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Thread: No bubble to burst

  1. #1
    Join Date
    Feb 2007
    Posts
    366

    Default No bubble to burst

    Wednesday, May 9, 2007

    No bubble to burst

    Strong fundamentals back high property prices here

    Letter from Charles Tan Meah Yang

    I WRITE in response to the letters from concerned readers Lim Boon Hee and Steve Ngo, regarding their views on the state of global price levels and, more specifically, those of our local housing market ("A lesson worth remembering", May 7 and "Just a lot of bull?", May 8).

    Let me quote a more prominent investing legend, Mr Warren Buffett, who said in his 1992 annual report to shareholders: "We've long felt that the only value of (stock) forecasters is to make fortune-tellers look good."

    This is not to discount the wisdom of legendary investor Jeremy Grantham — there is merit in his conclusion — but one need not take a six-week trip round the globe to tell you that abundant liquidity, fuelled by cheap Yen carries, exchange rate fixing by Asian central banks and gaping trade surpluses in the Middle East, will invariably lead to global inflation.

    I do not doubt that there will be a correction in prices, but I do not agree on how steep the correction will be, and how long it will take. Corrections are inevitable; collapses are improbable.

    For one, asset and stock prices are being supported by solid demand fundamentals this time around. For example, on April 29, a highway section collapsed in Oakland, California. But when CNBC first broke the news, contractors were reportedly struggling to find steel in sufficient quantities for the reconstruction effort. It has been more than a week since, and work has not yet begun.

    Also, oil prices are high for a variety of economic distortions, but China's building of a massive strategic reserve isn't helping.

    Lastly, the S&P500 is closing in on highs last seen seven years ago, but with trailing Price to Earnings (P/E) at 18 and forward P/E at 16, I wouldn't call the market cheap — but I would hardly call it overbought.

    Furthermore, central bankers in developed economies have had plenty of time to analyse policy failings from past recessions and are better informed than ever to avert global financial meltdown, and instead engineer a gradual cooling of inflation.

    One of the most annoying truisms in financial analysis is: "What goes up must come down". Stock markets, unlike bad stock analysts, are not subject to the physical laws of gravity. Stock markets trend upwards in reflection of a generally positive growth in population, productivity and profit. To insinuate that prices must return to origin based on a Newtonian concept of nature is simply puerile.

    An item is only worth as much as another is willing to pay for it. Rising valuations, as Mr Lim put it, are not a problem if deals are still getting closed, and, in fact, are a sign that there is no shortage of demand even at his perceived "bubble prices".

    If you look only at average salaries here, the current property boom is unsustainable. But our property market is not solely determined by the average Singaporean. Foreign investors with hefty paycheques contribute to demand, too, and this effect filters into the markets that are closed off to them (ie HDB flats) as richer Singaporeans who have been priced out of condominiums divert their fat wallets toward the Government alternative.

  2. #2
    Question Guest

    Default Re: No bubble to burst

    Quote Originally Posted by ahlahdin
    Wednesday, May 9, 2007

    No bubble to burst

    Strong fundamentals back high property prices here

    Letter from Charles Tan Meah Yang

    I WRITE in response to the letters from concerned readers Lim Boon Hee and Steve Ngo, regarding their views on the state of global price levels and, more specifically, those of our local housing market ("A lesson worth remembering", May 7 and "Just a lot of bull?", May 8).

    ....................

    If you look only at average salaries here, the current property boom is unsustainable. But our property market is not solely determined by the average Singaporean. Foreign investors with hefty paycheques contribute to demand, too, and this effect filters into the markets that are closed off to them (ie HDB flats) as richer Singaporeans who have been priced out of condominiums divert their fat wallets toward the Government alternative.

    In the first place, who says got bubble one?

  3. #3
    vested and no regrets Guest

    Default Re: No bubble to burst

    Quote Originally Posted by Question
    In the first place, who says got bubble one?
    Those who haven't bought (or have sold, but didn't buy back) properties yet, and are now lan-lan watching the prices skyrocket. They are the people who keep talking about bubble and "bear market". Human nature: jealousy and a sense of helplessness.

    -vested and no regrets

  4. #4
    Unregistered Guest

    Default Re: No bubble to burst

    Quote Originally Posted by vested and no regrets
    Those who haven't bought (or have sold, but didn't buy back) properties yet, and are now lan-lan watching the prices skyrocket. They are the people who keep talking about bubble and "bear market". Human nature: jealousy and a sense of helplessness.

    -vested and no regrets
    In any market, there is always sellers and buyers. Most of the times, both parties are convinced they got a better end of the deal. So, if you have been playing buyers lately, be happy, but no need to sound like you are a sure winner.

    Only time can tell. Remember, you can have hundreds and thousands of dollars of paper gain, until you can see the cash in your pocket, there is always a chance that you will end up losing everything including the capital
    I saw it happens time and agin to many folks

  5. #5
    Unregistered Guest

    Default Re: No bubble to burst

    In fact, there are still opportunity if one do a bit of homework....may be next year will become hard.

  6. #6
    Unregistered Guest

    Default Re: No bubble to burst

    Quote Originally Posted by vested and no regrets
    Those who haven't bought (or have sold, but didn't buy back) properties yet, and are now lan-lan watching the prices skyrocket. They are the people who keep talking about bubble and "bear market". Human nature: jealousy and a sense of helplessness.

