Europe is in recession, only the very rich can part their funds here or in the US (their preferred location)); the rest could not even travel. There will be no job for these foreigners in Singapore when crisis hits. In fact, more expats will be asked to go home instead.
Just curious to know if you have the mean now will you go out and buy that property now?
buy within your mean..
and
greed have no boundary.. :D:D:D
just buy la and learn the hard lesson ! :D:D
I actually think the Asia countries will be able to weather the storm quite well because of the very prudent government policies we have in place since the last financial crisis. SE Asia economy seems to be doing pretty well, so it China, and to a certain extend Japan
Actually the trouble in Europe will actually push more Europeans to some Singapore to look for job, so rental might not be that bad.
be it a crisis in europe or globally, SE asia will not be spared too..
everywhere will do their best, cost cutting..
Allthepies
30-05-12, 12:59
And with unstable political situation in Singapore, Singapore's future prospect is not as bright as it can be...
And with unstable political situation in Singapore, Singapore's future prospect is not as bright as it can be...
huh?! :confused:
a win for WP in hougang constituency does not equate to political instability
True. Market is really slowing down in recent months. But inflation is catching up. Even developers were not so aggressive in the Jurong East land bid. Something is looming. Just be careful with your money.
Still remember QE1, QE2.......
http://en.wikipedia.org/wiki/Quantitative_easing
The property will chong again. Remember what LKY say, it due to excess money. Try removing CM1, CM2, CM3, CM4, CM5 see what happen to the property.
For those who don't know what is CM1 to CM5 please do a search.
Haut Ah.........
phantom_opera
30-05-12, 14:07
True. Market is really slowing down in recent months. But inflation is catching up. Even developers were not so aggressive in the Jurong East land bid. Something is looming. Just be careful with your money.
Wah, 700+psf for top 3 bids with 12 bids submitted u call that NOT AGGRESSIVE :simmering: Jervois Road tender only 8XXpsf leh
No need QE, as long as Us Fed come out and say zero interest rate till 2020, ho say liao ... all properties will be sold out overnight :cheers5:
TheOnlyGayInTheVillage
30-05-12, 14:43
True. Market is really slowing down in recent months. But inflation is catching up. Even developers were not so aggressive in the Jurong East land bid. Something is looming. Just be careful with your money.
Not aggressive? Overshot analyst prediction of 700psf and expected launch price 1300-1500psf leh.
No need QE, as long as Us Fed come out and say zero interest rate till 2020, ho say liao ... all properties will be sold out overnight :cheers5:
Given the unlikely case, Singapore will have no choice but to move away from using exchange rate to interest rate to curb inflation. In fact, there has been numerous calls from think tanks asking MAS to do that.
Given the unlikely case, Singapore will have no choice but to move away from using exchange rate to interest rate to curb inflation. In fact, there has been numerous calls from think tanks asking MAS to do that.
if MAS switch to raising interest rates den our local banks will suffer frm over leverage in property loan when housing prices plunge...will MAS allow tat to happen ?
If Singapore raise interest rate, then they will have to raise CPF rate as well isnt it? Can government afford it?
phantom_opera
30-05-12, 15:39
If Singapore raise interest rate, then they will have to raise CPF rate as well isnt it? Can government afford it?
Not really, last time FD 3% CPF OA still 2.5% ... but hoh, SGS bond rate must go up if they raise interest rate, that also means MND/URA/HDB cannot issue low interest rate bond anymore
Also value of corp bond (5-10y) will plunge ... those holding Genting perpetual bond @ 5% will cry until no tears ...
LTA used to pay almost 5% for 10y bond:
The Land Transport Authority (LTA) is pleased to announce the launch of its debut S$300 million, 10-year Bond issue. The LTA Bonds will be listed on the Stock Exchange of Singapore Limited (SES). This maiden issue will be LTA’s only issue for 1999. Denominated in units of S$10,000, the Bonds yield a coupon rate of 4.92% p.a., payable semi-annually in arrears.
phantom_opera
30-05-12, 15:45
Date issued : 17 Feb 2012
The Housing and Development Board ("HDB") has issued S$385 million, 5-year Fixed Rate Notes (the “Notes”) under its S$12 billion Multicurrency Medium Term Note Programme ("MTN Programme").
2The Notes have a coupon of 1.105% per annum payable semi-annually in arrears. The Notes were issued on 16 February 2012 and will mature on 16 February 2017.
=> now it is almost free money for HDB/LTA etc ... low interest rate is good for them
Given the unlikely case, Singapore will have no choice but to move away from using exchange rate to interest rate to curb inflation. In fact, there has been numerous calls from think tanks asking MAS to do that.
"numerous calls" ?? do you have any source to support your claim ?
separately, if investment is that easy, every one is rich already. You are very risk adverse, that's obvious. What investment returns on property have you achieved so far ? In 2003 SARS time, if you had worried about a collapse of SG economy, you would have missed out a great opportunity.
things are not so simple today. what you are stating are the superficial observations that any one can make. Hard numbers are actual land/sale prices, M2/3 figures, gov finances, population numbers, inflation numbers, long term gov bond rates, etc. all these point to a very strange environment.
if MAS switch to raising interest rates den our local banks will suffer frm over leverage in property loan when housing prices plunge...will MAS allow tat to happen ?
That is part of business risks that banks need to consider when lending to its customers. I think MAS is more concern about people taking multiple loans than bank's exposure. You may recall during the 97' crisis, banks asked their clients to top up their undervalued properties and there were a lot of force sales. With 60% LTV for 2nd loan onward, not many people will get hurt this time. Banks are much more prudent than before with the various crisis they experienced.
"numerous calls" ?? do you have any source to support your claim ?
separately, if investment is that easy, every one is rich already. You are very risk adverse, that's obvious. What investment returns on property have you achieved so far ? In 2003 SARS time, if you had worried about a collapse of SG economy, you would have missed out a great opportunity.
things are not so simple today. what you are stating are the superficial observations that any one can make. Hard numbers are actual land/sale prices, M2/3 figures, gov finances, population numbers, inflation numbers, long term gov bond rates, etc. all these point to a very strange environment.
Strange questions from you which are not relevant to my response on the possibility of MAS using exchange rate to curb inflation.
For sources, you might want to read recent ST on the discussions by think tanks on curbing inflation including MAS spoke person on the limitations of using exchange rate to curb inflation.
You may also want to read my main posting this thread on my concerns which are again not consistent with your questions or assumptions.
"numerous calls" ?? do you have any source to support your claim ?
separately, if investment is that easy, every one is rich already. You are very risk adverse, that's obvious. What investment returns on property have you achieved so far ? In 2003 SARS time, if you had worried about a collapse of SG economy, you would have missed out a great opportunity.
things are not so simple today. what you are stating are the superficial observations that any one can make. Hard numbers are actual land/sale prices, M2/3 figures, gov finances, population numbers, inflation numbers, long term gov bond rates, etc. all these point to a very strange environment.
yah agree.. sometime in life we need to take a bit of risk but not too much lah.
like someone said in the forum, it is good to analyse but don't over analyse. like some of my colleagues and close friends, most of them are at least master in banking related, they all have in common, analyse too much..
Strange questions from you which are not relevant to my response on the possibility of MAS using exchange rate to curb inflation.
For sources, you might want to read recent ST on the discussions by think tanks on curbing inflation including MAS spoke person on the limitations of using exchange rate to curb inflation.
You may also want to read my main posting this thread on my concerns which are again not consistent with your questions or assumptions.
there are many ways to curb inflation. maybe just get rid of COE and the inflation will drop...:p
just invest with our means and shall not dwell into this topic. If not, B will be watching and laughing as this thread intention sound like..."property will drop >50% by 2015???" :D
there are many ways to curb inflation. maybe just get rid of COE and the inflation will drop...:p
just invest with our means and shall not dwell into this topic. If not, B will be watching and laughing as this thread intention sound like..."property will drop >50% by 2015???" :D
Exactly! That is why we must avoid entering into any discussions that create reactions that are emotional in nature. We should never ask or question any forumer here anything that are provoking.
yah agree.. sometime in life we need to take a bit of risk but not too much lah.
like someone said in the forum, it is good to analyse but don't over analyse. like some of my colleagues and close friends, most of them are at least master in banking related, they all have in common, analyse too much..
Exactly! What is important is to have a good feel of the market and the environments and the gut to make the decision. The decision of not buying now is also a big decision just as to somebody who made the decision to buy now.
For those people who regretted not buying the last time, there were equally number of people who never regretted not buying the last time. We normally hear more people telling others they missed the first price in 4D because they did not buy but seldom hear people telling others they had won.
Exactly! That is why we must avoid entering into any discussions that create reactions that are emotional in nature. We should never ask or question any forumer here anything that are provoking.
so thought provoking questions also cannot?
https://mail.google.com/mail/u/0/?ui=2&ik=3d88ba9d48&view=att&th=1379d2ca006fa8bd&attid=0.1&disp=emb&realattid=ii_1379d2c71a6ee55b&zw&atsh=1
This is how they reduce inflation. not increase interest rate.:tsk-tsk:
The US financial crisis back in late 2008/2009 did not bring much negative impact on the local property prices. As a matter of fact, property prices were slowly creeping up. And more foreigners came to Asia to work as they cannot find jobs back home. Foreign investment funds oso flown into asia as there is nothing worth investing back in their countries.
felicia_sg
30-05-12, 18:16
Sure buy if anybody can sell me say Newton Suites at $1600 PSF! It is all about price isn't it? obviously I won't pay >$1400 PSF for Bishan Say Sky Habitat but that doesn't means it is not worth buying at that price. :p
China cannot do well with less exports to Europe and US. Singapore is more vulnerable than any SE Asia countries when crisis hits. More job loss is likely in Singapore than any SE Asia countries when crisis hits. When Europe is in recession, only the very rich can part their funds here or in the US (their preferred location)); the rest could not even travel. There will be no job for these foreigners in Singapore when crisis hits. In fact, more expats will be asked to go home instead.
Just curious to know if you have the mean now will you go out and buy that property now?
Wah, 700+psf for top 3 bids with 12 bids submitted u call that NOT AGGRESSIVE :simmering: Jervois Road tender only 8XXpsf leh
No need QE, as long as Us Fed come out and say zero interest rate till 2020, ho say liao ... all properties will be sold out overnight :cheers5:
It will be the 2nd CBD. If FEO can sell $1700 psf at west coast (damn ulu place with no good view - I know because I stay near there), I expect the selling price to be on the high side at this plot. The developer probably got the land "cheap".
For the jurong bid, there were 3 players willing to pay 700+ psf for the land, unlike Bishan, only CAPL one guy overbid, so I think jurong bid is indeed very aggressive. The players clearly buy into the jurong story. Rightfully so I would say.
And to leeds, MAS stand on interest rate is very relevant. MAS said it several times already, that current exchange rate way of control cannot bring down inflation. But MAS has NEVER even hinted that they will abandon the policy. I may dare to say my conclusion is , MAS is going to tolerate inflation and low interest rate for a long period, as long as US is doing the same. If some one believe low interest rate is going to be the norm for another 3yrs, doing nothing for 3yrs is not the best way of managing his position.
Our exchange rate policy is so 20th century and risks getting listed as a currency manipulator by the US. Now that SG is fast becoming a developed economy, and with extremely high inflation for a long time, it's time to abandon what is outdated and move on with more effective policies. Most developed economies (especially the western nations) use interest rates as a control against inflation. Even the swiss were using interest rates until they recently intervened in their currency (currency manipulating, yes).
De-pegging from the USD could be very near. Effective interest rates at current should be around 5%.
For the jurong bid, there were 3 players willing to pay 700+ psf for the land, unlike Bishan, only CAPL one guy overbid, so I think jurong bid is indeed very aggressive. The players clearly buy into the jurong story. Rightfully so I would say.
