How to id The property bubble

[peterng8]

How to spot a bubble ... very simple!

I believe most people here own properties.

So it makes the job easy.

List your property for sale, ask for 5% above last done.
Tell agent base price is last done.

Then sit back and wait to see if there is a bubble.

If you get offer --> market still healthy.
If you DONT get offer --> lower price by 5% see if you get offer.

If get, market is inching downwards but stable.

If u you still dont get offer after inching it down by more than 15%.

Then ... BUBBLED and its BURSTING!! !!!

Hope the above can help u !

DKSG
Stay Calm and Cool (even got bubble)

bro, need to factor in location too if using this technique...

[Douk]

I believe we can identify the propery bubble through the price and buyers profile. Propery bubble burst not just due to no buyers, but also force to sell.

When interest rate head north, how many of the current buyers need to liquidate, government knows the answer. We can only guess the answer, maybe with 70/80% accuracy.

[rockinsg]

How to spot a bubble ... very simple!

I believe most people here own properties.

So it makes the job easy.

List your property for sale, ask for 5% above last done.
Tell agent base price is last done.

Then sit back and wait to see if there is a bubble.

If you get offer --> market still healthy.
If you DONT get offer --> lower price by 5% see if you get offer.

If get, market is inching downwards but stable.

If u you still dont get offer after inching it down by more than 15%.

Then ... BUBBLED and its BURSTING!! !!!

Hope the above can help u !

DKSG
Stay Calm and Cool (even got bubble)

When you market at less 15% and no takers then it not bubbled and bursting.it WAS bubble and its bursted. You are already late.

Trick would be to know before it bursts. Which ain't easy.

[carbuncle]

The next project launching next week is the one at Bendemeer. Cannot be higher than this as they have no renowed architect.

Bendemeer and Bishan although both B have very different image and occupant profiles...

[carbuncle]

If Caspian at Lake Side was remembered as the turning point for a bottom,
Sky Habitat will be remembered as the turning of a top.

One is the deep sea and ocean. One is sky high. Sounds about right.

[samuelk]

brother samuelk, me no B convert la Am merely explaining the signs of a pre-bubble from my own personal experience. It occurs to me to let the newbies here know the signs after I read an article on property bubbles. Not saying it is going to happen here or not.

no worries. Anything with smiley icon cannot be taken seriously. I mean you no malice.

[3C]

I guess most buyers already know that the property prices is at its peak or start to go flat as some have mentioned. Lots of buyers I guess with spare cash could not accept that their money sitting in the bank with miserable interest and decided to dumb their money into property, snapping up those small units with low quantum. They are careful not to over commit. So those who are waiting for fire sale & inerest rates goes up, etc and bubble gum burst may need to be a bit patient.

[DC33_2008]

Former has more potential for growth than the latter if former has lower asking price (20-25% lower).

Bendemeer and Bishan although both B have very different image and occupant profiles...

[FH99]

Back to 1997 when HK property price was at its peak, we were furiously debating whether we were in a bubble.
Looking back, the simple fact of more and more people starting to debate is a good sign of the bubble is going to bust.
Are we doing exact the same right now?
So we are at the peak!

[minority]

bro, need to factor in location too if using this technique...

Tell u what u sell us ur prop at 15% below we help u gauge if its bubble or not?

[3C]

Back to 1997 when HK property price was at its peak, we were furiously debating whether we were in a bubble.
Looking back, the simple fact of more and more people starting to debate is a good sign of the bubble is going to bust.
Are we doing exact the same right now?
So we are at the peak!

Those days queue up also can earn thousands of dollars overnight.
Is this happening?

[chestnut]

If you guys look at the property price index, you will find a correlation betwwen the state of economy and the price of property. All crashes happens when economy crashes and unemployment is high. All bubbles form when economy is booming, employment is great and stock market is booming. So to determine when market will crash, very simple - next recession. The recession needs to be deep and long, for crash to take place. The 2008/9 was brief because recovery was fast. During recession, first thing to happen - people lose job. Then next they sell shares. Them they sell car, then finally sell house and downgrade. So, if recession don't take place and everybody has a job and economy is doing great, don't expect bubble to burst. This all boils down to supply and demand. Think about it - from 2004 till now, population increased by 1 million, where do you house all this influx of people? Every year, more then 20,000 marriages are registered but the number of hdb and condos do not match this figures. This price increase over the past years were due to increase in demand and inflation. I too feel the prices are high, but the next high should be higher then previous high taking inflation into account. Right now, we have just past 1997 high base on ura's price index. So don't under estimate this run. As for me, I am staying at the sidelines. Already quite vested, so not going in anymore.

