Property market sentiments?

[proud owner]

US home prices rise
J.W. Elphinstone
Real Estate Writer
Associated Press
New York, New York, US
Tuesday, October 27, 2009, 9:25am US EDT


A home with a reduced price is for sale in Carmel, Ind. neighborhood, Tuesday, Oct. 20, 2009. - Photo: Michael Conroy, AP

US home prices rose for the third straight month in August, data Tuesday showed, a key sign for a broad and sustained housing recovery.

The Standard & Poor's/Case-Shiller home price index of 20 major cities climbed 1% from July to a seasonally adjusted reading of 144.5. While prices are down 11.4% from August a year ago, the annual declines have slowed since February.

Prices are at levels not seen since August 2003 and have fallen almost 30% from the peak in May 2006.

The latest index shows a widespread turnaround with prices rising month-over-month in 15 metro areas since June.

"If the increases are consistent across the markets, this is key," said Wharton School real estate professor Susan Wachter before the index was released. "Then we're seeing the formation of a bottom."

However, Wachter along with other industry experts still worry that rising unemployment and more foreclosures could stifle the rebound. Another unknown is whether a temporary federal tax credit for first-time buyers will be extended to help boost sales.

First-time homebuyers can receive a credit of 10% of the sales price, up to US$8,000. The real estate industry is lobbying Congress to extend the credit past the Nov. 30 deadline. Top Democrats in the Senate are pressing a plan that would prolong the credit but gradually phase it out over the next year.

Not all metros posted gains in August, though. Prices in Las Vegas, Seattle and Charlotte, N.C., all fell to their lowest levels in August. Prices in Las Vegas have plunged by 56% since peaking in April 2006, the largest peak-to-trough decline of all 20 cities.

DONT BE MISLED

of the sales seen so far .. some 45 pct are first time home buyers..lured into the mkt for that 8k credit ...

and what you dont know is that the authority found First Time home buyers ..as young as 8 yr old ?????????????

attempting to take advantage of the 8k credits...people are resorting to such tactics ..

extending the credit from nov 09 to 2010 will see more of such misuse ..and put the govt into bigger debts ..

just as the car clunkers ... what happens after that ?? car sale still up ???

whats stopping those with money from really getting into the property mkt is the mortgage rate..

with FED funds at 0.25 pct .. and mortgage rate is 5 over pct ..

look at spore, base rate maybe 0.50 pct but mortgage is 3 pct max ..

the US banks have lost so much money in realty that they are not lowering the rates ..even when their funding rates have come off so much

[Reporter]

China says no stimulus exit yet
Simon Rabinovitch and Aileen Wang
Reuters
Beijing, China
Tuesday, 27 October 2009, 12:43am CCT


On solid ground: China's economy has performed better than expected and the country is confident and capable of achieving its full-year economic targets, says the government. - Photo: Reuters

China's economic growth is likely to speed up this quarter, but the government will stay the course on its fiscal stimulus and loose monetary policy, senior officials said Monday.

Despite the emphasis on policy continuity, an unmistakeable shift towards greater optimism in China's official rhetoric has led analysts to conclude that Beijing is thinking about how to start unwinding its ultra-loose pro-growth policies.

Restating the thrust of a cabinet statement issued last week, Vice Premier Li Keqiang said the economy had performed better than expected and its recovery was now on solid ground.

"The pace of growth is quickening quarter by quarter," Li told an international tax conference. "China is confident and is capable of achieving its full-year economic targets."

The upturn in growth has also put China on track to meet its budget targets after a difficult start to the year, giving it the fiscal firepower to continue supporting the economy, Vice Finance Minister Wang Jun told the conference.

Driving home the point that Beijing feels little pressure to tighten policy, central bank vice governor Yi Gang told a separate forum that the country faced no serious inflation threat for the foreseeable future.

"Our near-term policy will focus on preventing deflation, but we should also have a balanced policy and adopt a forward-looking view," Yi said, adding he expected consumer price inflation to turn positive on a yearly basis this quarter after eight straight months in negative territory.

Faster Growth

China set itself a goal this year of 8% growth, which officials see as the minimum needed to maintain social stability, and there is little doubt it will hit that mark. GDP growth accelerated to 8.9% last quarter, compared with a year earlier, from 7.9% in the April-June quarter.

Noting that the road ahead was still strewn with obstacles, Vice Premier Li said the government would continue the "active fiscal and appropriately loose monetary policies" it adopted late last year when collapsing exports brought the world economy's woes to China's shores.

Beijing's 4 trillion yuan (358 billion pound) stimulus package, complemented by a surge in bank lending, has been the centrepiece of efforts to revive the economy. In the process it has weighed on the government's books.

Nationwide expenditures were up a more-than-budgeted 24.1% in the first nine months from a year earlier and revenues were up a less-than-budgeted 5.3%, casting some doubt on whether Beijing could hit its goal of a 950 billion yuan deficit.

But Vice Finance Minister Wang said there had been a clear improvement in revenue growth in recent months, a trend that would only become stronger over the fourth quarter, in part because last year provided a low base of comparison.

"I am confident that, through our efforts, we will achieve the full-year budget target," he said. "We will work out various measures to increase revenues and cut expenditures but will also ensure that the active stimulus measures remain unchanged."

Exit Planning

Still, international economic officials attending the Beijing conference said the time was ripe for countries to start making plans, especially for how to rein in bloated budget deficits.

"While it is still too early to exit support provided by fiscal and monetary policies, this is an appropriate time to begin the work of planning how we should exit from the deteriorated fiscal positions that have developed as a result of, and in response to, the crisis," Takatoshi Kato, an International Monetary Fund deputy managing director, said.

Angel Gurria, secretary-general of the Paris-based Organisation for Economic Cooperation and Development, echoed this view.

"I would recommend ... that in every country we start looking at fiscal consolidation -- that means, when are you going to be removing and then what do you do with this enormous growth of the debt," he said. Gurria cited the United States, Britain and Italy as examples of countries that needed to act.

China was in better shape because it entered the crisis with a fiscal surplus and had designed an ideal stimulus package, speedily ramping up spending, Gurria said.

"It is front-loaded. Most of it has already been spent," he said. "This is different, for example, from the United States' stimulus package, which mostly is more back-loaded, more towards 2010 perhaps, even 2011."