And to leeds, MAS stand on interest rate is very relevant. MAS said it several times already, that current exchange rate way of control cannot bring down inflation. But MAS has NEVER even hinted that they will abandon the policy. I may dare to say my conclusion is , MAS is going to tolerate inflation and low interest rate for a long period, as long as US is doing the same. If some one believe low interest rate is going to be the norm for another 3yrs, doing nothing for 3yrs is not the best way of managing his position.
My view on "aggressiveness" is a psf that creates shock like one Capland paid for the Bishan plot. Hence to me this is a very competitive bidding, not aggressive bidding.
Exactly! What is important is to have a good feel of the market and the environments and the gut to make the decision. The decision of not buying now is also a big decision just as to somebody who made the decision to buy now.
For those people who regretted not buying the last time, there were equally number of people who never regretted not buying the last time. We normally hear more people telling others they missed the first price in 4D because they did not buy but seldom hear people telling others they had won.
You sure? I have highlighted in RED what you said? Market up 50% since 2009 and there are equal number of people who NEVER regretted NOT buying?
What could be the reason?
You sure? I have highlighted in RED what you said? Market up 50% since 2009 and there are equal number of people who NEVER regretted NOT buying?
What could be the reason?
It was a general statement to say that there were just as many people who never regretted not buying when the crisis hit. I did not mention any time frame while you did.
This europe crisis will be bad, but it will mostly like to be be resolved quickly.
So there might not be enough time for Singapore property prices to go through a deep correction.
If you have $$, this is actually a good time to cherry pick in the resale market because during good and stable times, it is always hard to find those choice units for sale.
This europe crisis will be bad, but it will mostly like to be be resolved quickly.
So there might not be enough time for Singapore property prices to go through a deep correction.
If you have $$, this is actually a good time to cherry pick in the resale market because during good and stable times, it is always hard to find those choice units for sale.
With debts of trillions of dollars involving so many countries and the effects on China and the US, it is difficult to imagine a speedy recovery.
With debts of trillions of dollars involving so many countries and the effects on China and the US, it is difficult to imagine a speedy recovery.
there will always be crisis which are unpredictable and if it is predictable, then it is not so scary like the current europe crisis.
within the 10yr span, so many crisis and if we are worry, we will not be able to do anything. therefore, lets not keep stressing on how scary it is and how big the impact going to be...point taken and lets move on. pardon me if you feel offended (which is not my intention) as if not, this thread is going to be like the famous B thread....being very very negative!
Stay positive and be prudent :p
This europe crisis will be bad, but it will mostly like to be be resolved quickly.
So there might not be enough time for Singapore property prices to go through a deep correction.
If you have $$, this is actually a good time to cherry pick in the resale market because during good and stable times, it is always hard to find those choice units for sale.
Because of QE, this time is different from the Lehmans crisis. Now, for every crisis, there's QE funds (heck, the anticipation is enough) flowing to Asia in search of safer markets thus propping up the liquidity and hard assets like property. This is called risk-aversion. The US is currently also benefiting from it except they have problems of their own.
So for the property market to continue chionging, the crisis has to go on. Once the coast is clear, QE funds will flow back, interest rates will rise, game over for SG property liao. But that has to take at least a few more years :sleep:
With debts of trillions of dollars involving so many countries and the effects on China and the US, it is difficult to imagine a speedy recovery.
there has always been trillions of debts and the level will only continue to rise So long as the world economies are all in the same boat, they will always help each other to stay afloat unless there is a war or oil crisis.
dont need to worry too much lah....just get use to it.
rattydrama
31-05-12, 01:02
For the jurong bid, there were 3 players willing to pay 700+ psf for the land, unlike Bishan, only CAPL one guy overbid, so I think jurong bid is indeed very aggressive. The players clearly buy into the jurong story. Rightfully so I would say.
And to leeds, MAS stand on interest rate is very relevant. MAS said it several times already, that current exchange rate way of control cannot bring down inflation. But MAS has NEVER even hinted that they will abandon the policy. I may dare to say my conclusion is , MAS is going to tolerate inflation and low interest rate for a long period, as long as US is doing the same. If some one believe low interest rate is going to be the norm for another 3yrs, doing nothing for 3yrs is not the best way of managing his position.
thanks for the comments...so what will be your investment view as of now, staying vested with spare cash or cash out everything now/yesterday n watch the market aggressively in the next 3 years?
will a quick deep and go slow for many years to come ever come?
thanks for the comments...so what will be your investment view as of now, staying vested with spare cash or cash out everything now/yesterday n watch the market aggressively in the next 3 years?
will a quick deep and go slow for many years to come ever come?
Normal stamp duty is 3%, ABSD is 3%, SSD 16% (but depreciating) is four years, plus agent commission 1% and bank penalty for early termination of loan. Can you get out in time with decent profit within 3 years if the interest rates surge upwards? More likely to incur losses if the holding power is only 3-4 years.
I guess borrowing names to buy is highly risky in that case
felicia_sg
31-05-12, 09:37
Those calls are from devious people who red-eye Singapore & want to crash it by asking them to forsake proven method to go try something new & knowing that they will create a mess!
Me think want to lower inflation very easy, first PRs & people with income > $8k pm or net worth >$1m cannot buy HDBs, cannot rent out HDBs, HDB prices crash, rental crash, CPI component of rental will crash, so inflation sure drop!
Also, Have CMs for commercial Properties, forigners & foreign owned companies all need to pay ABSD if own > 2 buildings?
Given the unlikely case, Singapore will have no choice but to move away from using exchange rate to interest rate to curb inflation. In fact, there has been numerous calls from think tanks asking MAS to do that.
Having heard all the diverse views about the markets, it seem much clearer now why in every property cycle, we see some people able to profit from it while some people have to cut their losses. It is all about timing. Getting into the market is always easier than getting out of the market. The people who do not have much buffer will always be at the edge.
To those who remain positive and planning to buy despite the adversity of the market; the risk/return probably justify their actions. They probably see opportunities while others don't. If things turn out the way they hope for, they will be the one who gain.
To those who prefer to wait it out for better time to enter the market, you may well have the last laugh. Then again, you may have to experience the agony of feeling remorseful for not entering the market now or earlier.
Then again, investment in property is for the long haul. With property cycles getting shorter, one should have the opportunity to invest at some point in time when you feel comfortable with your decision.
It may be better for health sake to be able to sleep well with your investment decisions than having to worry about what tomorrow may become.
http://upload.wikimedia.org/wikipedia/commons/c/cc/Crisi-tunity.png (http://upload.wikimedia.org/wikipedia/commons/c/cc/Crisi-tunity.png)
Having heard all the diverse views about the markets, it seem much clearer now why in every property cycle, we see some people able to profit from it while some people have to cut their losses. It is all about timing. Getting into the market is always easier than getting out of the market. The people who do not have much buffer will always be at the edge.
To those who remain positive and planning to buy despite the adversity of the market; the risk/return probably justify their actions. They probably see opportunities while others don't. If things turn out the way they hope for, they will be the one who gain.
To those who prefer to wait it out for better time to enter the market, you may well have the last laugh. Then again, you may have to experience the agony of feeling remorseful for not entering the market now or earlier.
Then again, investment in property is for the long haul. With property cycles getting shorter, one should have the opportunity to invest at some point in time when you feel comfortable with your decision.
It may be better for health sake to be able to sleep well with your investment decisions than having to worry about what tomorrow may become.
http://upload.wikimedia.org/wikipedia/commons/c/cc/Crisi-tunity.png (http://upload.wikimedia.org/wikipedia/commons/c/cc/Crisi-tunity.png) Fully agree with you. :rolleyes:
http://upload.wikimedia.org/wikipedia/commons/c/cc/Crisi-tunity.png (http://upload.wikimedia.org/wikipedia/commons/c/cc/Crisi-tunity.png)
The wisdom calls for one to act while others fear.
Many people are entering the market now. Perhaps, it is still not the right time yet or it is?
The wisdom calls for one to act while others fear.
Many people are entering the market now. Perhaps, it is still not the right time yet or it is?
are you sure many entering the market now?? The market has paused and moved and then paused and move, which make you think that more and more people entering the market. But the fact is, why so many CMs?? Its because it wanted to slow down those on the side line, many still on the side line. what the govt want is to have soft landing, if already a lot enter the market then no need CM liao :)
two side of a coin, once I tossed up, you see one side, I see the other...get it :D
just my opinion here...:p
so what will be your investment view as of now, staying vested with spare cash or cash out everything now/yesterday n watch the market aggressively in the next 3 years?
I dun pretend to be guru, and everyone's background and financial positions are different.
For me, I'm doing short term corp bonds (3ys remaining) on the spare cash. meant to hold to maturity. dun even need to be very high yield.
(That's also because I have enough pty exposures in both CCR and OCR, I'm not selling now. Not buying either.)
there will always be crisis which are unpredictable and if it is predictable, then it is not so scary like the current europe crisis.
A financial crisis is scary for Singapore. Singapore's private debt has grown tremendously fueled by the QEs and low interest rates. The current private debt to GDP is over 130% and growing. Of the $432.6 billion of private debt in Singapore, $134.8 billion are housing loans by banks. This $134.8 billion does not include housing loans given by HDB. Local banks have massive exposure to this private debt especially property loans, and could be in serious trouble in a crisis.
If private debt to GDP is this large, it could mean that GDP is growing because of that private debt. Goods and services are largely been bought with borrowing money rather than been bought with earned money. For example the massive amounts borrowed from banks to buy property is fueling the construction boom. The crisis in Spain is due to huge private debt.
Recent GDP growth in Singapore is fueled by easy credit and low interest rates. Interest rate increase could have a big impact on GDP and this could be why PAP is scare to use interest rates to combat inflation. Looks like Singapore is already addicted to this easy credit and low interest environment artifically created by the Fed, which could end in 2014 or maybe even earlier.
For me, I'm in favour of increasing interest rates to combat inflation and high property prices. And use this increase in interest rates to promote and reward savers in Singapore. Just my :2cents:
are you sure many entering the market now?? The market has paused and moved and then paused and move, which make you think that more and more people entering the market. But the fact is, why so many CMs?? Its because it wanted to slow down those on the side line, many still on the side line. what the govt want is to have soft landing, if already a lot enter the market then no need CM liao :)
two side of a coin, once I tossed up, you see one side, I see the other...get it :D
just my opinion here...:p
The new launches are selling pretty well. The record sale volume over the last two months speaks for itself. The pauses were because of CMs which caused temporary stand still.
Soft landing means prices to soften over a period of time and not sudden price correction.
CMs are to prevent market from overheating and discouraging those overly leveraged from investing. They are the most vulnerable when market corrects.
...and use this increase in interest rates to promote and reward savers ...
unfortunately, most of the time, a pure saver is not going anywhere....
the only time a pure saver is "rewarded", is when a mega crisis comes. in 2009 last crisis time, ppl did a study for US, and found that 1999 -2009 10y period the best investment is actually cash ;) but that's because of the dot com high in 1999 and the crash in 2009.
It is in garment favour to see the growth in GDP. Whether is it real? I do not think they have too much concern as long as they have control.
A financial crisis is scary for Singapore. Singapore's private debt has grown tremendously fueled by the QEs and low interest rates. The current private debt to GDP is over 130% and growing. Of the $432.6 billion of private debt in Singapore, $134.8 billion are housing loans by banks. This $134.8 billion does not include housing loans given by HDB. Local banks have massive exposure to this private debt especially property loans, and could be in serious trouble in a crisis.
If private debt to GDP is this large, it could mean that GDP is growing because of that private debt. Goods and services are largely been bought with borrowing money rather than been bought with earned money. For example the massive amounts borrowed from banks to buy property is fueling the construction boom. The crisis in Spain is due to huge private debt.