    -vested and no regrets
    I agree! Sour grapes!

  7. #7
    Up Up Up Guest

    Default Re: No bubble to burst

    Hey hello! You all tone down your language a bit can?

  8. #8
    beavis Guest

    Default Re: No bubble to burst

    Yeah I agree. I think that Singapore is a better place to live than Hong Kong and Singapore Property Price is still under value. SO take Hong Kong as a benchmark price for Singapore.

    It is not too late for you to buy now....... BUYYYYYYYYY!

  9. #9
    beavis Guest

    Default Re: No bubble to burst

    Quote Originally Posted by vested and no regrets
    Those who haven't bought (or have sold, but didn't buy back) properties yet, and are now lan-lan watching the prices skyrocket. They are the people who keep talking about bubble and "bear market". Human nature: jealousy and a sense of helplessness.

    -vested and no regrets


    This Sound rather Sour Indeed , But IT MAKES SENSE .

    Its like Stock market, you think its too high but its still going up ...Only those who followed the trend made money....so why you go against the wave.

    Think the southeast asia economy is on the rise.

  10. #10
    Unregistered Guest

    Talking Re: No bubble to burst

    When you die then you will wake up.

  11. #11
    Teacher Guest

    Default Re: No bubble to burst

    Quote Originally Posted by Unregistered
    When you die then you will wake up.

    Missed the boat and watch others make money doesn't mean must die what!

    Just wake up and try not to miss the boat again lor.

  12. #12
    Join Date
    Apr 2007
    Posts
    72

    Default Re: No bubble to burst

    I dont think we've seen a bubble yet in Singapore - at least not until we've seen every uncle, aunty and taxi driver buying into properties...then we know it's a bubble.

    In fact - and I've mentioned it in another thread - that it will not be the popping of a Singapore-bubble that will bring prices down here but a decline in global housing prices, due to a global slowdown. Singapore's local supply-demand dynamic suggest prices are going higher esp in the central region. I have no doubt about that.

    But if you ask me what's going to happen to the global economy, then my bet is that we're heading for a very uncertain future. Imagine a global scenario

    (1) where the US slows. This is where a crazy bunch of consumers have over the past half a dozen years spent well over their income and gobbled up imports from China as though there is no tomorrow.

    (2) where China slows. With the US slowing, China will find its exports slowing in tandem with growth there suffering as a result.

    (3) where the liquidity boosting yen-carry trade unwinds. Everything has been rosy over the past few years because of the yen-carry trade. Borrow yen at ultra low rates, swap it into any other currency (selling yen in the process whch explains the JPY's weakness) with interest rates above 4% and make a minimum fat spread of 400 bps - wa la! a no brainer. And of course, better still, use the 0.1% yen borrowing cost to invest in not only currencies but other assets like the stock market and properties. But what happens when this yen carry unwinds? Of course the total opposite - sharp decline in asset prices. People have spoken about higher yen interest rates or lower non-japanses rates as the trigger for such an unwinding of yen-carries. With everybody super long on this yen-carry, I believe it will only take a rush to the exit when (1) & (2) spooks the market as the risk of a global slowdown increases.

    (4) Bird flu - in the market this is called a "low probability, high impact" event. I think its now a "moderate probability, high impact" event.

    I give event (1), (2) & (3) a 70% chance of happening over the next 24 months. I believe that "what goes up, must come down" albeit not necessarily to its starting point (which is still an uptrend overall). My take is that we'll see a 1/3 to 1/2 retracement in asset prices depending on how much such assets have risen over the past few years. Singapore properties might not be hit as bad as other countries given the relatively less price increases seen here.

    I give (4) a 40% possibility of happening within the next 5 years.

    So Singapore's property market is safe if we look within the confines of Singapore itself. But when you look at the broader picture, I am not too sure...

    My 2 cents worth

  13. #13
    Unregistered Guest

    Default Re: No bubble to burst

    Quote Originally Posted by Boon
    I dont think we've seen a bubble yet in Singapore - at least not until we've seen every uncle, aunty and taxi driver buying into properties...then we know it's a bubble.

    In fact - and I've mentioned it in another thread - that it will not be the popping of a Singapore-bubble that will bring prices down here but a decline in global housing prices, due to a global slowdown. Singapore's local supply-demand dynamic suggest prices are going higher esp in the central region. I have no doubt about that.

    But if you ask me what's going to happen to the global economy, then my bet is that we're heading for a very uncertain future. Imagine a global scenario

    (1) where the US slows. This is where a crazy bunch of consumers have over the past half a dozen years spent well over their income and gobbled up imports from China as though there is no tomorrow.

    (2) where China slows. With the US slowing, China will find its exports slowing in tandem with growth there suffering as a result.

    (3) where the liquidity boosting yen-carry trade unwinds. Everything has been rosy over the past few years because of the yen-carry trade. Borrow yen at ultra low rates, swap it into any other currency (selling yen in the process whch explains the JPY's weakness) with interest rates above 4% and make a minimum fat spread of 400 bps - wa la! a no brainer. And of course, better still, use the 0.1% yen borrowing cost to invest in not only currencies but other assets like the stock market and properties. But what happens when this yen carry unwinds? Of course the total opposite - sharp decline in asset prices. People have spoken about higher yen interest rates or lower non-japanses rates as the trigger for such an unwinding of yen-carries. With everybody super long on this yen-carry, I believe it will only take a rush to the exit when (1) & (2) spooks the market as the risk of a global slowdown increases.