[DC33_2008]

Many people here are waiting for that moment.

If you guys look at the property price index, you will find a correlation betwwen the state of economy and the price of property. All crashes happens when economy crashes and unemployment is high. All bubbles form when economy is booming, employment is great and stock market is booming. So to determine when market will crash, very simple - next recession. The recession needs to be deep and long, for crash to take place. The 2008/9 was brief because recovery was fast. During recession, first thing to happen - people lose job. Then next they sell shares. Them they sell car, then finally sell house and downgrade. So, if recession don't take place and everybody has a job and economy is doing great, don't expect bubble to burst. This all boils down to supply and demand. Think about it - from 2004 till now, population increased by 1 million, where do you house all this influx of people? Every year, more then 20,000 marriages are registered but the number of hdb and condos do not match this figures. This price increase over the past years were due to increase in demand and inflation. I too feel the prices are high, but the next high should be higher then previous high taking inflation into account. Right now, we have just past 1997 high base on ura's price index. So don't under estimate this run. As for me, I am staying at the sidelines. Already quite vested, so not going in anymore.

[peterng8]

Tell u what u sell us ur prop at 15% below we help u gauge if its bubble or not?

sure or not? on what assumption did u base on that 15% lower that u will be able to eat it up? some old resale unit Now at some out of place location 15% below valuation (again valuation is not like HDB)also hard to find buyer...some old resale units at good location, 5% lower u can still get generate some interest.. again generate interest does not mean it is translated into real sale or transaction(window shopping also can rite?)...

[minority]

I suggesting counting the no. of adds in the papers. i.e. property ads verses electronic ads or verses news.

This SAT the no. of Property Ads are amazing ! A lot!

[peterng8]

I think alot of resale unit sellers who are serious to sell their units are trying every possible way to get rid of their units ASAP..be it their tenanted or own stay unit if they are serious to sell.. some unit is even advertised by mulitple agents and turning up to be the same unit... They are not sitting in the dark they are aware of the market situation now which news is galore frequently on the property market trend....

[blackjack21trader]

If you guys look at the property price index, you will find a correlation betwwen the state of economy and the price of property. All crashes happens when economy crashes and unemployment is high. All bubbles form when economy is booming, employment is great and stock market is booming. So to determine when market will crash, very simple - next recession. The recession needs to be deep and long, for crash to take place. The 2008/9 was brief because recovery was fast. During recession, first thing to happen - people lose job. Then next they sell shares. Them they sell car, then finally sell house and downgrade. So, if recession don't take place and everybody has a job and economy is doing great, don't expect bubble to burst. This all boils down to supply and demand. Think about it - from 2004 till now, population increased by 1 million, where do you house all this influx of people? Every year, more then 20,000 marriages are registered but the number of hdb and condos do not match this figures. This price increase over the past years were due to increase in demand and inflation. I too feel the prices are high, but the next high should be higher then previous high taking inflation into account. Right now, we have just past 1997 high base on ura's price index. So don't under estimate this run. As for me, I am staying at the sidelines. Already quite vested, so not going in anymore.

very great insight ! bumpz up

[roly8]

many Mr B wannabe here?

anyway, if your head is not big ..don't wear so big hat lor..just sit back & do your usual stuff...ignore the market..

[FH99]

The 1M population are NOT residents, you will be surprised to see how fast they disappear when recession comes. (And unemployed Singaporean voters will cry to throw them out - regardless the actual result is a much smaller economy pie.)
It is already happening to those with S$10M (FIS program is gone!)

[howgozit]

So if it is that simple... may I humbly ask are we in a bubble now?
if yes... why?
if no.... why not?

Can't answer right?.... because it is not simple at all... what you have just stated are simply the effects of a recession of which a property crash is one among other effects like unemployment.