Recent GDP growth in Singapore is fueled by easy credit and low interest rates. Interest rate increase could have a big impact on GDP and this could be why PAP is scare to use interest rates to combat inflation. Looks like Singapore is already addicted to this easy credit and low interest environment artifically created by the Fed, which could end in 2014 or maybe even earlier.
For me, I'm in favour of increasing interest rates to combat inflation and high property prices. And use this increase in interest rates to promote and reward savers in Singapore. Just my :2cents:
For me, I'm in favour of increasing interest rates to combat inflation and high property prices. And use this increase in interest rates to promote and reward savers in Singapore. Just my :2cents:
property price already increase 100% or more ever since the crisis..
so, it will slow down and increase bit by bit..:o
next up is wait for interest rate to roll in.. :cheers1:
let's see how many can tahan when it hit 2% interest
I thought it is GOLD!:D
unfortunately, most of the time, a pure saver is not going anywhere....
the only time a pure saver is "rewarded", is when a mega crisis comes. in 2009 last crisis time, ppl did a study for US, and found that 1999 -2009 10y period the best investment is actually cash ;) but that's because of the dot com high in 1999 and the crash in 2009.
2% is not alot. Wait for 5% if it ever happens in the next 5 years. ;)
property price already increase 100% or more ever since the crisis..
so, it will slow down and increase bit by bit..:o
next up is wait for interest rate to roll in.. :cheers1:
let's see how many can tahan when it hit 2% interest
unfortunately, most of the time, a pure saver is not going anywhere....
the only time a pure saver is "rewarded", is when a mega crisis comes. in 2009 last crisis time, ppl did a study for US, and found that 1999 -2009 10y period the best investment is actually cash ;) but that's because of the dot com high in 1999 and the crash in 2009.
It is the Fed that continues with near zero interest rate that create a society where it rewards those who borrow and punish those who save. This easy credit has extended to the rest of the world and governments are finding it hard to contain.
Asian governments who advocate saving are struggling to contain what is view as eroding values; spending beyond your means or spending future money. An economy that rely on debts to survive can be dangerous as proven.
2% is not alot. Wait for 5% if it ever happens in the next 5 years. ;)
5% is a killer... i don't think govt. gonna let singapore run into any big crisis la...
at most is max. 3% within the next 5 yr.. but what i foresee is it will float around 2.2% to 2.5% :D:D
...spending beyond your means or spending future money. An economy that rely on debts to survive can be dangerous as proven.
there is a difference between spending beyond your means and leverage beyond your means.
how many Singaporeans have rollover credit card balances ? how many Americans have rollover balances ?
Most Singaporeans are still quite conservative. Maybe the early 20s are more gangho.
there is a difference between spending beyond your means and leverage beyond your means.
how many Singaporeans have rollover credit card balances ? how many Americans have rollover balances ?
there is a difference between spending beyond your means and leverage beyond your means.
how many Singaporeans have rollover credit card balances ? how many Americans have rollover balances ?
With cheap credits available, how many need to rollover?
This cheap credit has to stop or a new normal will evolute and a new society living on credit will surface over time.
Most Singaporeans are still quite conservative. Maybe the early 20s are more gangho.
property owners in Singapore generally have more holding power than those in western world and for that reason I think that Singapore property prices will not go through a major correction unless there is a prolong depression in the global economy.
It is the Fed that continues with near zero interest rate that create a society where it rewards those who borrow and punish those who save. This easy credit has extended to the rest of the world and governments are finding it hard to contain.
Asian governments who advocate saving are struggling to contain what is view as eroding values; spending beyond your means or spending future money. An economy that rely on debts to survive can be dangerous as proven.
with the 60%LTV, how to spend beyond your means? more like invest beyond your mean.
with the 60%LTV, how to spend beyond your means? more like invest beyond your mean.
A lot more people with 60% LTV are also borrowing from parents and other sources to make up the 40% cash. They will still be affected if interest rate rises.
You have also forgotten about people buying more than 2 properties and first timers who get 80% LTV.
A lot more people with 60% LTV are also borrowing from parents and other sources to make up the 40% cash. They will still be affected if interest rate rises.
You have also forgotten about people buying more than 2 properties and first timers who get 80% LTV.
To have a few hundred thousand of cash/cpf sitting around for property investment, he or she should be a saver.
To have a few hundred thousand of cash/cpf sitting around for property investment, he or she should be a saver.
Yes! But not when he uses all his cash and still borrow a lot more buying that property or properties. The issue here is not to over leverage. Rich or not so rich, once over leverage is vulnerable.
Yes! But not when he uses all his cash and still borrow a lot more buying that property or properties. The issue here is not to over leverage. Rich or not so rich, once over leverage is vulnerable.
some might be over leverage on property for sure but that will only force them to save harder because they need to pay their mortgage, which is part interest and part principle payment.
those spending beyond their means are usually those who choose to rent , or buy Hermes bags or $90k COE.
How to know once is over leverage? What should be the measure? Is it % of salary?
Yes! But not when he uses all his cash and still borrow a lot more buying that property or properties. The issue here is not to over leverage. Rich or not so rich, once over leverage is vulnerable.
With cheap credits available, how many need to rollover?
This cheap credit has to stop or a new normal will evolute and a new society living on credit will surface over time.
My friend said that a few of her friends declared bankrupt because they couldn't pay credit card debt. Said loooooong queue there :doh:
NorthernStar
31-05-12, 14:20
A lot more people with 60% LTV are also borrowing from parents and other sources to make up the 40% cash. They will still be affected if interest rate rises.
You have also forgotten about people buying more than 2 properties and first timers who get 80% LTV.
You have any sources state that MORE people who with 60% LTV are borrow money from other sources? if borrow from parents, can be very safe right? Regardless the SIBOR or SOR, interest rate is always 0%.;)
Maybe negative interest rate ... borrow but don't pay back!
How to know once is over leverage? What should be the measure? Is it % of salary?
Ask any qualified FA and they will be able to advise and probably with a formula to work on.
The real situation is when the bank came calling asking you to top up your loan because the value of your property is below the loan value and you are not able to come up with the extra cash OR when interest rate rises and you are not able to pay the additional interest monthly. Obviously, you are over leverage.
NorthernStar
31-05-12, 14:29
My friend said that a few of her friends declared bankrupt because they couldn't pay credit card debt. Said loooooong queue there :doh:
i mis-read a credit card bill and paid ard $50 less for the total amount. the next month bill come is $16 interest!!! i don't know how to calculate it.. even 24% annual rate will not come with this amount.
Called to bank and they waived it but forgot to question them how they come out this amount?
So, i just wonder how can people roll over their credit card bill.. sure will need to declare bankrupt one day. :beats-me-man:
how about those that take up term loan and plough it as downpayment for another property?
Leverage to me means using banks money even though got 50% of the money either in bank or liquid.
Ask any qualified FA and they will be able to advise and probably with a formula to work on.
The real situation is when the bank came calling asking you to top up your loan because the value of your property is below the loan value and you are not able to come up with the extra cash OR when interest rate rises and you are not able to pay the additional interest monthly. Obviously, you are over leverage.
You have any sources state that MORE people who with 60% LTV are borrow money from other sources? if borrow from parents, can be very safe right? Regardless the SIBOR or SOR, interest rate is always 0%.;)
how about those that take up term loan and plough it as downpayment for another property?
Maybe newbie11 can provide you with real example.
I am about to sign up a housing loan with DBS. the bank conducted so many stringent checks just to make sure that we do not over leverage. Ask so many questions until I joked with the banker how come so l'eh cheh'. She told me boh bian, MAS requirement.
so what I am trying to say is MAS is very careful about individual overstretching themself which I think is good governance. Not sure about other country though eg. US? I think MAS is putting all kind of measure to prevent past mistake like in 1996, a lot of people got burnt.
Leverage to me means using banks money even though got 50% of the money either in bank or liquid.
If that is the case, than there is no issue. You are obviously not overly leverage.
Loan quantum today does not say very much. If I have 1mil securely invested for a return of 5% pa, I could safely borrow another mil to purchase a property. If hdb today can command 2.5k rental, borrowing 500k to buy property could be a good decision. Just make sure one does not spread themselves too thin.
Leverage to me means using banks money even though got 50% of the money either in bank or liquid.
wah like this i over leverage liao.. but at the end still the holding power right?
NorthernStar
31-05-12, 14:59
Maybe newbie11 can provide you with real example.
I see. Don't think bank will give term loan for property downpayment, unless they use "cashline" facility?:D if ppl really do that i guess they should know they are playing with fire. No need to worry for them.
how about those that take up term loan and plough it as downpayment for another property?
I think it is now getting very difficult to take term loan because of the 60% LTV.
I see. Don't think bank will give term loan for property downpayment, unless they use "cashline" facility?:D if ppl really do that i guess they should know they are playing with fire. No need to worry for them.
bank do not ask or care what u use the fund for. taking term loan is quite common.
I think it is now getting very difficult to take term loan because of the 60% LTV.
if you only have 1 prop loan, then u can still obtain up to 80% ltv.. the term loan amt is (80% of valuation less outstanding loan less cpf used/accrued interest). then approval of this loan amt will be subjected to credit check, DSR etc, just like a normal loan process. so the 2 variables is LTV as not many bank will provide 80% (usually 70%) and valuation.
if >1 loan, then make above formula to 60%.. which means little/no meat..
if you only have 1 prop loan, then u can still obtain up to 80% ltv.. the term loan amt is (80% of valuation less outstanding loan less cpf used/accrued interest). then approval of this loan amt will be subjected to credit check, DSR etc, just like a normal loan process. so the 2 variables is LTV as not many bank will provide 80% (usually 70%) and valuation.
if >1 loan, then make above formula to 60%.. which means little/no meat..
Just to add. Term loan can be recalled anytime at the bank's discretion.
Unlike housing loans, which as long as you are servicing your loan diligently, banks usually leave you alone.
So if you are taking a term loan to finance another property, u need to understand the risk that if the bank give u notice to repay, you must somehow make that money appear!
Good Luck~!
DKSG
PS : During the last or some past recession, many got caught with Term Loans for properties. Cant tell you which bank, but u need to prepared ANY bank can do it.
Just to add. Term loan can be recalled anytime at the bank's discretion.
Unlike housing loans, which as long as you are servicing your loan diligently, banks usually leave you alone.
So if you are taking a term loan to finance another property, u need to understand the risk that if the bank give u notice to repay, you must somehow make that money appear!
Good Luck~!
DKSG
PS : During the last or some past recession, many got caught with Term Loans for properties. Cant tell you which bank, but u need to prepared ANY bank can do it.
In the past when LTV is around 80 to 90%, that is possible, however now with 60% LTV, it is almost risk fee to the bank so why would they want to do that?
if you only have 1 prop loan, then u can still obtain up to 80% ltv.. the term loan amt is (80% of valuation less outstanding loan less cpf used/accrued interest). then approval of this loan amt will be subjected to credit check, DSR etc, just like a normal loan process. so the 2 variables is LTV as not many bank will provide 80% (usually 70%) and valuation.
if >1 loan, then make above formula to 60%.. which means little/no meat..
actually when the moment, you buy your 2nd property, the 1st property will automatically be reduce to 60%LTV.
Some banks are more aggressive than other.
felicia_sg
31-05-12, 18:19
If savers don't take risk can get high return, who is going to take risk?
People forgot what causes deflation - yes, everybody don't take risk & don't spend & keep cash in banks because they know they will be rewarded for taking no risk & the more & longer they hold cash, the more things they can buy! So, reward savers to cause deflation? Lol. :doh:
A financial crisis is scary for Singapore. Singapore's private debt has grown tremendously fueled by the QEs and low interest rates. The current private debt to GDP is over 130% and growing. Of the $432.6 billion of private debt in Singapore, $134.8 billion are housing loans by banks. This $134.8 billion does not include housing loans given by HDB. Local banks have massive exposure to this private debt especially property loans, and could be in serious trouble in a crisis.