    (4) Bird flu - in the market this is called a "low probability, high impact" event. I think its now a "moderate probability, high impact" event.

    I give event (1), (2) & (3) a 70% chance of happening over the next 24 months. I believe that "what goes up, must come down" albeit not necessarily to its starting point (which is still an uptrend overall). My take is that we'll see a 1/3 to 1/2 retracement in asset prices depending on how much such assets have risen over the past few years. Singapore properties might not be hit as bad as other countries given the relatively less price increases seen here.

    I give (4) a 40% possibility of happening within the next 5 years.

    So Singapore's property market is safe if we look within the confines of Singapore itself. But when you look at the broader picture, I am not too sure...

    My 2 cents worth
    I think you sort of assuming property market is similiar to stock market even though very often they are linked. You don't expect taxi driver, aunty and uncle all are going to buy the property? aren't you? For stock market, this may is possible especially so many penny stocks in our market.

  14. #14
    Join Date
    Apr 2007
    Posts
    72

    Default Re: No bubble to burst

    It was a figure of speech - yes different asset markets have different "bubble" indicators but what I cited is a general cliche to suggest a market is in such a situation. I certainly do not expect taxi drivers to speculate let alone put down the downpayment for a private property for pure speculation purposes.

  15. #15
    Unregistered Guest

    Talking Re: No bubble to burst

    By the time the bubble burst, you wouldn't even know it until you try to sell. By then nobody in the right mind would even want to buy. You idiots buy $1,500psf have to sell $900psf. Even then, you still have to beg, hahahahahahahahahahaha. Anyway the Gov already make big money by then, developer already made you all exercised your option already. The property agents already made enough already. You will be there left standing with lots of debts and you will crawl into a hole and cry like a loser.

  16. #16
    F1 Guest

    Default Re: No bubble to burst

    Quote Originally Posted by Unregistered
    By the time the bubble burst, you wouldn't even know it until you try to sell. By then nobody in the right mind would even want to buy. You idiots buy $1,500psf have to sell $900psf. Even then, you still have to beg, hahahahahahahahahahaha. Anyway the Gov already make big money by then, developer already made you all exercised your option already. The property agents already made enough already. You will be there left standing with lots of debts and you will crawl into a hole and cry like a loser.

    Loser, it will not happen lah.
    We know the gap between us is widening.
    Take it easy!
    Change gear, go for 300 km/h.
    Charge!

  17. #17
    Property Cashier Guest

    Default RE: MCL Land Cheers Singapore Immigration Drive

    Quote Originally Posted by Reuters
    It says this will fuel demand for its mass- to mid-market condominiums.
    Reuters
    Singapore
    17 May 2007

    Singapore's drive to attract more immigrants will lift the earnings of residential property developer MCL Land for years to come, the firm's finance chief said on Thursday.

    The firm, 77% owned by Hongkong Land , expects demand for its mass- to mid-market condominiums will be fueled by the government's plan to woo more skilled foreign workers and boost the country's population to 6.5 million from 4.5 million.

    "The long-term prospect for Singapore's property market is good. You need to house that additional two million," Steve Chu, MCL Land's Chief Financial Officer, told Reuters in an interview.

    Singapore generated over 90% of MCL Land's earnings last year with the remainder coming from neighbouring Malaysia.

    Though private home prices in Singapore are at their highest levels in seven years, many of MCL Land's rival developers such as CapitaLand and Keppel Land are diversifying out of the country by building apartments, malls and offices in markets such as China and India.

    But Chu said the risk-returns of venturing beyond MCL Land's main markets of Singapore and Malaysia would not be attractive for a small firm that had a staff of about 30.

    "The current boom in Singapore has two to three more years to go before it eases off," Chu said, adding that Singapore private home prices could rise a further 15-20% this year.

    MCL Land has a market capitalisation of $654 million and is the 22nd-largest property firm among the 40 in Singapore's property index .

    Landbank

    Chu said MCL Land plans to spend up to S$600 million ($394 million) this year to grow its current landbank of about 1.6 million square feet of gross floor area.

    "We are actively looking for sites, particularly along the fringes of the core central area," he said.

    MCL Land's landbank acquisitions will be funded by cash from its home sales as well as bank financing.

    "We are comfortable with keeping our current debt gearing of 60% to equity," Chu added.

    MCL Land, which has tied up with rival developer Ho Bee Investment to develop two residential projects, has been approached by European and U.S. funds keen to invest in Singapore property.

    "We are not actively considering their offers as we haven't come across any large sites available for development yet," Chu said.

    Chu said MCL Land's 2007 net profit would easily exceed the US$30.5 million net profit it earned last year.

    "It will definitely be a much better performance than 2006," he said.

    Bucking the trend among Singapore property firms which reported strong first-quarter earnings growth, MCL Land posted a 75% fall in net profit for the three months ended March to US$1 million.