Economists at the Development Research Centre, the State Council's think-tank, backed the view that Beijing should be ready to tweak policy to nip the threat of inflation in the bud -- even though consumer prices are still falling year on year.

"If money supply continues to grow rapidly, China will again face the danger of inflation by the end of the second quarter next year," Fan Jianjun, a finance researcher with the DRC wrote in China Economic Times, a paper published by the think-tank.

Fan said inflation could reach 4% by mid-year. Writing in the same paper, fellow researcher Li Jianwei said inflation could keep climbing and hit 5% by the end of 2010.

[kali-yuga]

From a research report in June 2009

􀁑 It is amazing how easily group-think takes a vice-like hold in the financial markets. As the BRIC economies meet for their debut summit, few dare to speak out against the new, ‘New Paradigm’. We also saw this same investor mania 13 years ago with the Asian Bubble, which the consensus thought was a growth miracle. But to go that far against the consensus invites a deluge of hate mail. That is why I keep a copy of a World Bank book entitled Thailand’s Macroeconomic Miracle: Stable Adjustment and Sustained Growth – link. It was published in October 1996, less than a year before Thailand’s (and Asia’s) economic collapse. It is all too easy for investors to buy into beguiling ‘growth’ stories which are in fact utter nonsense. If the bubble of belief in China’s medium-term growth prospects
finally bursts it will have huge investment implications.

But it was notable that when the 6.1% yoy rise in Q1 GDP was published
he said the real outturn was actually more like 3.5% yoy, but that the authorities “smooth” the data at turning points. Let me put that into plain English. The Q1 6.1% GDP outturn is simply a lie – and it helps explain why the Chinese data is derided by so many economic commentators. Many have highlighted that the GDP seems inconsistent with other data such as electricity output

Yet few dare to point out that the emperor’s clothes might be absent. When, for example, the International Energy Agency had the temerity, a few weeks back, to suggest that the Chinese authorities were inflating the data, they were met with a robust broadside from the Chinese National Bureau of Statistics. The NBS said on its website “It is regrettable that the point of view in the original article is groundless…We believe that, for an international organization, this approach lacks seriousness” – link. I think this is a case of me thinks thou doth protest too much. Nevertheless, an article on Radio Free Asia reported that The National People’s Congress had found “serious fabrication” in official statistics.


From CNBC

Thursday, 10 Sep 2009
Trading The Globe: Is Beijing Telling The Truth?

The latest economic data out of China is due to be released on Friday and once again it’s expected to show impressive results. By all accounts industrial output should be improving and retail sales should be strong.

Just two more signs that China is quickly returning to solid economic health.
And other data furnished by Beijing earlier in the week suggests much the same – China is booming -- while the US and Europe continue to struggle.

In fact that bullish data accounts for the run up in the FXI as you can see from this chart.

No news in those tidbits, except maybe they're not true.

Major investors are starting to question whether Beijing is telling the truth. "I think the story is getting harder and harder to believe," says widely followed billionaire investor and hedge fund manager Jim Chanos.

"And I'm not the only guy crying about the data coming out of China. You are seeing a lot more articles being written about it, a lot more skeptical voices being heard about just how accurate some of this data showing this Chinese miracle. And the fact of the matter is I don't think it’s very accurate at all."
Considering the data may be questionable, is there a better 'tell."
Zach Karabell says there is. In fact he tells the desk, "I wouldn’t pay attention to government statistics as a reason to invest in China, ever."

Instead he makes bets on China using numbers that can't easily be manipulated "such as the price of copper or GM’s auto sales in China. Those figures are real indicators of demand," he says.

[Reporter]

香港收紧豪宅按揭 热钱或转至中小物业
香港瑞丰会计事务所
星期二, 27-10-2009

“天价豪宅”在香港各界引发的热议一浪接一浪，连香港特区政府也改变了以前的观望态度，直接出手干预。香港金融管理局(以下简称金管局)日前宣布，价格在2000万港元或以上的高端住宅，银行按揭贷款不能超过60%，而2000万港元以下住宅则沿用过去的最高七成房贷比例，但贷款总额不得超过1200万港元。

对此，香港舆论界普遍认为金管局的这项措施是形式大于实际，对打压香港豪宅市场未必有实际帮助。也有人认为，压制豪宅市场的做法可能会令热钱流向别处，而最糟糕的结果是流向中低档住宅，因此市场人士呼吁特区政府在未来谨慎出招。

香港豪宅成交仅占2%

本月15日香港半山一个复式豪宅创下每平方米70万元人民币的天价后，要求香港特区政府出手干预楼市的呼声日渐增多。但香港特首曾荫权认为，豪宅与普通住宅属于两个不同的市场，豪宅价格飙升不影响香港民生。

香港城市大学商学院副教授、著名财经评论员曾渊沧也认为，“实际上，今年前9个月，全香港住宅成交买卖有79661宗，其中2000万港元以上的住宅成交买卖仅1658宗，占全体买卖宗数的2%。……我们何必为这2%的超级富豪的行为担心？大做文章？”

曾渊沧表示，今年前9个月，香港住宅买卖成交宗数最多的价格是100万港元～200万港元的中价楼，占总数的35%。“中低价楼占了总成交量的44%，这才是香港的现实。”

他指出，在1997年香港楼市高峰期买楼的人至今仍为负资产人士。供楼负担比率(即家庭收入中用来还房屋分期付款的钱所占的比例)是一个最佳的衡量楼市是否泡沫化的指标。在1997年这个数字达到了85%，而如今则为35%，尚属正常水平。

市场人士认为，新政策姿态多于实际，其最大的作用是提醒市场别炒得疯过头。买豪宅的人如果是自用，一般为改善性住房，按揭也大多在30%至50%之间，而内地富豪则更不可能在香港申请房贷。

热钱或转移阵地

香港超级豪宅近年来不断升温，舆论称主要由内地买家推高，也伴随着各地炒卖资金的追逐。

香港《星岛[0.54 -1.82%]日报》的社论指出，热钱涌动的情况不但出现在楼市，同样也出现在股市、贵金属市场，不但在香港出现，在其他地区也在出现。假如资产泡沫是全球现象，那么本来炒卖的热钱集中在供应较少的豪宅，日后当局出手调节后，热钱可能会转移阵地，炒卖中小型楼宇或其他物业。

