Property price is coming down fast

[Shanhz]

Rationale Behind
Indeed, despite the previous four rounds of cooling measures, private residential prices have risen continuously for the past two years. It now stands at a record high, surpassing the peak in 1996 and 2008 by 13% and 16% respectively. Such relentless price gains are underlined by a jump in foreigner purchases – according to a report dated 25 November 2011, DTZ Research noted that the group accounted for approximately 19% of total purchases in the third quarter this year, nearly doubling from the 10% in the same quarter two years ago.

is there any study that looks at real housing prices increase from 1996 till now? or is the index already adjusted for inflation?

[Leeds]

is there any study that looks at real housing prices increase from 1996 till now? or is the index already adjusted for inflation?

[Shanhz]

during the last 2 crisis (1997 and 2007), the STI and DJIA both looked peakish just before the crash. not only that, they were pushed up to a high peak in a short time before it collapsed. there's a lot of euphoria in the mkt just before it tanked.

however, both STI and DJIA are off their last peaks currently.

STI 3000 vs 3600+
DJIA 13,000 vs 14,100+

and if you look at the stock mkt, it is hardly euphoric now. lots of fear and bad expectations. mkt hardly is "greedy" based on buffett's theory of being fearful when mkt is greedy.

just looking at this unscientific evidence - we are hardly looking at any major mkt crash at this point in time.

or are we?

[Shanhz]

thanks.. that was most helpful.

for those who are optimistic, does this imply that in real terms, we are actually below the 2008 peak? so we shouldn't be too worried?

[Leeds]

The current stock markets are supported by cheap money which should have gone to the consumers for their spendings but are not. In Asia, these cheap money find its way to real estate, stock markets and other hard assets.

The current inflation are externally generated which housing (inputed rentals) and transport constitute 60% of CPI-ALL. As such, government has to deal with the supply side of housing and transport which is key to bringing down inflation. The supply side takes time to materialise so the current high inflation will be tamed once the supply side came into effect.

Government will continue to manage the supply and demand of housing to control inflation.

[seletar]

Seletar, you should target your anger elsewhere, not developers.
Wong is right. Private developers ONLY operate for the 20% of the housing market, and are being hit the most by gov measures. It is the Gov's mistake in the last 10yrs that resulted in such shortage of supply in housing, and now private companies had to bear the most burden. Look at the situation now, private developers are being robbed of a free market, subjected to draconian gov tax and arbitrary restrictions. I still remember right after CDL bought that redhill plot, gov announced ABSD and loan restriction. If I were running CDL, I would have returned the plot to gov ! It is changing the rule after the game has started isn't it ?

Seletar what is your real complaint ? To get the gov punish the developers hard enough such that you can buy a private condo of your choice ? Do you also wish the gov can simply abolish COE such that you can buy a car at 30k ? Private housing was, and should be, meant for the top 20% of the market, not every one who has a dream. Massive liquidity resulted in lots of cash around. Every one is finding someway to deal with it. You are not thhe only one with a few hundred k cash at hand.

80% of the property are supplied by the government, prices controlled by the government. The only CM dearly needed is in that segment.

I support the CM on LTVs. That is to protect the financial system and our banks. But things like ABSD severely distorts the free market system.

Dun forget, CDL, UOL, FEO, etc are also legitimate companies running an honest business, employing thousands of Singaporeans. We are diff from HK, where developers truly cornered the market and manipulated the housing prices. Here, the biggest developer is HDB.

You make it sound like CDL is doing charity by holding on to a plot of land. What a joke. Either CDL did their calculations and decided not to back out, or the terms of contract stipulate that they cannot back out. If CDL is unhappy with the rule change, wht do they still continue to bid for land ? No one is putting a gun on CDL's head to make bids, they can choose not to. CDL knows the purchase terms from Govt and the threat of CM like every other developer, yet CDL continue to make bids under their own free will, they went in with their eyes wide open, if CDL gets burnt, those fault is it ?

Just like with Wong's CapitalLand. No one is putting a gun at CapitalLand's head to make very high bids for land in Bishan, it is their decision. Now that they cannot sell their ridiculously high priced Sky Habitat, whose fault is it ? Instead of lowering price to attractive levels for Sky Habiitat and pay the consequences of their bad decision, Wong is now whining and lobbying the Govt for assistance. That's why developers are shameless and descipable, during good times they happily charged high prices to consumers and make huge profits, during bad times they blame the Govt and lobby for Govt's assistance against losses.

