Is this even sustainable?

[Eldenfirefly]

Our GDP per capita is now 50,714 USD. Its already one of the highest in the world. And current property prices are at above 1000 psf for OCR. Even HDB also not that cheap any more. Questions is, is this sustainable in the long term?

Buying a property is a function of your income. The more you earn, the bigger the housing instalment payment you can afford. (Most people don't have the kind of cash to pay for property in full). So, if we are already one of the highest GDP per capita in the world, how much higher can we go? The competition is global nowadays. If Singaporeans refuse to work unless starting pay is at least $3000 or more, companies can start looking overseas for much cheaper workers who will do so for a fraction of our cost.

We used to say compared to westerners, we are cheap. But Sing dollar so super strong while their currency keep on dropping. Its no longer true. Now, their salaries quite comparable to ours already. We are now longer cheap.

Those of you banking on property chiong up another 100% in 10 years. The big question is, does that mean our income will chiong up 100% also? If it doesn't where is all that buying power going to come from? Foreigners? They don't make up the majority of our property buyers, and I doubt if government wants them to come in and distort the market.

Nowadays loan already extend until cannot extend already. 35 years max. Extend till next generation to pay off? Interest rate already rock bottom, cannot fall further, only way is up.

So, where are we going to get all the money to afford 2000 psf for a property? Starting pay next time 6000 S$ per month? If western country keep going backwards and SGD keep on going up. 6000 per month there can hire manager or higher level already.

So, how? Someone tell me. Otherwise, I just cannot see property going up like that over the next 10 years. 40 years ago, we are far far behind other countries, but today, we are on par, if not more expensive than most other places already. So, how to go up another 100%? We don't live in a bubble.

Unless we say, only the rich foreigners and higher mortals can buy up all our peroperty, while the rest of us lower mortals no house to stay? I don't think Government will let that happen, not if it doesn't want to lose more seats...

[Eldenfirefly]

To add to that. Other countries like Dubai have seen something like that before. See Dubai now, property crash 50% and looks like it will be in the slump for a long time. Foreigner money is quick in quick out, only local money is likely to stay for the long term. But in the long term, ability of locals to pay high property prices depend on their income. Can Singapore income grow so much on all levels?

So, taxi driver in Singapore next time earn more than manager in the US?

[mcmlxxvi]

Better faster get on the boat and buy something. Sell it for profit when time comes. You know very well wages will never increase enough to match inflation and progress of young developing first world country.

[mcmlxxvi]

Taxi driver ALREADY earn more than average manager in US, after taxes. Why else you think many a former CEO willing to retire and be cab driver.

[vboy]

1.) wage increase supported by going up the technological ladder (wide moat compared to the rest of region due to strong intellectual property rights here) and also increase in productivity

http://www.todayonline.com/Singapore...e-productivity

2.) asset prices supported by import of inflation from other countries who are currently debasing their currencies.

3.) agree that prices will come down when interest rates start going up, which is why the govt is moderating the bubble by cooling measures to make sure the landing wont be too hard later

4.) govt wont let mass mkt to not have roof over their heads.. thats why got public housing ... HDB prices are always moderated by the median income of residents (not foreigners)

[roly8]

i think singapore gonna follow hongkong & japan trend...

[devilplate]

tats y MM is here to stay.

and everybody knows property goes in a cycle. wait for the next down cycle lor.....

MM sizes oredi cut till cannot cut liao......new mm launches psf oredi stagnant liao.....12xx-13xxpsf stuck there liao.....

big quantum ccr property rental on the way down oredi......
http://www.propertyguru.com.sg/prope...0-in-singapore

CCR prices high chance gona drop soon......i am waiting for u

[samsara]

I have cleared all my property holdings; the only residential property that I am now holding onto is the one in which my family stays. In the process, I have also deleveraged to reduce my exposure as the likelihood of a topping out market is increasing with each passing month.

Moving into 2013, we will need to watch interest rates closely as it is inevitable that the excess liquidity in the global financial system has to be mopped up one way or another. The rising rates will apply significant downward pressure on property prices locally.

Based on recent developments in those regions, we will also need to be wary of black swan events arising from the Middle East and the Korean peninsula. Given the current combination of the lack-lustre domestic situation in the U.S. and unstable politics in the Middle East, there is a chance of military-based developments taking place to distract from domestic economic issues.

tats y MM is here to stay.

and everybody knows property goes in a cycle. wait for the next down cycle lor.....