IMHO, I think what you have pointed out does not help in identifying a bubble at all. When the things you say happens, it is already overtaken by events.

If you guys look at the property price index, you will find a correlation betwwen the state of economy and the price of property. All crashes happens when economy crashes and unemployment is high. All bubbles form when economy is booming, employment is great and stock market is booming. So to determine when market will crash, very simple - next recession. The recession needs to be deep and long, for crash to take place. The 2008/9 was brief because recovery was fast. During recession, first thing to happen - people lose job. Then next they sell shares. Them they sell car, then finally sell house and downgrade. So, if recession don't take place and everybody has a job and economy is doing great, don't expect bubble to burst. This all boils down to supply and demand. Think about it - from 2004 till now, population increased by 1 million, where do you house all this influx of people? Every year, more then 20,000 marriages are registered but the number of hdb and condos do not match this figures. This price increase over the past years were due to increase in demand and inflation. I too feel the prices are high, but the next high should be higher then previous high taking inflation into account. Right now, we have just past 1997 high base on ura's price index. So don't under estimate this run. As for me, I am staying at the sidelines. Already quite vested, so not going in anymore.

[chestnut]

The 1M population are NOT residents, you will be surprised to see how fast they disappear when recession comes. (And unemployed Singaporean voters will cry to throw them out - regardless the actual result is a much smaller economy pie.)
It is already happening to those with S$10M (FIS program is gone!)

You are right. But Over the past few yrs, where do u house this people? That's why prices shot up. If you are looking for price drop, u need to figure out when they will leave- that is during recession when companies retrench.

In 08 lehman crisis, I thot this round will be bad and waited. Then us pulled the QE stunt, stocks started shooting up and before u know it, properties started shooting. So I changed tact and went in to snap clover in 09. In 10, bot gardens at bishan at a steal while waiting for Cheung kong to launch Thomson grand.

So if u want to see massive price drop, a long deep recession is required. If not, u wll only see a dip and things will bounce back.

When us and Europe is down, everyone will bang on Asia. Remember during the 1997 when Asia was done, capital flight took to us... Now it is the reverse. So I think Asia will continue to do well for the next 2 yrs. but remember, when things change your plan needs to change. Don't be stubborn. See everything and re-evaluate on a periodic basis and change course if situation changes. Like the previous QEs.

[samuelk]

The 1M population are NOT residents, you will be surprised to see how fast they disappear when recession comes. (And unemployed Singaporean voters will cry to throw them out - regardless the actual result is a much smaller economy pie.)
It is already happening to those with S$10M (FIS program is gone!)

not sure about them leaving. But I do know one angmo who was retrenched. They normally still have like a month kind of thing even whenthey are serve the notice from where I used to work.
so I ask what is his plans and would he be heading back to australia.
the reply was in au is even worst as the job are less and takes a fair bit longer as they need to do all sort of checks before they get employed.
+ the family is here. What surprise me was, he then decided to take up a PR in singapore and that helps extend his stay.

so unless this is a strategy to get many of them to reconsider yheir PR status, this is one way to get more FT to turn PR.

he was also commenting that been angmo is a leg up as the local are more submissive and normally do what he ask. So its easier to work in sg thenanywhere else especially bad is HK.

so for hk to still be able to commend a premium over sg in the long run may soon be normallise.

[blackjack21trader]

You are right. But Over the past few yrs, where do u house this people? That's why prices shot up. If you are looking for price drop, u need to figure out when they will leave- that is during recession when companies retrench.

In 08 lehman crisis, I thot this round will be bad and waited. Then us pulled the QE stunt, stocks started shooting up and before u know it, properties started shooting. So I changed tact and went in to snap clover in 09. In 10, bot gardens at bishan at a steal while waiting for Cheung kong to launch Thomson grand.

So if u want to see massive price drop, a long deep recession is required. If not, u wll only see a dip and things will bounce back.

When us and Europe is down, everyone will bang on Asia. Remember during the 1997 when Asia was done, capital flight took to us... Now it is the reverse. So I think Asia will continue to do well for the next 2 yrs. but remember, when things change your plan needs to change. Don't be stubborn. See everything and re-evaluate on a periodic basis and change course if situation changes. Like the previous QEs.

