Property price is coming down fast

[Amber Woods]

Thank you Leeds for your explanation of the imperfect market and market failure. Now I understand why we have all the cooling measures because of market inefficiency as pointed out by DPM Therman. You make economics sound so simple.

[Leeds]

Thank you Leeds for your explanation of the imperfect market and market failure. Now I understand why we have all the cooling measures because of market inefficiency as pointed out by DPM Therman. You make economics sound so simple.

Thank you for your kind words.

I think you are one of the very few who read every word of my writings and quoted correctly.

[indomie]

Thank you for your kind words.

I think you are one of the very few who read every word of my writings and quoted correctly.

In my opinion singapore is one very rare country where full employment is virtually guarantee. It doesn't have a big population in the first place. Most infrastructure projects are not build based on it's population needs. Why u need such a big airport? A huge seaport? Extensive mrt network? Marina barrage? All these are build to support an economy that is bigger than the population itself. To think that the government is planning the economy based purely on market efficiency is too simplistic. If u consider your investment based on today efficiency level, you will lose out in the longer term.

[seletar]

Your hatred on developers and banks are simply ridiculous ("leeches of the society"?). It's full of emotion with no concrete business sense.

It's like, to solve ever increasing hawker center food price , let's tax Les Amis 100% for every trouffle sold.

How is private developers building million dollar home causing ordinary Singaporeans' housing problem ? How is les Amis charging $1000 for a set lunch causing $4 chicken rice sold in hawker center ? They are correlatd, but not causal.

To blame private developers for today's housing problem is not only uncalled for, it is simply unfair.

In SG, land prices are by and large controlled by gov. Gov do not want to see land price to slide. It only wants to see land price to appreciate or maintain. Do you know the Bishan plot CAPL bought for SkyHabitat had been on the market since 2007 ? There were no shortage of offers in all these years, but none met its reserve price. I won't be surprised the reserve px is above 750. In other cases gov even rejected low bids.

Gov has a bigger agenda to maintain land price, I hope you already know the reason.

I have no objections of the various CMs. Those are needed NOT because developers are all cheats, but because we are facing global liquidity problem, and we must protect our financial system. Developers are victims of these policies ( so are banks. Do you know how badly the NIM is now ?) They will have to answer to shareholders if the inventory cannot be sold. This is the risks they are having. Of course they are not pleased.

Your hatred towards developers smacks of sheer cynism. Cheap shot ? Sure, tell me why you are so dead upset ?

Developers are victims ? Is this a joke ? As I've said before, no one is forcing the developers to make bids. If the reserve price is too high, then don't bid, the choice is theirs. How is this unfair ?

The Govt is not forcing developers to make bids and the reserve price is what the Govt value the land, if the developers think the valuation is too high then don't bid, simple as that. Just like if people think private property price is too high, then don't buy. Buy HDB instead.

Developers are not stupid and reckless, they do their due diligence before deciding to bid for the plot as it involves a large amount of money. Developers are educated and informed, they know the market, they know the reserve price, they know purchase terms of the Govt, they know that the Govt reserves the right to change rules, they are aware of the threat of CM and the various risks invloved, yet they still went ahead to bid for the land. The sale of land is a business transaction, willing buyer, willing seller. The developers buy at their own risk. It is not the business of the Govt to guarantee developers profit or protect developers from losses if they cannot sell their units from the plot. And it is not right for developers to complain to the Govt, or even more ridiculously, blame the Govt for their plot bidding decisions or their inability to sell their inventory at the high prices they want. Property buyers are also not stupid, if price and product is not attractive, why would they want to buy from the developer.

No one forced Capital Land to make that ridiculously high bid for the Sky Habitat plot, in fact CAPL's bid was much higher than the second highest bidder. If CAPL is unable to sell units of Sky Habitat and gets burnt, it is the mistake of their management on the bid price, it is not the Govt's fault. If their shareholders want accountability, they should look for the management that made the bid.