MM sizes oredi cut till cannot cut liao......new mm launches psf oredi stagnant liao.....12xx-13xxpsf stuck there liao.....

big quantum ccr property rental on the way down oredi......
http://www.propertyguru.com.sg/prope...0-in-singapore

CCR prices high chance gona drop soon......i am waiting for u

[sh]

If our GDP becoming the world's highest.

Is our property prices among the world's highest?

Is the high prices in the cities with the highest GDP sustainable.... they have been high for a long time....

There's your answer.

If there is anything that is holding back high prices, it's our "public" housing policy. That forms the lowest denominator.

[samuelk]

Our GDP per capita is now 50,714 USD. Its already one of the highest in the world. And current property prices are at above 1000 psf for OCR. Even HDB also not that cheap any more. Questions is, is this sustainable in the long term?

Buying a property is a function of your income. The more you earn, the bigger the housing instalment payment you can afford. (Most people don't have the kind of cash to pay for property in full). So, if we are already one of the highest GDP per capita in the world, how much higher can we go? The competition is global nowadays. If Singaporeans refuse to work unless starting pay is at least $3000 or more, companies can start looking overseas for much cheaper workers who will do so for a fraction of our cost.

We used to say compared to westerners, we are cheap. But Sing dollar so super strong while their currency keep on dropping. Its no longer true. Now, their salaries quite comparable to ours already. We are now longer cheap.

Those of you banking on property chiong up another 100% in 10 years. The big question is, does that mean our income will chiong up 100% also? If it doesn't where is all that buying power going to come from? Foreigners? They don't make up the majority of our property buyers, and I doubt if government wants them to come in and distort the market.

Nowadays loan already extend until cannot extend already. 35 years max. Extend till next generation to pay off? Interest rate already rock bottom, cannot fall further, only way is up.

So, where are we going to get all the money to afford 2000 psf for a property? Starting pay next time 6000 S$ per month? If western country keep going backwards and SGD keep on going up. 6000 per month there can hire manager or higher level already.

So, how? Someone tell me. Otherwise, I just cannot see property going up like that over the next 10 years. 40 years ago, we are far far behind other countries, but today, we are on par, if not more expensive than most other places already. So, how to go up another 100%? We don't live in a bubble.

Unless we say, only the rich foreigners and higher mortals can buy up all our peroperty, while the rest of us lower mortals no house to stay? I don't think Government will let that happen, not if it doesn't want to lose more seats...

From my observation, there is one trend that is repeating itself. An that is the PMET that are FT will promote their own race and leaving the locals aside.

Used to be that the IT engineers from India are cheap. Nowadays when I reach the office I am fighting for parking lots with engineers on work permit.

They are no longer cheap as you expect. So they have money to rent. Buying property here ?, not so sure.

So the real question now is, will the singaporean be displlace in our own country ?

[Allthepies]

From my observation, there is one trend that is repeating itself. An that is the PMET that are FT will promote their own race and leaving the locals aside.

Used to be that the IT engineers from India are cheap. Nowadays when I reach the office I am fighting for parking lots with engineers on work permit.

They are no longer cheap as you expect. So they have money to rent. Buying property here ?, not so sure.

So the real question now is, will the singaporean be displlace in our own country ?

to be fair the foreigners working in the service sector have much better attitude and performance than our singaporean counterparts; it will be our lost if we dont hire them in this sector.i can't comment on PMETs though

[PropertyNewbie]

Confirm not sustainable.

And the GOVT will not let prices say in RCR Yishun Woodlands or CCK go to crazy 2000psf levels.

They will simply release CM after CM to keep prices in check.

Reasons:

1. Political
Last GE already kena warning. PM acknowledged that complains about high property prices are affecting voting results. Whether or not it is right to interfere in the private property market is moot, for political survival they HAVE to do it.

2. Economy
GOVT does not want a housing bubble. For the health of the economy, for the health of the banks, for the health of Land Sales, etc...

3. Social
The GOVT is trying hard not to let the wealth/social gap run too wide. This will create discontent in the lower/middle classes. They WILL make housing, either public or private housing, affordable to a big strata of voters.

[devilplate]

I have cleared all my property holdings; the only residential property that I am now holding onto is the one in which my family stays. In the process, I have also deleveraged to reduce my exposure as the likelihood of a topping out market is increasing with each passing month.