If private debt to GDP is this large, it could mean that GDP is growing because of that private debt. Goods and services are largely been bought with borrowing money rather than been bought with earned money. For example the massive amounts borrowed from banks to buy property is fueling the construction boom. The crisis in Spain is due to huge private debt.
Recent GDP growth in Singapore is fueled by easy credit and low interest rates. Interest rate increase could have a big impact on GDP and this could be why PAP is scare to use interest rates to combat inflation. Looks like Singapore is already addicted to this easy credit and low interest environment artifically created by the Fed, which could end in 2014 or maybe even earlier.
For me, I'm in favour of increasing interest rates to combat inflation and high property prices. And U. Just my :2cents:
TheOnlyGayInTheVillage
31-05-12, 19:35
Just to add. Term loan can be recalled anytime at the bank's discretion.
Unlike housing loans, which as long as you are servicing your loan diligently, banks usually leave you alone.
So if you are taking a term loan to finance another property, u need to understand the risk that if the bank give u notice to repay, you must somehow make that money appear!
Good Luck~!
DKSG
PS : During the last or some past recession, many got caught with Term Loans for properties. Cant tell you which bank, but u need to prepared ANY bank can do it.
How cum office boy know so much?? Dun tell me the office is of that bank!
I am about to sign up a housing loan with DBS. the bank conducted so many stringent checks just to make sure that we do not over leverage. Ask so many questions until I joked with the banker how come so l'eh cheh'. She told me boh bian, MAS requirement.
so what I am trying to say is MAS is very careful about individual overstretching themself which I think is good governance. Not sure about other country though eg. US? I think MAS is putting all kind of measure to prevent past mistake like in 1996, a lot of people got burnt.
It's not that they care about people overstretching; they care that the banks might go belly up (and we all know who owns the banks).
Singapore banks cannot afford to fold up. So our dear govt will come to rescue or even prevent tat from happening.
So the day the banks stop lending out $$$ or sudden hike interest rates, u will know something wrong is going to happen.
For now, still a lot of cheap money floating around for u to leverage. Dun waste this lifetime opportunity. Once the western economies recover in due course, property prices will already be another step higher until you cannot even afford MM.
Especially so for those who sold their hses and are now renting hses, waiting anxiously for prices to fall. Come into the forum and try to persuade others not to buy so that prices won't go up. These folks are throwing away $$$ every day as they pay rent to landlords who took the risk and leverage themselves. Keeping $$$ in the bank will rot as well.
As the saying goes, high risk yields high returns. There are no free or easy lunches.
The US financial crisis did not cause Asian property prices to fall, what makes you think the Euro crisis will? :cheers2:
Singapore banks and many banks in Asia will not fold up even with property prices come for a major correction. After the 1997 Asia Financial Crisis, banks in SEA had shored up their Balance Sheets and they are now able to weather the storms.
Interest rate over the next two years is likely to remain low as what the FED had indicated. However, beyond 2013, nobody can be sure.
It does makes sense to take advantage of the cheap loan now to buy fixed asset such as property bearing in mind that these assets are now at unreasonable high level which is not in line with the national income. Without the availability of these cheap loans, the prices of these assets are simply not sustainable.
Government is managing the market and aiming for a soft landing in the property market within the next few years as indicated by the Ministers. This is the determination of the government and we should expect prices to moderate over a period of time.
With interest rate expected to move higher after 2013, the cheap loans you are holding now will not be cheap after that.
If you need a roof now, you will have to buy or rent. If you think buying now is still better than paying rents for the next two years, then go ahead and buy now. Even if prices correct a lot more and you are buying for own stay, it really won't "affect" you much.
If you are buying for investment, the decision may not be that straight forward. Timing is key to investment of property. It is for the individual to decide on your risk level, your ability to hold on to your investments (should interest rate hike, price correction, global crisis etc) and also your investment horizon.
Like what most savvy investors always said; "never trust a third party with your money". They do not have the responsibility to make you rich.
Interest rate hike does not necessarily cause property prices to fall. In fact, bec cost of money becomes higher, property prices may soar even higher. Wat determines property prices at the end of the day is supply and demand. With our govt slated to increase our population to maintain GDP growth, more foreign talents will come in and more housing will be needed. So take more risk now and leverage is better than wait and see cos money wun fall from the sky.
Singapore banks and many banks in Asia will not fold up even with property prices come for a major correction. After the 1997 Asia Financial Crisis, banks in SEA had shored up their Balance Sheets and they are now able to weather the storms.
Interest rate over the next two years is likely to remain low as what the FED had indicated. However, beyond 2013, nobody can be sure.
It does makes sense to take advantage of the cheap loan now to buy fixed asset such as property bearing in mind that these assets are now at unreasonable high level which is not in line with the national income. Without the availability of these cheap loans, the prices of these assets are simply not sustainable.
Government is managing the market and aiming for a soft landing in the property market within the next few years as indicated by the Ministers. This is the determination of the government and we should expect prices to moderate over a period of time.
With interest rate expected to move higher after 2013, the cheap loans you are holding now will not be cheap after that.
If you need a roof now, you will have to buy or rent. If you think buying now is still better than paying rents for the next two years, then go ahead and buy now. Even if prices correct a lot more and you are buying for own stay, it really won't "affect" you much.
If you are buying for investment, the decision may not be that straight forward. Timing is key to investment of property. It is for the individual to decide on your risk level, your ability to hold on to your investments (should interest rate hike, price correction, global crisis etc) and also your investment horizon.
Like what most savvy investors always said; "never trust a third party with your money". They do not have the responsibility to make you rich.
.......so what are you saying? It does or does not make sense to buy now? Your sentence in highlighted in red seems contradictory......
How cum office boy know so much?? Dun tell me the office is of that bank!
...think this "Office-boy" is one of those "undercover" Boss........don't play-play with boi-boi...
.......so what are you saying? It does or does not make sense to buy now? Your sentence in highlighted in red seems contradictory......
It is for the individual to decide whether to take advantage of the availability of cheap loan to buy an inflated asset now or later.
It is for the individual to decide whether to take advantage of the availability of cheap loan to buy an inflated asset now or later.
Cheap Loan - I agree
Inflated asset or not - I disagree. Just like buy a Lambo vs a Toyota. Is Lambo inflated? Over or undervalued is a perception, not a fact.
Cheap Loan - I agree
Inflated asset or not - I disagree. Just like buy a Lambo vs a Toyota. Is Lambo inflated? Over or undervalued is a perception, not a fact.
lambo is overly inflated.. new lambor is damn ex, while 2nd hand lambo gallardo is cheap.. see the gap.? cos its overpriced,in such devalue fast compare to toyota fairly priced devalue abit
318k can get you a gallardo, we bet the seller may offload at 280-300k if offer.
lambo is overly inflated.. new lambor is damn ex, while 2nd hand lambo gallardo is cheap.. see the gap.?
318k can get you a gallardo, we bet the seller may offload at 280-300k if we offer.
Well, if you compare like this, not apple to apple.
Anything used cannot price the same as new one unless it is antique.
Like tat all new products are inflated while 2nd hand ones are not.:doh:
Perhaps u can compare it this way:
Pitching a tent by the beach (free) vs buying a house ($1M) => buying a hse is indeed inflated :D
phantom_opera
01-06-12, 14:31
18 WOODSVILLE WOODSVILLE CLOSE Apartment 1 1,433,070 732 Strata 1,958psf May-12
KATONG REGENCY TANJONG KATONG ROAD Apartment 1 1,167,880 581 Strata 2,009psf May-12
inflated??
ERP - Inflated?
COE - Inflated?
Housing - Inflated?
Salaries - Deflated?
Do u hv a choice? Yes, dun drive / live / work in Spore lor
From an economic perspective, an asset is inflated or not very much depends on the Purchasing Power Parity (PPP) which involves both exchange rate and income in the countries compared.
To most layman, an asset is inflated if its economic value does not match the price he is willing to pay.
There are many people willing to pay for what most believe is inflated prices of (high psf) shoebox apartment because their perception of the economic value of the apartment equal or exceed the overall price. There are also just as many people who do not see the economic value of the shoebox apartment for the price it commends.
Big inflation might hit us next year, if economy remains stable. Not too sure abt impact on property, but my sense is MM near MRT n EC will continue to do well. Mass mkt PCs will also trend towards compact size, thereby maintaining or raising e psf. I wld rather hold back n wait. The huge loan of buyers in e midst of low interest environment plus "investors" profile of most buyers I seen at showflats is worrying.
Again, it is all about perceptions and affordability of cos.
Buying a rolex watch - Inflated?
Buying a casio watch - Deflated?
Both are watches that last a very long time.
The fact is, everyone is chasing after highly "inflated" goods aka a higher quality of life. The more "inflated" it is, the more sought after.
Among Sporeans (in fact all asians), what are the two most important, highly sought after and most expensive items? Properties and Cars
You ask the Americans and the Europeans - Their answers are different. To them, buying a house is just for enjoyment, not investment. Plus they hv lots of land, so prices there won't soar as much.
If savers don't take risk can get high return, who is going to take risk?
People forgot what causes deflation - yes, everybody don't take risk & don't spend & keep cash in banks because they know they will be rewarded for taking no risk & the more & longer they hold cash, the more things they can buy! So, reward savers to cause deflation? Lol. :doh:
It is crazy and irresponsible to tell people to invest thier hardearned savings on high price property and/or stocks amid so much global uncertainty, all the major economies in the world are doing worse than expected. When people lose their savings on these investments, they will blame you. And if they lose their job in a global economic slowdown, they have no buffer to rely on.
Media reported today that private debt has risen to $435.3 billion and housing loans have swell to $136.1 billion. Housing loans had increased by $1.3 billion in the month of April. Many more Singaporeans have used their savings to buy property and entered into long-term debt, the property bubble gets bigger.
In Spain, many people went to invest in property, property prices shoot up and private debt grew very large. When property bubble burst, their banks could not handle the bad debts and need Govt bailout. But their Govt have no money to bailout the banks and need foreign help. But so far the IMF and ECB are not interested to lend them money hence the crisis.
"investors" profile of most buyers I seen at showflats is worrying.
do you mind sharing this observation?
The huge loan of buyers in e midst of low interest environment plus "investors" profile of most buyers I seen at showflats is worrying.
whahahahaha.. i know what u mean..:D
V obvious when u talk to e agents n see what units r sold in e first week of launch. Those buying for own stay r up-graders who r mostly planning to rent out their existing house after e project TOP.
U oso dun wan to be too conservative / prudent / under leveraged. Like my parents, they only purchased one HDB throughout their lives. And they hv chosen to buy a modest 3rm flat which they think they can afford to service the loan of $30K 25 years ago.
They didnt want to "over leveraged" themselves where they could have bought a 5rm flat or even landed.
And wat happens now? If they had chiong all the way to buy a landed at probably $100K back then, now I dun need to spend millions to buy one landed liao!
U oso dun wan to be too conservative / prudent / under leveraged. Like my parents, they only purchased one HDB throughout their lives. And they hv chosen to buy a modest 3rm flat which they think they can afford to service the loan of $30K 25 years ago.
They didnt want to "over leveraged" themselves where they could have bought a 5rm flat or even landed.
And wat happens now? If they had chiong all the way to buy a landed at probably $100K back then, now I dun need to spend millions to buy one landed liao!
Those were e good old days when nobody wld have tot 1 in 2 person in Singapore is a new citizen, PR or foreign worker.
Those were e good old days when nobody wld have tot 1 in 2 person in Singapore is a new citizen, PR or foreign worker.
Yep.. the good ol' days.
So in following thru' on this thought, how can we compare the prices now with what the govt benchmarks as 'high' which is the previous peak? To me, its just an arbitrary benchmark.
