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7/03/2007
Good news, property prices up
There must be a lot of cheering and happiness going around for all the property owners, including HDB flat owners. Then there are cries from analysts and property trading firms that the red light is on. It is alarming that the price is running to the pre crisis level of 1996. They are calling for the govt to take appropriate measures to curb the exuberance.
When the crisis hit in the late 1990s, harsh measures were taken to curb property speculations. So far nothing much was done except some cautionary words. Maybe we need the bubble to burst before something harsh will be introduced.
In the meantime all the rich property owners are laughing to the bank. Their money and assets growing in leaps and bounds.
For those who are genuinely looking for a home, sorry mate, your money value has just gone down by 7.9% if you are looking at the private property market and 2.9% in HDB resale market. Yes, your money is getting smaller. Not forgetting that practically everything is going up.
Are the people really benefitting from all these price hikes and property boom? Some obviously are. The en bloc owners will be very happy too. Who is the last to laugh?
Oh, the bubble will burst sooner or later. But who cares? Who is the biggest landowner in Singapore?
ReplyDeleteWho really benefits the most when bids for land go higher and higher? Be it private or public development the higher prices of land or properties translate into more money for the Government, through the sale of land and public housing getting more expensive.
And therein lies the problem with the CPF, where over the years, ever bigger amounts were taken out to buy homes. Something must give and it is now the money for retirement and medical that is greaviously short.
But, as usual, the cheering goes on by those who can afford and those who benefit the most.
can sell 3 room flats and buy 4 room flats, seel 4 room flats, buy 5 room flats, then buy private properties.
ReplyDeleteor the other way round?
Call me a dimwit, but what r some consequences when the bubble burst?
ReplyDeleteThks. :)
the last time when it burst, many ended up with properties with value that were less than the loan they borrowed or after selling them and repaying the bank, they would still be owing money to the banks. and many had their properties forced sold and made bankrupts.
ReplyDeletetoday we still people holding on to their properties that are worth much lesser than when they bought. last few days there were reports of people who bought bishan flats above $700k and their values are now less than $500k.
Alamak redbean, dun be such a wet blanket lah. People are enjoying, let them enjoy lah.
ReplyDeleteanonymous 3:42
The term "bubble bursting" is when the contradictions of monetary and credit expansion can no longer be "supported", and there is a severe contraction in the assets values—most of which are acquired by BORROWING LARGE AMOUNTS OF MONEY.
All of a sudden, the amounts owed for the assets exceed the true value of the assets, so what do people do? They frantically try to SELL their devalued assets to pay off their loans. Suddenly the market is flooded with assets for sale and this further depresses their prices. Because there is a cash crisis too, the money supply shrinks and thus there is less money to buy assets resulting in even lower prices.
So the consequences: If you are smart, you will be able to PROFIT from other people's suffering and stupidity by purchasing severely undervalued assets, and screwing people even harder until they buay tahan anymore, thus getiing even better price for their asset.
The key to eventual success is to have LIQUIDITY, and to drive people down as far as you can, without compassion or mercy. (afterall, it is their own fault for being so stupid. You'll be doing them a huge favour by making their lesson as painful as possible, so hopefully they won't be so greedy and stupid next time/)
You hang onto these assets, when the market recovers, you sell them for huge profits, and then retire to some beach in Thailand :-)
The problem is when the market value of your property is less than the bank loan, the bank will come after you to top up the difference. As they used to say: on a sunny day banks will offer you an umbrella but on a rainy day they will take the umbrella back from you.
ReplyDeleteYou hang onto these assets, when the market recovers, you sell them for huge profits, and then retire to some beach in Thailand :-)
ReplyDeletei am not throwing cold water, but staying on some beach in thailand with most of the time doing nothing else but sun-tanning and talking sweet nothings, is not boring meh? i think most people will fly back in a hurry after 3-6 months of doing the same thing. Just sharing my view...
To each his own lah. Talk is cheap — I agree — it can get boring.
ReplyDeleteI find to ease the boredom, the parties in question need to remove their clothes ASAP, then the situation shifts into "a new reality" ;)
anonymous 3:17 was me.
ReplyDeletewhat do you think matilah is doing in patpong beach? boring? : )
ReplyDeleteredbean i hope my suspicion that you maybe undersexed is wrong. Patpong or geylang same, too much also sian!
ReplyDeletei think matilah is having a great time there.
ReplyDeleteas for me, there is a time and place for everything. when time to eat, just eat. when time to sleep, just sleep. when in patpong, sleep on the beach : )
Hey Redbean & Matilah, thks for answering my queries & clearing doubts. :)
ReplyDelete*Anonymous Dimwit.
*Ok, this shall be my sign-off identity la. ;)
haha, calling yourself anonymous dimwit. this will disqualify you from being an elite : )
ReplyDeletewelcome to the land of human beans. peanuts are also beans of sort. legumes instead of fruits.
Dear Red bean, regulars & all,
ReplyDeleteBo pian liao. For sake of Singapore beans here, I'm a registered blogger now.
Anonymous Dimwit.
Non-elite.Dim future.At wit's end. ;>
it's ok dimwit. i have immortalised you in the list of contributors: )
ReplyDeletenow no need to feel depressed.