Banks are also victims ? is this another joke ? If you haven't notice, local banks have been aggressive in pushing home loans the past few years by enticing consumers with low mortgage rates. Now these banks have hooked record number of mortgages borrowers and record amounts of housing loans , it's only a matter of time before these banks increase mortgage rates on consumers to boost net interest income and bottomline. The ones that will truly suffer in the end are the mortgage borrowers.

And yes, that was a cheap shot you did to me.

[Leeds]

In my opinion singapore is one very rare country where full employment is virtually guarantee. It doesn't have a big population in the first place. Most infrastructure projects are not build based on it's population needs. Why u need such a big airport? A huge seaport? Extensive mrt network? Marina barrage? All these are build to support an economy that is bigger than the population itself. To think that the government is planning the economy based purely on market efficiency is too simplistic. If u consider your investment based on today efficiency level, you will lose out in the longer term.

Agree that Singapore's economy is dependent on the global demands because our domestic demand is simply too small. This is the reason why we are very vulnerable to changes to the external environment. Market is usually inefficient and that is why government's interventions are necessary in order to redistribute wealth 'more fairly' to the people. This is the primary role of any responsible government.

[seletar]

And why developers choose to pay the additional tax to gov instead of lowering price? You have got to have some business sense. It is protecting its earlier customers' interests ! This is the integrity we should appreciate. They are bearing the costs of gov measures.

Developers pay additional tax to protect its earlier customers interest, is this another joke ? or are you that naive ? 2 things I will say about your above statement.

1. What you say doesn't make business sense. If the developers pay additional tax, it means that they will have to factor in the additional tax and sell at a higher price to break even. If they are already unable to clear inventory at current price, what makes you so sure that they will be able to sell at the higher price given current market conditions. It is more wishful thinking than business sense. The developer could still end up continuing to struggle to sell their inventory and suffer greater losses with the additional tax.

2. What makes you so sure that the developer is not already selling at a lower price than the earlier customers ? Especially CCR properties close to the deadline, it is more likely that the developer have been selling at lower prices but still struggle to clear inventory before the additional tax hits them, so they have no choice but to bite the bullet. Demand is weak and the developer is unwilling to lower price further. In paying tax to extend selling period, the developer is hoping that demand will pick up in the months, but this is a risk that things could get worse instead of better.

[indomie]

Agree that Singapore's economy is dependent on the global demands because our domestic demand is simply too small. This is the reason why we are very vulnerable to changes to the external environment. Market is usually inefficient and that is why government's interventions are necessary in order to redistribute wealth 'more fairly' to the people. This is the primary role of any responsible government.

What evidence CMs are used to redistribute wealth (ie. Resulted in cheaper price), than to provide more revenue?. Market intervention only exist if there was a free market to begin with. Nothing happens here by accident.

[indomie]

Natural economic cycle doesn't exist, its a matter of gov policy. Most gov will choose inflation over recession, because its politically more palatable. Its senseless to try to time your investment purchase base on economic cycle. US and Japan can run their economy on debt forever. China is more interested on national growth over people welfare. If u try to beat their strategy with your decision to invest or not to invest, is equal to trying to break the casino with your small bet. You will never win. You better go along with them, don't go against them.

[Leeds]

What evidence CMs are used to redistribute wealth (ie. Resulted in cheaper price), than to provide more revenue?. Market intervention only exist if there was a free market to begin with. Nothing happens here by accident.

Agree that market intervention "exists" with a free market system because a free market can exist only under perfect market condition which we know the market is imperfect in the first place.

CMs have various objectives. Among other things, CM tries to address the inefficiencies of the property market. It also addresses the distribution of assets "fairly" in the sense that the rich cannot contiune to own more assets as they so wish at the expense of the middle class. Without this "redistribution" of wealth, there will be social divide to the extend creating social unrest if the market is allow to operate unsupervised.

