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Thread: Singapore Property Cycles.

  1. #1
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    Default Singapore Property Cycles.

    Let us look at the previous property cycles:

    1997: peak
    1998-2003: decline
    2004-2005: moderate growth
    2006-2007: growth accelerating
    2007: peak

    So till 2007, the cycle was lasting 10 years instead of the average 7. With the assumption the next cycle being the normal 7-year trend, we should reach the bottom around 2010-2011 and the next peak 2014-2015?

    Whats your view?

  2. #2
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    can 2011 be the bottom when it's higher than 2007?

    Maybe 2009 was the bottom and 2011 the peak

    Ppty cycle in my view flw govt policies

    Cooling measure = peak (2007 and 2011)

    Relax ppt rules = valley (2005 and 2009)

  3. #3
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    Disagree. Time varies depending on many factors. Economy, availability of HDB, rental yield etc. 1998 to 2005 was because too many HDB.


    Quote Originally Posted by Tingwei
    Let us look at the previous property cycles:

    1997: peak
    1998-2003: decline
    2004-2005: moderate growth
    2006-2007: growth accelerating
    2007: peak

    So till 2007, the cycle was lasting 10 years instead of the average 7. With the assumption the next cycle being the normal 7-year trend, we should reach the bottom around 2010-2011 and the next peak 2014-2015?

    Whats your view?

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    So by right, the BTO system will prevent that too many hdb situation from happening again? Which means no more price depression like that in the early 2000?

    Now it seems that the problem that may occur is too many mass market condo and MM units in the market.

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    Quote Originally Posted by hovivi
    can 2011 be the bottom when it's higher than 2007?

    Maybe 2009 was the bottom and 2011 the peak

    Ppty cycle in my view flw govt policies

    Cooling measure = peak (2007 and 2011)

    Relax ppt rules = valley (2005 and 2009)
    Good points!

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    The invisible hand at play. The cycle is not as predictable as stated. It all depends on the invisible hands.

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    How about ignoring the cycles, since prices increase over time in a non linear fashion. Just buy what you can afford to hold, by the time your kids are grown up they SHOULD all be worth a fortune then.

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    Quote Originally Posted by Tingwei
    Let us look at the previous property cycles:

    1997: peak
    1998-2003: decline
    2004-2005: moderate growth
    2006-2007: growth accelerating
    2007: peak

    So till 2007, the cycle was lasting 10 years instead of the average 7. With the assumption the next cycle being the normal 7-year trend, we should reach the bottom around 2010-2011 and the next peak 2014-2015?

    Whats your view?
    i think the ecomonic conditions in S'pore and in Asia today is much more dyanmic (up and down side) than it was in the late 90's, so the cycle mentioned above might not apply anymore in times today.

    In 2000, there was a upward spike of prop prices after the Asian financial crisis when ppl thought prop prices wld shoot up after a major downturn... turned out ... there were a few major world events that contradicted that belief
    - 911
    - Afhan war
    - Iraq war
    - then SARS

    so in my opinion, that 10 year cycle on prop prices is a rare occurence and one that was unduly prolonged in unprecedented circumstances

    In late 2008 to early 2009, prices plunge yet again due to the World's financial crisis after a year today, prices have largely recovered to 2007 level. The price recovery is in my opinion something overdue for Asian properties.... due to the dynamic growth conditions here in Asia...

    however, the financial crisis is yet over and next year would be an interesting year to watch... the de-coupling concept of Asia econimies from US / Europe seems to be holding true for 2010.. however the prolong dowturn effect in the US and Europe...what that will do the Asian economies will be quite telling in 2011 and 2012... i'm bullish long term on Asian properties but short term sceptical on the price level today

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    Quote Originally Posted by ahlipp
    ... i'm bullish long term on Asian properties but short term sceptical on the price level today
    I agreed this view and have liquidated some 30% of Sg properties in the last 3 months.
    In a traditional cycles, is the equity leads the property cycle, but not this time round.
    Equity will eventually provide a better yield and liquid.
    As the yield in the property in Asia with the raising prices, is not going to be that attractive soon

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    having observed the property cycle for about 12 years and missed them until last year, I feel that if one wanna gamble in property, better to look at future upside potential of a particular property of interest to you. Convenience, amenities, accessibility, ability to liquidate it as compared to the neighboring similar project, psf price, good facing are my key considerations.

    15 years ago, we dont have many selections and the condo designs were pretty standard, property buyers dont have many choices and are less demanding. In today's context, it is different. There are projects with specific themes which is appealing to certain group of people; the family, the gay community or purely for investment (MMs). Some developers engaged world renown architect which help a particular project to stand out from the crowd and sell at high psf, D'leedon for example, buyers still flocked... dont really understand.

    I think property cycle is just for reference only. There are other factors such as past experience from government to cool down the market until it over chilled it. So this time round, the government have taken steps not to over kill the market. Also right now hot money QE2 and our friendly China new citizens also buying up our property.

