Why did rents prices spike?

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nakatago
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Post by nakatago » Wed, 14 Jul 2010 11:09 am

sundaymorningstaple wrote:
scarbowl wrote:
Saint wrote:Greed
Also called the "free market." Nothing wrong with supply & demand determining price.
It's not supply and demand when people HAVE to have a place to sleep. Then they become captive buyers. Just look at what happens to fresh food prices just before Chinese New Year. Still plenty of supply, but all shopkeepers up their prices so you have no choice but to pay the price or go hungry. Supply & demand isn't when it's staples involved. It's called GREED.
Ah yes; invisible hands: very handy for picking pockets.
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Post by Saint » Wed, 14 Jul 2010 12:24 pm

free8 wrote:
This is one of the reasons why rental is at current level. Don't think it will drop with the increase in demand, and if more and more expats coming in. Unless you know lots of expats moving out? Asia economies growing steadily.
Yeah, I blame all those pesky construction worker renting out all these new condos for pushing rental prices up!

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Post by JayCee » Wed, 14 Jul 2010 12:38 pm

Saint wrote:
free8 wrote:
This is one of the reasons why rental is at current level. Don't think it will drop with the increase in demand, and if more and more expats coming in. Unless you know lots of expats moving out? Asia economies growing steadily.
Yeah, I blame all those pesky construction worker renting out all these new condos for pushing rental prices up!
Nah the construction workers are alright, it's all those big spending domestic helpers that are to blame!

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Post by nakatago » Wed, 14 Jul 2010 1:03 pm

JayCee wrote:
Saint wrote:
free8 wrote:
This is one of the reasons why rental is at current level. Don't think it will drop with the increase in demand, and if more and more expats coming in. Unless you know lots of expats moving out? Asia economies growing steadily.
Yeah, I blame all those pesky construction worker renting out all these new condos for pushing rental prices up!
Nah the construction workers are alright, it's all those big spending domestic helpers that are to blame!
I don't know about you but I'm sick and tired of these service and maintenance crews outbidding me in condominium rentals!

:roll:
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Post by sundaymorningstaple » Wed, 14 Jul 2010 2:38 pm

You reckon free8 thinks he might have wandered into a hornet's nest? :cool:
SOME PEOPLE TRY TO TURN BACK THEIR ODOMETERS. NOT ME. I WANT PEOPLE TO KNOW WHY I LOOK THIS WAY. I'VE TRAVELED A LONG WAY, AND SOME OF THE ROADS WEREN'T PAVED. ~ Will Rogers

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Post by nakatago » Wed, 14 Jul 2010 2:46 pm

sundaymorningstaple wrote:You reckon free8 thinks he might have wandered into a hornet's nest? :cool:
His reaction may vary from just "Oh snap!" to "f**k these crazy people!" Or something a little more entertaining.

:lol:

The recent threads have been relatively boring anyway...
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Post by Asian_Geekette » Wed, 14 Jul 2010 3:23 pm

nakatago wrote:
sundaymorningstaple wrote:You reckon free8 thinks he might have wandered into a hornet's nest? :cool:
His reaction may vary from just "Oh snap!" to "f**k these crazy people!" Or something a little more entertaining.

:lol:

The recent threads have been relatively boring anyway...
@nakatago: You have scared the trolls away with your humor. ;-) Just kidding!
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Post by Mad Scientist » Thu, 15 Jul 2010 4:34 am

free8 wrote:Sorry if I have step on your tail. I am not a property agent. No agent in Singapore will give us such statistics. Most of them only talk to sell by plucking bits and pieces here and there.

I am interested in properties and properties investment. At times also look into Singapore statistics. These are all fundamental of all investments.
Wow !! you are an Investment Guru !!! Is the statistics you have came from the Gahmen or Private Institution or your own Personal Judgement ?
Or something else ?
The positive thinker sees the invisible, feels the intangible, and achieves the impossible.Yahoo !!!

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Post by nakatago » Thu, 15 Jul 2010 8:57 am

Asian_Geekette wrote: @nakatago: You have scared the trolls away with your humor. ;-) Just kidding!
I can be as nasty as anyone can here but I'm trying to restrain using 'evil mode.' I bet free8 just bit off more than he could chew. :cool:

Speaking of stats, double-digit growth forecast for the Singapore economy! Just in time for...! :shock:
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Post by Saint » Thu, 15 Jul 2010 9:08 am

nakatago wrote:
Asian_Geekette wrote: @nakatago: You have scared the trolls away with your humor. ;-) Just kidding!
I can be as nasty as anyone can here but I'm trying to restrain using 'evil mode.' I bet free8 just bit off more than he could chew. :cool:

Speaking of stats, double-digit growth forecast for the Singapore economy! Just in time for...! :shock:
And according to the PM yesterday, he's expecting the FT workforce to increase by 100k over the next year so even more coffee shop workers to compete with and pushing up rental prices!

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Post by jshin » Thu, 15 Jul 2010 12:48 pm

sundaymorningstaple wrote:
scarbowl wrote:
Saint wrote:Greed
Also called the "free market." Nothing wrong with supply & demand determining price.
It's not supply and demand when people HAVE to have a place to sleep. Then they become captive buyers. Just look at what happens to fresh food prices just before Chinese New Year. Still plenty of supply, but all shopkeepers up their prices so you have no choice but to pay the price or go hungry. Supply & demand isn't when it's staples involved. It's called GREED.
actually, that is precisely what supply and demand means. since everyone needs a home, the demand is relatively inelastic.

what gets me is the fact that supply has been growing a high rate, while demand has been steady. so, why are prices still rising for rent and for purchases?

from my observations, bldg quality here is worse than mot places with similar economic development. they use substandard insulation, piping, wiring, hvac systems, irrigation systems, laborers,... and yet prices on a per sqft basis is approaching manhattan new york. ridiculous.