    Kim Eng Research analyst Wilson Liew said MCL Land's net profit figure was "deceptively abysmal" because the developer's unique accounting treatment of recognising its home sale profits only upon the completion of its projects.

    "MCL Land will reap the benefits of capital appreciation in the mass market," said Liew, who raised his target share price for the developer to S$3.23.

    MCL Land shares, which rose 0.75% to close at S$2.69 on Thursday, have gained 24% in the last three months, outperforming the 17% average gain of Singapore real estate stocks but underperforming the 33% increase chalked up by Ho Bee Investment over the same period.

    What else do I wanna to ask for?
    F1 cars zooming past IRs.
    F1 boats zooming around Marina Bay.
    Prices going up another 20% this year.
    2-3 more years of good time.
    It can never get better than this!

  18. #18
    Unregistered Guest

    Default Re: No bubble to burst

    Have you ever been to an F1 race? Let me tell you, it is boring! Sitting there in the VIP stand in the hot weather just to catch the one or two seconds every round when the cars zoom past. Then boring again for the next 15-20 mins. Watching live F1 is not all that's made out to be. I'd rather watch in the comfort of my own home. At least I get to see all the camera angles of the cars around the circuit.

  19. #19
    F1 Guest

    Default Re: No bubble to burst

    Quote Originally Posted by Unregistered
    Have you ever been to an F1 race? Let me tell you, it is boring! Sitting there in the VIP stand in the hot weather just to catch the one or two seconds every round when the cars zoom past. Then boring again for the next 15-20 mins. Watching live F1 is not all that's made out to be. I'd rather watch in the comfort of my own home. At least I get to see all the camera angles of the cars around the circuit.
    Wah! This fella not watching.
    Got 1 more seat ah!
    Go buy a ticket and watch man!

  20. #20
    Sanjeev Sanyal, IPS & DB Guest

    Default Cheer Up And Enjoy The Boom

    All the hand-wringing about asset/property price surges may be a little unwarranted. Having had a depressed market for 10 years, everyone should just cheer up and enjoy the boom.

    - 21 May 2007

  21. #21
    Unregistered Guest

    Default Re: No bubble to burst

    Quote Originally Posted by Unregistered
    Have you ever been to an F1 race? Let me tell you, it is boring! Sitting there in the VIP stand in the hot weather just to catch the one or two seconds every round when the cars zoom past. Then boring again for the next 15-20 mins. Watching live F1 is not all that's made out to be. I'd rather watch in the comfort of my own home. At least I get to see all the camera angles of the cars around the circuit.
    It goes without saying watching F1 race on site is most boring thing you can imagine. It is all hypes and it is really silly Singapore wanted to host this. To me, it shows that we are far from being creative

  22. #22
    Seng Guest

    Default Re: No bubble to burst

    Quote Originally Posted by Unregistered
    It goes without saying watching F1 race on site is most boring thing you can imagine. It is all hypes and it is really silly Singapore wanted to host this. To me, it shows that we are far from being creative
    Wat talkin' you?
    Where got silly?
    If silly, then all these countries like Germany, France, UK, Japan, Australia, etc. won't host it wat!
    Raise awareness good wat! You dun like awareness meh?

  23. #23
    Bull Run Guest

    Default RE: Hong Kong Expat Apartment Rents World's Most Expensive: Survey

    Quote Originally Posted by Unregistered
    By the time the bubble burst, you wouldn't even know it until you try to sell. By then nobody in the right mind would even want to buy. You idiots buy $1,500psf have to sell $900psf. Even then, you still have to beg, hahahahahahahahaha. Anyway the Gov already make big money by then, developer already made you all exercised your option already. The property agents already made enough already. You will be there left standing with lots of debts and you will crawl into a hole and cry like a loser.
    Quote Originally Posted by AP
    AP
    Singapore
    21 May 2007

    Hong Kong's high-end apartments are the world's most expensive to rent, followed by Tokyo and New York, reflecting high living costs in those cities, a survey on expatriate accommodation showed Tuesday.

    An executive three-bedroom apartment in Hong Kong costs more than US$8,500 (€6,311) a month to rent, according to the survey by U.K.-headquartered human resources consultancy ECA International.

    Rents for typical expatriate apartments in Hong Kong rose an average 10% last year and 15% in 2005, thanks to the Chinese territory's robust economic growth, said Lee Quane, general manager of ECA International Hong Kong.

    The gap between Hong Kong and other cities was widening, he added.

    The survey compared rental prices in 92 locations worldwide, the firm said in a statement.

    Tokyo rents for expatriates averaged US$7,358 (€5,474), while in New York, they were US$7,249 (€5,392).

    Moscow was ranked fourth most expensive at US$6,526 (€4,854), followed by Seoul, London, Mumbai and Shanghai, the survey found.

    The Venezuelan capital of Caracas was ranked ninth as expatriates there need to live in high-security compounds for safety reasons, Quane said. Paris was 10th.

    The cheapest location of the 92 cities was Nairobi, Kenya, where a three-bedroom apartment cost about US$1,000 (€750) a month, the survey said.

    To high?
    No lah.
    We are still way below.
    There's a lot more room for growth.