    So SG property scene is pretty complex now which make it harder to time when it will be a better time to buy. A strategy to adopt is to buy 2 units provided you have the means. When market up, you sell, or when market down, you buy some more. Property should appreciate over time.

    What I believed in is do not over leverage and ensure that if the market down by 20%, you are still able to hold on to it.

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    Quote Originally Posted by mogyi
    How about ignoring the cycles, since prices increase over time in a non linear fashion. Just buy what you can afford to hold, by the time your kids are grown up they SHOULD all be worth a fortune then.
    Because if you catch one cycle well..... you save 10-20 years of life.

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    Quote Originally Posted by rattydrama
    So SG property scene is pretty complex now which make it harder to time when it will be a better time to buy. A strategy to adopt is to buy 2 units provided you have the means. When market up, you sell, or when market down, you buy some more. Property should appreciate over time.

    What I believed in is do not over leverage and ensure that if the market down by 20%, you are still able to hold on to it.
    Agree. Holding power is very important. But the challenge is to know when the market is going up or down.

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    Quote Originally Posted by TS
    Because if you catch one cycle well..... you save 10-20 years of life.
    how to predict now? Its so so difficult.

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    Quote Originally Posted by Tingwei
    Agree. Holding power is very important. But the challenge is to know when the market is going up or down.

    during lehman brothers time in early 2009, gurus say the price will move south further, during the 30 Aug this year, alot say price will drop another 20% (not this forum) but the environment is more complex now and a lot of people have holding power so its harder to see a deep drop then in the earlier years.

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    Quote Originally Posted by rattydrama
    during lehman brothers time in early 2009, gurus say the price will move south further, during the 30 Aug this year, alot say price will drop another 20% (not this forum) but the environment is more complex now and a lot of people have holding power so its harder to see a deep drop then in the earlier years.
    i somehow agree with the point that ppl these days in S'pore have better holding power or rather, are more prudent in their finances.

    i guess S'pore over the years have seen her fair share of ups and downs and many have gotten burnt before... the lengthy property downturn after the Asian Financial crisis is also a good reminder of being overly bullish or overly stretched as the unforeseen is often lurking around the corner...

    what wld be interesting is the bullishes in emerging markets like China... will China experience the big crashes S'pore or Hong Kong experienced and what wld the reaction on the street be... every crash is a matter of time, but reaction and circumstances surrounding the crash is always different, with a weaken US / Europe, hard to imagine if Asia ecomony becomes unstable

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    Quote Originally Posted by ahlipp
    i somehow agree with the point that ppl these days in S'pore have better holding power or rather, are more prudent in their finances.

    i guess S'pore over the years have seen her fair share of ups and downs and many have gotten burnt before... the lengthy property downturn after the Asian Financial crisis is also a good reminder of being overly bullish or overly stretched as the unforeseen is often lurking around the corner...

    what wld be interesting is the bullishes in emerging markets like China... will China experience the big crashes S'pore or Hong Kong experienced and what wld the reaction on the street be... every crash is a matter of time, but reaction and circumstances surrounding the crash is always different, with a weaken US / Europe, hard to imagine if Asia ecomony becomes unstable
    The older investors that has witnessed the ups and downs of the market would have learnt to be cautious and be prepared for the eventual downturn.

    I'm more concerned about the newer guys that have only seen the market move up (since 2004) and assumed that the market can only go up. Hopefully they have made provisions for the worst. (I'm not saving that the market is going to crash now, but the market has its ups and downs)

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    OR The newer ones who saw mass market new launch move up from $600 psf to $1200 psf recently and assume that now CCR properties are dead, the future for OCR property prices is super bright and will close gap to CCR properties of $3000 psf! (because suddenly so many Singaporeans become so rich, earning >$20k per month etc?) All of the buyers chasing OCR properties will super HUAT ah!

    Quote Originally Posted by sh
    The older investors that has witnessed the ups and downs of the market would have learnt to be cautious and be prepared for the eventual downturn.

    I'm more concerned about the newer guys that have only seen the market move up (since 2004) and assumed that the market can only go up. Hopefully they have made provisions for the worst. (I'm not saving that the market is going to crash now, but the market has its ups and downs)

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    1200 psf for OCR is no value buy. 3000 psf for CCR unless it's nassim is no value buy either. Devonshire, grange et al is at best 2000psf.

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    Another thing to note is where u keep your extra cash. The place u keep ur cash to wait for downturn to buy more properties must be immune to the downturn as well.

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    No money headache.... Too much money aso headache?? Just spend lor.... Hehe

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    Quote Originally Posted by azeoprop
    Another thing to note is where u keep your extra cash. The place u keep ur cash to wait for downturn to buy more properties must be immune to the downturn as well.
    Under the mattress?

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    Quote Originally Posted by sh
    The older investors that has witnessed the ups and downs of the market would have learnt to be cautious and be prepared for the eventual downturn.
    Well said. Hope they will all have enough holding power when the time comes.

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    Quote Originally Posted by Tingwei
    Well said. Hope they will all have enough holding power when the time comes.
    "The time will never come.... if it really does, I would have cashed out by then".... guess that is what is going through people's head now....

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