Wednesday, December 08, 2010

Property Bubble

There are some lessons that should have been learnt from the 1996 property bubble and the link between the bubble and the effects Asian financial crisis that came shortly after that housing bubble.
Many Asian countries appeared to have learnt from that episode to keep bank lending in real-estate market low. If the lessons from 1996 have faded, there were reminders from the recent subprime crisis in the USA and what happened in Ireland.
Many Asian countries appeared to learnt the lessons well to contain the risks to financial system...but there are exceptions.


Guess which country is the exception? It is quite close to home ... actually it is home! Read Lucky Tan's blog in SGEP


C H Yak said...

Singapore :
Price to Income (GDP Per Cap) Ratio : 29.06
Price to Rent Ratio : 26 yrs

Price to Rent Ratio - the higher the yield; the lower the ratio. At present, India, HK, China & Taiwan all significantly higher than SG.

Read my blog and my replies to comments:-

See Reference #4 @"(b)Property prices: The average price-to-rent ratio of China's eight key cities is 39.4 times - this figure was 22.8 times in America just before its housing crisis." -

So SG already crossed 22.8.

Redstar said...

My personal observations and opinions :

1. You heard those guys arguing no market crash, boom and boom, this is Singapore, not USA, UK or Ireland. These are property agents guarding their turf. Or property speculators waiting to off load their bad mistakes.
2. People who owe shares will say the stock market will get higher. People wanting to buy shares will say the opposite. It depends on who is owing what.
3. Heard of the funds set up by property developers before the crisis, and their Reits? I do believe these vehicles are used to prop up and even artificially push up asset prices, in order to benefit their books & performance. It's all a game played by the Elites and Freemasons.

Vaishri said...

Mr Tan,
Thank you for your advice on so many issues. Property prices in Singapore continue to rise and have reached stratospheric levels.

I've been looking for a property to buy for my own stay for the last 2 years but have not found one as yet as the prices quoted are astronomical. I'm kicking myself for not buying during the dip in 2009.

Meanwhile,I've been renting and that is a considerable amount (as rentals have also increased significantly).

Should i bite the bullet and purchase now as I dont see prices coming down at all - I know I will have to pay off huge mortgage but the security of having a roof over my head and paying towards it is very appealing.

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