I knew it ! the way you replied in your previous post. I already know u are a seasoned investors liao lor.

PS: Not trying to 3-legged you hor...WOAAHHAHAHAHAH

[speculator]

You are right. But Over the past few yrs, where do u house this people? That's why prices shot up. If you are looking for price drop, u need to figure out when they will leave- that is during recession when companies retrench.

In 08 lehman crisis, I thot this round will be bad and waited. Then us pulled the QE stunt, stocks started shooting up and before u know it, properties started shooting. So I changed tact and went in to snap clover in 09. In 10, bot gardens at bishan at a steal while waiting for Cheung kong to launch Thomson grand.

So if u want to see massive price drop, a long deep recession is required. If not, u wll only see a dip and things will bounce back.

When us and Europe is down, everyone will bang on Asia. Remember during the 1997 when Asia was done, capital flight took to us... Now it is the reverse. So I think Asia will continue to do well for the next 2 yrs. but remember, when things change your plan needs to change. Don't be stubborn. See everything and re-evaluate on a periodic basis and change course if situation changes. Like the previous QEs.

One of the best sensible posting... Good one

Did the same during Europe crisis. Before Greece collapse they pulled out LTRO.
Now don't know what new tricks again by ECB for Spain

Each time they end up causing inflation to rise

[darkseid]

If you guys look at the property price index, you will find a correlation betwwen the state of economy and the price of property. All crashes happens when economy crashes and unemployment is high. All bubbles form when economy is booming, employment is great and stock market is booming. So to determine when market will crash, very simple - next recession. The recession needs to be deep and long, for crash to take place. The 2008/9 was brief because recovery was fast. During recession, first thing to happen - people lose job. Then next they sell shares. Them they sell car, then finally sell house and downgrade. So, if recession don't take place and everybody has a job and economy is doing great, don't expect bubble to burst. This all boils down to supply and demand. Think about it - from 2004 till now, population increased by 1 million, where do you house all this influx of people? Every year, more then 20,000 marriages are registered but the number of hdb and condos do not match this figures. This price increase over the past years were due to increase in demand and inflation. I too feel the prices are high, but the next high should be higher then previous high taking inflation into account. Right now, we have just past 1997 high base on ura's price index. So don't under estimate this run. As for me, I am staying at the sidelines. Already quite vested, so not going in anymore.

Finally see someone posted this.

[Arcachon]

http://market-uncle.blogspot.fr/2009...er-can-it.html

[Arcachon]

http://www.asiaone.com/Business/My%2...-283799/4.html

[Arcachon]

http://www.um.mo/fba/irer/papers/pas...45-063Sing.pdf

Shortly after the completion of this paper, the government announced first a reduction of land to be sold in 1998, and later a complete deferral of remaining land to be sold this year to next year. The window for completion of 99-year leasehold projects was extended from five to eight years with a substantial reduction of the penalty for delays. These measures lead to a cutback in the immediate and future supply, which is partly what the developers asked for in order to maintain the price level.

[Arcachon]

http://ink.library.smu.edu.sg/cgi/vi...t=soe_research

[Arcachon]

http://www.asiaone.com/Business/My+M...26-212422.html

And as a result of the very low interest rates today, an investor who takes up an 80 per cent loan to be paid off over 30 years can entirely service his or her monthly mortgage payment from the rental income. Here, the mortgage rate is calculated based on the one-year interbank rate plus 1.5 percentage points.

Based on URA's numbers, the median price of an apartment in the first quarter of 2010 was $9,952 per sq metre (psm), and for condominiums, $10,490 psm. Let's take the average of the two to represent the median price of a non-landed property. That works out to $10,221 psm. A 100 sq metre unit would cost some $1.02 million. Assume that an 80 per cent loan is taken and that the housing loan rate is 1.5 percentage points above the interbank rate, which was at 0.625 per cent. For a $818,000 loan on a 2.125 per cent interest over 30 years, the monthly mortgage payment is $3,074.

On the rental side, the median for a non-landed private property is $34.06 psm per month. So the rental income from a 100 sq metre unit would be $3,406. That more than covers the mortgage payment. However, additional expenses relating to owning a property like property tax or property maintenance are not taken into consideration.