hurry, property prices shooting up!

Boomtown Charlie, Property prices on the rise Everyone in the business is using his loud hailer shouting that property prices are shooting to the sky. Quick, quick, go out and grab one before it is too late. My rich neighbour already bought 4 properties, one for son, one for daughter and two for suckers. Where are the suckers coming from? Most heartlanders have one or two children who would probably inherit the little flat they have bought. The rich, like my neighbour, have already bought all they wanted, and in excess, and waiting. Sure there will be a few young couples who have made it and wanted a place of their own. And these will have to play catch up if they can afford it. But many young people will not have enough, with the kind of pay they are getting, to buy those skyrocketing price private properties. Where is the demand coming from? Maybe some foreigners going for the top end. What about the general market, the HDB market? Is there really a demand to chase prices up? The memory of the balloon bursting is still deeply etched in the minds of many who have been made bankrupt. Bang, bang, bang, propery prices going up!


Matilah_Singapura said...

I think the Asian central banks are being very naughty by inflating their money supplies, and relaxing banks reserve requirements.

The USD has been falling steadily, probably due to the Fed inflating to pay for wars in Iraq and Afganistan.

The US of course is the favourite place for foreign investors. A depreciated USD however means the the returns on foreign investments are LESS.

For e.g. lets say you own a USD100 asset, and you bought when SGD-USD was 1.7. Asset returns 10% p.a., therefore you get 10 US cents or Singapore17¢. Now SGD-USD is (for simplicity) 1.5. Your return on your foreign asset is 15¢.

Government's don't like this, so what do they do? The get their own central banks to INFLATE.

China has been inflating its money supply too.

Add fractional reserve banking (creating money from debt—i.e. "moneytizing" debt) by the banking system and you have credit bubbles in the making.

S'pore's land supply is virtually fixed. OK, you can tear down and rebuild, but the land itself is fixed. Demand will always be strong because of the natural scarcity of S'pore land. Of course when there is no money no one can buy. Now there is plenty of (credit) money, plus inflation by central bank.

Buy buy buy.... go nuts! Spend like as if money is going out of style!

Yes, redbean, the fun has started.

redbean said...

if we are not careful, it does not need too much money to buy up singapore.