《大公报》的评论认为，防止整体楼市滑坡比打压豪宅市场来得重要，如果为了压抑豪宅楼价而造成整体楼市滑坡，令大量供楼市民陷入严峻的负资产困境，将牵动更大的社会影响面。评论同时指出，楼市的升幅已与香港实体经济脱节，香港楼市存在着泡沫威胁。

舆论认为，香港政府在1997年前后推出的修建居屋(即廉租房)计划，是造成当年楼市大挫七成的主要原因之一。而目前许多声音呼吁港府重启居屋计划，并恢复定期供应，专家表示，香港政府需要慎重考虑，切莫病急乱投医。

[Reporter]

Property Asset Bubble?
Wong Sui Jau
General Manager
Fund Supermart
Wednesday, 28 October 2009, 10:52am



Is Asia entering a time when asset bubbles might be forming? It might seem unbelievable. After all, it was barely just over a year ago when the financial crisis in US hit and spread to the rest of the world. But look at the property prices in Singapore and you wouldn’t know we just came from a recession. Home prices have surged, as have demand. 10,000 private residential units were sold in the first seven months of 2009, and this is more than double that of the 4300 sold for the whole of last year. Prices of HDB flats have surged as well. Prices of resale HDB flats have hit record highs in 3Q2009, with the index at 145.2 in the 3Q2009. Prices of private homes also surged, going up 15.8% in the third quarter alone.

Part of the reason was that Asia, including Singapore was in a different part of the property cycle when the US financial crisis hit last year. US had been coming off a property bull run, one fuelled by cheap home loans and made especially widespread due to the easy availability of subprime loans. So, the crash there was sharp and the US property market may take some time to recover. Yet for Asia, there wasn’t a subprime loan fueled property bubble. In contrast, Asia was still recovering gradually from the property highs of the nineties. Hence, was barely in the early stages of a property bull run before the US financial crisis hit.

Now, with governments all over the world keeping interest rates at rock bottom, the lending costs of buying property are at a low. It doesn’t help that with so much money being printed by governments to stimulate the economy, people are nervous about possible hyperinflation and in light, property would seem even more attractive because it has historically always been resilient to inflation.

Indeed, the three things likely to be resilient to inflation are commodities, property, and stocks. Stocks because companies sell goods and services, so if there is high inflation, they can raise prices as well! For commodities, well, even if inflation is rampant, people need to eat, companies need their raw materials to build their goods. Hence, commodities are resilient to inflation. Finally, for property, everyone needs and wants a roof over their heads. So, good property will always have value which appreciates even as things get more expensive.

However, are we experiencing an asset bubble already? My answer would be “Not yet.” This is crucial. We may be at the early stages of an asset bubble forming, and if no action is taken, there will be a huge bubble, which when it bursts, is going to be very painful, just like all bubbles are painful when they burst (anyone still remember the technology bubble in 1999?). But if Asian governments, including Singapore’s can take early enough action to make sure it doesn’t spin out of control, then we may yet avoid experiencing an asset bubble.

This doesn’t mean property prices shouldn’t rise. Over the long term, all prices generally go up. Governments agree that low to moderate inflation is fine, its high inflation they don’t want. But in a bubble situation, prices do not reflect fundamentals or demand at all. Everyone is just jumping in because they want to make a quick buck and everyone thinks they can get out in time before the party ends.

Asia’s stronger economic growth and general land scarcity means that property will always be in demand. But there is a reasonable price to pay for anything, and during bubbles, prices are pushed up well beyond reasonable levels. We are not in an asset bubble yet. But the ingredients are all there. Low interest rates, ample supply of money in the system, a recovering economy, increased demand, limited supply. Whether we end up like US will depend a lot on how our government can manage the current surge in property prices. In the meantime, if you already have property, let it ride the current surge. But if you don’t, then don’t chase after the property market. The higher property prices surge in the short term, the greater the danger of a bubble forming. And if government steps in now to rein in the excess as a pre-emptive measure, that would also put some brakes on the surging property market. So either way, there is no necessity to chase after the property market.

[bargain hunter]

hahaha, please don't quote this guy. can't make it lah. according to a sunday times interview months ago, he bought a unit at clover by the park. i think already sweat in his pants so trying very hard to talk up the market. your other sources are definitely miles more credible than this fella.

Property Asset Bubble?
Wong Sui Jau
General Manager
Fund Supermart
Wednesday, 28 October 2009, 10:52am



Is Asia entering a time when asset bubbles might be forming? It might seem unbelievable. After all, it was barely just over a year ago when the financial crisis in US hit and spread to the rest of the world. But look at the property prices in Singapore and you wouldn’t know we just came from a recession. Home prices have surged, as have demand. 10,000 private residential units were sold in the first seven months of 2009, and this is more than double that of the 4300 sold for the whole of last year. Prices of HDB flats have surged as well. Prices of resale HDB flats have hit record highs in 3Q2009, with the index at 145.2 in the 3Q2009. Prices of private homes also surged, going up 15.8% in the third quarter alone.

Part of the reason was that Asia, including Singapore was in a different part of the property cycle when the US financial crisis hit last year. US had been coming off a property bull run, one fuelled by cheap home loans and made especially widespread due to the easy availability of subprime loans. So, the crash there was sharp and the US property market may take some time to recover. Yet for Asia, there wasn’t a subprime loan fueled property bubble. In contrast, Asia was still recovering gradually from the property highs of the nineties. Hence, was barely in the early stages of a property bull run before the US financial crisis hit.

Now, with governments all over the world keeping interest rates at rock bottom, the lending costs of buying property are at a low. It doesn’t help that with so much money being printed by governments to stimulate the economy, people are nervous about possible hyperinflation and in light, property would seem even more attractive because it has historically always been resilient to inflation.

Indeed, the three things likely to be resilient to inflation are commodities, property, and stocks. Stocks because companies sell goods and services, so if there is high inflation, they can raise prices as well! For commodities, well, even if inflation is rampant, people need to eat, companies need their raw materials to build their goods. Hence, commodities are resilient to inflation. Finally, for property, everyone needs and wants a roof over their heads. So, good property will always have value which appreciates even as things get more expensive.

