7/30/2009

Shedding crocodile tears

Why is property speculation bad? The buyers are happy, the sellers are happy, the land owners are happy, the developers are happy, and so are property agents and conveyance lawyers. And everyone is laughing to the bank. Let's churn the property market higher, limiting supplies, increasing demands, and get the media to write more frightening stories about the prices going higher and better rush in to grab one before it is too late. Or write about how a $200k property is now selling at $400k to move the herd for the slaughter. In property market, we only hear of the money people are making. We never hear who is paying for the enormous sums and how many years they must slog to pay back. But these are the normal things in a free market when prices are determined by supply and demand. Go for it, let the prices surge higher. It is good. There will be money everywhere. I forget, the banks too will be very happy to loan out more money. And all the property owners will be beaming, seeing how much their properties are worth now. The same 4 walls, and many with dwindling lease life. Still the herd will rush in to buy, fearing that they will miss the boat. Anyone remember the dizzy demands for country and golf clubs a few years back? 30 year lease and most of them with less than 15 years left. And the value for the less prestigeous clubs is probably 20% left from their highs. And this will keep going down, and may become negative value when the lease expires and a new top up is demanded from every member for a new lease.

5 comments:

Anonymous said...

Hi Sir,

high time for You to stop killing the joy of the buyer, seller and regulator, let them have their happiness. It is their money and it is up to them to spend it anyway they like.

redbean said...

yes sir. i thought that was what i said? no? what is wrong with speculation in private properties? it is speculation in public housing that is bad. but the whole housing policy has gone so crazy that everyone is confused.

the govt should not encourage the hardlanders to gamble or speculate with their only property. it is a roof over the head, one and only. but for those who have graduated into the private property market, they are the financially more successful people, so let them speculate to their hearts content.

but things have gone down the wrong path for so long that it cannot be turned back. so we are puzzled, very puzzled? why is our huge savings not enough for our retirement? still blur, don't know the answer?

so keep paying a big chunk of one's income to the 99 lease property for your whole life. live to work to pay for that 99 year lease.

Jaunty Jabber said...

When prices just go up and out of the range of the overall public's affordability, then can we still say the HDB is a subsidized housing?

And when retirement fund has become not retirement fund anymore but residential rental fee, then what is the origin intent of CPF?

redbean said...

what retirement fund? singaporeans better save up or buy more insurance for their old age, and make sure the contractual terms are clearly stated and cannot suka suka be changed by the insurance agencies.

any insurance terms that can be changed is nothing better than the lehmon bonds.

Anonymous said...

Redbean:

The Last Sentence of most contract, if not all, shall read; 'All terms and conditions are subject to changes'.

patriot