What a property investor shouldn't do in today's market condition.

[eng81157]

5-10% refers to 5-10% of borrowers. Not every owner is a borrower, i'm not sure about the exact percentage though, anyone has any idea?

well, i believe it's reasonable to assume not many can afford to pay a property up in full immediately on purchase. if they can, they aren't part of the statistics mentioned in the MAS report.

hence, the questions still hold.

[economist]

well, i believe it's reasonable to assume not many can afford to pay a property up in full immediately on purchase. if they can, they aren't part of the statistics mentioned in the MAS report.

hence, the questions still hold.

But some owners who bought a few years ago may have paid up in full. The question is how many percentage of the owners still have outstanding mortgages. And MAS's 5-10% over-leveraged borrower refers to 5-10% of those still with outstanding mortgages. So in terms of percentage of total stock (with or without outstanding loans), it should be lower than 5-10%.

I recall someone in this thread mentioned he read somewhere that only 40% of HDB owners still have outstanding loans (or 60%?), not sure about private properties.

[eng81157]

But some owners who bought a few years ago may have paid up in full. The question is how many percentage of the owners still have outstanding mortgages. And MAS's 5-10% over-leveraged borrower refers to 5-10% of those still with outstanding mortgages. So in terms of percentage of total stock (with or without outstanding loans), it should be lower than 5-10%.

I recall someone in this thread mentioned he read somewhere that only 40% of HDB owners still have outstanding loans (or 60%?), not sure about private properties.

HDB owners are safe, if they took up a loan with HDB.

back to the discussion on volume, my guess is similar to yours too - relatively small.

hence my question, would this small volume of fire sales be sufficient to cause a 20% dip in prices?

[felicia_sg]

Your words are really illuminating! Makes me think about this:
why you see them buying into small landed terraces(/MM condo units) INSTEAD of actual LAND SIZE because the BIG LANDED (/normal size condos) quantum is simply TOO BIG for them

If we see BIG transactions in the BIG LANDED segment, then indeed the 5% market is healthy, because the composition of the buyers within the 5% must be High Net Worth Individual. ( By High Net Worth, I mean buyers with net position after minus all their loans and they still have liquid assets of more than S$10million and Net Worth of over S$25million, just a rough gauge. This are not the ones you see queing at Privilege Banking in Retail Banks; these are the Blue Whales who banks privately.).

However, this group is very very silent recently as in their transaction. So , I presume the present 5% composition are not such individuals but SPECULATORS who are highly leveraged. That is why you see them buying into small landed terraces INSTEAD of actual LAND SIZE because the BIG LANDED quantum is simply TOO BIG for them.


Good Luck.

[felicia_sg]

The TDSR rules is like self-employed money earn $1 can only be counted $0.70. Can we exchange money with them so that they pay us $1 and we give them $0.70 ratio? Rental income also, can we exchange with them $1:$0.70? Otherwise why TDSR must have haircut of 30% for them?

TDSR at 60% is generous. No need to pay income tax?

Cheers!

[mermaid]

The 5 to 10 per cent who over leveraged, will probably become richer than they ever imagined in the next 5 years (or die of poverty)

actually, one shd not blindly digest the 5-10% thingy lah ... actual truth is not all who > 60% TDSR r over leveraged.

take me for eg. I oni hv 1 ppty now, according to the tdsr rule, I am seriously, desperately, over leveraged
> 70% ok! but tat is becos I chose to take a 80% loan & a short repayment period.
I prefer to hide a lot of cash under my pillow cannot meh?

[felicia_sg]

May be the TDSR ill effect end up to be to force people to pay more cash upfront so that when crush comes they have little cash on hand & will have to fire sale? So actual fact is, TDSR > 60% is not over-leverage, is those TDSR < 60% but no cash on hand that is over-leveraged! (but you will never get such real statistics because it really looks very bad for the policy!)

actually, one shd not blindly digest the 5-10% thingy lah ... actual truth is not all who > 60% TDSR r over leveraged.

take me for eg. I oni hv 1 ppty now, according to the tdsr rule, I am seriously, desperately, over leveraged
> 70% ok! but tat is becos I chose to take a 80% loan & a short repayment period.
I prefer to hide a lot of cash under my pillow cannot meh?