[Leeds]

Natural economic cycle doesn't exist, its a matter of gov policy. Most gov will choose inflation over recession, because its politically more palatable. Its senseless to try to time your investment purchase base on economic cycle. US and Japan can run their economy on debt forever. China is more interested on national growth over people welfare. If u try to beat their strategy with your decision to invest or not to invest, is equal to trying to break the casino with your small bet. You will never win. You better go along with them, don't go against them.

Whether economic cycle is the result of weak monetary and fiscal policy is debatable. Economists have differing views about the recent US sub-prime crisis, the Asian financial crisis and even the 'Japanese lost decade' in the 90s'. Was it economics cycle at work or fiscal and monetary policies that bought down these economies? It may be easier to take the view that it was a combination of all these. The true is economists all over are still divided on this.

[Shanhz]

Whether economic cycle is the result of weak monetary and fiscal policy is debatable. Economists have differing views about the recent US sub-prime crisis, the Asian financial crisis and even the 'Japanese lost decade' in the 90s'. Was it economics cycle at work or fiscal and monetary policies that bought down these economies? It may be easier to take the view that it was a combination of all these. The true is economists all over are still divided on this.

economics theories are easy to quote - they all assume ceteris paribus.

in the real world, there is no such thing. too many variables interact to cause wanted/unwanted outcomes. there is also human psychology and herd instincts at play, which can defy gravity. also, funds and private investors who can control markets.

in short, economists can never have the right solutions to the world's problems.

[indomie]

Agree that market intervention "exists" with a free market system because a free market can exist only under perfect market condition which we know the market is imperfect in the first place.

CMs have various objectives. Among other things, CM tries to address the inefficiencies of the property market. It also addresses the distribution of assets "fairly" in the sense that the rich cannot contiune to own more assets as they so wish at the expense of the middle class. Without this "redistribution" of wealth, there will be social divide to the extend creating social unrest if the market is allow to operate unsupervised.

With or without CM the poor will never buy, unless they take risk to buy. The rich will not stop buying, they just buy cheaper OCR. CM is never meant to redistribute wealth. Its just an opportunity to bring in more revenue under the cover of social justice. There are more effective ways to bring down property price, but its not going to happen. Please tell me which is more possible, the rise of HDB price is by demand or by design?.

[Leeds]

economics theories are easy to quote - they all assume ceteris paribus.

in the real world, there is no such thing. too many variables interact to cause wanted/unwanted outcomes. there is also human psychology and herd instincts at play, which can defy gravity. also, funds and private investors who can control markets.

in short, economists can never have the right solutions to the world's problems.

Absolutely! The foundation of economic studies lie in the understanding of a perfect market so that all other variables constitute to the imperfect market. As such, government's monetary and fiscal policies are to address these inefficiencies within the system or market.

Ceteris paribus is just a condition to aid the understanding of economic and financial studies in understanding the reaction of two variables with another holding other variables constant. It is not economic per se.

[Leeds]

With or without CM the poor will never buy, unless they take risk to buy. The rich will not stop buying, they just buy cheaper OCR. CM is never meant to redistribute wealth. Its just an opportunity to bring in more revenue under the cover of social justice. There are more effective ways to bring down property price, but its not going to happen. Please tell me which is more possible, the rise of HDB price is by demand or by design?.

The role of any responsible government is to redistribute wealth (generated by the resources including people, money, material, time etc) back to its people fairly or at least perceived to be fair. Whether CMs serve this purpose is debatable. I have stated my views and you have stated yours. So lets' leave it as it is.

As to which are the more effective ways to bring down prices of HDB flats; I think we need a separate thread on this. The SDP's housing report has gained quite a lot of support from various quarters. Maybe, we could revisit this thread which was also started by me.