  24. #24
    TIME Guest

    Default Singapore's New Look

    Kathleen Kingsbury
    TIME
    Thursday, 24 May 2007


    Banker Pinchin Kwok says she came back to Singapore for "the good life".
    Munshi Ahmed for TIME


    There was something a bit unusual about Lee Kuan Yew's annual Chinese New Year speech this year. The words of Lee, Singapore's former Prime Minister and founding father, are heeded by the public, because they provide a road map for the city-state's economic development. Hewing to custom, Lee spoke dryly of free-trade agreements and strengthening economic ties with the region. But then he started talking about art exhibitions, jazz bands, museums and alfresco dining. In fact, eating outdoors was mentioned no fewer than three times as Lee laid out the government's vision for a multibillion-dollar residential and commercial real estate project located near the downtown core. The Marina Bay development would transform the way people live and work in Singapore, the Minister Mentor said. Electric golf buggies will whiz by diners as they gaze from the water's edge upon the "sailing, boating, windsurfing and fishing." Singapore aspires to be "a tropical version" of New York, Paris and London all in one, Lee said, adding "the Marina will be like the St. Mark's Piazza in Venice."

    Say what? It was hard to tell if the architect of Singapore's rise from third world to first was charting an economic course or making a sales pitch for a master-planned leisure community—because he was, in a way, doing both. Marina Bay is just one part of a government-orchestrated effort to change the face of Singapore. This is no Botox job. Work is underway on an epic facelift, one that could within a few years render Singapore nearly unrecognizable: the financial district will have a striking new skyline while casinos and other amusements will dot the city. Even sleepy Sentosa Island, a 500-hectare tourist hangout located 15 minutes from the city center, is slated for overhaul via a 10-year, $5 billion plan to turn it into a world-class playground for the wealthy, with multimillion-dollar seafront homes, a megayacht marina and a Universal Studios theme park. The point of this real estate renaissance: change Singapore's image as a prosperous but rather dull commercial hub into that of a vibrant, fun destination—a place people will want to live in or at least visit on holiday, not merely transit on their way to more exotic Southeast Asian locales such as Bangkok and Bali. "Our entire nation is focused on a self-transformation," says Lim Neo Chian, CEO of the Singapore Tourism Board. "Singapore is changing its image in the eyes of the world."

    Change it must. Faced with challenging long-term economic prospects and a flagging birth rate, Singapore's leaders have determined that the future of its 4.4 million citizens depends upon attracting multinational corporations along with hundreds of thousands of ambitious, educated (and preferably wealthy) foreigners to work and live there. Like other Asian tigers such as Taiwan, Singapore is losing high-tech manufacturing jobs—once crucial to economic growth—to lower-cost countries such as China. Manufacturing now provides work for just 20% of the island's 2.5 million workforce, down from 33% a decade ago, a decline reflected in people's paychecks. The poorest 30% of Singaporeans have seen their wages drop consistently for the past five years, according to United Nations data. This economic predicament is complicated by flagging demographics. Younger Singaporeans—the most productive workers—are increasingly seeking employment overseas, while the ones who remain are having fewer children. At the current birth rate, the population will begin to shrink in 2020. And that portends stagnating economic growth and a declining standard of living.

    The antidote: open the gates to immigration. The city aims to boost its population by 25% to 6.5 million over the next few decades. Due to the flagging birth rate, that goal can be reached only by admitting up to 1 million foreigners, more than doubling the current expat population of 875,400. Drawing in so many worker bees will require a lot of honey, in the form of good jobs, recreational opportunities, decent housing—the myriad elements that factor into a city's lifestyle. It will also require a certain amount of buzz—and Singapore is not currently thought of as an exciting city. Not that it isn't a model in many ways. It's admired for its efficient government, first-world infrastructure, solid educational system—a real plus if it is to attract high-income talent from overseas—and clean, crime-free streets. Singapore is regularly named in regional surveys as one of the best places in Asia for expats to live. Per capita income last year was $30,900, equal to that of Japan, and the economy is popping; GDP grew 7.9% last year.

    But detractors have long complained about Singapore's paternalistic politics and its straitlaced social environment that can be as stuffy as its equatorial climate. "I tell people Singapore is the Lexus of countries," says David Martin, a U.K. citizen who moved to Singapore three years ago and now is general manager of the Marina Bay Financial Centre, a $2 billion office-and-residential project that is under construction in downtown Singapore. "Lexus could be the most well-made car out there, but it will never be as attractive as a Mercedes or BMW." This ambivalence is perhaps heightened by Singapore's unprepossessing cityscape. Many great metropolises have icons and landmarks like Big Ben or the Chrysler Building. The only physical attributes associated with Singapore are its statues of "merlions," a chimera with a lion's head and fish's body that was invented by the tourism board for a 1964 marketing campaign.

    The government for years has been trying to liven up the place. In 2002 nightclubs were allowed for the first time to remain open around the clock, an attempt to inject some oxygen into the tourist trade and nightlife (lawmakers also repealed a law barring dancing on tabletops). Two years ago, city officials stopped tinkering and got serious: over considerable public objection, gambling was legalized. The government subsequently struck deals with major gaming companies to build two casino/resort developments, each costing about $4 billion. When completed, they will be the twin suns around which a solar system of new developments and diversions are expected to revolve.