Can our prices be considered 'high' when the population has more than doubled compared to the popn at the last peak, GDP has increased exponentially and available land for development has shrinked drastically.
I think if someone was to adjust our prices to the conditions back then, they might be shocked to see that prices have not really risen (in a 'real' sense) so much. It may even have dropped.
Another 25 yrs from now, your kids will be blaming u why u didnt over leverage yourself to get a landed. :D
Then they will say the good old days...
Another 25 yrs from now, your kids will be blaming u why u didnt over leverage yourself to get a landed. :D
Then they will say the good old days...
the idea of having a landed property is nice, that is provided your landed property has plenty of land instead of just 3 or 4 floors of MM apartment joint together.
Also living in landed property in Singapore is actually very costly if you factoring in the opportunity cost. For a 3 to 4m landed property, the opportunity cost will be around 10 to 15K per month, or $500 per day.
worth it?
the idea of having a landed property is nice, that is provided your landed property has plenty of land instead of just 3 or 4 floors of MM apartment joint together.
Also living in landed property in Singapore is actually very costly if you factoring in the opportunity cost. For a 3 to 4m landed property, the opportunity cost will be around 10 to 15K per month, or $500 per day.
worth it?
How you derive at $10K to $15K per month opportunity cost forgone when buying a $3 to $4M landed? :tsk-tsk:
It's not even a cost but an investment. And 25yrs from now, you know you are making $500 per day by buying a landed now. :cheers3:
How you derive at $10K to $15K per month opportunity cost forgone when buying a $3 to $4M landed? :tsk-tsk:
It's not even a cost but an investment. And 25yrs from now, you know you are making $500 per day by buying a landed now. :cheers3:
Thats the rental income you would have got if you buy 4 x $1m apartmen for rental, instead of $4m landed for own stay.
Several of my friends who have bought landed property in the past 2 to 3 years told me that they cant afford to buy a 2nd property because all their money is stuck in the landed property.
For me, landed property good for people who are already making millions in their business or their job.
lambo is overly inflated.. new lambor is damn ex, while 2nd hand lambo gallardo is cheap.. see the gap.? cos its overpriced,in such devalue fast compare to toyota fairly priced devalue abit
318k can get you a gallardo, we bet the seller may offload at 280-300k if offer.
Nice to know. I always thought ferrari and lambos are $600k onwards even for used ones (<5yrs).
My dream of owning one just got closer.. lol
Nice to know. I always thought ferrari and lambos are $600k onwards even for used ones (<5yrs).
My dream of owning one just got closer.. lol
Maybe 9 yrs old lambo or even renewed COE ones? :D
Nice to know. I always thought ferrari and lambos are $600k onwards even for used ones (<5yrs).
My dream of owning one just got closer.. lol
yup, me too .. seller also happen to be my frd, an agent.
if u need to check the service record, just get the license plate number.
coe left more than 3yr+
Nice to know. I always thought ferrari and lambos are $600k onwards even for used ones (<5yrs).
My dream of owning one just got closer.. lol
If you need to ask how much then it is most likely you cant afford. there are more things in life to do than to drive the bull or prancing horse
Thats the rental income you would have got if you buy 4 x $1m apartmen for rental, instead of $4m landed for own stay.
Several of my friends who have bought landed property in the past 2 to 3 years told me that they cant afford to buy a 2nd property because all their money is stuck in the landed property.
For me, landed property good for people who are already making millions in their business or their job.
U are mixing up rental income and capital gain.
For the same $4M you spent on 4 x MMs and rent out for $12K per month, you can oso buy a landed and rent out to fetch the same rental income. This is rental income.
For capital gain, whether you are staying or renting out, you still get capital gain when price appreciates.
What you are saying is you buy a house and rent out for rental income, then where are you going to stay? Rent a place? So rental income offsets rental expense in the end? Where is the opportunity cost forgone?
So in the end, would it be better for you to buy and stay in a landed vs you buy and rent out the landed, then you have to rent somewhere else to stay? You probably can only make a small differential gain if you rent somewhere else cheaper. But the quality of your life is lost as you gain the rental differential.
Next, rental income comes with additional unforeseen costs:
1) Property tax at 10%
2) Maintenance expenses - Normal wear and tear caused by your tenants
3) Tax on rental income
4) Agent commission
5) Provision of partial furnishing for your tenants
6) Rental income (fixed) vs Interest on loan (variable)
7) Difficult to arrange viewing when you want to sell cos tenants are normally not cooperative
8) Your dream landed house brand new is being abused by tenants, by the time lease ends, and you take over the hse with used conditions, u hv to spend additional capex to make good. Tenant's security deposit oso not enuf to cover.
U are mixing up rental income and capital gain.
For the same $4M you spent on 4 x MMs and rent out for $12K per month, you can oso buy a landed and rent out to fetch the same rental income. This is rental income.
For capital gain, whether you are staying or renting out, you still get capital gain when price appreciates.
What you are saying is you buy a house and rent out for rental income, then where are you going to stay? Rent a place? So rental income offsets rental expense in the end? Where is the opportunity cost forgone?
So in the end, would it be better for you to buy and stay in a landed vs you buy and rent out the landed, then you have to rent somewhere else to stay? You probably can only make a small differential gain if you rent somewhere else cheaper. But the quality of your life is lost as you gain the rental differential.
Next, rental income comes with additional unforeseen costs:
1) Property tax at 10%
2) Maintenance expenses - Normal wear and tear caused by your tenants
3) Tax on rental income
4) Agent commission
5) Provision of partial furnishing for your tenants
6) Rental income (fixed) vs Interest on loan (variable)
7) Difficult to arrange viewing when you want to sell cos tenants are normally not cooperative
8) Your dream landed house brand new is being abused by tenants, by the time lease ends, and you take over the hse with used conditions, u hv to spend additional capex to make good. Tenant's security deposit oso not enuf to cover.
That is true, provided you can afford to buy a $3-4m landed and not live in it.
That is true, provided you can afford to buy a $3-4m landed and not live in it.
Funny right, if you can buy 4 x MMs and not live in any of it, why can't u do the same for landed?
Funny right, if you can buy 4 x MMs and not live in any of it, why can't u do the same for landed?
because if you live in it, you have not rental income. if you hold multiple properties, at least you have live in one of them and rent out the others.
because if you live in it, you have not rental income. if you hold multiple properties, at least you have live in one of them and rent out the others.
Aiyo, u still dun get it :doh:
U can buy 4 MMs $4M and rent out all. Where are you going to stay?
U can buy 1 landed $4M and rent it out. Where are you going to stay?
You hv to rent somewhere else to stay right? So end up your rental income offsets rental expense right?
Compared to you buy landed to stay. Isn't it the same as above?
Either above scenarios, you are just waiting for capital gain when u sell.
I am preparing to get a second FH/999 leasehold PC with 1.3-1.5mil Budget while holding onto my current HDB with outstanding loan of 460k.
Household income is around 7k+ with disposal rental income of 2k+.
I am sort of confident that market will goes up and price will be escalating upwards.
I am preparing to get a second FH/999 leasehold PC with 1.3-1.5mil Budget while holding onto my current HDB with outstanding loan of 460k.
Household income is around 7k+ with disposal rental income of 2k+.
I am sort of confident that market will goes up and price will be escalating upwards.
Gd for u. Tats the spirit. :cheers4:
If you need to ask how much then it is most likely you cant afford. there are more things in life to do than to drive the bull or prancing horse
I actually ask the hawker.. 'how much ah"... when i buy something from the stall... gosh...
Aiyo, u still dun get it :doh:
U can buy 4 MMs $4M and rent out all. Where are you going to stay?
U can buy 1 landed $4M and rent it out. Where are you going to stay?
You hv to rent somewhere else to stay right? So end up your rental income offsets rental expense right?
Compared to you buy landed to stay. Isn't it the same as above?
Either above scenarios, you are just waiting for capital gain when u sell.
Rental yield for smallish apartment in CCR region can be rented out at around $6 psf. For most landed you will be lucky if you can get $3 psf.
In order to command $12-15K rental for landed property, the property will easily cost you around $5m and above. Do you know that for $12-15K per month you can actually rent a GCB in dist 10 that cost easily over 10m?
For a $3-4m freehold landed you will be lucky if the rental can cover your monthly mortgage payment.
And honestly, what is the point of bragging about owning landed property when you cant afford to live in it, or worst, have to sneak into condo illegally just to use the facilities.
TheOnlyGayInTheVillage
02-06-12, 16:26
Nice to know. I always thought ferrari and lambos are $600k onwards even for used ones (<5yrs).
My dream of owning one just got closer.. lol
We used to say its HDB on wheels!!!
Rental yield for smallish apartment in CCR region can be rented out at around $6 psf. For most landed you will be lucky if you can get $3 psf.
In order to command $12-15K rental for landed property, the property will easily cost you around $5m and above. Do you know that for $12-15K per month you can actually rent a GCB in dist 10 that cost easily over 10m?
For a $3-4m freehold landed you will be lucky if the rental can cover your monthly mortgage payment.
And honestly, what is the point of bragging about owning landed property when you cant afford to live in it, or worst, have to sneak into condo illegally just to use the facilities.
Likewise, whats the point of bragging about owning 4 x MMs in CCR, rented out at $3K each when you cant afford to live in it, or worst, have to sneak into condo illegally just to use the facilities?
Worst still, if you take 60% loan to buy 4 x MMs ($1M each) to rent out, effectively, you stucked yourself $1.6M downpayment just to earn $4K net rental per month after deducting loan interest and maintenance fees (have not even counted in the cost of partial furnishing, rental income tax, higher propery tax @ 10% and agent commission). Price appreciation is also limited cos nobody buys MMs for own stay. Your return on investment excluding loan principal reduction ($48K / $1.6M) is <3% per year.
As for landed, if you buy for own stay, u have the choice to down 20% to 40%. Yet even if you down 40%, say $1.6M, and borrow the same as you would for MMs, you are only losing out a monetary gain of $4K per month by staying in the landed and enjoying it. It is not difficult for landed price to appreciate $48K per year / $4M = 1.2% per year. I've made 3X more monies out of landed than from condos, so I know its potential.
Anyway, if you dun buy my reasoning, it's fine. Go get your MMs if you think it's worth it. :D
Worst still, if you take 60% loan to buy 4 x MMs ($1M each) to rent out, effectively, you stucked yourself $1.6M downpayment just to earn $4K net rental per month after deducting loan interest and maintenance fees (have not even counted in the cost of partial furnishing, rental income tax, higher propery tax @ 10% and agent commission). Price appreciation is also limited cos nobody buys MMs for own stay. Your return on investment excluding loan principal reduction ($48K / $1.6M) is <3% per year.
As for landed, if you buy for own stay, u have the choice to down 20% to 40%. Yet even if you down 40%, say $1.6M, and borrow the same as you would for MMs, you are only losing out a monetary gain of $4K per month by staying in the landed and enjoying it. It is not difficult for landed price to appreciate $48K per year / $4M = 1.2% per year. I've made 3X more monies out of landed than from condos, so I know its potential.
Anyway, if you dun buy my reasoning, it's fine. Go get your MMs if you think it's worth it. :D
if you put all your money in a landed property for own stay you have ZERO income and assuming if you bought your $4m landed with 80 %loan, you monthly mortgage will be $10k per month, interest payable will be around $40,000 per year or $3.3K per month. And this is excluding additional loan you might have taken for A&A.