[phantom_opera]

lai liao lai liao, Chinese property market is heating up again

11月楼市供销两旺 低调复苏迎“暖冬”

and price of Chinese herbs up big time

[indomie]

The role of any responsible government is to redistribute wealth (generated by the resources including people, money, material, time etc) back to its people fairly or at least perceived to be fair. Whether CMs serve this purpose is debatable. I have stated my views and you have stated yours. So lets' leave it as it is.

As to which are the more effective ways to bring down prices of HDB flats; I think we need a separate thread on this. The SDP's housing report has gained quite a lot of support from various quarters. Maybe, we could revisit this thread which was also started by me.

In a country where the gov is richer than its citizen, the policy is more important than demand. In a country where the people are richer than the gov, demand is more important than policy. So next time the gov telling you that the sg population will hit 6 mil or a plate of chicken rice will cost 10 dollar, u better believe it.

[Leeds]

In a country where the gov is richer than its citizen, the policy is more important than demand. In a country where the people are richer than the gov, demand is more important than policy. So next time the gov telling you that the sg population will hit 6 mil or a plate of chicken rice will cost 10 dollar, u better believe it.

Yes Sir! I hear you.

[Leeds]

<a href="http://forums.condosingapore.com/member.php?u=149809" target="_blank">http://forums.condosingapore.com/ima...ine=1333455462

Just want to express my joy in exchanging views with you (indomie).

- You never attempt to misquote others
- You never challenge people at personal level
- You never insult others
- You never provoke others
- You challenge the subject and not the person
- You stay focus and true to your conviction
- You accommodate others' views

Hopefully, this thread or forum will remain this way.

[amk]

seletar I still do not get your extreme hatred towards developers/banks.
Even as you said, they bid higher, "willing buyer" cases, and then later cannot sell, so what ? the one that is going to suffer are the shareholders (and their employees, etc), not you. Why are you cursing so much when they do not reduce price ? (I dun want to believe you are Mr B reincarnated, but seriously, why are you so infuriated when developers dun reduce price ??)

Btw there is one thing you have to get it right: developers HAVE to buy land to sustain a business. If they do not replenish their land bank, a few yrs later there will be no property to sell, then what, all employees just sit there with no income ? The business today is the result of land acquisition years earlier. You think running a pty business is so easy ?

[indomie]

<a href="http://forums.condosingapore.com/member.php?u=149809" target="_blank">http://forums.condosingapore.com/ima...ine=1333455462

Just want to express my joy in exchanging views with you (indomie).

- You never attempt to misquote others
- You never challenge people at personal level
- You never insult others
- You never provoke others
- You challenge the subject and not the person
- You stay focus and true to your conviction
- You accommodate others' views

Hopefully, this thread or forum will remain this way.

The joy is mutual. You bring out the thoughts that could never be materialized, should I never cross words with you. What a brilliant mind and gentleman too.

[amk]

Obviously, you have no knowledge of basic economics. I am always impressed with your willingness to learn.

... to speak of "provoking", what kind of language is this ?

[Leeds]

... to speak of "provoking", what kind of language is this ?

Here is a example of 'misquoting" others. You have to look at the series of events and the contents of the threads that lead to my 'reaction' to the 'misquote'.

I did not in my thread said that there exist a perfect market. I was totally being 'misquoted' and my entire writing was being called into question because somone misquoted me.

[chestnut]

... to speak of "provoking", what kind of language is this ?

Brudder, first he says I have no basic knowledge of economics when he doesnt even know me. Hahahaha. When he talks down to people, it is OK. But when others to him, cannot. I


But when someone says that about him, he says, "you provoke me, I will not reply...." So my stance is very simple lah... I dont reply him lor... Hahahaha..



But I want to tell people here, no "perfect market". Please do your homework and do not harbour anger or frustration against and individual or companies.... It will only shorten your life... So sad

[Leeds]

It started with my response below to explain why government needs to intervene the market.