    One casino is located on a 24-hectare strip of land on the southern shore of Marina Bay, not far from the city's growing financial district at the mouth of the Singapore River. In February American casino operator Las Vegas Sands broke ground there on what will be the city's first integrated resort, scheduled to be completed in 2009. Beyond gambling, the Marina Bay Sands—composed of three nearly identical 50-story towers—will offer 2,500 hotel rooms, 93,000 sq m of convention space, two theaters, an ice-skating rink, shops and restaurants. A revitalized waterfront will sport the world's tallest Ferris wheel, miles of walkways and a 100-hectare botanical garden. To help bring in tourists, Singapore recently announced it had cut a deal to become a stop on the Formula One Grand Prix circuit starting in 2008; the city will host the annual event on downtown streets and may hold Formula One's first night race. For those with more genteel interests, a world-class art-and-science museum is being built near the Marina Bay Sands. Designed by renowned Israeli architect Moshe Safdie, the facility looks on paper to be as distinctive a landmark as the Sydney Opera House—its dramatic roofline resembles flower petals or an upturned palm. "We call it the Hand of Singapore," says George Tanasijevich, general manager of Singapore development for Las Vegas Sands.

    The other casino, to be developed by Malaysia's Genting International, will stand on Sentosa Island, which is connected by bridge, light rail and cable car to the main island. Using land it had been reclaiming since the 1970s, the government several years ago began auctioning Sentosa plots to the private sector, but only to be developed under its careful guidance and marketing. Beaches that ringed the island were spruced up, and two golf courses modernized. Thirteen hotels containing about 3,500 rooms are planned, providing lodging for tourists drawn to the beaches, the casino and a Universal Studios theme park, which is also being built by Genting International and is slated to open in 2010.

    Then there's what is arguably the capstone of the Sentosa initiative: Sentosa Cove, Singapore's first waterfront property development and also its first gated community. Each of its approximately 600-sq-m lots will soon sport luxury homes costing up to $20 million, each with infinity pools and private boat berths. Mixed in with the single-family homes will be four condominium complexes, a five-star hotel and a megayacht marina.

    The government hopes the high-end properties will be purchased by wealthy locals as well as expat residents and overseas investors. To bring in the latter, a new property law was passed last year making Sentosa Cove the first land in Singapore that could be owned by foreign individuals (through 99-year leases) without special government clearance. Previously, foreigners could not easily secure land rights; those wishing to invest were obliged to purchase condominiums.

    Backed by an international marketing campaign, Sentosa Cove homes are nearly sold out—more than half of the buyers are foreigners—and are generating a little bit of buzz that is music to the ears of the city fathers. When Hong Kong housewife and property investor Betty Ling first saw advertisements for Sentosa Cove three years ago, her Singaporean friends warned her "only ghosts live there." But she says she chose to buy in Singapore instead of Bali or Phuket because, "It's an international city and you have all the infrastructure of city life. You can feel safe there. Bali and China are scary. You don't know whom to trust." Plus, she says, prices are relatively low, adding, "Where in Hong Kong can you moor your boat right outside your house?" Another Sentosa Cove owner is Rick Scanlon, a 37-year-old investment-fund manager who has lived with his family in Singapore since 1996. "Our lot is right on the water, sort of carved into the hillside," says Scanlon, an American expat. "It reminds me almost of living in Malibu."

    Malibu? In some ways, what's happening in Singapore more closely resembles recent events in Macau, the former colonial enclave on the Chinese mainland that saw its property market and economy soar after the government in 2002 ended a longstanding gambling monopoly and touched off construction of a spate of new casinos, resorts and residential projects. Singapore's actions are having a similar effect. Development is booming and property prices have been soaring. Upscale home prices that averaged about $8,500 per sq m two years ago are expected to reach more than $21,300 per sq m this year. Developers are piling into the market. Beyond Sentosa, several new luxury residential projects have gone up around the city in the past year, and units are selling out at record prices within hours of going on the market. In one such project, St. Regis Residences, located in Singapore's shopping district, seven penthouses sold at an average price of $18 million; three-quarters of the buyers were from Europe, the U.S. and the Middle East. "Singapore has entered a new era in terms of costs," says Tay Huey Ying, Singapore research director for Colliers International property brokers. "The top tier—and its prices—are here to stay."

    The commercial-property sector is also buoyant, especially around Marina Bay, the western shore of which is being promoted as Singapore's answer to Wall Street, but with sailing, waterskiing and dining on your doorstep. Eight new skyscrapers are in the works that would quadruple Singapore's supply of top-quality office space by 2010. Partnering with both local and foreign developers, government planners have applied every element of its newest mantra—"live, work, play"—to the area. "It's definitely [the government's] vision," says Martin, the general manager of Marina Bay Financial Centre. "But they've convinced the private sector to foot the bill."

    In fact, the government effort to revamp Singapore goes beyond property development. After the 1997 Asian financial crisis, bureaucrats realized the city could no longer rely upon manufacturing to fuel its economy, and began setting policies designed to create higher-paying, white-collar jobs in specific sectors: biotechnology, education, and private banking and finance. Singapore aspires to be a regional or even global center in those areas by offering incentives to corporations such as tax breaks, reasonably priced premium office space and Singapore's corruption-free business climate.