I guess he is talking about the ROI based on capital appreciation rather than rental. Rental if for investment is just a tool to leverage on while you pay for your loan. Alot also depends on your entry time since Blue bot during the downturn. MM is based on quantum theory which also can also make insane >90% ROI p.a + at a lower investment amount for those not so cash rich investors.
phantom_opera
04-06-12, 16:03
A good investor will not be obsessed by any fixed theory
Landed not always has high return
MM also from king become farmer one day
IT is important not to get carried away by your past success, thinking you are always right is the most dangerous mindset of any investor
Look at Mr B .. he thinks he is always right too
if you put all your money in a landed property for own stay you have ZERO income and assuming if you bought your $4m landed with 80 %loan, you monthly mortgage will be $10k per month, interest payable will be around $40,000 per year or $3.3K per month. And this is excluding additional loan you might have taken for A&A.
Staying in a $4M landed paying only $3.3K interest per month => Isn't that more worth it than to pay $3K rental to stay in a MM that is 10 times smaller?
Let's just say no loan involved, all fully paid. If you have $4M cash now, would you buy a landed to stay or buy 4 x MMs (studio at $1M each) of which 3 to rent out at net rental $7K per month (after accounting for maintenance, agent comm, furnishing, property tax, additional rental income tax) and 1 MM for own stay?
So the opportunity cost forgone is $84K or 2.1% per annum ($84K / $4M). But you are enjoying the landed which is 10 times bigger than the MM.
Do u expect landed price not be able to appreciate at least 2.1% per annum to cover the opportunity cost forgone?
For MMs, do you expect the capital appreciation can go in tandem with landed? Probably not, bec pple invest in MMs only for rental yield not own stay. So unless rental rate goes up, there is very limited upside.
I have seen landed price gone up by $1M within a period of 2 yrs while I have certainly not seen MMs gone up as much for the same period.
Do your maths, dun be penny wise pound foolish :2cents:
An increase of just $50psf for a landed has a more significant absolute increase in $ than a MM unit.
Staying in a $4M landed paying only $3.3K interest per month => Isn't that more worth it than to pay $3K rental to stay in a MM that is 10 times smaller?
Let's just say no loan involved, all fully paid. If you have $4M cash now, would you buy a landed to stay or buy 4 x MMs (studio at $1M each) of which 3 to rent out at net rental $7K per month (after accounting for maintenance, agent comm, furnishing, property tax, additional rental income tax) and 1 MM for own stay?
So the opportunity cost forgone is $84K or 2.1% per annum ($84K / $4M). But you are enjoying the landed which is 10 times bigger than the MM.
Do u expect landed price not be able to appreciate at least 2.1% per annum to cover the opportunity cost forgone?
For MMs, do you expect the capital appreciation can go in tandem with landed? Probably not, bec pple invest in MMs only for rental yield not own stay. So unless rental rate goes up, there is very limited upside.
I have seen landed price gone up by $1M within a period of 2 yrs while I have certainly not seen MMs gone up as much for the same period.
Do your maths, dun be penny wise pound foolish :2cents:
Staying in a $4M landed paying only $3.3K interest per month => Isn't that more worth it than to pay $3K rental to stay in a MM that is 10 times smaller?
Let's just say no loan involved, all fully paid. If you have $4M cash now, would you buy a landed to stay or buy 4 x MMs (studio at $1M each) of which 3 to rent out at net rental $7K per month (after accounting for maintenance, agent comm, furnishing, property tax, additional rental income tax) and 1 MM for own stay?
So the opportunity cost forgone is $84K or 2.1% per annum ($84K / $4M). But you are enjoying the landed which is 10 times bigger than the MM.
Do u expect landed price not be able to appreciate at least 2.1% per annum to cover the opportunity cost forgone?
For MMs, do you expect the capital appreciation can go in tandem with landed? Probably not, bec pple invest in MMs only for rental yield not own stay. So unless rental rate goes up, there is very limited upside.
I have seen landed price gone up by $1M within a period of 2 yrs while I have certainly not seen MMs gone up as much for the same period.
Do your maths, dun be penny wise pound foolish :2cents:
1) There are many type of condo around, why do you have to limit your landed comparison to MM apartments?
2) $3300 of interest payment per month is a lot of money especially if you are paying for your own stay.
3) With $4m, i will try to leverage it to $10m.
4) With so many restriction on landed property, why do you think that landed prices will appreciate faster than PC?
I guess we can agree to disagree. It is true any landed bot before the runup confirm laugh to the bank. But similarly, assuming another investor with similar cashflow only looking purely into MMs:
ALEXIS 356 Alexandra Road #03-06 1 37 Strata 442,000 11946 1110 02-MAR-2009 Apartment Freehold Uncompleted New Sale HDB 03 15 159949 Central Region Queenstown
ALEXIS 356 Alexandra Road #03-06 1 37 Strata 700,000 18919 1758 17-APR-2012 Apartment Freehold Uncompleted Sub Sale HDB 03 15 159949 Central Region Queenstown
NOMU 20 Handy Road #06-05 1 51 Strata 540,700 10644 989 17-FEB-2006 Apartment Freehold Uncompleted New Sale Private 09 22 229236 Central Region Museum
NOMU 20 Handy Road #06-05 1 51 Strata 928,200 18272 1697 10-JUL-2008 Apartment Freehold Uncompleted Sub Sale HDB 09 22 229236 Central Region Museum
ILLUMINAIRE ON DEVONSHIRE 65 Devonshire Road #07-03 1 41 Strata 950,000 23171 2153 21-APR-2010 Apartment Freehold Uncompleted Sub Sale Private 09 23 239900 Central Region River Valley
ILLUMINAIRE ON DEVONSHIRE 65 Devonshire Road #07-03 1 41 Strata 756,000 18439 1713 13-MAY-2009 Apartment Freehold Uncompleted New Sale HDB 09 23 239900 Central Region River Valley
-These are not just 1 or 2 transactions but several at 7xxk and I have yet to include area like sophia, somerset, D8, and so on...
-Assuming you consistently hoot 6x alexis MM bot at 4xx now selling at 7xx, based on 20% down, monthly is just a mere 1.5k based on 1.15% for 35yrs. Not bad for a 4.Xmil worth of MM units with just 1.5k monthly loan ;)
- Again I do agree that landed performance is as good since the psf disparity is insanely high after the runup :) :)
1) There are many type of condo around, why do you have to limit your landed comparison to MM apartments?
2) $3300 of interest payment per month is a lot of money especially if you are paying for your own stay.
3) With $4m, i will try to leverage it to $10m.
4) With so many restriction on landed property, why do you think that landed prices will appreciate faster than PC?
1) MMs have the highest rental yield due to quantum. If you use a 3bedrm condo, your rental yield is worst. For the same $4M, you can buy 2 x 3bedrm condo at most. So you can only rent one for $5K and stay in one yourself?
2) Do you not need to pay interest when you take loan to buy MM or 3bedrm for own stay? If you say paying $3.3K per month to stay in landed is expensive, then I pity those who rent MMs from you paying the same amount per month. They are more penny wise pound foolish.
3) Fully paid vs leveraged loan. Both has their pros and cons. Although personally I prefer leverage due to low interest enviroment. Yes, with $4M cash, one can buy up to $10M property. So you are comparing to buy 10MMs vs 1 bungalow vs 2 semi-ds? I would buy 2 semi-ds, one for own stay, one for rent out at $12K per mth, i get the best of both worlds - rental income and captial appreciation
4) Already with so many restrictions on landed purchase, the price can still soar so high. Can you imagine what will happen if the door is opened one day to foreigners? The pot of gold becomes a hill of gold! You dun say this will never happen. Many high paying jobs are already lost to foreign talents. Many spore girls are dating or kena scr**ed by ang mos. Next time, u see a lot of eurasians in Sg with single mums as the ang mohs all go back to their countries. Do u think the government care about all these, and care about who is buying / owning the land?
How is the rental for those MM alexis apartment facing the roads?
I guess we can agree to disagree. It is true any landed bot before the runup confirm laugh to the bank. But similarly, assuming another investor with similar cashflow only looking purely into MMs:
ALEXIS 356 Alexandra Road #03-06 1 37 Strata 442,000 11946 1110 02-MAR-2009 Apartment Freehold Uncompleted New Sale HDB 03 15 159949 Central Region Queenstown
ALEXIS 356 Alexandra Road #03-06 1 37 Strata 700,000 18919 1758 17-APR-2012 Apartment Freehold Uncompleted Sub Sale HDB 03 15 159949 Central Region Queenstown
NOMU 20 Handy Road #06-05 1 51 Strata 540,700 10644 989 17-FEB-2006 Apartment Freehold Uncompleted New Sale Private 09 22 229236 Central Region Museum
NOMU 20 Handy Road #06-05 1 51 Strata 928,200 18272 1697 10-JUL-2008 Apartment Freehold Uncompleted Sub Sale HDB 09 22 229236 Central Region Museum
ILLUMINAIRE ON DEVONSHIRE 65 Devonshire Road #07-03 1 41 Strata 950,000 23171 2153 21-APR-2010 Apartment Freehold Uncompleted Sub Sale Private 09 23 239900 Central Region River Valley
ILLUMINAIRE ON DEVONSHIRE 65 Devonshire Road #07-03 1 41 Strata 756,000 18439 1713 13-MAY-2009 Apartment Freehold Uncompleted New Sale HDB 09 23 239900 Central Region River Valley
-These are not just 1 or 2 transactions but several at 7xxk and I have yet to include area like sophia, somerset, D8, and so on...
-Assuming you consistently hoot 6x alexis MM bot at 4xx now selling at 7xx, based on 20% down, monthly is just a mere 1.5k based on 1.15% for 35yrs. Not bad for a 4.Xmil worth of MM units with just 1.5k monthly loan ;)
- Again I do agree that landed performance is as good since the psf disparity is insanely high after the runup :) :)
How is the rental for those MM alexis apartment facing the roads?
haha dunno top very soon.. maybe I go kpo if got time. Me thinks rental front or backside should be relatively similar
I guess we can agree to disagree. It is true any landed bot before the runup confirm laugh to the bank. But similarly, assuming another investor with similar cashflow only looking purely into MMs:
ALEXIS 356 Alexandra Road #03-06 1 37 Strata 442,000 11946 1110 02-MAR-2009 Apartment Freehold Uncompleted New Sale HDB 03 15 159949 Central Region Queenstown
ALEXIS 356 Alexandra Road #03-06 1 37 Strata 700,000 18919 1758 17-APR-2012 Apartment Freehold Uncompleted Sub Sale HDB 03 15 159949 Central Region Queenstown
NOMU 20 Handy Road #06-05 1 51 Strata 540,700 10644 989 17-FEB-2006 Apartment Freehold Uncompleted New Sale Private 09 22 229236 Central Region Museum
NOMU 20 Handy Road #06-05 1 51 Strata 928,200 18272 1697 10-JUL-2008 Apartment Freehold Uncompleted Sub Sale HDB 09 22 229236 Central Region Museum
ILLUMINAIRE ON DEVONSHIRE 65 Devonshire Road #07-03 1 41 Strata 950,000 23171 2153 21-APR-2010 Apartment Freehold Uncompleted Sub Sale Private 09 23 239900 Central Region River Valley
ILLUMINAIRE ON DEVONSHIRE 65 Devonshire Road #07-03 1 41 Strata 756,000 18439 1713 13-MAY-2009 Apartment Freehold Uncompleted New Sale HDB 09 23 239900 Central Region River Valley
-These are not just 1 or 2 transactions but several at 7xxk and I have yet to include area like sophia, somerset, D8, and so on...
-Assuming you consistently hoot 6x alexis MM bot at 4xx now selling at 7xx, based on 20% down, monthly is just a mere 1.5k based on 1.15% for 35yrs. Not bad for a 4.Xmil worth of MM units with just 1.5k monthly loan ;)
- Again I do agree that landed performance is as good since the psf disparity is insanely high after the runup :) :)
I think what matters most is after the runup, can the MMs still perform as good as the landed? :D This is like MM Rabbit and Landed Turtle Race. One goes a long way, the other is short term quick flip and go.
