Monday, October 6, 2008

About this Blog

Singapore Property Outlook: Short, Medium and Long Term Outlook

What do Singapore property buyers think of the short term, medium term and long term outlook of Singapore property market? Do they agree with the Singapore political leaders that this is the most promising decade for Singapore? The following are some views extracted from the Singapore Property Forum:

Ann wrote:
Singapore has to constantly reinvent itself just to maintain our current prosperity which is derived from being premium compared to our neighbours. For the next 5-10 years, current efforts (eg tourism, biotech, financial services, high-end manufacturing.) may succeed. For now, its not a done deal.

Running a tight ship can get you far and fast, but its still a small ship. Eventually, the limitation of size will catch up with us. We can’t keep reclaiming land, and we can’t keep increasing the population. This may become increasingly the rate-limiting factor to growth. Not enough space for roads, water, recreation, factories, offices, homes.

Our neighbours are also reinventing themselves. Tourism, financial services, high-end manufacturing, ports and shipping, reformations in governance (transparency, stamping out corruption, law-making etc)… China, India, HK, Malaysia are developing and eroding our lead. Why do it here when you can do it cheaper and nearer to where the real action and growth is? Our ability to command a price premium may weaken.

Last year, MM Lee was interviewed about Singapore’s long term prospects. He said that for now, we could attract foreign talents, but in 20-30 years time, once China, India has caught up, they won’t want to come here anymore.

20-30 years time is exactly the time frame of a mortgage loan. Lots of things could happen.

Anonymous wrote:
i agree with ann that the long term outlook of Singapore is very uncertain... even the medium outlook, which was rosy before the subprime crisis, is somewhat downcast ... the short tem outlook of course is a mess for those who are highly leveraged including the speculators and the developers ...

As a full-fledged bear, like Ann, I'd want to wait and see how history unfold itself before I decide how much money is the Singapore real estate really worthed .. one thing I am sure, it's definitely not worthed its current price.

Another anonymous wrote:
Sorry but I'm only bearish in the current and medium term. In the long term, Singapore still has a lot of things going for itself. Stable government, low crime, pro-business policies, solid worker base, large local companies that venture overseas, not to mention government war chest which runs to hundreds of billions of dollars. If you divide government chest with the total number of people, each Singaporean would have tens of thousands if not hundreds of thousands. Then consider others countries (US for example) which borrows money, instead of lending. Each citizen of these countries, whether rich or poor, has a debt to pay. Their government take it out from the citizens thru various taxes. Due to economic uncertainties and price bubble, home prices should come down to more appropriate levels. But I don't see the Singapore economy collapsing in the future or even taking a lower position in the world economics.

Aitan wrote:
As long as our immediate neighbors don't play catch up at our playing level, Singapore should be still able to maintain its competitive edge. Though that its true, we also don't wish that they fall too far back in the race to prosperity. Having very poor neighbors when we lead and bound are definitely not in our advantage.

Remember what MM always said...Singapore can't grow and prosper if this region is not stable politically, economically and in constant conflicts. Look at 1950 to early 60's, you expect our property price to rise or for that matter, the whole economy to prosper?

Always bear in mind that the rest of the world view Singapore not as a stand alone country but just a small and tiny city state situated within a region with few hundred million people.

To expand a little further, Singapore is within a bigger spectrum of Asia. Just imagine the repercussion if North Korea goes to war with South Korea or China take Taiwan by force. Do you still think Singapore can survive on its own like Australia, without much regards to what happen in the outside world? If then, Australia still feel the pain if US falls sick.

"Stable govt, low crime, pro-business policies, solid worker base, large local companies that venture overseas, not to mention govt war chest which runs to hundreds of billions of dollars" as mentioned by Ann are all but prerequisite as we differentiate ourselves among our immediate neighbors.

Ultimately, Singapore's survival depends not only from within but also others factors that are not under our control.

With that said, I agreed with MM that Singapore should still be doing alright within the next ten years.

Ann wrote:
That's the problem. We can only be fairly confident about the next 10 years. At 10-20 years, competition may heat up. At 30 yrs (by the time we've paid up the mortgage), who knows?

Lots of foreign funds that were buying into Singapore property last year... how long is their investment horizon? My guess up to 5-10yrs, then KIV cut and run. Beyond that, probably unplanned.

Actually, some of them may even have been very short-term, speculative type. They were happy to pour money in whilst is seemed like a sure bet, easy money in 2-3yrs. But now, it is no longer certain, its not worth their while. That may explain why Kuwait Investhment House let their option expire, and why there are so few sales this year.

May also want to read:
History of Singapore Property 1960 to 2008
HDB Resale flats Price Index 1990-2008: Graph & Chart
Property Price Index Graph Plotter & Online Property Valuation
Your Property Investment Determines Your Financial Success in Your Life
HDB Resales: West Sees Highest Price Increase


Post a Comment

Dear visitors:
Your comments are most welcome!

The blogger here has been affectionately named by close allies as "Smart Buyer" but really, he's not smart. Smart Buyer just believes that being prudent is smart. That's the essence of the message of this blog and Smart Buyer hopes it'll benefit other property buyers.

Smart Buyer :)