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Thread: Private home prices fell for five consecutive quarters in Singapore

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    Default Private home prices fell for five consecutive quarters in Singapore

    By Andrew Batt:
    Claims published last week which suggested that private home prices in Singapore have fallen for five consecutive quarters, once adjusted for inflation, were questioned by a large number of PropertyGuru readers.

    In a report published on Wednesday by The Global Property Guide and subsequently republished around the world and on Propertyguru.com.sg ('Asian property markets show signs of weakness'), a claim was made that private home prices in Singapore, once adjusted for inflation, have fallen for five consecutive quarters.

    A large number of readers made contact to question the validity of this assertion that home prices have fallen, given the plethora of stories which appear on an almost daily basis which seem to contradict this claim.

    When contacted for further comment, the publisher of The Global Property Guide Matthew Monatgu-Pollock, told PropertyGuru that he stands by the claims made by his company. He also revealed the data his company used to establish the claim.




    The Global Property Guide said: “Using property price data from the Urban Redevelopment Authority (URA) and data for consumer price index (CPI) from Statistics Singapore, we computed the inflation-adjusted property price index (4th column) using the following equation:
    Real property price in quarter t = (Nominal property pricet /CPIt) x 100


    In the table above, property prices rose by 0.6 percent (in nominal terms) during the latest quarter. But when adjusted for inflation, property prices actually dropped by 0.3 percent, the country’s fifth consecutive quarter-on-quarter house price decline."

    We can also look at it in another way, they said.



    “Listed above are the property price index (all residential) and the CPI for Singapore from the first quarter of 2011 to the third quarter of 2013.

    As we can see, the quarterly change for the CPI has been greater than the quarterly change for the residential price index in the past five quarters. And, anyone can already guess (even without computing further) that if we adjust the property price index to account for inflation, quarter-on-quarter property price changes would be negative from Q3 2011 to Q3 2012.”

    Andrew Batt, International Group Editor of PropertyGuru, wrote this story. To contact him about this or other stories email [email protected]

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    Based on information above, it means that even the rapid rise in PPI is not sufficient to offset increase in CPI.

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    Quote Originally Posted by Pynchmail
    Based on information above, it means that even the rapid rise in PPI is not sufficient to offset increase in CPI.
    I guess it depends what is the CPI made up of and whether CPI truly reflects the consumption patterns.

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    GOD good old days cnud's Avatar
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    So don't anyhow whack another CM.

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    Quote Originally Posted by Kanarazu
    I guess it depends what is the CPI made up of and whether CPI truly reflects the consumption patterns.
    yes i agree with u. it is the composition of cpi that is important. is the cpi made up of coe prices, or not ?

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    Quote Originally Posted by cnud
    So don't anyhow whack another CM.
    this is definately a sound advice! btw, i love ur avatar, he is so handsome, isn't he?

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    Quote Originally Posted by Pynchmail
    Based on information above, it means that even the rapid rise in PPI is not sufficient to offset increase in CPI.
    this report is made in the correct logic. we should always take inflation into account. but what is cpi made up of as one bro pointed out.

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    东方 mcmlxxvi's Avatar
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    I remember reading it includes imputed rent, whatever that means...

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    Quote Originally Posted by mcmlxxvi
    I remember reading it includes imputed rent, whatever that means...
    Bro, let me ask u a few question:
    1. If the property is fully paid up. The rise in property in % wise, can it keep up with inflation? - ans :

    2. If you borrow, 80%, can it keep up with inflation or exceed inflation?

    3. If u borrow 60%, can it keep up or beat inflation?

    Finally, of the 3 options, which 1 will beat inflation or CPI MOST??

    Hahahahahaha


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    At 5% pa, there is nothing much can beat inflation.

    Unless you loan to loan sharks ... haha!

    They should compare increase in property prices vs money left in bank, money in unit trusts, and money in CPF.

    Then they will realise that other than loan shark, money in property is one of the best guard against inflation.

    I say that because I got money in these places ... hehe ... Just a little bit in each category ... oh, of course money idling in the banks ...

    DKSG

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    东方 mcmlxxvi's Avatar
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    Quote Originally Posted by chestnut
    Bro, let me ask u a few question:
    1. If the property is fully paid up. The rise in property in % wise, can it keep up with inflation? - ans :

    2. If you borrow, 80%, can it keep up with inflation or exceed inflation?

    3. If u borrow 60%, can it keep up or beat inflation?

    Finally, of the 3 options, which 1 will beat inflation or CPI MOST??

    Hahahahahaha

    hmmm cheem. I hope RES exam not so tough leh....

    leverage most can beat inflation best isn't it? coz the rise in price is of the whole ppty value not just one's downpayment portion.... ? in terms of quantum...

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    but enbracing leverage is like treading on thin ice
    need to b careful, the 60% LTV restriction for 2nd loan is good I find

    Quote Originally Posted by mcmlxxvi
    hmmm cheem. I hope RES exam not so tough leh....

    leverage most can beat inflation best isn't it? coz the rise in price is of the whole ppty value not just one's downpayment portion.... ? in terms of quantum...
    if you dont't own any property, you're short. take cover quickly

  13. #13
    东方 mcmlxxvi's Avatar
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    Quote Originally Posted by auroraborealis
    but enbracing leverage is like treading on thin ice
    need to b careful, the 60% LTV restriction for 2nd loan is good I find
    to that, I say

    enjoy our ice lemon tea while it lasts

    before it turns into piping hot tea

    we only live once, better to say I DID then I SHOULD HAVE

  14. #14
    ipropertyguru
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    In fact, gold price if adjusted for inflation is atill way off the previous peak.

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