Property Market Sentiments

(19-08-2014, 08:01 AM)koh_52 Wrote: This year hard time for those property investors.
- rental drop
- maintenance fee go up
If bank mortgage rate up, most of them will run road.
But strangely property price till to-date still holding only suffer marginal drop..

Koh,
the question is: what is the trigger for property to crash?

then, you will know that these trigger does not exist.

lastly, G will not allow a ppty crash because of SG50 + GE16

G already called out that their aim is to stablised the market. aka no intention to crash the market.

My simple mind, thinking out loud.

Love Compassion


Earth day - save the world everyday.

chialc88 Wrote:Koh, the question is: what is the trigger for property to crash? then, you will know that these trigger does not exist. lastly, G will not allow a ppty crash because of SG50 + GE16 G already called out that their aim is to stablised the market. aka no intention to crash the market. My simple mind, thinking out loud. Love Compassion Earth day - save the world everyday.

Property crash will wreak havoc on hdb lease buy back scheme . If govt is serious about implementing its policy , it will achieve it no matter what . Just look at Olam. Government has more firepower than any one of us here. Hence , if govt is serious about stabilising the housing market , they will just hold price more or less constant and wait for wage index to catch up .

I also hope property market can crash badly . But it is just not going to happen ....

plus, the trigger is missing


Earth day - save the world everyday.

i think property will crash when the equity market crash. Right now it seems too much liquidity ( due to QE) in the market. So everyone can afford to hold as long as possible.

Quite amused when I hear that people believe that the government wont allow a crash.
They are correct, the government would want a stable market and the property curbs are designed to prevent the bubble from forming.

The only flaw in this logic is that, in many occasions, the government is powerless to curb the extreme market forces as and when they happen. They can only calibrate tools that aim to promote a stable market. So when an oversupply + higher unemployment + rising interest rate + negative GDP + other negatives, i can bet my last dollar that the prices would come down faster than they took to climb up. Falling is faster than climbing, fear is an emotion greater than greed.

yes, market crash is possible when all the negative factors come together into a deadly concoction, but we are trying to say is that " it is not the intent of government to purposefully engineer a crash". yes, downturn is always faster than upturn.

QE is starting in Eurozone. QE is in vogue in Japan. Interest rate is likely to remain low in Australia for a while. China is engineering its form of "QE", etc. The whole market is still flushed with so much liquidity. I don't know how it is going to crash when 50% of the retail people (or more) are saying market is going to crash soon..

(20-08-2014, 12:12 AM)Temperament Wrote: i think property will crash when the equity market crash. Right now it seems too much liquidity ( due to QE) in the market. So everyone can afford to hold as long as possible.

So am i correct to say, "All bubbles have something to do with the G directly or indirectly."
GFC definitely have something to do with Gs - especially US G. No?

All bubbles has to do with lots of liquidity. From money printing or external money flowing in or easy credit. And must have optimism about endless potential.

It will bust when no more easy money or reality bites (talk is a easier than walk).


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^^ Agree and to add it is usually on hordes mindlessly rushing into factors of production ie land, capital, labour (& innovation) and expecting capital gains instead of production. Properties, market PE expansion or mispricing of risk, hedge fund managers' fees, internet start-ups are examples.

And I repeat myself:

(19-08-2014, 11:09 AM)specuvestor Wrote: That's why I never believe a bubble cannot be identified. Just that everyone takes their chances on when it will pop.

_________________

(20-08-2014, 08:33 AM)Temperament Wrote: So am i correct to say, "All bubbles have something to do with the G directly or indirectly."
GFC definitely have something to do with Gs - especially US G. No?

The G in GFC is not Government GFC started primarily from rise of leveraged CDO and made worse by leverage SPV trying to roll down the yield curve by funding short invest long. If it was China we can say that the G had a hand in directing all these activities.... but in this case I think we have to blame the "invisible hand"

The issue I have is that US G abolished the Glass-Steagall act which was wisely enacted in 1933 by G.

//////////////////////
AN ENVIRONMENT PROTECTION AGENCY FOR FINANCIAL MARKETS

We cannot expect prosecutors alone to police markets and renew our trust in financial institutions. What else can we do to re-establish market confidence and our trust in institutions? The fear and breakdown in trust ultimately arises from other’s greed and fantastic rewards, with the rest of us assuming much of the risk. If this premise was not understood by all before, there is almost a universal understanding following the Credit Crisis and the Global Financial Meltdown. Even Alan Greenspan, the Pharaoh of FREE Markets, recently became the apologist of the Financial Apocalypse. While he maintain a lifelong love affair with free markets, he recently discovered that they are an attractive but illusory ideal.
In his testimony on Thursday, October 23, 2008, before Henry Waxman’s Congressional House Committee on Oversight and Government Reform, Greenspan stated, “Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief…….” When asked whether he still believed that markets are self-correcting and self-regulating, he stated, “The whole intellectual edifice, however collapsed in the summer of last year.” He then went on to admit the role of greed over good public policy.

NB:
How much do you think the US G's financial policies were responsible directly or indirectly for the recent GFC. It's really a "cowboy town's policy."