    The push appears to be contributing as much to recent economic growth as property. Since 2000, production of drugs and medical devices has quadrupled to $15 billion. World-class educational institutions such as INSEAD and Johns Hopkins University have established Singapore campuses. The city-state is becoming the largest hub for private banking outside Zurich. Assets held in the Singapore offices of private banks including UBS and Citigroup have been rising 20% annually since 2003. More than 100 hedge funds have relocated to the island, up from 20 in 2004, according to the Singapore Monetary Authority. The Boston Consulting Group reckons Singapore now has more millionaire households as a percentage of total households than any other Asian economy.

    Overall, an unprecedented 173,300 jobs were created in Singapore last year, and not just in high-pay professions. The construction and tourism sectors are also on the upswing. The Marina Bay Sands and Genting casino projects by themselves will add $8 billion of foreign investment. When completed, the developments are expected to create 38,000 service-sector jobs. "We have more than 450,000 citizens over 55 that are underemployed and undereducated," says Dr. Loo Choon Yong, a lawmaker and chairman of the Sentosa Development Corporation. "These are jobs they can do." Today, 68% of Singaporeans work in service industries, according to the Ministry of Manpower.

    Despite this economic revitalization, many Singaporeans find the changes their city is undergoing to be bewildering and even threatening. According to public opinion polls, a majority of citizens were against the legalization of gambling, fearing casinos would result in increased crime and other social ills. Today, there's additional anxiety over ambitious efforts to boost immigration. In January, a local newspaper poll showed that 90% of Singaporeans opposed those efforts because they fear losing their jobs to foreign professionals. Nearly 43% said they believe the government is more concerned about foreigners than its own people; they also expressed doubt that Singapore's open-door policy will translate into more jobs. "The backlash comes from so-called foreign talents taking the best jobs without any obligations to maintaining the national good," says National University of Singapore sociology professor Chua Beng Huat.

    There's also backlash over the potential impact that an influx of up to a million immigrants could have on society in coming years. Singapore has steadily been adding about 100,000 expats annually since 1990, census data shows. Foreigners now make up about 19% of the city's population, in contrast with Hong Kong, where expats make up less than 8% of all residents. "There are concerns over how in the world Singapore's tiny island and infrastructure will support the increased foreign population and how that will impact transportation, taxes, traffic, housing and schooling for the locals," says Singaporean Cheryl Liew, a consultant for an executive-search firm. One of those locals, Lance Lim, summed up this skepticism in a letter to the local Straits Times newspaper published in March. "We need to seriously consider whether our country is prepared to sacrifice its national identity for supposed economic growth," Lim wrote.

    But not everyone is having an identity crisis. Pinchin Kwok chose to return to her native Singapore last year after living in New York for five years. The 28-year-old banker says she came home for "the good life" and that she's excited by the changes. "Many of the reasons people leave Singapore when they are young will be gone," Kwok says. "Life can only become more cosmopolitan and sophisticated. Everything will be less boring." Kwok adds that she expects Singapore will become "more of a melting pot like Manhattan, but at the core will be the heartlanders who've lived here for a long time and can pass along their values."

    So maybe Lee Kuan Yew was right when he compared this new Singapore with Venice, London and New York. Those cities grew into giants not by copying blueprints of other capitals, but by being open to fresh ideas and unfamiliar DNA. "Yes, we should study best practices and features from other great cities," says Cheong Koon Hean, CEO of Singapore's Urban Redevelopment Agency. "But, ultimately, we need to seek out answers that best suit Singapore. To find our own soul." With their usual determination, Singaporeans are looking.

  25. #25
    Unregistered Guest

    Default Re: No bubble to burst

    Quote Originally Posted by ahlahdin
    Wednesday, May 9, 2007

    No bubble to burst

    Strong fundamentals back high property prices here

    Letter from Charles Tan Meah Yang

    If you look only at average salaries here, the current property boom is unsustainable. But our property market is not solely determined by the average Singaporean. Foreign investors with hefty paycheques contribute to demand, too, and this effect filters into the markets that are closed off to them (ie HDB flats) as richer Singaporeans who have been priced out of condominiums divert their fat wallets toward the Government alternative.
    The biggest problem with SInagpore property market is that it is too dependent on foreigners. The driver for the current boom is actually from both local and forign investors. Many locals are purchasing up three or more properties. Everyone is having a gambling mentaity hoping someone will buy their property for a heafty profit. Is it worthwhile to take on that much risk?

  26. #26
    Observer. Guest

    Default Re: No bubble to burst

    Quote Originally Posted by Unregistered
    The biggest problem with SInagpore property market is that it is too dependent on foreigners. The driver for the current boom is actually from both local and forign investors. Many locals are purchasing up three or more properties. Everyone is having a gambling mentaity hoping someone will buy their property for a heafty profit. Is it worthwhile to take on that much risk?

    Don't say gambling mentality lah.

    Like that all investors in stocks, commodities, forex, etc. are gamblers.

    Not true lah. All these are investors - not gamblers.
    They did research before making any committment. Gamblers don't.