However, are we experiencing an asset bubble already? My answer would be “Not yet.” This is crucial. We may be at the early stages of an asset bubble forming, and if no action is taken, there will be a huge bubble, which when it bursts, is going to be very painful, just like all bubbles are painful when they burst (anyone still remember the technology bubble in 1999?). But if Asian governments, including Singapore’s can take early enough action to make sure it doesn’t spin out of control, then we may yet avoid experiencing an asset bubble.

This doesn’t mean property prices shouldn’t rise. Over the long term, all prices generally go up. Governments agree that low to moderate inflation is fine, its high inflation they don’t want. But in a bubble situation, prices do not reflect fundamentals or demand at all. Everyone is just jumping in because they want to make a quick buck and everyone thinks they can get out in time before the party ends.

Asia’s stronger economic growth and general land scarcity means that property will always be in demand. But there is a reasonable price to pay for anything, and during bubbles, prices are pushed up well beyond reasonable levels. We are not in an asset bubble yet. But the ingredients are all there. Low interest rates, ample supply of money in the system, a recovering economy, increased demand, limited supply. Whether we end up like US will depend a lot on how our government can manage the current surge in property prices. In the meantime, if you already have property, let it ride the current surge. But if you don’t, then don’t chase after the property market. The higher property prices surge in the short term, the greater the danger of a bubble forming. And if government steps in now to rein in the excess as a pre-emptive measure, that would also put some brakes on the surging property market. So either way, there is no necessity to chase after the property market.

[kali-yuga]

Commentary by William Pesek

Oct. 28 (Bloomberg) -- It’s as provocative an argument as an economist can make: China is stealing jobs.
Paul Krugman did it on Oct. 22, raising blood-pressure levels around Beijing. The idea that China is siphoning prosperity from other poor nations using an undervalued currency isn’t new. It’s just that a Nobel laureate writing it in the New York Times turns heads.

China should boost the yuan now. Not because Krugman wants it or because it would help U.S. Treasury Secretary Timothy Geithner. And perhaps not even because it would help many Asians. China should act because as 2010 nears, its economy desperately needs a measure of restraint. Six months ago, it was still possible to give China a pass.
Raising millions of people out of poverty becomes even harder in a global crisis. China’s 4 trillion-yuan ($586 billion) stimulus plan and liquidity-pumping efforts beat all expectations. The risk now is bubbles, and that’s where the yuan comes in. A stronger currency would help China control its economy today and set the stage for an even brighter future.

China will regret putting quantity before quality. The 8.9 percent annual growth rate it achieved in the third quarter is impressive on the surface. Below the surface, it’s not so good.
The opacity of Chinese data is one thing. How statisticians sitting in a room come up with a single figure offering a snapshot of the activities of 1.3 billion people and many industries at various levels of development over a 365-day period is hard to imagine. A recent blog posting by Barry Ritholtz, chief executive officer of research firm Fusioniq in New York, asked: "Who Believes China’s Bernie Madoff Data?"

Growth on Steroids

Nor does the conventional wisdom about China masterfully steering around the global crisis make sense. Economist Michael Pettis of Peking University in Beijing sees it as "growth on steroids." He’s right and it raises doubts about how China can find an exit strategy without a sharp slowdown. China can’t until it takes long-lasting steps to boost domestic demand -- something a stronger yuan would achieve. It would enhance domestic purchasing power in a way massive public- works spending and rampant lending can’t. China is sacrificing the development of an organic economy for rapid growth today.

Hence efforts to hold down the yuan. China’s $2.3 trillion of currency reserves are the clearest manifestation of the determination to maintain a competitive exchange rate.

Global Rebalancing

The problem Krugman is concerned about is a crucial one. By keeping the dollar up on a trade-weighted basis, China is delaying a badly needed rebalancing of global markets. It’s also taking demand away from poor Asian nations. Similar arguments have been made over the years. During a chat in 2003 with Hafiz Pasha, an assistant United Nations secretary-general and former Pakistani finance minister, he said: "Poverty reduction is important, but China ought not to do it at the expense of the rest of the region."

Six years on, it’s still a highly sensitive topic that makes last weekend’s confab in Cha-am, Thailand, look all the more hollow. Beggar-thy-neighbor policies of the kind China is pursuing make a mockery of talk there of forming an East Asian bloc of 16 nations. Keeping the yuan effectively pegged to the dollar does little for Asian brotherhood. The more immediate concern is asset bubbles and inflation, which China will regret in a few years. A stronger yuan would take tension out of China’s $4.3 trillion economy. The nation would no longer be standing in its own way.

Yuan Policies

Yuan convertibility is a bigger issue than officials let on. At a time when China would love to find a replacement for the dollar, its currency stance ensures the yuan won’t be it. To internationalize its economy, China needs to encourage more overseas investment, reduce exports and promote sales of yuan-denominated debt by foreign companies. Instead, China wastes time devaluing its currency, adding to its imbalances and global ones. If it had any teeth at all, this would be an issue for the World Trade Organization to tackle. China is rightfully worried about fiscal irresponsibility in Washington damaging its vast dollar holdings. Yet a weaker dollar is exactly what the world needs. Nothing would help more than a rebound in the $14.2 trillion U.S. economy. Also, strength is being able to borrow in your own currency -- not owning a mountain of reserves.

If China won’t act out of regional fairness, it should out of its own national interests. China’s stimulus and lending efforts are fueling asset bubbles in stocks and real estate and creating the illusion of stable growth. Its largess may be paving the way for a bad-loan hangover.

It’s time for China to create a healthy economy -- not one that is run on steroids, cannibalizes jobs from neighbors or puts today before next year. Realizing how much the yuan is at the core of all these problems would be a good start.

[bargain hunter]

keep up the good work kali-yuga, really helps to provide this forum with more balanced views.

[focus]

hahaha, please don't quote this guy. can't make it lah. according to a sunday times interview months ago, he bought a unit at clover by the park. i think already sweat in his pants so trying very hard to talk up the market. your other sources are definitely miles more credible than this fella.

Agreed. You got so manu gurus out there who have made investing their business and succeeded at it ..

why go and follow the call of someone who have yet to made it..

[kali-yuga]

Sure, division of labour. BRO Reporter post un-Pessimistic reports while I post un-optimistic reports. Just like the Yin & Yang......balanced.

