Wednesday, November 14, 2007
About this Blog
Personally, I sold off my leasehold property late last year and somehow regretted it as I could have held on for a better price if I sell this year. Nevertheless, I bought another property at a reasonable price and felt better knowing that when you sell high you also buy high and this could negate your profits anytime.
Those who sold off their property on an en-bloc basis need to scout around for a property that is affordable and within their budget. I have a feeling that they are the ones chasing up the property prices, as flushed with cash from their en-bloc sales, they are the ones now anxiously looking for a new place. They somehow have a bigger headache of looking for a place now due to the skyrocketing property price and the heavy demand due to the number of property en-bloc sales.
A friend of mine commented that he is envious of the many millionaires that resulted from the dozens of en-bloc sales that is ongoing since late last year. Some may even retire earlier or go for their dream holiday with so much cash on hand. I told him that money earned from such transactions are often difficult to hold on to as, firstly, they will buy another property that may also be around the same price range or even higher unless they are willing to downgrade and, secondly, money that is acquired easily seem to be let off easier too. My advice to en-bloc benefactors is to approach financial advisers for sound financial investment planning and to save up for their retirement, which many Singaporeans fail to do. Another concern of en-bloc sales is that it actually benefits only a small section of the population and out of which a high percentage could also be foreigners.
Singaporeans who put off their property purchase all along may also now begin to hunt for property, contributing to the tight supply
As a large majority of property owners live in public housing, they could never be benefactors of such dream transactions. This also perpetuates the discontentment among the poor and sandwiched middle class who struggle in our ever rising living standard. Many will feel that the booming economy only benefits the rich and upper middle class. Their salaries remain stagnant or rise moderately, never keeping pace with the living cost or their liabilities. The much debated wage rift is also another major concern as the higher wage earners seem to pull away from the rest who continue to struggle, leaving nothing much behind for retirement planning. The top 20 per cent income earners earn at least 10 times more than the bottom 20 per cent wage earners, creating a substantial wage gap which can only fuel discontentment.
My advice to Singaporeans is to live simply and be contented with what you have. Never cast an envious eye on those who have much more financially as I always believe that wealth can never buy happiness. I personally have a few wealthy friends who say that to them their wealth is never a major contributor to their happiness quotient but that strong family bonding, good health and job satisfaction are the main reasons for living a satisfied life. For me, it is better to have some savings and live happily surrounded by supportive family members and friends than having a big fat account and not able to enjoy life due to poor health or a disintegrated family.
Source: Unknown
May also want to read:
History of Singapore Property 1960 to 2008
Buy or Not Buy: How to decide amid mixed market signals
Smart Buyers, 10 reasons to wait
Property Price Index Graph Plotter & Online Property Valuation
Making Property Money Second: Supportive Family & Friends First
The common topics among Singaporeans now are the sizzling property prices and the rocketing stock market. It also shows that we are buyers of sentiment and also perhaps followers of the market. Many who purchase properties or stocks last year must be sitting on hefty profits as prices are on the upward trend. Those who buy in middle of this year have a narrower profit margin and perhaps a much riskier portfolio as compared to those who bought last year.Personally, I sold off my leasehold property late last year and somehow regretted it as I could have held on for a better price if I sell this year. Nevertheless, I bought another property at a reasonable price and felt better knowing that when you sell high you also buy high and this could negate your profits anytime.
Those who sold off their property on an en-bloc basis need to scout around for a property that is affordable and within their budget. I have a feeling that they are the ones chasing up the property prices, as flushed with cash from their en-bloc sales, they are the ones now anxiously looking for a new place. They somehow have a bigger headache of looking for a place now due to the skyrocketing property price and the heavy demand due to the number of property en-bloc sales.
A friend of mine commented that he is envious of the many millionaires that resulted from the dozens of en-bloc sales that is ongoing since late last year. Some may even retire earlier or go for their dream holiday with so much cash on hand. I told him that money earned from such transactions are often difficult to hold on to as, firstly, they will buy another property that may also be around the same price range or even higher unless they are willing to downgrade and, secondly, money that is acquired easily seem to be let off easier too. My advice to en-bloc benefactors is to approach financial advisers for sound financial investment planning and to save up for their retirement, which many Singaporeans fail to do. Another concern of en-bloc sales is that it actually benefits only a small section of the population and out of which a high percentage could also be foreigners.