Moving into 2013, we will need to watch interest rates closely as it is inevitable that the excess liquidity in the global financial system has to be mopped up one way or another. The rising rates will apply significant downward pressure on property prices locally.

Based on recent developments in those regions, we will also need to be wary of black swan events arising from the Middle East and the Korean peninsula. Given the current combination of the lack-lustre domestic situation in the U.S. and unstable politics in the Middle East, there is a chance of military-based developments taking place to distract from domestic economic issues.

Tats fast! How u manage to sell so fast within these 2mths? Fetch current market px or?

[teddybear]

You a real newbie? What you said didn't make sense as follow:
1. Most people complain HDB flat prices lah, not private properties. It is not govt's job to guarantee you or anybody a private property (since <20% household will own a private property).

2. For the sake of the state's coffer, land price will just have to increase to catch up inflation and hence property price will have to rise similar to inflation rate. Otherwise selling land below market value or fair value is called raiding of Singapore's reserve!

3. If govt ensure private property is so cheap, then who buy and live in HDB? Sure everybody want private property with facilities lah! Who want to work hard to upgrade when everything so cheap and affordable?
Gov's national responsibility is just to ensure you have a cheap (read "HDB") housing, nothing to do with private property!
The easiest way to achieve what you said "The GOVT is trying hard not to let the wealth/social gap run too wide. This will create discontent in the lower/middle classes." is to go back to communism!

Confirm not sustainable.

And the GOVT will not let prices say in RCR Yishun Woodlands or CCK go to crazy 2000psf levels.

They will simply release CM after CM to keep prices in check.

Reasons:

1. Political
Last GE already kena warning. PM acknowledged that complains about high property prices are affecting voting results. Whether or not it is right to interfere in the private property market is moot, for political survival they HAVE to do it.

2. Economy
GOVT does not want a housing bubble. For the health of the economy, for the health of the banks, for the health of Land Sales, etc...

3. Social
The GOVT is trying hard not to let the wealth/social gap run too wide. This will create discontent in the lower/middle classes. They WILL make housing, either public or private housing, affordable to a big strata of voters.

[testtest]

2. Economy
GOVT does not want a housing bubble. For the health of the economy, for the health of the banks, for the health of Land Sales, etc...

Housing bubble, like it or not, is already here...else why so many CMs. Like all bubbles, no prize for guessing what happen when it pops!

May the mass x acceleration be with you!

[Arcachon]

No property bubble yet, says MM
Jun 28, 2010 - PropertyGuru.com.sg
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There is no bubble yet in the Singapore property market, said Minister Mentor Lee Kuan Yew.

The sharp price increases that have been experienced were "part of the total liquidity in the whole world system", said Mr. Lee, adding that foreigners still see properties as affordable and interest rates are still low.

"Even if we cap our excess, people in Hong Kong, Indonesia, will say, compared to what I have to pay, Singapore is cheap, let’s buy it," he said. "And apart from landed properties, they can buy into any condos."

Mr. Lee said the Singapore government is convinced that there is an underlying demand for residential property. "So it’s probably not a bubble yet."

He stressed that the Singapore government has taken measures to address concerns regarding the market overheating such as releasing more land to property developers and putting in place more stringent policies for homebuyers when borrowing from banks to acquire a property.

"More land is being released, to dampen the enthusiasm of everybody rushing for the latest release, and we’ve told the banks to be more prudent and have a higher downpayment," said Mr. Lee.

"These are the precautions we can take, but it does not stop the Indonesians or the Thais or the Malaysian Chinese or the Filipino Chinese from coming here and saying, ‘Compared to what I have to pay in my country, this is cheap’."

http://www.condosingapore.com/forums...t=12359&page=7

[howgozit]

Huh?... Jun 2010..?

No property bubble yet, says MM
Jun 28, 2010 - PropertyGuru.com.sg
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There is no bubble yet in the Singapore property market, said Minister Mentor Lee Kuan Yew.

The sharp price increases that have been experienced were "part of the total liquidity in the whole world system", said Mr. Lee, adding that foreigners still see properties as affordable and interest rates are still low.

"Even if we cap our excess, people in Hong Kong, Indonesia, will say, compared to what I have to pay, Singapore is cheap, let’s buy it," he said. "And apart from landed properties, they can buy into any condos."

