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Thread: Property upswing: Beware the exuberance

  1. #1
    mr funny is offline Any complaints please PM me
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    Default Property upswing: Beware the exuberance

    http://www.straitstimes.com/Review/E...ry_408843.html

    July 28, 2009 Tuesday

    Editorial

    Property upswing: Beware the exuberance


    THE real estate sector is stirring, though not lustily yet. There is every reason to support the rationale that the upswing this time is better moderate than precipitous. The lesson learnt of the irrational exuberance in the second half of 2007 was that asset price inflation that began to eviscerate purchasing power in Singaporeans' foremost ownership ambition was socially fraught. The trap can be avoided. Now that the second-quarter GDP rebound and intermittent stock market rallies will provide real estate momentum, it is not too early to counsel caution.

    But one should still be thankful. The property turnaround is tracking closely the people's confidence, which has withstood better than thought the effects of the recession. There are also the multiplier gains for businesses providing appliances, furniture, electronic gadgets, home decor and renovation works. Although the Urban Redevelopment Authority's monitoring showed that prices of private property declined again in the second quarter, what was noteworthy was that the slower rate of quarterly dip (4.7 per cent against 14.1 per cent) mirrored the improved buyer sentiment evident since February. In the HDB market, confidence has been more pronounced as prices and values stayed up through the worst of the economic slump.

    Real estate companies have a responsibility to steer the recovery along a steady path that will bring them sustained earnings while keeping condominiums and flats affordable. The temptation to raise prices too sharply and quickly to catch the crest of the wave (it is not rolling fast yet) must be resisted. Precipitate repricing when the market is still tentative will set the recovery back - then it will be a case of all fall down. Property consultancies for their part should stay true to their ethical principles to not talk up the market and drive fear into people waiting to time their purchases correctly. So far, the actions of these two market catalysts have been mainly responsible. Long may this continue.

    And buyers? They should never give in to the unwarranted fear of 'missing' their entree in a rising market. The evidence shows that HDB upgraders, en-bloc sellers and middle-aged types with savings have been the dominant buyers. Young couples with neither the CPF cache nor dependable careers can be expected to dive into the private market soon. They should stay well clear. The HDB is created for them as a step-up ladder. This cautionary tale may require review when rich foreigners and funds start buying sight unseen, as in 2007. Even then, prices can get out of whack only to the eventual dismay of developers - to say nothing of bona fide home owners.

  2. #2
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    Default Agents behaving badly.

    hi,

    From the above article :
    So far, the actions of these two market catalysts have been mainly responsible. Long may this continue.

    Of course a Straits Times editiorial is going to ignore the effect of it's own articles. It's not just property consultancies or real estate companies. The Straits Times have published every hipped-up item on property for the past few months. They've given headlines such as "selling like hot cakes" and more. And I imagine that a good 25% of any ST issue is made up of condo ads and classifieds. The ST makes cash out of the promotion of property. And the fact that it publishes a holier than thou editorial doesn't hide this.

  3. #3
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    Quote Originally Posted by scott7777
    hi,

    From the above article :
    So far, the actions of these two market catalysts have been mainly responsible. Long may this continue.

    Of course a Straits Times editiorial is going to ignore the effect of it's own articles. It's not just property consultancies or real estate companies. The Straits Times have published every hipped-up item on property for the past few months. They've given headlines such as "selling like hot cakes" and more. And I imagine that a good 25% of any ST issue is made up of condo ads and classifieds. The ST makes cash out of the promotion of property. And the fact that it publishes a holier than thou editorial doesn't hide this.
    I have see many news from the government that warned us that our economy is not fully recovered yet and we need to depend on US and Europe market to pick up very much. But yet on the other hand people are rushing to buy properties like no tomorrow. WHY???

  4. #4
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    Quote Originally Posted by Honesty
    I have see many news from the government that warned us that our economy is not fully recovered yet and we need to depend on US and Europe market to pick up very much. But yet on the other hand people are rushing to buy properties like no tomorrow. WHY???
    These people are greedy. They just want to flip. It is this group of people who making geniune buyers like us suffering; failing to get a decent roof top. Its the same group of people who costs inflation on property price, and this negative spiral just goes on uncontrolled. I am frustrated.

  5. #5
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    Quote Originally Posted by yowetan
    These people are greedy. They just want to flip. It is this group of people who making geniune buyers like us suffering; failing to get a decent roof top. Its the same group of people who costs inflation on property price, and this negative spiral just goes on uncontrolled. I am frustrated.
    I don't think it is fair to blame the "flippers".

    In fact, during the downturn, these "flippers" are the ones who get their fingers burnt and they have to offload their properties at a large lost.

    During this time, you can squeeze the "flippers" and make them vomit back the blood that they have sucked.

    It's easier to squeeze blood from the "flippers" because they have no holding power.

    On the other hand, long-term investors just go into hibernation mode during the winter and you can forget about getting a good price from them.

    In one of my investment condo units, recently some units are transacted at 25% below market value. These must be sold by "flippers" who could not hold.

    But now the prices have bounced back up again.

    You could have moved in to make a kill during that time.

    "Flippers" can be advantages to you if you know how to kill them.

  6. #6
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    3 cheers to the last post

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