Singaporeans who put off their property purchase all along may also now begin to hunt for property, contributing to the tight supply
As a large majority of property owners live in public housing, they could never be benefactors of such dream transactions. This also perpetuates the discontentment among the poor and sandwiched middle class who struggle in our ever rising living standard. Many will feel that the booming economy only benefits the rich and upper middle class. Their salaries remain stagnant or rise moderately, never keeping pace with the living cost or their liabilities. The much debated wage rift is also another major concern as the higher wage earners seem to pull away from the rest who continue to struggle, leaving nothing much behind for retirement planning. The top 20 per cent income earners earn at least 10 times more than the bottom 20 per cent wage earners, creating a substantial wage gap which can only fuel discontentment.
My advice to Singaporeans is to live simply and be contented with what you have. Never cast an envious eye on those who have much more financially as I always believe that wealth can never buy happiness. I personally have a few wealthy friends who say that to them their wealth is never a major contributor to their happiness quotient but that strong family bonding, good health and job satisfaction are the main reasons for living a satisfied life. For me, it is better to have some savings and live happily surrounded by supportive family members and friends than having a big fat account and not able to enjoy life due to poor health or a disintegrated family.
Source: Unknown
May also want to read:
History of Singapore Property 1960 to 2008
Buy or Not Buy: How to decide amid mixed market signals
Smart Buyers, 10 reasons to wait
Property Price Index Graph Plotter & Online Property Valuation
Thursday, September 20, 2007
About this Blog
If you wait, chances are you'll be spoilt for choices.
According to URA's data, there'll be a supply of 65,400 residential units by 2010.
PRIVATE RESIDENTIAL UNITS IN THE PIPELINE EXPECTED TO BE COMPLETED FROM THE FOURTH QUARTER OF 2007
(Source: URA)
In addition, the GLS (Government Land Sales) programme for 2008 Q1 will add another 8250 units. The government has assured Singaporeans that it will continue to review the GLS to meet demand.
Add that to HDB's Ponggol 21 plus, Dawson Estate and the many design and build flats that will give private condo a run for its money; and you'll see the reason to wait. What about those enbloc sales which will come back in manifolds their orginal number. To give you some sense of the quantum, I've seen site which used to be just a bungalow housing one household being turned into a 30 storey high building with some 50 units. Why should 10 people rush for 1 flat when there are so many coming. Buying property is a long term commitment and it's definitely worth waiting for even it means a few years.
(What Singaporeans have to say about the GLS (government land sales) programmes? Are Singaporeans confident that the property supply in the pipeline will take the heat off the property market? Join the Smart Buyers forum.)
2) Global Outlook Uncertain
Despite the recent drop in Fed rates, US subprime problem which has now spreaded to Europe will continue to loom in the years ahead. The uncertain outlook is clearly spelt out in the roller coastal stock market. Most market watchers have conceded now that there is more than a 50% chance that US will go into a recession. A number of them are of the view that the recession is likely to last for years.
Oil prices are climbing to a level that warrants concern too, so have commodities. This has brought about one of the biggest inflation rate ever seen. Singaporeans are going to feel it increasingly more painful in their every day life. While most are still optimistic about our jobs, it is possible that a global recession can take a toll on our economy and hence, our employment.
If you buy at a very high price with a huge mortgage, you may not be able to hold through any such disaster.
Join the Smart Buyers Forum
3) Asking Prices Near 1996's Peak
Many sellers are now asking prices near the 1996's peak and even, beyond. At such prices, any rational person will see that there is little upside left. If you plunge in now, you'll be making transaction record for future sellers to ask for even more. For sure, it won't go up forever and you may just be the last one holding the hot potatoe.
(Have something to say about this? Click here.)
4) Capital Appreciation Limted
If you are looking for capital appreciation, calculate your odds against the impending supply and bear in mind that more than 90% of Singaporeans already own their homes and are in no urgency to buy if prices are not right.(If there's a genuine urgent housing need, how come the market was so quieet just about a year ago?) Furthermore, Singapore is a mature economy and property value cannot be expected to rise like before.
