When the housing bubble bursts

All the signs are there that we are having a housing bubble, and a very big one. It is only a matter of when it will burst. There is no such thing as a bubble will not burst. We are not so exceptional that it will not happen. And given the high percentage of speculators and foreigners in the market, all it needs is for someone to decide to take profit and run. This will lead to more and more trying to get out before the next person and a trickle will lead to a stampede.

The point is that who will pay or suffer the most? No tears or sympathy for the speculators and the foreigners. What is undesirable is the number of young Singaporeans that will be hurt, the genuine buyers who have been pushed to grab that property fearing that they will not be able to buy it if the prices keep going up.

The fear of not being able to buy made them plunged down a few hundred thousands for a public flat or more than a million for private properties. How many will end up with negative assets and a big debt to service? But as long as they are able to service the loan, maybe in the long term things could still work out. What is troubling is that if they are unable to service the debt and are forced to sell their over priced properties at a big loss.

The high cost of living and prices of big ticket items are supported by a high income. Many of the yuppies or high living professionals are living on their salaries and the moment the salaries go, the balloon will go poop and all the nice things will become unaffordable. The house and the fine cars will have to be returned as they are still under mortgage or loans. The debt, as we all know, is just too big to stomach without a big income to service.

Things will not be pleasant. Pray the clock keeps on ticking and will not stop.


patriot said...

It will come, like lightning and thunder, without any warning.
Caught in the rain; not so bad, struck by lightning; rest in peace and be mourned.
Caught in flood, chance to rebuild; swept by flood, hope for miracle.
Life is full of unpredictables, but, if the Unpredictables are manmade, than man deserves what he sow.


Anonymous said...

The housing bubble will not burst lah. At worst, it will be sustained.

Because there is room to get 1.9 million more foreigners, to make it to 6.9 million, from the current 5 million or so population.

And I think PAP will be targeting mostly the rich ones to get the 1.9 million more foreigners, at least to sustain the bubble in the long term.

So I trust the bubble will not burst under our very capable PAP govt ruling over perhaps many daft Sinkies.

And what so difficult getting 1.9 million rich foreigners from an estimated 38 million millionaires in the whole wide world?

PAP is definitely not counting on Sinkies, you know.

PAP is counting on foreigners and on WP to remain as strongest opposition!

agongkia said...

Please dun be daft.If burst,Sinkies will be doom.
Prices should be up and up.

Sinkies should learn to stay with parent if they cannot afford housing.There is no law to say that Sinkies must stay away from parent when married.

We should in fact call for a slowdown in building houses.Selfish Sinkies have caused the destruction of nature.
Longkang,birds,fishes,rambutan ,durian tress,vegetarian.. etc are being destroyed and gone.
Even my Ah Kong grave oso kenna kacheow.
Stop building houses and preserve some nature,if any found left .
Allow my pigeon hole to fetch a million.I oso want to be millionaire.

Chua Chin Leng aka redbean said...

Throughout history, every policy made by an empire or govt is to protect its interest and consolidate its power forever. It never works and empire or govt will fall.

All the govts today execute and implement polcilies for the same reasons. All carefully worked out not to fail. But crisis after crisis will happen. No one is wiser.

Like they said, man proposed, God disposed.

Anonymous said...

Time they are a changing'

Anonymous said...

RB, the only way to defer thr bursting of the ballon down 10 to 20 years in te future is to increase the population. Now u know why government has the interest of sinkies at heart. Of course with the additional two million people, the bubble will be pushed to the future but in the mean time, the additional 2 million people will bring all sorts of problems tat ay be it is worst then bursting the bubble.

Chua Chin Leng aka redbean said...

The Australians are so concerned about over populating their country and trying their best to preserve and protect what they have inherited.

While we think that we are progressing by building and building and refusing to see that we have gone past the point that we are going to destroy everything in the future.

This is the same as the over population and harvesting of mother earth by overpopulation and economic activities. Man will create its own crisis and the destruction of earth if it keeps going on at this pace of economic exploitation of mother nature.

Property Tycoon Wannabe said...

My property guru, the one who boasts that he can teach us how to accumulate ten properties by just starting with one predicts that whether the balloon will burst or not is academic because by 2016, everyone will be laughing all the way to the bank.

Looking at his crooked smirk, I believe that this will come true. So when prices are low, I am going to sell everything I have, lock stock and barrel, including my grandmother if necessary to be a property millionhair.

Matilah_Singapura said...

I doubt the housing bubble is anywhere close to bursting.

Of course I could be wrong: the global state of debt/ liabilities -- bonds, sovereign debt, private debt, corporate debt (like GM's yet-to-be-paid-for pension fund shortfall), shitty debt-based derivatives -- is high. High debt levels increase the level of uncertainty/ unpredicatability several fold -- i.e. the system becomes MORE chaotic. Therefore failure could occur tomorrow, or 30 years from now -- it's difficult if not impossible to predict, but you could get "lucky" with just one "lucky guess", and make zillions like THESE GUYS in a very short time, starting with a small amount of money.

All the world's central banks have more or less agreed to print money in concert to stave off any threat of DEFLATION. Soon-to-be-retired "Helicopter" Ben Bernanke has indicated the US Fed Resv has no limit on what it will print to "save the day".

