Is Now The Right Time To Invest In Property?

[swakoo]

Singapore household statistics at end 2010:

Currency & Deposits: $247.0 bil
CPF: $185.9 bil

Mortgage Loans (financial institutions, hdb): $158.5 bil
Personal Loans (motor vehicle, credit cards): $53.9 bil

CPF > Mortgage Loans
Currency & Deposits >>> Personal Loans

From a liquidity perspective only, looks like scope for further asset inflation.
Perhaps not in residential property which is already facing 5 rounds of counter measures.
But in strata titled commercial and industrial properties and COEs?

[Image: Household+Net+wealth+breakdown.JPG]

[lvpierre]

Just for sharing, a good example of how developers used the "phasing approach" to make its sales look good (infact all the units are available for sales):



====extracted from another forum=====

xxx wrote:
Not true leh.

My colleague went down and it's all available for sale.
The "phase" approach is just for marketing, so that it looks better with "70% sold in phase 1", rather than "Only 20% sold over the weekend launch despite the hype"...

yyy replied:

There is a review of Sky Habitat at H88.com.sg » Singapore Property News, Reviews and Property Ads. - they reported that ALL the units are available for sale. The review says this:

"There are 509 units here in various forms beginning from 1+1BRs. Most notable of which are the Terrace units which have giant sized balconies (and - to clarify - normal height ceilings). All units here are released for sale, the developers have not held back any choice units, which is pretty nice unlike some other developers we know."

[koh_52]

Quote from swakoo:
"From a liquidity perspective only, looks like scope for further asset inflation.
Perhaps not in residential property which is already facing 5 rounds of counter measures.
But in strata titled commercial and industrial properties and COEs?"

Yes, very good points from swakoo san.
Ppty prices usually driven up by sentiment, so seller will use all sort of tactics to drive up the profit.

In actual fact most layman usually cannot buy those really cheap and under-value ppty, why? insiders and those deep pocket old bird ppty investors will snatch-up before you come to know.....so is it now the right time to sell, I am asking myself this question also...

Anyway what I can only said is....
So long interest rate is rock bottom, inflation will keep on rising...

my 2 cts opinion....

[Musicwhiz]

So long interest rate is rock bottom, inflation will keep on rising...

The problem is that everyone expects interest rates to remain at "rock bottom" until at least 2014, as the Fed has already indicated it will not raise rates too quickly as it wishes to stimulate economic growth.

But one factor which no one can anticipate is inflation - if inflation rises too quickly in the USA the Fed will be forced to hike rates earlier than expected. This will result in the party here ending earlier than expected too.

It's truly a case of buyer beware, I guess.

[WolfT]

still waiting.... waiting... waiting!
i already prepared where and what to buy le.
still waiting... waiting ... waiting.
The cash sitting in deposit very wasted lay.

[ken]

Well, now the situation is a bit tricky.
Even if US up its interest rates, S'pore may not follow.
Most likely, those whose borrowings is in US$ may be affected.

There are those who has deposits in Singapore Dollars, but where to put their money.

My guess is either in dividend stocks or properties.
Some may even buy for their children as it is worrying that prices of properties are still up, and worries (kiasu) flames inflation.

My call is that there should be a extra round of properties measures.
Therefore, no property investment or property stocks for my portfolio at this moment.

[brattzz]

definately not the best time to buy property for investment now...
wait for correction when the new units TOP in 2013/14 comes online...

[pianist]

i am afraid correction may never come...as home ownership over not just 1 but 2 or more houses is a deeply entrenched mindset in this part of the world.

[Temperament]

It's so-called social engineering by our Papy. Try renting a house from our Papy. But then if not will Singaporeans in the mass defend their homes? The rich can have many homes in many countries.
Of course Papy influences the property price to a large extend all the while, while it seems the market does it. Don't agree? Don't forget Singapore is just a "Little Red Dot" as our largest neighbour call us.

[sgd]

of course there will be a correction, maybe not now but all things correct eventually with time. The main thing is interest rates, so the first thing we want to watch out for is the fed discount window rate that is the rate that the fed charges to commercial banks. That will determine the outcome of everything on the cost to do business and of course stock/property markets.

Look at it this way, the loan usually between 10 - 20 years the bull market will run out of legs way before that.

Interest rates goes up in increments if we lucky but if inflation becomes too severe like in the 80's where it went up very drastically and it caused a global recession.

My general take is that people who buy residential property for rental income do it based on following conditions a booming local economy, abundant of high paying jobs and here a shortage homes.

If a recession hits, if you been thru a few of them, first thing they will do is cut costs, lesser hirings, cut benefits to get more productivity etc ... as the recession worsens they will start cutting pay of employees after that they will lay off people.

If jobs at stake it will local vs foreigners topic all over again so you can predict the mood of the 2014 elections. So means garmen will play the patriotic card encourage companies to keep locals and layoff FT.

To be fair many FT already PRS not employment pass so how the garmen going solve the problem hmm .... brewing political storm on horizon.

FT's layoff means no money to earn here they will leave Singapore and go back home or go wherever they can earn a living, so who will rent apartments here? It will lead to oversupply, that and new homes set to flood the matket which will drag down rental and property prices.

Property prices tank but principle loan remains the same and interest rate also hiking a condition that could lead to many foreclosure and firesales later.

Yes home ownership is a mindset entrenched in this part of the world I also waiting to buy from firesales. my prices for the 350sq ft pigeon hole is 50k, waiting to buy them from those who overpaid sky high million $$ prices