[Reporter]

hahaha, please don't quote this guy. can't make it lah. according to a sunday times interview months ago, he bought a unit at clover by the park. i think already sweat in his pants so trying very hard to talk up the market. your other sources are definitely miles more credible than this fella.

Agreed. You got so manu gurus out there who have made investing their business and succeeded at it ..

why go and follow the call of someone who have yet to made it..

I will not say whether he is credible or successful. He is quoted for everyone to comment - not for anyone to follow.

Why follow a piece of article? Why not follow the gurus?

If you are looking for gurus who have made it, you don't need to look outside. Believe it or not, they are right here in this forum! Just observe closely to what some are doing and you will get some clues.

[HP65]

Why your `colouring' so one sided. All seems to suggest should buy properties . Let me color the `warnings' at the end of the article, which is the true message of Wong Sui Jau

Property Asset Bubble?
Wong Sui Jau
General Manager
Fund Supermart
Wednesday, 28 October 2009, 10:52am



Is Asia entering a time when asset bubbles might be forming? It might seem unbelievable. After all, it was barely just over a year ago when the financial crisis in US hit and spread to the rest of the world. But look at the property prices in Singapore and you wouldn’t know we just came from a recession. Home prices have surged, as have demand. 10,000 private residential units were sold in the first seven months of 2009, and this is more than double that of the 4300 sold for the whole of last year. Prices of HDB flats have surged as well. Prices of resale HDB flats have hit record highs in 3Q2009, with the index at 145.2 in the 3Q2009. Prices of private homes also surged, going up 15.8% in the third quarter alone.

Part of the reason was that Asia, including Singapore was in a different part of the property cycle when the US financial crisis hit last year. US had been coming off a property bull run, one fuelled by cheap home loans and made especially widespread due to the easy availability of subprime loans. So, the crash there was sharp and the US property market may take some time to recover. Yet for Asia, there wasn’t a subprime loan fueled property bubble. In contrast, Asia was still recovering gradually from the property highs of the nineties. Hence, was barely in the early stages of a property bull run before the US financial crisis hit.

Now, with governments all over the world keeping interest rates at rock bottom, the lending costs of buying property are at a low. It doesn’t help that with so much money being printed by governments to stimulate the economy, people are nervous about possible hyperinflation and in light, property would seem even more attractive because it has historically always been resilient to inflation.

Indeed, the three things likely to be resilient to inflation are commodities, property, and stocks. Stocks because companies sell goods and services, so if there is high inflation, they can raise prices as well! For commodities, well, even if inflation is rampant, people need to eat, companies need their raw materials to build their goods. Hence, commodities are resilient to inflation. Finally, for property, everyone needs and wants a roof over their heads. So, good property will always have value which appreciates even as things get more expensive.

However, are we experiencing an asset bubble already? My answer would be “Not yet.” This is crucial. We may be at the early stages of an asset bubble forming, and if no action is taken, there will be a huge bubble, which when it bursts, is going to be very painful, just like all bubbles are painful when they burst (anyone still remember the technology bubble in 1999?). But if Asian governments, including Singapore’s can take early enough action to make sure it doesn’t spin out of control, then we may yet avoid experiencing an asset bubble.

This doesn’t mean property prices shouldn’t rise. Over the long term, all prices generally go up. Governments agree that low to moderate inflation is fine, its high inflation they don’t want. But in a bubble situation, prices do not reflect fundamentals or demand at all. Everyone is just jumping in because they want to make a quick buck and everyone thinks they can get out in time before the party ends.

Asia’s stronger economic growth and general land scarcity means that property will always be in demand. But there is a reasonable price to pay for anything, and during bubbles, prices are pushed up well beyond reasonable levels. We are not in an asset bubble yet. But the ingredients are all there. Low interest rates, ample supply of money in the system, a recovering economy, increased demand, limited supply. Whether we end up like US will depend a lot on how our government can manage the current surge in property prices. In the meantime, if you already have property, let it ride the current surge. But if you don’t, then don’t chase after the property market. The higher property prices surge in the short term, the greater the danger of a bubble forming. And if government steps in now to rein in the excess as a pre-emptive measure, that would also put some brakes on the surging property market. So either way, there is no necessity to chase after the property market.

[Reporter]

China set to continue with stimulus policy
Morgan Stanley Asia head contradicts views of Credit Suisse, UBS
Bloomberg
Hong Kong
Wednesday, 28 October 2009

Stephen Roach, chairman of Morgan Stanley Asia, said investors are wrong to bet that China will restrain its unprecedented stimulus after the economy accelerated in the third quarter.

'The Chinese really are fixated on one thing and one thing alone which is social stability - they don't want to take a risk of another negative growth surprise' slowdown, he said in an interview yesterday on Bloomberg Television in Hong Kong.

Mr Roach's view contradicts that of analysts at Credit Suisse AG and UBS AG, who are among those predicting that China's authorities will raise banks' cash reserve requirements as soon as by the end of December.

Government figures last week showed gross domestic product increased 8.9% in the third quarter from a year before, the fastest pace in a year.

As the impact of the current stimulus wears off, China's economy is at risk of a renewed slowdown, according to Mr Roach.

To combat the weakest expansion rate in a decade, policy makers enacted a two-year US$586 billion stimulus package, and reduced the benchmark one-year lending rate to a five-year low. The efforts kicked off a record US$1.27 trillion boom in new loans.

China may 'go back to the well with bank-funded, infrastructure-led spending programmes' in the middle of next year, Mr Roach said.

Asked about the prospects of the People's Bank of China raising interest rates in the coming months, he said: 'I don't think that's feasible over the near term given their concerns about economic growth.'

Mr Roach also predicted that China will 'ultimately' allow the yuan to be freely convertible to other currencies. While Chinese officials, including PBOC governor Zhou Xiaochuan, have called this year for an alternative to the US dollar as the world's main reserve currency, they maintain controls on the yuan that prevent it for now from becoming a competitor.

The Morgan Stanley official added that the Hong Kong dollar's peg to the US currency 'will relax' after China makes the yuan convertible. The unpegging of the Hong Kong dollar is out of the question for now, he said.