  27. #27
    Buyer Guest

    Default Re: No bubble to burst

    Quote Originally Posted by Unregistered
    By the time the bubble burst, you wouldn't even know it until you try to sell. By then nobody in the right mind would even want to buy. You idiots buy $1,500psf have to sell $900psf. Even then, you still have to beg, hahahahahahahahahahaha. Anyway the Gov already make big money by then, developer already made you all exercised your option already. The property agents already made enough already. You will be there left standing with lots of debts and you will crawl into a hole and cry like a loser.

    Quote Originally Posted by Paterson
    28 June 2007

    First Phase of The Marq Fully Sold
    Units sold at an average S$4,137 psf, with a highest price of S$5,100 psf


    Singapore, 28 June 2007 - SC Global Developments Ltd, one of Singapore’s leading developers of exclusive luxury residences, is pleased to announce that it received overwhelming response to the first phase of private previews for its ultra luxurious residential development, The Marq On Paterson Hill (‘The Marq’). Previews were by invitation only.

    The first phase – about a third of all available apartments – comprising 21 units from the two blocks, Premier Tower and Signature Tower – have been fully sold. The average selling price achieved was $4,137 per square foot. Of the 21 units sold, eight apartments were within The Signature Tower, highly coveted for its signature 15-metre private lap pool in every unit. Prices for the entire development ranged from approximately S$11 million to S$31 million, with a unit in the Signature Tower achieving S$5,100 psf.

    The Marq on Paterson Hill is 24 storeys high; the 3 penthouses which occupy the top two floors of the building and apartments on the higher floors were not released in the first phase of private previews. The Signature Tower will be home to 21 ultra spacious 5 –bedroom apartments averaging 6,195 sq ft, beside it will stand the Premier Tower with 42 luxuriously appointed 4 –bedroom apartments averaging 3,000 sq ft.

    SC Global Developments has no confirmed date for the release of the second phase of units at this point.

    Oh please!
    $1,500 psf have to sell at $900 psf?
    $1,500 psf is stupidly cheap you know?

    It's 1500 - not 5100, OK?
    $5,100 psf is a different story.

  28. #28
    Unregistered Guest

    Cool Re: No bubble to burst

    I sort of agree with the "aunties" and "uncles" buying indicating a bubble. The definition of who they are will vary with that of the stock market. What is happening in the US is lending to every tom dick and harry for additional mortgages. It is starting to happen in Singapore. You could get countless cashlines and credit cards from banks now unlike years ago when you could only get 1 or two ; max 2 times your annual salary.

    But, our govt will definititely step in before the "aunties" and "uncles" can get their private property so we dun need to worry incessatnly about this ever happening.

    I believe the prime (9,10,11 and Marina Bay area) property prices are very much dependent on whether Singapore can rival the West to become a global financial hub. If we believe that the sub prime mortgage woes in the US will eventually unravel, then the safest place to be is in the east!

    The easten great kingdoms (I mean in Asia) are conservative and have loads of reserves. So I beliee in the longevity of the property market in Singapore (especially).

    It may weaken, but not collapse. Govt is also careful that they dun repeat a 1996 financial crisis!

  29. #29
    Unregistered Guest

    Default Re: No bubble to burst

    If you look at the great cities of the world such as Amsterdam, London, NYC, Sydney, Melbourne, and the many other European cities, you will realise that developed countries' property prices go high where the area has the X factor. In other areas without the X factor, their prices can take a tumble. In most of the premium areas, the X factor has been water. This has been true from time immemorial. Water has this magical feel to it. Residences by the sea, bay and river will invariably command a high premium over those lacking in the water factor. For Singapore, the future of great living will be in, in my very humble opinion, what I will call the "Water Strip Towns" - Sentosa Cove, Marina Bay, East Coast beachside, Pasir Ris beachside, Tg Rhu and River Valley riverside. For HDB, look out for Punggol, Marine Parade and Pasir Ris New Town.

  30. #30
    Join Date
    Jun 2007
    Posts
    58

    Default Re: No bubble to burst

    Quote Originally Posted by Unregistered
    I sort of agree with the "aunties" and "uncles" buying indicating a bubble. The definition of who they are will vary with that of the stock market. What is happening in the US is lending to every tom dick and harry for additional mortgages. It is starting to happen in Singapore. You could get countless cashlines and credit cards from banks now unlike years ago when you could only get 1 or two ; max 2 times your annual salary.

    But, our govt will definititely step in before the "aunties" and "uncles" can get their private property so we dun need to worry incessatnly about this ever happening.

    I believe the prime (9,10,11 and Marina Bay area) property prices are very much dependent on whether Singapore can rival the West to become a global financial hub. If we believe that the sub prime mortgage woes in the US will eventually unravel, then the safest place to be is in the east!

    The easten great kingdoms (I mean in Asia) are conservative and have loads of reserves. So I beliee in the longevity of the property market in Singapore (especially).

    It may weaken, but not collapse. Govt is also careful that they dun repeat a 1996 financial crisis!
    The only direction for properties in prime district for the next 10 years is to head north. Why? for the following simple reasons:-
    - growing number of rich businessman in China and India
    - limited inventories, expecially after the recent massive en-bloc in the prime locality
    - SG as a prefer destination for wealth management industry
    - continued strong GDP growth
    - top notch government
    - SG as a emerging financial, R&D, education, trading, wealth management hub


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