As the printed money seeps into the system, you get more and more money chasing a fixed amount of already scarce goods -- a notable example would be Singapore real estate -- an EXTREMELY scarce good.

Although prices have risen, we haven't seen (yet) any runaway inflation, which of course pleases the Central Banksters who are now convinced their policies are "working". Refer to US housing data -- see-saw recovery with an upward trend.

So, Housing Bubble? Yes. Imminent collapse? Not likely.

Please continue to bid up prices. Go on. You know you want to :-))

Matilah_Singapura said...


>> The Australians are so concerned about over populating their country and trying their best to preserve and protect what they have inherited.

Not correct. The policy is for the govt to grow the population to reverse the trend of an ageing society. Same reasons as Singapore -- the Aussie state wants more people, more babies, more TAXPAYERS.

Also business -- big and small for once in concert -- wants bigger population, ASAP so they are definitely pro-immigration.

Australia's problem is ILLEGAL immigration. That's the one that gives everyone here a big headache, and forces governments to make controversial, harsh policy -- like Rudd's latest plan to dump these illegal fuckers on PNG where they can eat shit and die.

Me? I'm pro immigration. Bring in the illegals -- they are highly motivated and a great source of labour, which if allowed to compete in the labour market will probably bring the costs of labour down. Australia's minimum wage is AUD18 per hour. Plus superannuation contribution (like CPF, but super is your money held privately) 9 %.

Fucking ridiculous.

Anonymous said...

when the housing buble burst, increase GST to 40%. Problem solved.

Government then say that GST to 40% is no problem to citizens because government already inform the public. If you search hard, you find such dumb moron example of such reason given by the government before.

Anonymous said...

We all know that the property prices cannot keep going up in a straight line even if we want to grow to 6.9M or 10M population. This is BASIC STATISTICAL SCIENCE!

Experts believe the property prices will correct 20-30% over next few years when interest rates move up and when there is plenty supply of new flats.

If housing is too high (other living costs are also high too), who would want to come and settle here! Some said we can attract millionaires, multimillionaires and billionaires to park their $ here. But, how many? Remember they cannot form the main bulk of the 6.9M or 10M population!

Unless our govt want to made everyone owning an HDB flat and pte home, a walking millionaire with huge debts...........

.......anyway nobody can be 100% sure/correct ..............

Chua Chin Leng aka redbean said...

There must be a correction. We are in a phase of irrational exuberance like the stock markets and the gold markets. The people driving up the markets are waiting to cash out and when one makes the move, everyone will scramble to get out as everyone knows that it is too high and waiting to crash, like the stock markets.

Anonymous said...

"But, how many? Remember they cannot form the main bulk of the 6.9M or 10M population!"
Anon July 27, 2013 3:56 pm

You are daft lah. So let me explain and analyse to you.

Currently there is already about 5 million or so population, tio bo?

Are the main bulk of these 5 million people millionaires? Unlikely, tio bo?

But yet property prices are so high now!

Therefore PAP only need to get more rich foreigners just to sustain the property prices!

Some more, these rich foreigners, even though they may become Sinkie PRs, don't even have to live here but they can buy those properties to flip or invest. But as PRs, they will be counted by PAP in the 6.9 million or even 10 million statistics.

6.9 or even 10 million population doesn't mean there are really these numbers of people physically present in Sinkieland at any one time. Hence it may not be as crowded as the numbers suggest.

But definitely the property bubble will at least be sustained.

Anonymous said...

If I were a very rich foreigner, I will choose to live in the Swiss Alps. The climate is excellent.

But I can choose to be Sinkie PR and buy Sinkie properties because Sinkieland is very safe to park my money.

Of course I will not want to live in hot, humid and haze prone Sinkieland lah. Maybe just go there once or twice a year to check my wealth and talk to my wealth managers.

SG Girl said...

We should learn to be debt free. Don't over spent and incur credit cards debts. Don't buy cars; they start to depreciate when you pay for them. If have excess money, buy gold. Countries like China and India are stock-piling them. When gold prices drop, you could see the India and PRC foreigners here bringing big bags to queue for gold.
Forget about branded goods. They can't feed you when you are poor. If global economies fail and money becomes valueless, people might start trading in gold and silver for food and necessities.

Anonymous said...

Uncle RB is correct to say that there will be a property correction (9.27).

Uncle have gone thru a few property cycles to tell U what happen when property bubble bursts.

In fact, some experts are quietly among themselves predicting a correction of 50% if economy don't recover with no growth. Believe or not at yr own risks......

Anonymous said...

"There must be a correction. "

government hear you by correcting the right thing. Ok, you ask for it, it will be corrected to another few percent UP. Still want to complain, up some more lah. Don't we know how this government works ?

what do you think ?

b said...

I see a lot of money moving back to us and europe, thus i predict interest rate in asia will go up soon. When interest rate goes up, property prices will go down. It will be a mad rush to sell.

Anonymous said...

... thus i predict interest rate in asia will go up soon.
b July 28, 2013 2:36 am

How soon? Next year? Next 5 years? Next 10 years? As soon as the WP will be ready to be govt?

Anonymous said...