1) MMs have the highest rental yield due to quantum. If you use a 3bedrm condo, your rental yield is worst. For the same $4M, you can buy 2 x 3bedrm condo at most. So you can only rent one for $5K and stay in one yourself?
MM might have the higher psf rental, but that doesnt mean the yield is the highest because of their high PSF price. In today's market you still can get decent rental yield for 3 bedder that cost below $1m, especially if you go for LH property.
2) Do you not need to pay interest when you take loan to buy MM or 3bedrm for own stay? If you say paying $3.3K per month to stay in landed is expensive, then I pity those who rent MMs from you paying the same amount per month. They are more penny wise pound foolish.
that difference between an investment property and your home is that investment property will pay for itself. $3.3K per month is only interest. Monthly mortgage payment for a $4m property with 80% loan is around $10k per month.
3) Fully paid vs leveraged loan. Both has their pros and cons. Although personally I prefer leverage due to low interest enviroment. Yes, with $4M cash, one can buy up to $10M property. So you are comparing to buy 10MMs vs 1 bungalow vs 2 semi-ds? I would buy 2 semi-ds, one for own stay, one for rent out at $12K per mth, i get the best of both worlds - rental income and captial appreciation
with $10m, you could easily pick up a couple of MM apartment in good location, a couple of 3 bedder in dist 10 that is near good school, and perhaps another 3 bedder for own stay. Rental for investment property will be more than enough to pay mortgage for your 3 bedder.
4) Already with so many restrictions on landed purchase, the price can still soar so high. Can you imagine what will happen if the door is opened one day to foreigners? The pot of gold becomes a hill of gold! You dun say this will never happen. Many high paying jobs are already lost to foreign talents. Many spore girls are dating or kena scr**ed by ang mos. Next time, u see a lot of eurasians in Sg with single mums as the ang mohs all go back to their countries. Do u think the government care about all these, and care about who is buying / owning the land?
dream on.
phantom_opera
04-06-12, 17:17
五十步笑百步 ;)
:p
MM might have the higher psf rental, but that doesnt mean the yield is the highest because of their high PSF price. In today's market you still can get decent rental yield for 3 bedder that cost below $1m, especially if you go for LH property.
that difference between an investment property and your home is that investment property will pay for itself. $3.3K per month is only interest. Monthly mortgage payment for a $4m property with 80% loan is around $10k per month.
with $10m, you could easily pick up a couple of MM apartment in good location, a couple of 3 bedder in dist 10 that is near good school, and perhaps another 3 bedder for own stay. Rental for investment property will be more than enough to pay mortgage for your 3 bedder.
dream on.
Buying 10 toyotas can never equate to 1 Ferrari.
Buying 100 casio watches can never equate to 1 rolex watch.
Screwing 30,000 thai chicks in Geylang can never equate to 1 Zhang Zhi Yi
:D
Make money while enjoying life. Wats the point if you make so much but sacrifice the quality of your life? Will u live to see what's coming?
I think what matters most is after the runup, can the MMs still perform as good as the landed? :D This is like MM Rabbit and Landed Turtle Race. One goes a long way, the other is short term quick flip and go.
For ur question on this, I will use my quantum theory justification model for MM investments. I will compare with an upstream [i.e 1rm in the similar area]. If someone says 4xx FH alexis is exp, how about at 99LH ONR 1rm selling at 7xx at the same period? If now ONR selling at 9xx, doesnt it make sense for alexis to go to 7xx? It is all about quantum play for MM. If you are investing an MM in an area where the gap with an immediate upstream is so little <100k then it is obviously not advisable to invest in the MM at all. Not all MM are deem as investable assets.
But then again, i shall humbly not debate on this topic because different investors have different pov, some see MM no future some see got future.. everyone got its own reasoning and analysis
Buying 10 toyotas can never equate to 1 Ferrari.
Buying 100 casio watches can never equate to 1 rolex watch.
Screwing 30,000 thai chicks in Geylang can never equate to 1 Zhang Zhi Yi
:D
Make money while enjoying life. Wats the point if you make so much but sacrifice the quality of your life? Will u live to see what's coming?
Your ZZY analogy really cracks me up.. anyway reminded me of a joke shared by a fellow investor...
He sees that buying a condo with 80% loan and relying on rentals to finance the monthly rentals akin to buying a young cow, and selling all its milk to finance the food or loan to maintain the cow. End of the 20yrs or so, you nv get to enjoy a single drip of the milk cos u have sold them all just to finance it. Worse, what u get then would be a very old cow of low value ....
On top of that, u have to pray hard throughout the loan tenure that there is constant high demand for the milk (rentals), and the finance interest rates do not shoot up. And yr cow appreciates in value faster than the inflation rate :D
For ur question on this, I will use my quantum theory justification model for MM investments. I will compare with an upstream [i.e 1rm in the similar area]. If someone says 4xx FH alexis is exp, how about at 99LH ONR 1rm selling at 7xx at the same period? If now ONR selling at 9xx, doesnt it make sense for alexis to go to 7xx? It is all about quantum play for MM. If you are investing an MM in an area where the gap with an immediate upstream is so little <100k then it is obviously not advisable to invest in the MM at all. Not all MM are deem as investable assets.
But then again, i shall humbly not debate on this topic because different investors have different pov, some see MM no future some see got future.. everyone got its own reasoning and analysis
Tats y the MM quantum theory justification model is short lived. Beyond a certain quantum, everything else doesn't make sense anymore and will come back to face reality.
My landed goliath theory defies the quantum theory, and will and always hold true over the long run.
I just find it ridicule when Mr P acknowledged that paying $3.3K a month to stay in a landed is no better than paying the same to stay in a MM, and he still believe that his tenants will not wake up and continue to serve him his daily milk for the rest of his life. :scared-1:
Tats y the MM quantum theory justification model is short lived. Beyond a certain quantum, everything else doesn't make sense anymore and will come back to face reality.
My landed goliath theory defies the quantum theory, and will and always hold true over the long run.
I just find it ridicule when Mr P acknowledged that paying $3.3K a month to stay in a landed is no better than paying the same to stay in a MM, and he still believe that his tenants will not wake up and continue to serve him his daily milk for the rest of his life. :scared-1:
QT for MM is not short-live or rather there are always pockets of opportunity, that is the reason why I gave timeline in 2006,2009,2010 and 2012. MM is still an emerging trend and rather new in SG especially ulu places so if die die want me vomit 10yrs series, this is something I cant do :)
Based on what you say, it appears that MM and other non-landed will stay stagnant and landed only 1 way up. Both theories are different and that's why they cannot applied on the same asset class. Goliath or Large sqft low psf theory only work best in recession or when disparity of psf compared to other property assets class has a huge gap which presents a huge opportunity for the runup. For example, 40yr super chui FH at Botanic Gardens Mansion av 8xxpsf during recession till 17xx last transacted and now asking 2k psf. Each piece of the unit are large sqft. At 800psf gain for 1.4ksqft, you get over 1mil.
If you apply a landed and a non-landed in the same area, same tenure, if both assets have very close psf gap, how much do you think the possibility for another round of insane runup?
Tats y the MM quantum theory justification model is short lived. Beyond a certain quantum, everything else doesn't make sense anymore and will come back to face reality.
My landed goliath theory defies the quantum theory, and will and always hold true over the long run.
I just find it ridicule when Mr P acknowledged that paying $3.3K a month to stay in a landed is no better than paying the same to stay in a MM, and he still believe that his tenants will not wake up and continue to serve him his daily milk for the rest of his life. :scared-1:
I think you misread what I said. $3.3K is only interest alone, to service a mortgage for a $4m landed property with 80% loan, it will cost your $10K per month based on current interest of 1.25%.
Again, why are you always talking about MM?
QT for MM is not short-live or rather there are always pockets of opportunity, that is the reason why I gave timeline in 2006,2009,2010 and 2012. MM is still an emerging trend and rather new in SG especially ulu places so if die die want me vomit 10yrs series, this is something I cant do :)
Based on what you say, it appears that MM and other non-landed will stay stagnant and landed only 1 way up. Both theories are different and that's why they cannot applied on the same asset class. Goliath or Large sqft low psf theory only work best in recession or when disparity of psf compared to other property assets class has a huge gap which presents a huge opportunity for the runup. For example, 40yr super chui FH at Botanic Gardens Mansion av 8xxpsf during recession till 17xx last transacted and now asking 2k psf. Each piece of the unit are large sqft. At 800psf gain for 1.4ksqft, you get over 1mil.
If you apply a landed and a non-landed in the same area, same tenure, if both assets have very close psf gap, how much do you think the possibility for another round of insane runup?
I think you do not fully understand the goliath theory. The goliath theory besides value for money, it also defies logical sense. Does buying a ferrari or rolex or screwing Zhang Zhi Yi makes any sense to you? Does paying $39M for a 99LH bungalow in Sentosa Cove makes any sense to you?
So what is the potential upside for a landed that is exclusive only to the top 1% of the country bearing in mind there are only 50,000 of these going around vs a non-landed (few hundred thousands) which the numbers add on every now and then with new launches while older buildings (and hence rental) deteroriate over time as they age?
I think you misread what I said. $3.3K is only interest alone, to service a mortgage for a $4m landed property with 80% loan, it will cost your $10K per month based on current interest of 1.25%.
Again, why are you always talking about MM?
Whatever principal you are repaying to the bank, isn't that your own money at the end of the day when u sell unless u say the landed price will depreciate instead of appreciate over time?
So the occupancy cost is only the interest you are paying to the bank at $3.3K per mth.
Likewise, when you rent out $3.3K to your tenant, he gets back nothing at the end, isn't this his occupancy cost? How long do u think your tenant will be happy to pay this rent especially as the condo ages while new condos spring out next door?
U started with MM, and now u are deviating from it?
I think you do not fully understand the goliath theory. The goliath theory besides value for money, it also defies logical sense. Does buying a ferrari or rolex or screwing Zhang Zhi Yi makes any sense to you? Does paying $39M for a 99LH bungalow in Sentosa Cove makes any sense to you?
So what is the potential upside for a landed that is exclusive only to the top 1% of the country bearing in mind there are only 50,000 of these going around vs a non-landed (few hundred thousands) which the numbers add on every now and then with new launches while older buildings (and hence rental) deteroriate over time as they age?
-ah ok thanks for the clarification.
-rental yield for non-landed has been consistently higher for landed so there isnt a huge concern on this, so buy for home stay da best for landed
- more old condos, more empty landed even better, en bloc push up the prices
- yes target group is very low and hence the transaction vol and % is also very low:
Landed available stock:
2012Q1 70159
Non-landed transactions:
2012Q1 526
transaction/available stock = 0.75%
Non-landed available stock:
2012Q1 200761
Non-landed transactions:
2012Q1 6269
transaction/available stock = 3%
Recently view this Mont timah and heard that two unit was for rental. One of the owner rented out at about 14k. Is this consider good? Considering the selling price is about 3.8mil. :confused:
nobrainer32007
04-06-12, 21:12
Agree! The longer the crisis, the,longer interest rate will stay low which is positive for properties. Coupled With a strong currency and continued inflation, it makes sense to park your money in hard and solid properties instead of bank (substandard return), structured deposits (remember minibond?), bonds (why lock in at lock rate now?) or perpetuals (they are not really bond but more like equities but paying substandard returns).
How much land does singapore government have? CAN release gls land non stop meh? Did I not hear "last piece of residential land in JLD? LAND IS LIMITED IN SINGAPORE!
Based on current situation, my take is that interest rate is going to stay low for 4 more years. So get the bank to lend you easy money to fund your property and let the tenant to fund your instalments while you enjoy the return with an option on capital gain realisation.
Do it right (this is my qualifier) and money works for you instead of the other way round.
Huat ah!