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Post by sundaymorningstaple » Thu, 15 Jul 2010 12:56 pm

jshin wrote:
sundaymorningstaple wrote:
scarbowl wrote: Also called the "free market." Nothing wrong with supply & demand determining price.
It's not supply and demand when people HAVE to have a place to sleep. Then they become captive buyers. Just look at what happens to fresh food prices just before Chinese New Year. Still plenty of supply, but all shopkeepers up their prices so you have no choice but to pay the price or go hungry. Supply & demand isn't when it's staples involved. It's called GREED.
actually, that is precisely what supply and demand means. since everyone needs a home, the demand is relatively inelastic.

what gets me is the fact that supply has been growing a high rate, while demand has been steady. so, why are prices still rising for rent and for purchases?

from my observations, bldg quality here is worse than mot places with similar economic development. they use substandard insulation, piping, wiring, hvac systems, irrigation systems, laborers,... and yet prices on a per sqft basis is approaching manhattan new york. ridiculous.
Didn't you just contradict yourself? If the Supply is increasing faster than the demand that is looking, then prices would drop to grab the demand that is there. Which is what I said. Your second paragraph contradicts your first that was disagreeing with my assessment. :???:
SOME PEOPLE TRY TO TURN BACK THEIR ODOMETERS. NOT ME. I WANT PEOPLE TO KNOW WHY I LOOK THIS WAY. I'VE TRAVELED A LONG WAY, AND SOME OF THE ROADS WEREN'T PAVED. ~ Will Rogers

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Post by jshin » Thu, 15 Jul 2010 1:08 pm

sundaymorningstaple wrote:
jshin wrote:
sundaymorningstaple wrote: It's not supply and demand when people HAVE to have a place to sleep. Then they become captive buyers. Just look at what happens to fresh food prices just before Chinese New Year. Still plenty of supply, but all shopkeepers up their prices so you have no choice but to pay the price or go hungry. Supply & demand isn't when it's staples involved. It's called GREED.
actually, that is precisely what supply and demand means. since everyone needs a home, the demand is relatively inelastic.

what gets me is the fact that supply has been growing a high rate, while demand has been steady. so, why are prices still rising for rent and for purchases?

from my observations, bldg quality here is worse than mot places with similar economic development. they use substandard insulation, piping, wiring, hvac systems, irrigation systems, laborers,... and yet prices on a per sqft basis is approaching manhattan new york. ridiculous.
Didn't you just contradict yourself? If the Supply is increasing faster than the demand that is looking, then prices would drop to grab the demand that is there. Which is what I said. Your second paragraph contradicts your first that was disagreeing with my assessment. :???:
to clarify, the thing w/ singpaore RE market is that there are a lot of empty apt's owned by offshore buyers who leave the units vacant and only use occasionally. so, these units are never offered for rental. so while there is no apparent reason for increases in prices to purchase, there continues to be robust rental demand. i was speaking more to your statement of a captive market. if demand is static and captive, prices will increase until demand slackens - in classical economics anyway.

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Price increase due to ignorance

Post by thismyvoice » Sat, 17 Jul 2010 12:48 am

Rental price is very dependent on supply and demand. However, there are always agents hoping for a quick gain. Rental rate for a condo may be going for $3000. However, rental quoted in property websites and newspaper may indicate $4000. Expat who do not know the market negotiate to $3800 thinking it is a good deal but end up paying excessively more.

My suggestion is not to believe property agents when they talk about market rate and instead do your own research. Go to URA website. They publish quarterly rental rates for different condo and use it as a gauge. If the unit has afternoon sun or is low floor, make sure you pay no higher than 25th percentile.

Yes, there are lots of supply in the market due to recent TOP of Clementiwoods, The Parc, One Amber, etc. Go to streetdirectory website and you will notice there are many condos under construction. Will price plummet after they are built?

One thing you have to realize is that if a person is buying to stay, they will stay irregardless of price changes. The family may upgrade or downgrade depending on needs but demand is relatively inelastic. On the other hand, if you are buying for investment, and you have taken a loan, then rent becomes very important. If you cannot get a tenant after 2 months, you will lower the price until you get one or sell the unit.

Before 2005, 2006 most property owners are stayers. They are Singaporeans and citizens of the country. Nowadays 40% of the people in Singapore are not citizens. Many of the PR and expats buy properties. There are also many investors who are not even staying in the country. These people are mobile and their investment is mobile.

If there is a drop in demand or oversupply, price of property will drop and rental price will plunge even more. When that day comes, location becomes key.

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Re: Price increase due to ignorance

Post by x9200 » Sat, 17 Jul 2010 5:02 am

thismyvoice wrote:One thing you have to realize is that if a person is buying to stay, they will stay irregardless of price changes. The family may upgrade or downgrade depending on needs but demand is relatively inelastic.

It is always good to point to the obvious in a mentoring fashion :)

On the other hand, if you are buying for investment, and you have taken a loan, then rent becomes very important. If you cannot get a tenant after 2 months, you will lower the price until you get one or sell the unit.

Unfortunately not in Singapore. Here ppl will wait suffering obvious financial losses just not to rent it below the price they think would be right. This is nothing but the greed mentioned already earlier. This, plus a fear that if they rent with the price too low it would make them loosing their face.

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