Russian Finance Minister Alexei Kudrin said on Saturday that the yuan could become a global reserve currency in about 10 years should China make it convertible. A change in Chinese policy would make the yuan a 'notable and weighty' reserve unit, he said in an interview on state-run Vesti television channel.

[Reporter]

China QDII Funds to Target Hong Kong Stocks, Wan Says
Chua KongHo
Bloomberg
Shanghai, China
Wednesday, 28 October 2009, 9:29 CCT

‘Cheap’ Hong Kong stocks will be targeted as China expands a program for local investors to buy equities and bonds overseas, according to Lewis Wan, chief investment officer of Pride Investment Group Ltd.

E Fund Management Co. said Oct. 26 it received a $1 billion quota to invest abroad under the qualified domestic institutional investor program, the first approval by the government in 17 months. QDII funds are the only route for Chinese investors to buy overseas stocks and bonds. Hong Kong- traded shares of Chinese companies typically trade at a discount to mainland listings.

“We’ve seen a lot of Chinese money trying to invest overseas, especially in Hong Kong shares because of the cheap valuations and as a lot of the shares can’t be bought on the A- share market,” said Wan, whose Pride China Fund has gained 59% this year. “At the beginning, mostly they will invest in the big shares, for example China Mobile, Cnooc.”

Stocks on Hong Kong’s Hang Seng Index trade at 24.09 times reported earnings, less than the Shanghai Composite Index’s multiple of 34.18, weekly Bloomberg data show. China’s regulator may issue more than $4 billion of new quotas, Z-Ben Advisors estimates.

China Mobile Ltd., the world’s first phone company with more than half a billion subscribers, has declined 2.6% this year, compared with a 54 percent rally by Hong Kong’s benchmark gauge. Cnooc Ltd., the nation’s biggest offshore oil producer, has climbed 72% in 2009. Neither stocks are listed in mainland China markets.

Housing Rally

Wan also said Hong Kong’s government won’t take “aggressive” steps to curb gains in housing prices.

Developers dragged the Hang Seng down 1.9% yesterday, the most in three weeks, after the Hong Kong Monetary Authority tightened down-payment requirements for luxury homes for the first time since 1991 to curtail property speculation.

“The government is just sending some smoke to the market,” Wan said. “The government will not introduce some massive or aggressive program to cool down the property market.”

[jlrx]

I will not say whether he is credible or successful. He is quoted for everyone to comment - not for anyone to follow.

Why follow a piece of article? Why not follow the gurus?

If you are looking for gurus who have made it, you don't need to look outside. Believe it or not, they are right here in this forum! Just observe closely to what some are doing and you will get some clues.

Look at this "crazy" guru below ...

Yup, by looking back you should be aware how much was Ardmore Pk launch price.

The Sail? People call me crazy when I purchase 5 units.

I bought a prime freehold apartment just before The Sail was launched. The apartment has already been en-bloced, but I did not even make as much as one unit of The Sail (which is a 99 LH property on a piece of land so small that it is not en-blocable).

At that time (and even until today), I still cannot believe that a 99 LH property with such a small land area can actually make more than a freehold en-bloced apartment !!!

Heaven got eyes or not?


The Straits Times 1st October 2004
CDL's iconic project all set to Sail this month
Initial launch of 200 of the 1,111-unit Marina Bay project, Singapore's tallest residential building, will likely see prices starting at around $900 psf


Caveat 18 Sep 2009, #61-04, 936 sf, $2,849 psf, $2,667,600.


If I had bought this unit for 900 psf when it was launched, it would cost only $842,400. That is a profit of $1,825,200 per unit !!! That's more than my en-bloced profit!


How can a 99 LH ...


That's why I say the property market is crazy, nonsensical and irrational.

[bargain hunter]

i once worked in the industry and know who he is. he wasn't even in research until he joined fund supermart. then, i give him credit for writing good reports on unit trusts. good as in sales boosting. but property?!?!?!?!

Agreed. You got so manu gurus out there who have made investing their business and succeeded at it ..

why go and follow the call of someone who have yet to made it..

[Reporter]

CIC Focuses on Commodities and Property as Hedge Against Inflation
Zhang Dingmin
Bloomberg
Beijing, China
Wednesday, 28 October 2009



China Investment Corp., the country’s sovereign wealth fund, said it has US$110 billion for overseas investments and will focus on buying into commodities companies and property as a hedge against accelerating inflation.

“Now we are seeing expectations of medium and long-term inflation, and the value of major currencies may have to fall to a new equilibrium level,” Chairman Lou Jiwei told a forum in Beijing today, according to a transcript of his comments posted on financial portal hexun.com. “Investing in major commodities can be a hedge. So is investing in real estate.”

CIC, which held almost $300 billion in assets at the end of last year, is seeking resources from Indonesia to Canada to support expansion in the world’s fastest-growing major economy. It spent at least $3.69 billion on resources in September, buying stakes in Indonesia’s PT Bumi Resources, Noble Group Ltd. and a stake in the London-traded unit of Kazakhstan’s state-run energy company.

The fund has made “not bad” returns from overseas holdings this year after pumping more money into stocks, mining, energy and real estate, Lou said. CIC sees opportunities in “many” commodities companies after asset bubbles burst in the financial crisis, he added.

“Our strategy is just long-term risk-adjusted return, is making money,” Lou said. “Now is the opportunity. I don’t care about how many tons of oil to ship home, I care about whether stocks are worth more money.”

SouthGobi, Bumi

China’s sovereign wealth fund is increasing investments in commodities firms after losing money on financial companies including Blackstone Group LP and Morgan Stanley. Copper prices in London have almost doubled this year on Chinese demand while crude oil has added 86% in New York.

SouthGobi Energy Resources Ltd., a unit of Ivanhoe Mines Ltd., said Oct. 26 it has obtained $500 million of financing from CIC to expand and develop coal reserves in southern Mongolia.

CIC bought an 11% stake in Astana, Kazakhstan-based JSC KazMunaiGas Exploration Production for about $939 million, it said Sept. 30. A week earlier it bought $1.9 billion of debt from Jakarta-based Bumi Resources, Indonesia’s biggest coal producer, and paid $850 million for a 15% stake in Noble Group, a Hong Kong-based commodity supplier. Vancouver-based Teck Resources Ltd., Canada’s largest diversified mining company, sold a 17% stake to CIC in July.

