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4/06/2011

Property price will come down?

'People who chase after the property market will ultimately pay the price when our property market nosedive. The property prices will have to fall after a certain peak and that is when thiings can go very awry.' Gilbert Goh The above is quoted from Gilbert's article in his blog with a title calling for the ban on PRs buying HDB flats. I think Gilbert is grossly wrong in his prediction that property prices will fall. This is one item in Singapore that will defy gravity. Several people in the know already said it clearly, that property prices will be manged to go up. It has to be as more than 80% of the population are living in HDB flats and they will suffer financial losses if the price will to go down. Up it must be. And the market forces will make sure that the demand will always exceed supply. If not, the market forces will be made to increase the demand or lower the supply. So Gilbert, sorry you are wrong. The gods will make sure that you are wrong.

7 comments:

Wally Buffet said...

Property prices will stay high provided the foreign talents from China and India keep coming to generate demand.

The minute the human inflow stops and there is an exodus for whatever reasons, property prices will dive and then all hell will break loose.

How to ensure high property prices?

My granddaughter suggests Vote for Mr. Mah and his Herculean team to ensure more good years of property price appreciation.

Gilbert may have missed the boat and wished that he had bought a string of condos when prices were bargain basement.

Hehe.

Matilah_Singapura said...

Ah, people predicting the future – like as if they can – and getting upset when they disagree with each other.

Supply- demand arguments are out of context. I have huge 'demands' – private jet, helicopter, my own vineyards, a castle in The Alps...and last I checked, there is adequate 'supply'. One thing happens to always stand in the way: money – on my part.

And that is going to be the reason property prices will fall: it'll come to a point where no one can afford it anymore – due to prices rising to a point where people's incomes just cannot catch up.

You are now seeing the effects of money supply inflation in areas other than the property market: food, energy and producer's goods are all skyrocketing in price. People's incomes are hardly moving. Even if they are, income increase is not keeping up with price increases.

One more more global banking crisis, and it could be 'game over' for many of the property speculators. Our financial system is like a stack of dominoes – contagions spread – very quickly.

If you take all the emotional language and bickering out of the matter, a fall in property prices is just a market adjustment where 'nominal values' are 'corrected' to reflect true(er) market values – i.e. all the distortions in the capital structure (aka 'malinvestments') are bled out of the system.

Singapore property – especially land -- is as good as gold because of the 'fixed' supply. To buy it when it is 'cheap' – after a severe financial crisis – is one of the best things anyone can do – whether you are foreign or local.

When Singapore's economy is doing well, property prices are firm and rental market is sweet – that you can count on. Many owners of S'pore rental property live off their rent-income – some live overseas and 'shake leg' because they have solid, regular cash flow from their S'pore property.

In fact: The majority of wealthy Singaporeans, was made in Singapore's property market.

And to those defiant up-trenders: You fellas forget 2000 – 2002. A few solid years of low property prices. Reasons: Asian Currency Crisis, Tech and Telco wreck, then 9/11. Remember around 1995-7 people going nuts – HDB's hitting 500k?

Of course it can happen again. And it will. When? That's anyone's guess.

Anyway, isn't it the intention of the govt to 'make property more affordable' – hence policies like the anti-speculation tax penalty.

Chua Chin Leng aka redbean said...

I said Gilbert is wrong, and I also say Matilah is wrong. They have learnt their lessons and found the solution to manage property prices and called it market forces.

When demand is falling, turn on the taps, and foreigners can rush in. When people complained prices too high, relax a little, turn the tap down a little. When people forget and when to sleep, turn it on some more.

Things are never gonna be the same again.

Matilah_Singapura said...

I won't be drawn into this 'right vs wrong' argument - and the only thing achieved by arguing with an idiot is that now there are 2 idiots when previously there was only one.

Time and consequence are the ultimate judges of one's 'predictions'.

The nature of profit-making is a matter of money and experience: those with the experience get the money, those with the money get the experience!

I don't want it to crash soon though. Let is grow some more. Orchard Rd has to hit and sustain at 10-15k per sq ft. The 'sustaining' period will then send a 'false signal' and more of the Kiasu Herd (KH) will rush in.

One day when the KH get into shit because they find their rental income cannot cover the loans, plus MAS/ Benrnake has increased bank reserve ratios and tightened credit...

..it'll be time to mop up the blood in the streets.

Oh shit, I'm getting an erection from all this erotic day-dreaming!

Anonymous said...

May i just say that with the amount of contamination Sin is exposed to due to development and huge population increase, it is a matter of time for the property price to collapse, not just come down.

And worse than the above, with more tourists visiting and transiting at this little rock, any virulent killer disease will cause a panic. If it is very bad. Owners may just leave their properties to the ghost. They wont bother to make money nor pay their mortgages anymore.

Oh, me was just running wild with thoughts about the above, hope it will never happen.

patriot

Anonymous said...

market forces are not market forces when they can be cooked.

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