Mr. Lee said the Singapore government is convinced that there is an underlying demand for residential property. "So it’s probably not a bubble yet."

He stressed that the Singapore government has taken measures to address concerns regarding the market overheating such as releasing more land to property developers and putting in place more stringent policies for homebuyers when borrowing from banks to acquire a property.

"More land is being released, to dampen the enthusiasm of everybody rushing for the latest release, and we’ve told the banks to be more prudent and have a higher downpayment," said Mr. Lee.

"These are the precautions we can take, but it does not stop the Indonesians or the Thais or the Malaysian Chinese or the Filipino Chinese from coming here and saying, ‘Compared to what I have to pay in my country, this is cheap’."

http://www.condosingapore.com/forums...t=12359&page=7

[Arcachon]

http://www.propwise.sg/will-the-upco...rices-to-fall/

[samsara]

I had let most of them go below market value to clear fast - averagely about 5% to 10% below market value for all. One of my landed sold to the first buyer who came to view.

Tats fast! How u manage to sell so fast within these 2mths? Fetch current market px or?

[samsara]

I had been bullish on the local property market for the last few years (accumulated since 2008). A lot of the upside had been due to the convergence of several factors:

a. supply-demand mismatch (demand increased much faster than supply)
b. liquidity tsunami (money-printing presses working full-time in U.S. and now EU)
c. inflation (partly as a result of b but also due to currency tussle across the world)
d. low-interest rates (partly due to b but also due to artificial suppression by governments world-wide to increase the velocity of money in the global financial system)
e. momentum of rebound from trough in 2009

I have adjusted my stance from bullish to moderately bearish because of changes in the conditions:

a. supply has increased tremendously while demand is now being tempered through FT policy changes
b. the money-printing presses will be slowing down in the U.S. with the improved economic indicators (EU will still be at it for a while)
c. many countries are facing inflationary pressures and have adjusted their policies to keep inflation under control
d. cannot be forever, U.S. will need to adjust them going into 2013 once economic stimulation is no longer a viable reason to congress (even though they have "promised" to keep them low till 2014)
e. momentum has almost, if not already, peaked especially with the CMs coming in (resale volume and prices have stagnated and dipped in Jan 2012)
f. political/military-action risks arising from Middle-East and North Korea
g. political risks arising locally (especially moving into next GE)

http://www.propwise.sg/will-the-upco...rices-to-fall/

[hyenergix]

I had let most of them go below market value to clear fast - averagely about 5% to 10% below market value for all. One of my landed sold to the first buyer who came to view.

I recall bullman bought two landed about 10% below "market value" in recent months... could the buyer be...

[devilplate]

I had let most of them go below market value to clear fast - averagely about 5% to 10% below market value for all. One of my landed sold to the first buyer who came to view.

icic...

interesting tat u dump ur asset even though u got holding power.

u got PM.

[Eldenfirefly]

Some of us think just keep HDB affordable, let private chiong can already. But its not as simple as that. Everything cascades down in effect. If a PR finds condo too expensive, then his next target would be to buy a resale HDB. If condo chiong up too high until only the very rich expats can afford, then automatically the resale HDB market will be flooded by PRs looking for a place to stay.

You let resale HDB chiong up, then your BTO got a problem also. The difference between resale HDB and a brand new BTO flat is just 5 years. So, are we saying, anyone just stay in a BTO for 5 years, immediately can get hundreds of thousands of dollars free? (if we artifically keep BTO price down).

Our Ginni Coefficient already one of the worst in the world, and this Ginni coeddicient is used to show that the gap between the rich and the poor here is already very big. If you open the floodgates to let in the rich to push up the property market, it will only get worse.

As seen from the latest measure. They are realising that there is too much hot money coming into Singapore, and some don't mind even earning close to nothing buying Singapore property. They are getting free money overseas because interest rates are close to zero. But they want to place it into real assets, and Singapore property is seen that one of those type of assets.

But we cannot accomodate all the rich from overseas that would want a piece of Singapore's real estate. It would cause a lot of problems (many of which we are already facing now). So, I think government will step in, and if the property market still doesn't cool enough for it, then the will do even more.

Like I said in my opening thread, is it even sustainable? So, in 10 years time, starting salary will be 6000 SGD per month? I will believe it only when I see it.