China’s economy, the world’s third largest, expanded at the fastest pace in a year in the third quarter as stimulus spending and record lending growth helped the nation lead the world out of recession. Gross domestic product grew 8.9% from a year earlier.

Commodities Buyer

The world’s biggest buyer of commodities including soybeans, cotton and iron ore, will expand 8.2% this year, compared with a March forecast of 7%, the Asian Development Bank said this month.

CIC should set aside “a certain percentage” of its investments in commodities because they’re important to China’s economic growth, Lou said. A “bigger” part of the fund’s investments in mining, energy and real estate were made in the open market through external agencies and not disclosed to the public, he said, adding that direct investments are less efficient and more difficult to adjust.

CIC is preparing for “rebalancing” overseas investments to further boost returns, Lou said without elaborating, according to the transcript. The company has completed nearly half of its overseas investments, he said.

[Reporter]

Look at this "crazy" guru below ...

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

I bought a prime freehold apartment just before The Sail was launched. The apartment has already been en-bloced, but I did not even make as much as one unit of The Sail (which is a 99 LH property on a piece of land so small that it is not en-blocable).

At that time (and even until today), I still cannot believe that a 99 LH property with such a small land area can actually make more than a freehold en-bloced apartment !!!

Heaven got eyes or not?

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

If I had bought this unit for 900 psf when it was launched, it would cost only $842,400. That is a profit of $1,825,200 per unit !!! That's more than my en-bloced profit!


How can a 99 LH ...


That's why I say the property market is crazy, nonsensical and irrational.

I switched from "posting" mode to "observation/learning" mode after you posted. Since you stopped, I shall post.


I was laughing when you mentioned you were scared. But now I am very scared too.

All this while, we mind our own business - buy property to hedge against inflation, to create wealth, etc.. But things have changed lately.

This dragon cousin from above (i.e. the north) is eating into our terrority. He is attacking us big time with a warchest of US$110 billion!!!

We don't even have US$1.1 billion. How to fight him? What is our strategy now?

[teddybear]

Easily lah, we sell them CCR properties at $10k psf and OCR properties at $3k psf then we will win! After that, everybody retire to Johor Iskandar Special Zone (ha ha ha!).

I switched from "posting" mode to "observation/learning" mode after you posted. Since you stopped, I shall post.


I was laughing when you mentioned you were scared. But now I am very scared too.

All this while, we mind our own business - buy property to hedge against inflation, to create wealth, etc.. But things have changed lately.

This dragon cousin from above (i.e. the north) is eating into our terrority. He is attacking us big time with a warchest of US$110 billion!!!

We don't even have US$1.1 billion. How to fight him? What is our strategy now?

[proud owner]

Easily lah, we sell them CCR properties at $10k psf and OCR properties at $3k psf then we will win! After that, everybody retire to Johor Iskandar Special Zone (ha ha ha!).

better still

take some profit and buy USA ..

tell you .. it cpuld be China's dream to one day OWN USA
and tell them what form of govt they should adopt .. just like how US decide how Afghan and Iraq shold be run

[Reporter]

What crisis? China's billionaires live it up!
Pascale Trouillaud
Agence France-Presse
Beijing, China
Wednesday, 28 October 2009, 11:20 pm CCT


Pedestrians are seen walking past a Rolls Royce parked in front a hotel in Beijing. While the rest of the world struggles to bounce back from the global financial crisis, China's billionaires are living it up, snapping up all sorts of luxury products at a breathtaking pace. - Photo: Wang Zhao, AFP

While the rest of the world struggles to bounce back from the global financial crisis, China's billionaires are living large, snapping up luxury products at a breathtaking pace.

Beijing's Jinbao Street is the must-visit address for billionaires with yuan to burn. Once a maze of alleys, the 800-metre (yard) stretch of road is now home to Rolls-Royce, Bugatti, Lamborghini, Gucci, Cartier, the exclusive Hong Kong Jockey Club and several five-star hotels.

"Our customers are 100% Chinese, and very rich," explained Wilson Ho, managing director for Lamborghini, as he showed off a sparkling white Murcielago convertible, which can hit 325 kilometres (200 miles) an hour.

Ho, who also represents Bugatti and Rolls-Royce in the Chinese capital, describes his clients as "successful entrepreneurs from the property business, entertainment, the financial sector, coal mining and steel manufacturing".

"They are very, very young -- a majority of them are in their early 20s," he said.

"For some people here, money is nothing, they come and they buy a car in one hour ... and they settle the payment in full. We're talking about cars that are 6, 7, 8 million yuan (S$1.2 - S$1.6 million)!"

The Shanghai-based Hurun Report earlier this month published a list of the country's 1,000 richest people -- many of whom made their fortunes in real estate and the stock market, and 130 of whom are dollar-billionaires.

The collective net worth of the 1,000 totalled US$571 billion by September 15 of this year -- more than the entire gross domestic product of Indonesia or Belgium.

"China's wealth is growing at breakneck speed," said Rupert Hoogewerf, the founder of the Hurun Report, noting that China has the most known dollar billionaires after the United States.

Beijing is the world's number three market for Rolls-Royce after Dubai and Abu Dhabi -- 52 Phantoms were sold here in 2008, one per week, with a price tag of 7 to 10 million yuan (US$1 - US$1.5 million dollars), depending on the model.

Ho said some wealthy Chinese were "car fanatics", describing the demand for luxury sports cars as "huge ... some have maybe 10 cars in the garage".

"For rich people, this is just pocket money," said Ho. "They are billionaires!"

In another well-heeled shopping area of Beijing, Chinese customers crowd into the city's biggest Louis Vuitton boutique -- three stories high -- bringing armfuls of purchases to the cash register.

The French luxury brand, which opened on average one store a month in China this year, hailed its "exceptional performance" in the Asian giant, which state media says has become the world's number two luxury goods consumer after Japan.

At Cartier, a saleswoman in white gloves arranges a showcase where a massive white gold watch encrusted with diamonds is on display. Price tag -- US$185,000.

"Our business is very good in China," says shop manager Bonnie Bao. The jeweller opened 11 stores in China last year and will set up 8 more in 2009, according to its Hong Kong office.

"Our clients are very rich. Many buy without looking at the price," Bao said.