[mermaid]

May be the TDSR ill effect end up to be to force people to pay more cash upfront so that when crush comes they have little cash on hand & will have to fire sale? So actual fact is, TDSR > 60% is not over-leverage, is those TDSR < 60% but no cash on hand that is over-leveraged! (but you will never get such real statistics because it really looks very bad for the policy!)

I hv to admit tat a low TDSR will ensure tat one is more prudent but how can they make a sweeping conclusion juz liddat? If a person is sibeh cash tight wif a lot of burdens, having a low TDSR oso dun mean tat they will be able to cope wif the interest hikes.

in short, not all who r botak is yr ah gong!

[DKSG]

MAS reported 5-10% of Singaporeans have over-leveraged themselves. assuming that truly shit hits the fans when interest rate rises, does this mean that only these 5-10% are likely to conduct fire sales?

if so, is the volume large enough to constitute to an oft-mentioned 20% drop in prices?

if not, does this mean the current price ceiling are likely to form tomorrow's support?

questions, questions, questions

These are statements officials make to cool the market without real measures. And the reason why they wanna cool the market is to make certain group of people happy,, and this certain group of people happens to be small. So making such statements make everyone happy but inconsequential.

When unemployment goes up, confirm there will be some good deals, but look at the market now, with thousands of people on the sidelines and so many CMs to undo, there is a real limit to downside.

Unless you are buying a OCR PC at ridiculously high price, at 80% loan, there is little to worry.

DKSG

[mcmlxxvi]

if buy today....
9910 / 109600 (with stamp duty) = 9.04%
9910 / 144600 (with stamp duty, 7% ABSD) = 6.85%
9910 / 159600 (with stamp duty, 10% ABSD) = 6.21%

if 2nd loan at 50% LTV,
9910 / 294600 (with stamp duty, 7% ABSD) = 3.36%

if 3rd loan at 40% LTV,
9910 / 359600 (with stamp duty, 10% ABSD) = 2.76%

Ya. The worst is still better than cpf O acct 2,5% tio bo?

[mcmlxxvi]

Who else has over leveraged in the past? Please raise your hand

Me. All the time. TDSR abv 50. Now approaching 75 with haircut in place, but thats until i rejoin the rat race...

[taggy]

Ya. The worst is still better than cpf O acct 2,5% tio bo?

tio....
actually i am guessing the ultra rich couldn't be using own name to take home loans to buy their multi properties... they must have some way to get cheap loans and pay the prop in full.... then the LTV / TDSR become irrelevant to them...

[狮子王]

tio....
actually i am guessing the ultra rich couldn't be using own name to take home loans to buy their multi properties... they must have some way to get cheap loans and pay the prop in full.... then the LTV / TDSR become irrelevant to them...

You are WRONG liao. If you are talking about creating company and buying properties, The Authority has been very STRICT for the past 10 years. Many were taken to courts, just check the law journal. I have a business friend who was barred from his enbloc proceeds for this reason, until now no news whether he can get it before TAXES.

Don't believe just ask around your rich friends

[taggy]

You are WRONG liao. If you are talking about creating company and buying properties, The Authority has been very STRICT for the past 10 years. Many were taken to courts, just check the law journal. I have a business friend who was barred from his enbloc proceeds for this reason, until now no news whether he can get it before TAXES.

Don't believe just ask around your rich friends

i confirm believe you, bec i no so many rich friends to ask leh...
i just thought ultra rich are super sophisticated, who had many ways around things, guess i am wrong.

[hopeful]

You are WRONG liao. If you are talking about creating company and buying properties, The Authority has been very STRICT for the past 10 years. Many were taken to courts, just check the law journal. I have a business friend who was barred from his enbloc proceeds for this reason, until now no news whether he can get it before TAXES.

Don't believe just ask around your rich friends

give some links can?
to quote a russian proverb, "trust, but verify".

[狮子王]

give some links can?
to quote a russian proverb, "trust, but verify".

WOAAHAHAHAHAHAHHA

you rely too much on the google liao la.

[狮子王]

WOAAHAHAHAHAHAHHA

you rely too much on the google liao la.

For me, I used the more advanced research method : "Youtube".

Good Luck.

[smartboy2]

any bro and sis here in this forum willing to share their investment spreadsheet to me?

much appreciated!