(Have something to say about this? Click here.)
5) Rental Yield Limited
Even at today's peak rental, yield is just about 4-5%. In the long run, increasing supply and the government's concern over losing competitiveness will most
certainly put a downward pressure on it. The optimists may argue that with the completion of the IR, our expat population is set to grow and hence, rental yield.
Take a closer look at this argument. Firstly, our expat population is still largely from the third world countries and generally cannot afford the high rental that landlords are looking for to justify their property investment. Secondly, while the IR may create a good number of jobs, they are not going to be high paying for most.
(Have something to say about this? Click here.)
6) Market Correction Imminent
There are some signs that a market correction is imminent. The first sign being the dwindling transaction volume. En bloc sales in particular have dwindled into a streak. The graph below shows that the number of private residential units sold in Q4 2007 drops drastically as price index climbs towards 170, just about 10 points below the historical 1996's peak. This may indicate buying resistance as more and more people are priced out of the market.
Last Updated on 3 Feb 2008
OCBC Investment Research analyst Winston Liew said,'A correction is going to take place.' Asking prices, which went up by the hundred thousands in the last few months, have either stayed put or showed sign of waning. New launches especially the smaller ones are seeing much slower take up. It seems that all those wild speculators and frantic buyers who have been chasing the price up in the past few months have suddenly gone, as quickly as they have come. Developers, real estate agencies and all those who have a vested interest will continue their attempt to talk up the market. The truth is prices will not go up forever. Read the signs yourself.
(Have something to say about this? Click here.)
7) The 10-Yr Property Cycle
The property market is cyclical. It is an established behaviour. The last time the market went down was 1998. There was a supply glut then. Now we see a supply shortage, with developers building frantically to cash in on the demand. It doesn't take a lot of intelligence to see what's next in the cycle.
(Have something to say about this? Click here.)
8) Less Risk Buying Completed Units
As you wait, more residential units will be completed. It's far better to buy what you can see than try to imagine from some floor plan. Believe me, you don't want any rude shock for something that costs you your life savings and more.
(Have something to say about this? Click here.)
9) No Urgency to Buy
More than 90% of Singaporeans already own their homes which means that for most of us, there is no real urgency to buy. So why rush in at this rocket-high price?!
(Have something to say about this? Click here.)
10)Heed to the Minister's Advice
"Stand back and let the others rush. If you want to follow the crowd, you must be prepared to take higher risks." was the advice of Mah Bow Tan.
(Have something to say about this? Click here.)
With all said, I must conclude that the fundamentals for housing demand in Singapore are still strong. Barring any unforseen catastrophe, Singapore's econcomy is set to grow in the forseeable future. The influx of expat workers will continue to grow with job creation, particularly with the completion of the Integrated Resort. Property will still make good investment. You'll just need to wait for the right one at the right price.
(Have something to say about this? Click here.)
Smart Buyers, 10 Reasons to wait....
1) Supply is Increasing RapidlyIf you wait, chances are you'll be spoilt for choices.
According to URA's data, there'll be a supply of 65,400 residential units by 2010.
PRIVATE RESIDENTIAL UNITS IN THE PIPELINE EXPECTED TO BE COMPLETED FROM THE FOURTH QUARTER OF 2007
(Source: URA)
In addition, the GLS (Government Land Sales) programme for 2008 Q1 will add another 8250 units. The government has assured Singaporeans that it will continue to review the GLS to meet demand.
Add that to HDB's Ponggol 21 plus, Dawson Estate and the many design and build flats that will give private condo a run for its money; and you'll see the reason to wait. What about those enbloc sales which will come back in manifolds their orginal number. To give you some sense of the quantum, I've seen site which used to be just a bungalow housing one household being turned into a 30 storey high building with some 50 units. Why should 10 people rush for 1 flat when there are so many coming. Buying property is a long term commitment and it's definitely worth waiting for even it means a few years.
(What Singaporeans have to say about the GLS (government land sales) programmes? Are Singaporeans confident that the property supply in the pipeline will take the heat off the property market? Join the Smart Buyers forum.)
