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Thread: Is This the Tipping Point?

  1. #1
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    Default Is This the Tipping Point?

    Is this the tipping point?

    by Tan Chin Keong
    04:45 AM Aug 10, 2012

    For the last three years, the trend in Singapore's residential
    property market has been virtually one-directional: Up.
    Despite the Government's repeated efforts to cool the market,
    home prices have remained resilient and recently hit new highs.
    It is not hard to see why.
    Population growth has been on an uptrend, there has been a
    housing shortage for years, and borrowing rates are currently
    low.
    I have mentioned these three forces separately in previous
    editions of this column, but they bear repeating because two of
    them are forming a confluence that is about to change the
    market's status quo.
    In my view, the days of steadily increasing residential property
    prices are numbered, and I expect the private housing market to
    correct moderately over the next 12 months.
    The first and perhaps most fundamental change is the decline in
    Singapore's population growth due to tighter immigration policy.
    The Government has scrapped its scheme that allows foreign
    investors to fast-track their permanent residency applications,
    raised foreign-worker levies and lowered the maximum ratio of
    foreign workers in companies' total workforce.
    These policies are unlikely to be reversed in the near term. On
    top of these, the Government may introduce further cooling
    measures as it deems necessary.
    National Development Minister Khaw Boon Wan has said he is
    especially monitoring the market for shoebox residential units,
    or those with gross floor area of less than 600 square feet. These
    shoeboxes are popular because bigger units have become less
    affordable for ordinary Singaporeans.
    The second change is in the works. The market's decade-old
    shortage of 90,000 units, based on my estimates, is now being
    addressed, thanks to active project launches by the Housing
    Development Board and record Government land sales over the
    last one to two years.
    From 2012 to 2015, my estimate is that a total of 140,000 to
    150,000 residential units will be completed, enough to fully
    compensate, by 2014 or 2015, for my estimated shortfall.
    The third price force - low interest rates - is unlikely to change
    soon. Given that the United States is likely to raise its policy
    interest rate in the third quarter of next year at the earliest, low
    mortgage rates are likely to persist for at least the next 12
    months.
    In addition, the Monetary Authority of Singapore's current policy
    in favour of a strong Singapore dollar could continue to attract
    fund inflows into the country and help keep local interest rates
    subdued.
    Low rates, tight housing supply even as new homes are being
    built in the next few years and developers' pricing power given
    their good balance sheets lead me to believe that the upcoming
    residential price decline in the next 12 months will be moderate.
    You may ask: Can we really call this a tipping point for the
    market? Admittedly, that will depend on how long the change I
    predict in the market would last. But considering that the change
    in the two price forces I discussed above is fundamental in
    nature, I believe that, at least, the one-directional price
    movement we have seen so far will not be sustainable.
    Furthermore, some sociologists may agree that it is in the best
    interest of the Government to continue to try to keep a lid on
    property prices.
    The popularity of shoebox units is probably likely to lead to
    households making decisions to have fewer or no children,
    which would run counter to the Government's programme to
    encourage larger families.
    This is one demographic tipping point worth watching.

    Tan Chin Keong is an analyst at UBS CIO Wealth Management
    Research

  2. #2
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    writer sold his house now waiting to buy

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    moderate = 1%, 0.5%, 3%, 10%??

    The author obviously did not know the previous GLS top bidding price, 676psf for TM, 700psf for JLD, 720psf for Thomson

    Moderating? CCR & Flora Road yes, near MRT OCR still got steam
    Ride at your own risk !!!

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    Default Hong Kong inflation half is due to rental

    香港中文大學經濟學系副教授莊太量解釋,雖然香港商舖租金不納入計算範圍,「但尖沙嘴舖租貴了,名店多了,附近住宅租金點都有影響,」同時租金人工上揚,令商販經營成本上升,令減價幾無可能,結果進一步拉高本港通脹率。此外,如港鐵加價推高交通開支、薪金上調等等「本土因素」,都令香港通脹率跑贏內地

    Very similar to Singapore, rental of HDB + REITs + COE the main driver for high inflation
    Ride at your own risk !!!

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    This UBS guy doesn't want you to buy property. He want you to invest in junk bond, funds, and all sort of derivative products. He could not possibly giving you free advise out of his kind heart.

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    Quote Originally Posted by indomie
    This UBS guy doesn't want you to buy property. He want you to invest in junk bond, funds, and all sort of derivative products. He could not possibly giving you free advise out of his kind heart.
    you are too brutal
    Ride at your own risk !!!