(I will revisit this posting in 4 years' time)
Wah, 700+psf for top 3 bids with 12 bids submitted u call that NOT AGGRESSIVE :simmering: Jervois Road tender only 8XXpsf leh
No need QE, as long as Us Fed come out and say zero interest rate till 2020, ho say liao ... all properties will be sold out overnight :cheers5:
Recently view this Mont timah and heard that two unit was for rental. One of the owner rented out at about 14k. Is this consider good? Considering the selling price is about 3.8mil. :confused:
It's lease is running down.
I am preparing to get a second FH/999 leasehold PC with 1.3-1.5mil Budget while holding onto my current HDB with outstanding loan of 460k.
Household income is around 7k+ with disposal rental income of 2k+.
I am sort of confident that market will goes up and price will be escalating upwards.
Numbers dun add up. How much loan r u getting for that PC? Or u have a 靠山 when interest rate hikes? How much spare cash do u actually have to service ur loan?
Sorry i am not flaming u. I am in a much better position than u, but i'm not taking any risks with the current inflated prices. Jus sold my FH PC, staying in good old hdb with 5 digit outstanding loan. Jus wan to understand better.
It's lease is running down.
what do you mean??
Numbers dun add up. How much loan r u getting for that PC? Or u have a 靠山 when interest rate hikes? How much spare cash do u actually have to service ur loan?
Sorry i am not flaming u. I am in a much better position than u, but i'm not taking any risks with the current inflated prices. Jus sold my FH PC, staying in good old hdb with 5 digit outstanding loan. Jus wan to understand better.
U r not leveraging yourself in this low interest rates environment by selling ur PC, cash out, and stay HDB with minimal loan. There is nothing wrong wif this if u r risk adverse, however, as time goes by, u will realise that ur wealth is stagnant or diminuting while others who leveraged kept on accumulating wealth till they cash out eventually and move back to HDB fully paid with a load of cash for retirement.Remember, taking up a housing loan is a form of forced savings
Remember, taking up a housing loan is a form of forced savings
wa......very profound! :o
wa......very profound! :o
keke, it means if u r cash rich, u probably spend the money elsewhere on some stuff which yields no return, eg. Cars, food, drinks, women. On the contrary, having a loan commitment would mean u will force urself to set aside money for mthly instalments, and is therefore a forced savings, yet with a much higher return than fixed deposits and stocks
U r not leveraging yourself in this low interest rates environment by selling ur PC, cash out, and stay HDB with minimal loan. There is nothing wrong wif this if u r risk adverse, however, as time goes by, u will realise that ur wealth is stagnant or diminuting while others who leveraged kept on accumulating wealth till they cash out eventually and move back to HDB fully paid with a load of cash for retirement.Remember, taking up a housing loan is a form of forced savings
I dont understand what you are saying? Isnt Shanhz cashing out like you said?
I dont understand what you are saying? Isnt Shanhz cashing out like you said?
Didnt u read that he still has 5 digit outstanding HDB loan after cash out his PC? This means he hasn't earned enough to fully pay for his HDB and for his retirement.
Instead of cashing out in a low interest rate environment, this is the best time to leverage (probably only once in your lifetime to come across less than 1% SIBOR or SOR - this would not have happened without the financial crisis).
So after cashing out, what is he going to do next? How is he going to grow more money? Wait until interest rates goes up to 5%, then take loan? :D
phantom_opera
05-06-12, 17:19
Didnt u read that he still has 5 digit outstanding HDB loan after cash out his PC? This means he hasn't earned enough to fully pay for his HDB and for his retirement.
Instead of cashing out in a low interest rate environment, this is the best time to leverage (probably only once in your lifetime to come across less than 1% SIBOR or SOR - this would not have happened without the financial crisis).
So after cashing out, what is he going to do next? How is he going to grow more money? Wait until interest rates goes up to 5%, then take loan? :D
That is only true if you can fix for 15,20 or 30y like those fixed rate loan in the US ... in Singapore, you hardly find anything fixed beyond 3y. On the other hand, corporate can borrow money by having a fixed rate bond / maturity ...
Didnt u read that he still has 5 digit outstanding HDB loan after cash out his PC? This means he hasn't earned enough to fully pay for his HDB and for his retirement.
Instead of cashing out in a low interest rate environment, this is the best time to leverage (probably only once in your lifetime to come across less than 1% SIBOR or SOR - this would not have happened without the financial crisis).
So after cashing out, what is he going to do next? How is he going to grow more money? Wait until interest rates goes up to 5%, then take loan? :D
There is nothing wrong with having an exit strategy for investment. And for him he might have already achieved his target and wish to sell and wait for the market correction. Or perhaps use the money for other investment purpose etc.
Are you speaking based on your personal circumstance rather than speaking from a pure investment point of view? Perhaps your situation is different because all your money is stuck in your landed property so cashing out was no longer an option until perhaps when you are too old to enjoy the fruits of your investment.
wa......very profound! :o
I fully agree, in 1995 when I get my $180,000 from HDB only think of spending. Lucky did not spend all and manage to saving $100,000. In 2006 force myself to buy 2 Bedroom at Southbank with only 7 good years left in the RSAF with the $100,000. 4 years later only think of spending but in the end decide to get another PC. Worst can happen is I lose all which is the $100,000 but 3 years rental more than $100,000, look like nothing to lose. Chiong Chiong Chiong nothing to lose chiong............
There is nothing wrong with having an exit strategy for investment. And for him he might have already achieved his target and wish to sell and wait for the market correction. Or perhaps use the money for other investment purpose etc.
Are you speaking based on your personal circumstance rather than speaking from a pure investment point of view? Perhaps your situation is different because all your money is stuck in your landed property so cashing out was no longer an option until perhaps when you are too old to enjoy the fruits of your investment.
Well, I have invested both landed and condos, and frankly, it is so much easier to cash out from landed (4 mths lead time to sell) than condos (1.5 yrs lead time to sell). Reason is very simple, there is only one landed unit (can't really compare with others) while there are so many similar units in a condo, and there are so many condos in an area. Worst still are the MMs which you invested, hardly any room for capital appreciation and purely just earn from rental yields at <3% per annum. This is more pathetic than buying a blue chip stock and earning 5% dividends every year.
From an investment point of view, please tell me what other investments besides property under a low interest rate environment can you achieve at least 20% returns per annum with minimal risk? Shares price can go down 30% for no reason but property price correction happens only if something drastic happens. Run your own business maybe - win big or lose big?
Well, I have invested both landed and condos, and frankly, it is so much easier to cash out from landed (4 mths lead time to sell) than condos (1.5 yrs lead time to sell). Reason is very simple, there is only one landed unit (can't really compare with others) while there are so many similar units in a condo, and there are so many condos in an area. Worst still are the MMs which you invested, hardly any room for capital appreciation and purely just earn from rental yields at <3% per annum. This is more pathetic than buying a blue chip stock and earning 5% dividends every year.
From an investment point of view, please tell me what other investments besides property under a low interest rate environment can you achieve at least 20% returns per annum with minimal risk? Shares price can go down 30% for no reason but property price correction happens only if something drastic happens. Run your own business maybe - win big or lose big?
I have sold 3 PCs over the past 3 to 4 years and it usually take me about 3 weeks to find a buyer. So I am not sure why you need 1.5years to find a buyer for your condo? Must have been those 30-40 years old condo that cant go enbloc?
Actually why do you need to question about what other people do with their investment profit? They can go for a holiday if they wish, invest in start up company, buy a hawker stall sell chuikway, invest in bond, put money back to CPF etc etc.
Perhaps you should open up your mind a bit about investment opportunity in PC instead of just bury yourself in your LAND. Rental yield for PC is a lot higher then what you think. The current yield I am getting for all my PC are above 4%, and none are MM units.
Btw, what do you mean by only 1 LANDED UNIT? you live in Istana?
I have sold 3 PCs over the past 3 to 4 years and it usually take me about 3 weeks to find a buyer. So I am not sure why you need 1.5years to find a buyer for your condo? Must have been those 30-40 years old condo that cant go enbloc?
Actually why do you need to question about what other people do with their investment profit? They can go for a holiday if they wish, invest in start up company, buy a hawker stall sell chuikway, invest in bond, put money back to CPF etc etc.
Perhaps you should open up your mind a bit about investment opportunity in PC instead of just bury yourself in your LAND. Rental yield for PC is a lot higher then what you think. The current yield I am getting for all my PC are above 4%, and none are MM units.
Btw, what do you mean by only 1 LANDED UNIT? you live in Istana?
4% rental yield you still feel very proud huh? Is this net of all expenses and taxes? Just blue chips and REITs dividend yields, bonds coupn rates can outperform your miserable rental yield. :doh:
I have made more than $1M out of just one landed investment. How much hv u made so far out of many MMs or non-MMs PC?
Please dun comment just for the sake of commenting cos at the end of the day, it is how much you make not how much you comment. :cheers5:
4% rental yield you still feel very proud huh? Is this net of all expenses and taxes? Just blue chips and REITs dividend yields, bonds coupn rates can outperform your miserable rental yield. :doh:
I have made more than $1M out of just one landed investment. How much hv u made so far out of many MMs or non-MMs PC?
Please dun comment just for the sake of commenting cos at the end of the day, it is how much you make not how much you comment. :cheers5:
In one of your earlier post you are talking loudly about leveraging in the low interest environment, and suddenly you are throwing that concept out of the window when you compare rental yield to buying REITS and stocks. If you want to compare rental yield to buying stocks and dividends, then you should look at the ROE instead of ROI.
To tell you the truth, I dont really know how much I make from property, because whenever I sell, I will plough it back to diversity my property portfolio. When it just paper gain,lets not talk about profit because who knows, property prices might plunge 50% by next year.
I have sold 3 PCs over the past 3 to 4 years and it usually take me about 3 weeks to find a buyer. So I am not sure why you need 1.5years to find a buyer for your condo? Must have been those 30-40 years old condo that cant go enbloc?
Actually why do you need to question about what other people do with their investment profit? They can go for a holiday if they wish, invest in start up company, buy a hawker stall sell chuikway, invest in bond, put money back to CPF etc etc.
Perhaps you should open up your mind a bit about investment opportunity in PC instead of just bury yourself in your LAND. Rental yield for PC is a lot higher then what you think. The current yield I am getting for all my PC are above 4%, and none are MM units.
Btw, what do you mean by only 1 LANDED UNIT? you live in Istana?
I think because landed is one parcel of land followed by another. Where else PC is stack one above the other. In terms of similarities for pc in the same block yes. But then more so for HDB the PC base on some of the newer designs that is been launch.
I think in landed, the pool of people who can afford landed and the profile is more limited. So the fact that it takes more then 2 mths to sell may not be a surprise. And in all investment majority falls within a range of affordsbility, upside potential n the pool of people.
anyway still learning how the gain / yield is achieve. Worst is now commercial property also come into the piture. I think the loop hole for buying hawker space is been closed off so some actually got trap in that investment.
In one of your earlier post you are talking loudly about leveraging in the low interest environment, and suddenly you are throwing that concept out of the window when you compare rental yield to buying REITS and stocks. If you want to compare rental yield to buying stocks and dividends, then you should look at the ROE instead of ROI.
To tell you the truth, I dont really know how much I make from property, because whenever I sell, I will plough it back to diversity my property portfolio. When it just paper gain,lets not talk about profit because who knows, property prices might plunge 50% by next year.
Nothing is gained until u eventually cash out. I still strongly believe property prices will not fall sharply unless something drastic really happens, i.e. the whole world slip into recession with companies doing mass retrenchment.
However, within the property market, certain properties (segment) may not perform as well as others. Eg. I am seeing catching up game on the OCR prices towards CCR prices while CCR prices may be stagnant for a while. Just as I see Landed property prices will continue to rise and catch up its buillt-in psf vs non-landed.
So, good luck if you are already vested in CCR and fetching miserable rental yields now. The only way out is to pray hard that China wun fall into crisis.
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