In economic term, for a perfect market to exist, there must be perfect competition; which requires perfect information with supply meeting demand and hence zero profit exist in the industry. In reality, the market is not perfect especially in the property market. As such, competitive advantage decides who make abnormal profits. Obviously, establishments have the competitive advantage against the individuals and hence the imperfect market.

Because the market is imperfect, there is a need for government's interventions to ensure a fair level of playing field. How the government intervene often decides who beneifit more. As such, the government has to balance the interests of the economy, corporates and the individuals to achieve both social and political goals.

In a competitive environment, organisations will continue to thrive for competitive advantage through means which may or may not be ethical and often at the expense of consumers. Individual consumers are usually powerless against such "protectionism" from organisations. As such, consumer group becomes necessary to balance the forces. Unfortunately, consumerism in Singapore is still in its infant stage and hence consumers are often at the receiving ends.

Mr Chestnut responded this way"

Wah, cheem?

Can u imagine the following:
1. U start company and your objective is not to make money? Then why start? Might as well be employee?

2. Imagine u work for a company, the company report they did not make money. Are u as employee happy? Will they be pay freeze or cut? Will there be hiring freeze or retrenchment?

3. Imagine u own shares of company. Do u expect the company to make money or break even?

4. Which country, developers don't make money?

5. Can u imagine singapore w/o banks. How do biz function?

Many love idealistic world. Very much like the communist, everyone is equal. But is Mao equal. Does he have 'servants'? Does he toil the field? Does he have a car? There is no idealistic world. It is but a fantasy in the mind of dreamers who cannot accept facts. So sad

I tried to show him what I was writing in economics term through the Wikipedia below:

Perfect market

From Wikipedia, the free encyclopedia

Jump to: navigation, search


In economics, a perfect market is defined by several conditions, collectively called perfect competition. Among these conditions are

• Perfect market information
• No participant with market power to set prices
• No barriers to entry or exit
• Equal access to production technology

The mathematical theory is called general equilibrium theory. On the assumption of Perfect Competition, and some technical assumptions about the shapes of supply and demand curves, it is possible to prove that a market will reach an equilibrium in which supply for every product or service, including labor, equals demand at the current price. This equilibrium will be a Pareto optimum, meaning that nobody can be made better off by exchange without making someone else worse off.[1]
Share and foreign exchange markets are commonly said to be the most similar to the perfect market. The real estate market is an example of a very imperfect market. Note that the conditions for Perfect Competition mean that a perfect market cannot be unregulated, since these preconditions for market function cannot at the same time be products of the market, yet must be provided somehow.
Another characteristics of a Perfect Market is normal profits, just enough to induce enough participants to stay in the market to satisfy customer demand. The least efficient producer may have very small profits, and be unable, for example, to pay dividends to shareholders, while more efficient producers have larger profits.
This attribute of perfect markets has profound political and economic implications, as many participants assume or are taught that the purpose of the market is to enable participants to maximize profits. It is not. The purpose of the market is to efficiently allocate resources and to maximize the welfare of consumers and producers alike. The market therefore regards excess profits, or economic rents, as a signal of inefficiency, that is of market failure, which is to say, not achieving a Pareto optimum

References

1. ^ Gerard Debreu, Theory of Value: An Axiomatic Analysis of Economic Equilibrium, Yale University Press, New Haven CT (September 10, 1972). ISBN 0-300-01559-3

Another attribute of the perfect market is even the market is operating at zero profit it is operating at the efficient scale (otherwise the firm will not be able to stay in the market). It is the market that provides the premium social benefits to the whole society.

He responded (maybe he did not read the Wikipedia) and post his response below:

Which industry operates in a perfect market? None. It is ideal and does not exist. That's why it is called perfect. This market does not exist in the us as well. If not, why company put aside money for r&d.it is like stating perfect spouse and looking for it. 1 in a million.

Car, computer, phone, supermarket, cereal, oranges, which one has perfect market? None.

I reacted with my response below:

Obviously, you have no knowledge of basic economics. I am always impressed with your willingness to learn.