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    brutal but i think he is right on this one....

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    Quote Originally Posted by carbuncle
    brutal but i think he is right on this one....
    I got a bank trader friend who thinks property investors are people who feel property is the only way to make money using leverage......whereas all the financial people play with derivatives with leverage.....

    We don't understand him and he doesn't understand us.... so why bother with the anal report.

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    the days of financial derivatives making huge pile of money is officially over ... the whole world is deleveraging and trust on bankers are now near zero degree and could go negative anytime
    Ride at your own risk !!!

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    i have only ever heard of children saying i wanna be a doctor, lawyer, engineer or scientist or even teacher when they grow up.

    never have i heard any that mention BANKER.

    children with all their pureness must be right.

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    Quote Originally Posted by carbuncle
    i have only ever heard of children saying i wanna be a doctor, lawyer, engineer or scientist or even teacher when they grow up.

    never have i heard any that mention BANKER.

    children with all their pureness must be right.
    Yes, becos banker is nvr taught in the school as a great professional..

    but once they are in college and know what is going on, all of them want to be bankers.

    U check, who want to be engineers now?

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    Quote Originally Posted by carbuncle
    i have only ever heard of children saying i wanna be a doctor, lawyer, engineer or scientist or even teacher when they grow up.

    never have i heard any that mention BANKER.

    children with all their pureness must be right.
    but b4 Lehman crisis, reckless investment bankers betting big big with client money were paid handsomely, if you were in investment banking 6-12m bonus was THE NORM, just read how much JP Morgan CEO and CIO (the highest paid Wall Street woman but resigned after London Whale) got paid last year

    of course after Lehman, the sin of banks were exposed, one by one falling from grace .... but many still managed to resign with big payout to them

    it is an extremely unfair world ... u can only pray that they will pay back in HELL
    Ride at your own risk !!!

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    I have a cousin graduates with a financial degree. He is now working in a big bank as an analyst. One day my old grand uncle asked him what he really doing as a job. Knowing that my grand uncle would be confused with the financial jargons, he replied " I make up product to cheat other people's money". My great uncle said "okay I understand..!".

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    im a banker but personally i know the mindset of bankers. property is simply too illiquid for our liking so we are kinda biased. but then again, i am a banker with very diverse portfolio, and i believe in accumulating assets as that's the most 'stable' way to generate passive income. more importantly, assets are safer 'bets' in the long term so to speak.

    i am tired of the markets. i, the banker, am tired of banks too. there's so much rubbish going on i don't wanna criticize my own profession.

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    Quote Originally Posted by Laguna
    Yes, becos banker is nvr taught in the school as a great professional..

    but once they are in college and know what is going on, all of them want to be bankers.

    U check, who want to be engineers now?
    Sad to say that if you want to do well as an engineer, Singapore can be a tough place. For the same amount of effort in studies and at work, other careers can give much higher mileage.

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    The tipping point ... both Dow and gold had a minor reversal last night ... tipping point to the upside instead??

    Ride at your own risk !!!

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    Quote Originally Posted by phantom_opera
    moderate = 1%, 0.5%, 3%, 10%??

    The author obviously did not know the previous GLS top bidding price, 676psf for TM, 700psf for JLD, 720psf for Thomson

    Moderating? CCR & Flora Road yes, near MRT OCR still got steam
    The trend is to cut back on domestic helpers and cars. Hence OCR properties near MRT will continue to grow gradually.

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    I believe developers are holding back their launches in Q2-Q3 2012. I'm expecting plum sites to be launched around Q4 2012 onwards to coincide with year end bonus and performance bonus. Buyers should hold back for a while for these sites, but be prepared for high psf.

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    watching psf n apartment size will tell when is the tipping point for the mass market.... think it has yet to breach the affordability level if the economy stay as it is

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    Wage inflation is going up and outpacing increase in housing prices.. So how to tip

    ESP. Lots of people have cash waiting and waiting to enter

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    Quote Originally Posted by Clim1688
    ESP. Lots of people have cash waiting and waiting to enter
    It is true.
    Got a couple of friends who are waiting to chiong and buy property.
    Few days ago, a close friend just told me she bought spottiswoode residences in 2010. Now then tell me probably slip of the tongue, and she told me not to tell anyone...... mabbe lots of people buy but never tell their friends.