When consumers buy high priced property from developers and subsequently go bankrupt from the property purchase, do they get assistance from the developer or the Govt ? No, they pay the consequences for their mistake / bad decision and go bankrupt. Why should developers get assistance from the Govt for their mistakes and bad decisions ? Singapore should not be a charity and bailout for developers, developers have to pay the consequences for their mistakes just like every other business and be allowed to fail if need be. China is even tougher on their developers and and many developers have gone bankrupt for their mistakes and bad decisions.

It is devious of the developers to blame the Govt for high land prices, when it is actually the developers that are the culprits that bid up the land to new highs. It is also devious of the developers to blame the Govt for the high private property prices, when it is actually the developers that are the ones that set the selling prices of their properties. If the Govt give developers subsidies for the land, the developers will still sell consumers are high prices, claiming it is "market price" and pocket bigger profits from the subsidies. We have seen it in the past where developers bought the land cheap and sold at high prices and make huge profits, so it make no sense for the Govt to subsidise land prices for developers which is what the developers are indirectly asking.

Developers and bankers are the biggest leeches of Singapore's prosperity, the leeching have made these developers some of the richest people and highest paid people in Singapore. Now a hugh amount of Singaporeans' wealh goes to paying off the high priced properties from developers, contributing to the developers' hefty profits. The past shortage of housing supply is a big boon for developers as it allows them to sell their properties ar record high prices. Thankfully, the housing supply has been ramped up significantly and squeezing these greedy leeches.

It's a good thing that we have HDB, it is a counterweight against these greedy developers. HDB is not the problem, it is the greedy leeches that is the problem. And now these greedy leeches are whining and lobbying the Govt for assistance because they are worried of getting burnt.

Lastly, you do not know me, yet you make incorrect statement about me to put me down. That's a cheap shot.

[Shanhz]

i like this post.

[sherlock]

during the last 2 crisis (1997 and 2007), the STI and DJIA both looked peakish just before the crash. not only that, they were pushed up to a high peak in a short time before it collapsed. there's a lot of euphoria in the mkt just before it tanked.

however, both STI and DJIA are off their last peaks currently.

STI 3000 vs 3600+
DJIA 13,000 vs 14,100+

and if you look at the stock mkt, it is hardly euphoric now. lots of fear and bad expectations. mkt hardly is "greedy" based on buffett's theory of being fearful when mkt is greedy.

just looking at this unscientific evidence - we are hardly looking at any major mkt crash at this point in time.

or are we?

There is still a risk of the fiscal cliff looming. And we will never know what the politicians are thinking

[lajia]

U think they will let it happen?? 10 out of 10 know the impact and in my opinion, they are just finding ways to let each other step down easier...anything that is known is not so scary, what that remains unknown and will be surprises are more deadly

There is still a risk of the fiscal cliff looming. And we will never know what the politicians are thinking

[DKSG]

Economics Lesson 101.

Adams Invisible Hand.

Developers bid the price they think the market can take.
If Developer A dont bid $850 psf, Developer B will also bid $840 psf.

Whats the diff ? Stop complaining. If MTB, then say MTB lor.

No company can corner our market la! You talk as if all developers in collusion to bid up land prices and talk to each other to fix prices.

This is a serious allegations and may result in you being investigated or charged with defamation.

So please think before you write, not as if the senseless cut and paste is bad enough. Now start with these senseless arguments and conspiracy theories just to continue the dream of "DOWN 50% by 2015 !".

DKSG

[amk]

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 ?

[amk]

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.

[phantom_opera]

I don't think there will be anymore CM unless we have 10% property price appreciation in a year ... anymore CM property developers will call it quit

Seletar should go and read the news about UOL being rejected for the Paya Lebar plot even the bid was at reasonable price

You know what, I suspect our garmen peg land price to gold

[Leeds]

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.

[chestnut]

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

[Leeds]

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.

[Leeds]

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

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

[chestnut]

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.

[Leeds]

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.

You should read Michael Porter's "Competitive Strategy". You will be enlightened and your questions will be answered.

[chestnut]

Don't believe theories. Practical is more important. U should look at what's around u. U will be enlightened. Serious. All the theories are bull shit. They hope for an ideal situation.

That's why it is so diff for u to name 3 or even 1.

[chestnut]

Till today, I am still amazed at the number of idealistic people in the world and in this forum.

1. Houses
They have houses but do not want prices to go up?

2. Companies
They wish for companies to break even. But when they have their own companies, they hope to make money. Or if they work for someone, they hope for the company to make money. Or if they buy the shares, they hope for the company to make money. When u ask them why, they tell u - u don't understand lah...

3. Equality
They hope for equality in society even though they know it will not exist. They still hope and hope. So sad
All we can hope for is one day, they will wake up.