I thought he was always willing to learn as he had suggested in his other postings. I think I was wrong.

With this, I shall let readers to draw their conclusions.

[chestnut]

All I said was there is no "perfect market". Thats all... So simple.

There is no perfect wife, no perfect car, no perfect house. So simple. What is there not to understand about my statement?

I am sharing with all bros and sis here, THERE IS NO PERFECT MARKET !!!!

Please do not think there is such thing as perfect market... If you believe, than you should listen to John Lenon
"Imagine" Because even John Lenon couldnt change the world. Even after his death.

So sad

Maybe I have NO BASIC ECONOMICS... Hahahahaha

Cheers - Remember, you control your own feelings. Never let anyone control your feelings !!!! You also control your own destiny !!!!

Cheers to all bros and sis.... Believe in yourself and make things happen. Dont dwell on things that you cannot change. Do things that can change your destiny. Remember - YOU CONTROL YOUR DESTINY.

Merry Christmas to All

[Leeds]

All I said was there is no "perfect market". Thats all... So simple.

There is no perfect wife, no perfect car, no perfect house. So simple. What is there not to understand about my statement?

I am sharing with all bros and sis here, THERE IS NO PERFECT MARKET !!!!

Please do not think there is such thing as perfect market... If you believe, than you should listen to John Lenon
"Imagine" Because even John Lenon couldnt change the world. Even after his death.

So sad

Maybe I have NO BASIC ECONOMICS... Hahahahaha

Cheers - Remember, you control your own feelings. Never let anyone control your feelings !!!! You also control your own destiny !!!!

Cheers to all bros and sis.... Believe in yourself and make things happen. Dont dwell on things that you cannot change. Do things that can change your destiny. Remember - YOU CONTROL YOUR DESTINY.

Merry Christmas to All

I was trying to be helpful by showing the Wikipedia's version of a perfect market and the reason why it does not exist. Never in my writing suggest the presence of a perfect market. You 'misquoted' me and the rest was history.

[chestnut]

I was trying to be helpful by showing the Wikipedia's version of a perfect market and the reason why it does not exist. Never in my writing suggest the presence of a perfect market. You 'misquoted' me and the rest was history.

At least u agree it doesn't exist. Cheers

Don't be so upset bro. Life is what we make it out to be. Everyday is beautiful.

Cheers And Merry Christmas.

[Leeds]

At least u agree it doesn't exist. Cheers

Don't be so upset bro. Life is what we make it out to be. Everyday is beautiful.

Cheers And Merry Christmas.

I maintained at the very beginning that there exist no perfect market and hence government needs to intervene. You did not perhaps understand what I was writing hence I enclosed the Wikipedia version.

I am not upset; just appreciative for the opportunity to clarify.

Wish to hear the Chestnut I came to 'know' and respect.

Cheers!

[indomie]

I maintained at the very beginning that there exist no perfect market and hence government needs to intervene. You did not perhaps understand what I was writing hence I enclosed the Wikipedia version.

I am not upset; just appreciative for the opportunity to clarify.

Wish to hear the Chustnut I came to 'know' and respect.

Cheers!

The idea that there is imperfect market and the gov is constantly tweaking it so it runs at near perfect is bizzare. The way sg gov operate is to pick winners and throw losers out. This idea is also dangerous in a sense that it gives people false hope that the market will be corrected to their way if they left behind economically. U better learn to swim now, than waiting for the ship that never arrive.

[Shanhz]

The idea that there is imperfect market and the gov is constantly tweaking it so it runs at near perfect is bizzare. The way sg gov operate is to pick winners and throw losers out. This idea is also dangerous in a sense that it gives people false hope that the market will be corrected to their way if they left behind economically. U better learn to swim now, than waiting for the ship that never arrive.

bro, you come across to me as an extreme bull on the mkt. care to share why you feel so strongly so?