Possible Reason For the Property "Increase"

(14-12-2017, 09:18 AM)CY09 Wrote: Hi Cory,

While it indeed is true that ABSD and TDSR are artificially pressing down prices; I am of the opinion that the QE being done by USA, EU and Japan is artificially pushing up our home prices. This is because money is flooding our Singapore monetary system. Should this artificial intervention done by these 3 central banks are stopped, Singapore's property market may faced a sudden twist in the arm and thus fall. Hence to negate the external artifical factors, we have to implement "internal artificial price suppressors".

I have no argument about QE or whether TDSR / ABSD is not right. What I am pointing at, with all this environments, relative to the world, as you agreed suppressed our property market. The question asked is why property is seeing a revival even though as we know have TDSR / ABSD still in place.


Cory

Cory,

same reason why we are seeing the surge in the first place!
Marco : singapore is one of the safest rated country, invest in properties in an island is SURE make money for the long term!
Micro :lack of investment options, easy credit, low interest rates, and maybe NOT high enough TDSR/ABSD!!

(14-12-2017, 01:01 PM)corydorus Wrote:

(14-12-2017, 09:18 AM)CY09 Wrote: Hi Cory,

While it indeed is true that ABSD and TDSR are artificially pressing down prices; I am of the opinion that the QE being done by USA, EU and Japan is artificially pushing up our home prices. This is because money is flooding our Singapore monetary system. Should this artificial intervention done by these 3 central banks are stopped, Singapore's property market may faced a sudden twist in the arm and thus fall. Hence to negate the external artifical factors, we have to implement "internal artificial price suppressors".

I have no argument about QE or whether TDSR / ABSD is not right. What I am pointing at, with all this environments, relative to the world, as you agreed suppressed our property market. The question asked is why property is seeing a revival even though as we know have TDSR / ABSD still in place.


Cory

Hi Cory,

One swallow does not make a summer. In my opinion, one-two quarters uptick does not mean we are seeing a revival in Singapore property market (I may be wrong on this). A market never goes straight down, its a roller coaster journey.

Going back to the theory of whether DPS provided the uplift for properties recently, I remembered about reading on Hyman Minsky's theory on financing and how his classification is applicable to the current property market.

There are 3 kinds of financing namely; "hedge", "speculative" and "ponzi". 

“Hedge financing”, is the safest: firms rely on their future cashflow to repay all their borrowings.

"Speculative financing", is a bit riskier: firms rely on their cashflow to repay the interest on their borrowings but must roll over their debt to repay the principal.

"Ponzi financing", is the most dangerous. Cashflow covers neither principal nor interest; firms are betting only that the underlying asset will appreciate by enough to cover their liabilities. If that fails to happen, they will be left exposed.

Reference: "Minsky's moment" (The Economist, July 30th 2016)

In the event if the purchasers of properties were to go via the DPS route and if most of them fall under the third classification, then caveat emptor.

If along DPS route as mentioned, the buyers must be insane if they have to pay the ABSD 7% minimum for 2nd property. With stamp duties etc ... Probably at least 10% to break even ?

A Happy New Year to all.

Further to the DPS, I believed the scheme was started around the middle to late part of 2016. If this is so, 2018 will be the year to see who is/are swimming naked.

This is what MAS has to say about DPS back in August 2016 in the Straits Times

"Home buyers using deferred payment schemes will get smaller loan amounts: MAS" (Straits Times, 16 August 2016)

Between, its not sunny days for every property related counters, something to take note of

"Profit Guidance For the Financial Period Ended 30 November 2017", Tee International Limited (5th January 2018)

Under point no. 2
"Impairment loss of S$1.8 million for the unsold units in Peak I held by TEE Land Limited as the
recent sale of one of the units indicated that the net realisable value of these unsold units has
declined."

Will be monitoring the results of related property counters to monitor the trend.

Stay safe & happy investing everyone

(06-01-2018, 10:10 AM)Redcape Wrote: A Happy New Year to all.

Further to the DPS, I believed the scheme was started around the middle to late part of 2016. If this is so, 2018 will be the year to see who is/are swimming naked.

This is what MAS has to say about DPS back in August 2016 in the Straits Times

"Home buyers using deferred payment schemes will get smaller loan amounts: MAS" (Straits Times, 16 August 2016)

Between, its not sunny days for every property related counters, something to take note of

"Profit Guidance For the Financial Period Ended 30 November 2017", Tee International Limited (5th January 2018)

Under point no. 2
"Impairment loss of S$1.8 million for the unsold units in Peak I held by TEE Land Limited as the
recent sale of one of the units indicated that the net realisable value of these unsold units has
declined."

Will be monitoring the results of related property counters to monitor the trend.

Stay safe & happy investing everyone

Well, to have the privilege to see who is naked, the tide has to go down. Based on the latest price trends and view from property agent (yes, just one), the odds of tide going down in 2018 is not high.

One thing that was interesting in Singapore property market was how cheap leverage was. In 2017, 1st year interest rates for property loan was 1.6-1.8%, while the 1 year/9 month FD rates were below 1%.

On the contrary, Singapore government bond was selling at a yield of 1.73%. I wonder how long can this unique trend be sustained when borrowing cost of the government is higher than your local deposit and property loan rates

(06-01-2018, 05:21 PM)weijian Wrote:

(06-01-2018, 10:10 AM)Redcape Wrote: A Happy New Year to all.

Further to the DPS, I believed the scheme was started around the middle to late part of 2016. If this is so, 2018 will be the year to see who is/are swimming naked.

This is what MAS has to say about DPS back in August 2016 in the Straits Times

"Home buyers using deferred payment schemes will get smaller loan amounts: MAS" (Straits Times, 16 August 2016)

Between, its not sunny days for every property related counters, something to take note of

"Profit Guidance For the Financial Period Ended 30 November 2017", Tee International Limited (5th January 2018)

Under point no. 2
"Impairment loss of S$1.8 million for the unsold units in Peak I held by TEE Land Limited as the
recent sale of one of the units indicated that the net realisable value of these unsold units has
declined."

Will be monitoring the results of related property counters to monitor the trend.

Stay safe & happy investing everyone

Well, to have the privilege to see who is naked, the tide has to go down. Based on the latest price trends and view from property agent (yes, just one), the odds of tide going down in 2018 is not high.

Unfortunately, I do not have the data to further develop my point at the current moment. Guess time is the best essence to define the hypothesis as we go along through 2018.

Lastly, for that privilege to materialize currently,  I guess it has to be confined to late, lonely nights in front of the computer for some.

(06-01-2018, 06:09 PM)CY09 Wrote: One thing that was interesting in Singapore property market was how cheap leverage was. In 2017, 1st year interest rates for property loan was 1.6-1.8%, while the 1 year/9 month FD rates were below 1%.

On the contrary, Singapore government bond was selling at a yield of 1.73%. I wonder how long can this unique trend be sustained when borrowing cost of the government is higher than your local deposit and property loan rates

I remember reading one of LKY book. The T-bond etc is there just to help pricing purposes. The Gov do not really need to raise funding from there.
As for SSB, it was scaled down quite significantly IIRC. The demand basically not there.