New property cooling measures announced

(12-01-2013, 09:17 AM)nsengkia Wrote: P.P.S.: I currently do NOT own a house and am renting my place so I do have an interest in a housing crash.

Thanks for your observations! Interesting.

So I see you are "short" on Singapore's property market. Haha.

(12-01-2013, 08:53 AM)corydorus Wrote: Frankly after so many rounds of ineffective cooling measures, i seriously doubt their capability to manage housing.
Why need to go through so many rounds ? If they have nip the problem in the bud, things will be much easier to manage.

The one who can set the rules of the game is also the big owner of land. This explains everything.

In the previous rounds of cooling measures, I saw some of my property counters drop 7% the next day but what happened in the end? I seriously think there will be no much change overall as if Singapore PR first house demand is high enough (sub-let or not, i do know china PRs who are swooning at Singapore housing prices compared to China big cities and they want the captial appreciation) then there will be no difference for HDB resale prices.

What i really observe is that Singapore govt way of "curbing hot property market" (or many other "measures") is to increase their tax revenues. Why can't they simply announce like foreigners are not allowed to buy private property and PRs not allowed to buy HDBs anymore?

(12-01-2013, 12:24 AM)freedom Wrote: the Singapore version of subprime probably would be the result of higher mortgage interest rate.

If that happens, wonder whether MAS will depreciate SGD to save the property market and let inflation fly or MAS will stay put and let a lot of property owners suffer.

Be prepared.

They would never depreciate the SGD and surrender all the investors to HK and nearby countries. Lessons learnt from Indonesia and others.

(12-01-2013, 09:17 AM)nsengkia Wrote: P.S.: I do believe in Freudian Psychology. So when a Minister goes out of his way to categorically state that "we are not intending to engineer a market crash" when announcing a "tsunami" of property cooling measures, I draw the opposite conclusion.

P.P.S.: I currently do NOT own a house and am renting my place so I do have an interest in a housing crash.

You lucky bloke, you. So, what is your target price psf for a freehold condo. at the CRASH?

(11-01-2013, 11:50 PM)koh_52 Wrote: Many PR buy HDB resale to sublet, now cannot sublet whole house income not enough to pay loan, so how? sell lor...well I do not have a crystal ball just use logic to analyses...this will also deter PR from buying HDB resale, they are the culprit that recently causes the surge in HDB resale prices....

PR will secretly rent out......don't think they are so kiasee as Sgps.

Till HDB 杀一警百

And why are PRs allowed to buy public housing in the 1st place?

(12-01-2013, 11:15 AM)mrEngineer Wrote: In the previous rounds of cooling measures, I saw some of my property counters drop 7% the next day but what happened in the end? I seriously think there will be no much change overall as if Singapore PR first house demand is high enough (sub-let or not, i do know china PRs who are swooning at Singapore housing prices compared to China big cities and they want the captial appreciation) then there will be no difference for HDB resale prices.

What i really observe is that Singapore govt way of "curbing hot property market" (or many other "measures") is to increase their tax revenues. Why can't they simply announce like foreigners are not allowed to buy private property and PRs not allowed to buy HDBs anymore?

If is people desire to live in their own housing to improve their quality life instead of introducing constraints. They are unnecessary imo to limit people lifestyle happiness.
I say build a lot more and bring down the price.

(12-01-2013, 11:15 AM)mrEngineer Wrote: What i really observe is that Singapore govt way of "curbing hot property market" (or many other "measures") is to increase their tax revenues. Why can't they simply announce like foreigners are not allowed to buy private property and PRs not allowed to buy HDBs anymore?

Blanket bans are not 100% effective and create a black market e.g. nominee owners etc. It also depresses revenues because (1) demand falls and (2) there are policing costs. There are also reputational costs as the government can be accused of blatant discrimination, being anti-foreigner etc.

A tax is less effective than a blanket ban, but it generates revenues which the government likes very much. Policing costs are also lower as the black market is smaller. Reputational costs are also lower as the government can only be accused of meddling in the market instead of dictating it.

So, net net, taxes are usually much preferred over bans. A good analogy would be smoking - it's clearly bad for health and wealth, yet the government continues to allow it, because it generates immense revenues. Likewise with the casinos - bad for personal wealth and family health, but the government taxes locals $100 instead of banning them. Bans are used only when the after-tax negative effects are still too large e.g. narcotic drugs, firearms etc.

(12-01-2013, 09:27 AM)Musicwhiz Wrote:

(12-01-2013, 09:17 AM)nsengkia Wrote: P.P.S.: I currently do NOT own a house and am renting my place so I do have an interest in a housing crash.

Thanks for your observations! Interesting.

So I see you are "short" on Singapore's property market. Haha.

Actually I am not really "short" on Singapore's property market, but just following Benjamin Graham's advise that "Investment is most intelligent when it is most businesslike.".

I am currently renting a HDB flat. The decision to do so was made in Dec 11. At that time, market value was around $700K. Asking rent was $3K per month. I am retired so I do not want (or qualify for) a housing loan. So the investment decision was between $700K to call a place my own or rent a place and invest $700K in the stock market.

$3K per month is $36K per year or a rate of about 5% of market value but owning the place does provide possible upside. By comparison, at that time, industrial REITS were trading around a 10% yield and the high end property developers were trading at 50% of RNAV.

For me, the intelligent decision was a no brainer as 50% of the required capital amount invested in industrial REITS fully covered the rental cost and the remaining 50% of the required capital cost invested in high end property developers fully covered the capital cost. So essentially, you get a "synthetic" (though non-exact) exposure to the Singapore property market with a much more favourable risk return profile.

As to my "target price psf for a freehold condo. at the CRASH?" - I really do not have one. If it makes intelligent business sense (when my rental is up at the end of this year) to buy a property compared to investing in the stock market I would do so and vice versa.

nsengkia

I have toyed with your idea myself before except that my CPF money is still in the good care of CPF, which limits my ability to invest in stocks.

The only weakness I see from your scheme is that you have given up the shelter of a HDB flat for your funds. A HDB is a very unique shelter in the sense that nobody, not even the government, can force one to liquidate it to satisfy one's debts. (Except for maybe one's spouse in a divorce proceeding or one has defaulted on a loan to the flat?)

> What i really observe is that Singapore govt way of "curbing hot property market" (or many other "measures") is to increase their tax revenues. Why can't they
> simply announce like foreigners are not allowed to buy private property and PRs not allowed to buy HDBs anymore?

Singapore is a market economy. They wont want to risk their reputation like this.

No. 2 - if some1 wants to take the risk, they earn the extra taxes

No. 3 (MOST IMPORTANT) - The property market will crash, banks need business, lawyers no business, agents need jobs...

So still pragmatic businessman approach...