4. Bitch
They complain but are unable to come up with a solution.... So sad...

I am not targeting at anyone... I just feel sad for such people... If they do exist. Maybe they don't.. Hahahaha

I just TCSS today....

Cheers

I am sure such people don't exist. Hahahahah

[Leeds]

Don't believe theories. Practical is more important. U should look at what's around u. U will be enlightened. Serious. All the theories are bull shit. They hope for an ideal situation.

That's why it is so diff for u to name 3 or even 1.

It is more than simply theory and practical. One needs to understand the roles of governments (economics, social and political), corporations (profits) and consumers (needs), only can we understand what is market efficiency, inefficiency, perfect and imperfect market and market failure. We will then understand better why government intervene and why and what MAS are so concern with.

I will only response to questions if I see the benefit or fun in doing so.

[phantom_opera]

Yeah perfect market ... perfect debt ..the reality is perfect for inflation or deflation, you decide, here is comment from Bill Gross

PIMCO ‏@PIMCO
Gross: WSJ Op-ed confirms PIMCO thesis: U.S. debt is 5 times what it admits to. Inflation ahead.

... Quote from WSJ:

The actual liabilities of the federal government—including Social Security, Medicare, and federal employees' future retirement benefits—already exceed $86.8 trillion, or 550% of GDP. For the year ending Dec. 31, 2011, the annual accrued expense of Medicare and Social Security was $7 trillion.

[lajia]

enlighten so what? will not make mistake? will know when to enter the market and make money? if so simple, then we dont need so many scho and yet make some cock up policies, rite or not?? everyone is learning and like what chestnut bro says, theory is theory.

You should read Michael Porter's "Competitive Strategy". You will be enlightened and your questions will be answered.

[Leeds]

Yeah perfect market ... perfect debt ..the reality is perfect for inflation or deflation, you decide, here is comment from Bill Gross

PIMCO ‏@PIMCO
Gross: WSJ Op-ed confirms PIMCO thesis: U.S. debt is 5 times what it admits to. Inflation ahead.

... Quote from WSJ:

The actual liabilities of the federal government—including Social Security, Medicare, and federal employees' future retirement benefits—already exceed $86.8 trillion, or 550% of GDP. For the year ending Dec. 31, 2011, the annual accrued expense of Medicare and Social Security was $7 trillion.

What governments all over the world trying to do is not to "create a perfect market" which never exists. What governments all over the world are trying to do is to prevent market failures or delay failures by introducing measures hopefully sustainable in the longer term.

That is why economists gave advice to governments and project the possible outcomes of market failure and what it entails so that governments in their "best interests" put in place measures to prevent it.

[chestnut]

enlighten so what? will not make mistake? will know when to enter the market and make money? if so simple, then we dont need so many scho and yet make some cock up policies, rite or not?? everyone is learning and like what chestnut bro says, theory is theory.

Bro, ask michael porter to go indo or china to do biz, he faint... Hahahaha
He won't have any clue on greasing... Hahahahaha

[Leeds]

enlighten so what? will not make mistake? will know when to enter the market and make money? if so simple, then we dont need so many scho and yet make some cock up policies, rite or not?? everyone is learning and like what chestnut bro says, theory is theory.

Information provides you with the knowledge and knowledge provides you with the confidence to make decision.

[indomie]

Information provides you with the knowledge and knowledge provides you with the confidence to make decision.

Many of classical economic theories in my opinion are obsoletes. In singapore case, a country with very little competitive advantages is especially true. Sg income comes from sources that other countries can never imagine. Such as, coe, cpf contributions, stamp duties, property tax. These incomes will never get depleted as long as population number get sustained. No matter what happen in the world, sg gov will always find a way to get the rich people in as the source of tax based. You can argue about supply/demand theory, perfect/imperfect market, etc. At the end of the day life is just not fair to everybody. Get over it.

[Leeds]

Many of classical economic theories in my opinion are obsoletes. In singapore case, a country with very little competitive advantages is especially true. Sg income comes from sources that other countries can never imagine. Such as, coe, cpf contributions, stamp duties, property tax. These incomes will never get depleted as long as population number get sustained. No matter what happen in the world, sg gov will always find a way to get the rich people in as the source of tax based. You can argue about supply/demand theory, perfect/imperfect market, etc. At the end of the day life is just not fair to everybody. Get over it.

Interesting subject! I think in the case of Singapore, it is more than just economics. It is about "capitalism" and how the rich creates economic values to the poor. China has a different system as ours and the macroeconomics in term of unemployment, national income, rate of growth, GDP, inflattion and price level are still fundamental to both system of government.

[phantom_opera]

EM / EA fever

856B Tampines St 82 11 to 15 145.00
Apartment 1995 $780,000.00