2) Global Outlook Uncertain
Despite the recent drop in Fed rates, US subprime problem which has now spreaded to Europe will continue to loom in the years ahead. The uncertain outlook is clearly spelt out in the roller coastal stock market. Most market watchers have conceded now that there is more than a 50% chance that US will go into a recession. A number of them are of the view that the recession is likely to last for years.
Oil prices are climbing to a level that warrants concern too, so have commodities. This has brought about one of the biggest inflation rate ever seen. Singaporeans are going to feel it increasingly more painful in their every day life. While most are still optimistic about our jobs, it is possible that a global recession can take a toll on our economy and hence, our employment.
If you buy at a very high price with a huge mortgage, you may not be able to hold through any such disaster.
Join the Smart Buyers Forum
3) Asking Prices Near 1996's Peak
Many sellers are now asking prices near the 1996's peak and even, beyond. At such prices, any rational person will see that there is little upside left. If you plunge in now, you'll be making transaction record for future sellers to ask for even more. For sure, it won't go up forever and you may just be the last one holding the hot potatoe.
(Have something to say about this? Click here.)
4) Capital Appreciation Limted
If you are looking for capital appreciation, calculate your odds against the impending supply and bear in mind that more than 90% of Singaporeans already own their homes and are in no urgency to buy if prices are not right.(If there's a genuine urgent housing need, how come the market was so quieet just about a year ago?) Furthermore, Singapore is a mature economy and property value cannot be expected to rise like before.
(Have something to say about this? Click here.)
5) Rental Yield Limited
Even at today's peak rental, yield is just about 4-5%. In the long run, increasing supply and the government's concern over losing competitiveness will most
certainly put a downward pressure on it. The optimists may argue that with the completion of the IR, our expat population is set to grow and hence, rental yield.
Take a closer look at this argument. Firstly, our expat population is still largely from the third world countries and generally cannot afford the high rental that landlords are looking for to justify their property investment. Secondly, while the IR may create a good number of jobs, they are not going to be high paying for most.
(Have something to say about this? Click here.)
6) Market Correction Imminent
There are some signs that a market correction is imminent. The first sign being the dwindling transaction volume. En bloc sales in particular have dwindled into a streak. The graph below shows that the number of private residential units sold in Q4 2007 drops drastically as price index climbs towards 170, just about 10 points below the historical 1996's peak. This may indicate buying resistance as more and more people are priced out of the market.
Last Updated on 3 Feb 2008
OCBC Investment Research analyst Winston Liew said,'A correction is going to take place.' Asking prices, which went up by the hundred thousands in the last few months, have either stayed put or showed sign of waning. New launches especially the smaller ones are seeing much slower take up. It seems that all those wild speculators and frantic buyers who have been chasing the price up in the past few months have suddenly gone, as quickly as they have come. Developers, real estate agencies and all those who have a vested interest will continue their attempt to talk up the market. The truth is prices will not go up forever. Read the signs yourself.
(Have something to say about this? Click here.)
7) The 10-Yr Property Cycle
The property market is cyclical. It is an established behaviour. The last time the market went down was 1998. There was a supply glut then. Now we see a supply shortage, with developers building frantically to cash in on the demand. It doesn't take a lot of intelligence to see what's next in the cycle.
(Have something to say about this? Click here.)
8) Less Risk Buying Completed Units
As you wait, more residential units will be completed. It's far better to buy what you can see than try to imagine from some floor plan. Believe me, you don't want any rude shock for something that costs you your life savings and more.
(Have something to say about this? Click here.)
9) No Urgency to Buy
More than 90% of Singaporeans already own their homes which means that for most of us, there is no real urgency to buy. So why rush in at this rocket-high price?!
(Have something to say about this? Click here.)
10)Heed to the Minister's Advice
"Stand back and let the others rush. If you want to follow the crowd, you must be prepared to take higher risks." was the advice of Mah Bow Tan.
(Have something to say about this? Click here.)
With all said, I must conclude that the fundamentals for housing demand in Singapore are still strong. Barring any unforseen catastrophe, Singapore's econcomy is set to grow in the forseeable future. The influx of expat workers will continue to grow with job creation, particularly with the completion of the Integrated Resort. Property will still make good investment. You'll just need to wait for the right one at the right price.
(Have something to say about this? Click here.)
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