Saturday, August 21, 2010

Property Bubble

According to this article, the property market in Singapore is a bubble, and is the worst in the world. This is measured by the ratio of property value to rent. The property prices are at least 20% over-valued, according to this criteria.

My view
I agree with the assessment. Our property prices are too high, due to temporary factors (i.e. the sudden increase in population) and the low interest rate. This cannot be sustained over the long term.
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3 comments:

C H Yak said...

I must agree with Mr Tan's comments.

Further to my posting & comments in my Blog [ Link :-
http://de-leviathan.blogspot.com/2010/08/property-bubble-investment-trap.html ]

These are few "good" pieces, as published in TODAY 20 Aug 2010. Read them and my blog posting, you will understand and see the whole perspective I am coming from and going to.

It all depends on "who you are and what "message" you want to send" !

Where are you in the PROPERTY MAZE? Understand THEIR strategy, and see the RISKS and TRAPS before you pursue YOUR OWN strategy.

(a) Watch what they do, not what they say
Link : - http://www.todayonline.com/Business/Property/EDC100820-0000039/Watch-what-they-do,-not-what-they-say

(b) Pushing price boundaries in private residential market
Link :- http://www.todayonline.com/Business/Property/EDC100820-0000034/Pushing-price-boundaries-in-private-residential-market

(c) New kid on the block is good news
Link :- http://www.todayonline.com/Commentary/EDC100820-0000032/New-kid-on-the-block-is-good-news

(d) Twin Peaks of luxury
Link :- http://www.todayonline.com/Business/Property/EDC100820-0000069/Twin-Peaks-of-luxury

August 21, 2010 11:41 AM
ron said...

Singapore is too small to afford a property crash.

The implications to the economy as a whole is far too risky.

The powers that are will engineer a soft landing and this is a known fact that even foreigners across the causeway are fully aware of.

Generally,Singaporeans are too task orientated with work and do not have entrepreunal mindset except for special offers by NTUC or Carrefour.

For now, we bask in the sunshine of 18% growth and the success of the YOG and Singtel's F1.

The entire cabinet is relaxed and have a breather for 2- 3 months.
Civil servants are busy crafting new rules to prepare for a soft landing or engineer an even greater growth figure.

As for me, I refuse to get on the Battlestar Galactica... there are signs that the supports are weak.

August 21, 2010 2:44 PM
Spur said...

The only property insider I pay attention to is Colin Tan from Chesterton Suntec. He's the guy who wrote the "Watch what they do, not what they say" article in the first comment above.

All the other property "analysts" and "experts" basically just cheerleaders always painting a positive light, even if prices have shot to the moon, or a major recession is getting underway. Colin is the only person in the industry who calls it as he truly sees it --- no white-washing, if he feels prices are toppish he will say so.

August 22, 2010 4:23 PM

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