In another boutique owned by a French luxury brand, a saleswoman -- who asked that neither she nor the shop be identified as she was not authorised to speak to the press -- said 99% of customers were Chinese.

"We really did not get the impression that our clientele was affected in any way by the economic crisis," she said. "There are more and more customers in China who can afford to enter our universe."

At the lavish Baroque-style Lan Club, dreamed up by French design darling Philippe Starck, revellers -- 70% of them Chinese -- are not exactly suffering either.

The restaurant's best bottle of cognac goes for 5,400 dollars, a 1995 Chateau-Lafite costs 3,650 dollars and a platter of fresh shellfish goes for 775 dollars.

Back in Jinbao Street at the exclusive Jockey Club, where membership costs a crisp 36,600 dollars, the ambiance is muted -- mobile phones do not ring, the carpets are thick and the scent of fresh-cut lilies fills the air.

The 450 employees must know not only the names of all 300 members -- almost all of whom are Chinese -- but which type of tea they prefer. The club once brought in tailors from Italy to make suits for the clientele.

"The rich people in China are already past the point of showing off -- they now know how to use their wealth to have a better lifestyle and enjoy life in a more private space," said assistant public relations manager Chris Chen.

"This place is not bling-bling luxury. Members don't want to be disturbed -- some of our members are celebrities from TV, movies, entertainment, but here they can be very relaxed."

[mcmlxxvi]

Why your `colouring' so one sided. All seems to suggest should buy properties . Let me color the `warnings' at the end of the article, which is the true message of Wong Sui Jau

Like some radio station ad says, hear only the 'good' things.

[kali-yuga]

We have seen these many times right, in the earlier 80s when Japan huge wealth boast spill over into US, whereby they also buy without asking the price (Film Studio, Iconic Building, Companies....etc etc), but where are they now......suffering still from the lost decade (oops soory, if lost decade X 2 liao).


For China, in 2007, there was also this talk that China's version of GIC (think its called China HuiJin) also have big plans to invest big overseas....what did they buy? Blackstone, Morgan Stanley and so many others that's such a flop that you can see so many criticisim back in China.

They want to come here and buy........good as I see it as a sign that the peak is here (if we have not pass it).

2 cents worth nia ah......dun flame me.

[bargain hunter]

don't worry, i support you. your arguments are totally logical. We need to be here to balance off the one-sided coloured reports.

but did they even say they are coming here to buy at all? with their large US$ reserves, they could well head to the US to buy up their on fire sale properties.

We have seen these many times right, in the earlier 80s when Japan huge wealth boast spill over into US, whereby they also buy without asking the price (Film Studio, Iconic Building, Companies....etc etc), but where are they now......suffering still from the lost decade (oops soory, if lost decade X 2 liao).


For China, in 2007, there was also this talk that China's version of GIC (think its called China HuiJin) also have big plans to invest big overseas....what did they buy? Blackstone, Morgan Stanley and so many others that's such a flop that you can see so many criticisim back in China.

They want to come here and buy........good as I see it as a sign that the peak is here (if we have not pass it).

2 cents worth nia ah......dun flame me.

[mcmlxxvi]

I thought China money will flow into HK markets first before anywhere else? (and then some... into Macau casinos)

[bargain hunter]

if i am not mistaken, Reporter's view is that HK already pushed up very high so will flow into sg. (Reporter, please correct me if i am wrong.)

I thought China money will flow into HK markets first before anywhere else? (and then some... into Macau casinos)

[bargain hunter]

anyway, with shanghai stock market in correction mode and govt reigning in speculative money (Blooomberg reported that China’s banking regulator plans to tighten rules for personal loans to prevent the misuse of funds for auto and real estate purchases.) I really wonder how much money will flow to sg.

[Reporter]

I thought China money will flow into HK markets first before anywhere else? (and then some... into Macau casinos)

if i am not mistaken, Reporter's view is that HK already pushed up very high so will flow into sg. (Reporter, please correct me if i am wrong.)

anyway, with shanghai stock market in correction mode and govt reigning in speculative money (Blooomberg reported that China’s banking regulator plans to tighten rules for personal loans to prevent the misuse of funds for auto and real estate purchases.) I really wonder how much money will flow to sg.

Err ... maybe I should let the gurus here (i.e. you guys and the rest) express their views.
Maybe I don't have a view?
But I for sure have a question.

Did China Sonangol consult you guys before they purchase the site from OUE? Judging from your views, it seems like this Hong Kong-based company is doomed.

I feel sorry for ...

CBRE is making a very conservative estimate with $3,500 psf. They could not imagine the final figure. It could be much more than $5,000 psf.

Hong Kong developers have been organising fully-paid-for tours for tycoons from the mainland China. One of the itinerary of these tour is a lunch-shopping trip to a showroom, where these tycoons can grab all they want, a $8,888 psf item, a $13,000 psf item or the best-of-the-best-$20,000 psf item.

With this purchase, China Sonangol will be adding a new destination for these tours - Singapore. These tycoons hate to be labelled as "cheapskate". The last thing China Sonangol want to do is to make them "lose face" when they are back in their homeland after a Singapore tour.

Just ask youself these questions:
1. Are China Sonangol buying this site to compete against the local big boys who have all the cost advantage?
2. If China Sonangol can't beat the local big boys in terms of cost, why should they even bother to buy the site?
3. Are China Sonangol willing to offend their most-valuable customers by offering them a condo that is not the most expensive in Singapore and costs just 25% of those in Hong Kong?

[mcmlxxvi]

Dunno... these HK / China developers come in... often to unknown waters. Take Yanlord's Parc MacKenzie for example.... still can't sell out. Finishing looks decent but has that 'cheena-piangness' about it...

Parc Mackenzie Mackenzie Road Yanlord Development Pte Ltd Non-Landed CCR 42 42 28 14 0 0

[Reporter]

Dunno... these HK / China developers come in... often to unknown waters. Take Yanlord's Parc MacKenzie for example.... still can't sell out. Finishing looks decent but has that 'cheena-piangness' about it...

Parc Mackenzie Mackenzie Road Yanlord Development Pte Ltd Non-Landed CCR 42 42 28 14 0 0

You mean Parc MacKenzie came in to Singapore market at a time when their home market is red hot?