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    Quote Originally Posted by buttercarp
    It is true.
    Got a couple of friends who are waiting to chiong and buy property.
    Few days ago, a close friend just told me she bought spottiswoode residences in 2010. Now then tell me probably slip of the tongue, and she told me not to tell anyone...... mabbe lots of people buy but never tell their friends.
    Tell only if got paper profit ... kiasu Singaporeans

    If loss on paper, will never tell

    Not to worry, food inflation is coming, MAS unlikely to achieve 4.5% inflation target due to high COE, rental and food prices in 2H2012

    I told my friend about Archipelago 2br 850k... he said why so cheap ... I asked further he said he went to Watertown, 2br selling at much higher prices
    Ride at your own risk !!!

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    Quote Originally Posted by phantom_opera
    Tell only if got paper profit ... kiasu Singaporeans

    If loss on paper, will never tell

    Not to worry, food inflation is coming, MAS unlikely to achieve 4.5% inflation target due to high COE, rental and food prices in 2H2012

    I told my friend about Archipelago 2br 850k... he said why so cheap ... I asked further he said he went to Watertown, 2br selling at much higher prices
    that's the problem. If its too good to be true, its probably is. When I went to view flamingo v in the initial launch, I was bow over by the design. I ask gor further discount. The agent say no. Then when I walk away he say wait, I got some units that is further from the pool. Tail end of the block, within the price you are asking for. I ask is it ?. Why. He hesitate and say not good facing ...blah blah blah.. Then finally say the G word. Graveyard.

    some other buyer near by also heard and started to ask about this. Sad to say it went down hill from there. But its still a almost sold out proje t.

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    Quote Originally Posted by buttercarp
    It is true.
    Got a couple of friends who are waiting to chiong and buy property.
    Few days ago, a close friend just told me she bought spottiswoode residences in 2010. Now then tell me probably slip of the tongue, and she told me not to tell anyone...... mabbe lots of people buy but never tell their friends.
    Why are there still so many people with cash on hand? Locals or foreigners?
    Since 2009, prices have been going up and up with no real correction insight.
    Those who sold in 2010 and 2011 are surely regretting right now.
    Many of you think that with inflation and low interest rate. this bull run will continue. There is still no end in sight for the number of people who are still cheonging, not even Euro crisis and CMs can hold them back.

    In reality, prices are running away from affordibility for first time buyers though this is partly compensated by the shrinking of the unit size.

    Will this party ever going to end?

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    Quote Originally Posted by ekl2ekl2
    Why are there still so many people with cash on hand? Locals or foreigners?
    Since 2009, prices have been going up and up with no real correction insight.
    Those who sold in 2010 and 2011 are surely regretting right now.
    Many of you think that with inflation and low interest rate. this bull run will continue. There is still no end in sight for the number of people who are still cheonging, not even Euro crisis and CMs can hold them back.

    In reality, prices are running away from affordibility for first time buyers though this is partly compensated by the shrinking of the unit size.

    Will this party ever going to end?
    Name an relatively safe, alternative investment in Singapore that can hedge 5-6% inflation? Corporate bond / bank preference shares needs private placement of 250k ... u have the guts and know-how??

    Stocks nowadays are range bound, many people were burnt during Lehman e.g. COSCO, the volatility is only for the strong hearts, REITS are risky (read about recently closure of Banquet foodcourts and check out whether CapitalMall can continue to squeeze more tenants and increase rent or not)
    Ride at your own risk !!!

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    Quote Originally Posted by buttercarp
    It is true.
    Got a couple of friends who are waiting to chiong and buy property.
    Few days ago, a close friend just told me she bought spottiswoode residences in 2010. Now then tell me probably slip of the tongue, and she told me not to tell anyone...... mabbe lots of people buy but never tell their friends.
    but u just told the whole world....

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    IS this the tipping point?

    Ride at your own risk !!!

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    Quote Originally Posted by radha08
    but u just told the whole world....
    They were afraid to be the laughing stock if they bought at the peak mah. Better play safe. Wait till got some unrealised gains then say.

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    ...ok I admit recently I started losing from the stock market after a long winning run in the past when this happened it was my tipping point
    Last edited by Komo; 12-08-12 at 01:03.

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    Quote Originally Posted by Clim1688
    Wage inflation is going up and outpacing increase in housing prices.. So how to tip

    ESP. Lots of people have cash waiting and waiting to enter
    Ya, I agreed with you, inflation rate are so high now, building and labour cost also went up so much how to tip.

    Also people/Singaporean are rich and do not have much place to invest and put their money.

    A piece of paper only for 10 years of use already cost almost $100,000 what is $1,000,000 for a condo, which you can sell it with profit after 10 years, if you believe in inflation and the next high in property.

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