[devilplate]

every bull run is not sustainable la.....everybody knows it......greed and fear wat......sames goes to every bear market is also not sustainable bcoz prices will never go all the way down.....LOL

its a matter of avoiding entering at the peak to win the game in the long run......look out for signs of peak peak lor......learn from history.....certain patterns may repeat itself

[Jadey]

Some of us think just keep HDB affordable, let private chiong can already. But its not as simple as that. Everything cascades down in effect. If a PR finds condo too expensive, then his next target would be to buy a resale HDB. If condo chiong up too high until only the very rich expats can afford, then automatically the resale HDB market will be flooded by PRs looking for a place to stay.

You let resale HDB chiong up, then your BTO got a problem also. The difference between resale HDB and a brand new BTO flat is just 5 years. So, are we saying, anyone just stay in a BTO for 5 years, immediately can get hundreds of thousands of dollars free? (if we artifically keep BTO price down).

Our Ginni Coefficient already one of the worst in the world, and this Ginni coeddicient is used to show that the gap between the rich and the poor here is already very big. If you open the floodgates to let in the rich to push up the property market, it will only get worse.

As seen from the latest measure. They are realising that there is too much hot money coming into Singapore, and some don't mind even earning close to nothing buying Singapore property. They are getting free money overseas because interest rates are close to zero. But they want to place it into real assets, and Singapore property is seen that one of those type of assets.

But we cannot accomodate all the rich from overseas that would want a piece of Singapore's real estate. It would cause a lot of problems (many of which we are already facing now). So, I think government will step in, and if the property market still doesn't cool enough for it, then the will do even more.

Like I said in my opening thread, is it even sustainable? So, in 10 years time, starting salary will be 6000 SGD per month? I will believe it only when I see it.

if you are responding to teddybear's comment, don't waste your time.

[richwang]

I had been bullish on the local property market for the last few years (accumulated since 2008). A lot of the upside had been due to the convergence of several factors:

a. supply-demand mismatch (demand increased much faster than supply)
b. liquidity tsunami (money-printing presses working full-time in U.S. and now EU)
c. inflation (partly as a result of b but also due to currency tussle across the world)
d. low-interest rates (partly due to b but also due to artificial suppression by governments world-wide to increase the velocity of money in the global financial system)
e. momentum of rebound from trough in 2009

I have adjusted my stance from bullish to moderately bearish because of changes in the conditions:

a. supply has increased tremendously while demand is now being tempered through FT policy changes
b. the money-printing presses will be slowing down in the U.S. with the improved economic indicators (EU will still be at it for a while)
c. many countries are facing inflationary pressures and have adjusted their policies to keep inflation under control
d. cannot be forever, U.S. will need to adjust them going into 2013 once economic stimulation is no longer a viable reason to congress (even though they have "promised" to keep them low till 2014)
e. momentum has almost, if not already, peaked especially with the CMs coming in (resale volume and prices have stagnated and dipped in Jan 2012)
f. political/military-action risks arising from Middle-East and North Korea
g. political risks arising locally (especially moving into next GE)

Solid analysis!
But what are you going to do with your cash?
Some rich Chinese bought backrupted US bank for 60M USD.
http://www.zaobao.com.sg/cz/cz120222_006.shtml

My French friend who sold his condo last Dec sitting on 1M cash is thinking of buying farm land in France.

Thanks,
Richard

[Eldenfirefly]

Stocks are still quite cheap now. If worry that stocks are risky, then diversify lor. Buy an equity fund managed by a fund manager.

[devilplate]

Stocks are still quite cheap now. If worry that stocks are risky, then diversify lor. Buy an equity fund managed by a fund manager.

i only buy UT when i dun haf direct access to the stocks wor....for eg...i buy china and india UT instead....for HK, US, SG definitely go for direct stocks better

[groggy]

I had let most of them go below market value to clear fast - averagely about 5% to 10% below market value for all. One of my landed sold to the first buyer who came to view.

Hi samsara,

The newly launched are about 10% to 20% higher than comparable subsales. If you sell 10% below market, those new launches have to go down 30% or more for you to be able to "profit" by buying back. Don't you think you might miss the boat if property prices just consolidate and move up again in 2 or 3 years time? You might be left with no property exposure.

[amk]

......learn from history.....certain patterns may repeat itself

already repeated.

massive no. of ECs coming out...

LH99 in areas where you would have NEVER even thought of trading at >1100 psf

.. btw I think this is not what TS meant though. He's onto a much broader context