The missed boat feeling regarding property

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Mi Amigo
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Post by Mi Amigo » Fri, 15 Nov 2013 10:07 am

PrimroseHill wrote:I found the article lack of clarity and written without much research both in terms of property market specifics or the international market specifics.

In truth income/wages versus ability for first time buyers are worse in majority of the major cities worldwide. It has been that way for many many years. It will probably get worse and never get better, hence thats why there are so many Banks of Mom and Dads and now the increase of Banks of Grandparents too.

I mean a first time buyer with the help of mom and dad and grandparents do not have any hope of getting on the housing ladder unless their basic salary is pretty decent and bonus is at 200%. I mean look at the D9/10/11, Knightsbridge, Sloane Square, Notting Hill, Chelsea, Primrose Hill, Hampstead, St John's Wood, Rose Bay, Marouba, Herne Bay, upper east, midtown, sacremento st, etc. I small studio is something like GBP300k.
Even Damansara Heights, Mont Kiara that sort of areas are rather expensive these days. However, late 1980s and early 1990s, when I was in UK, a lot of my colleagues were hit by huge interest rates of 12/13%, and their houses have lost something like 50-70%, yet thouse prime london areas didn't fall, merely stagnant. Soon after 911 and financial crisis, prime london housing stick went up, due to the influx of flight money, prices didn't drop either.
^^^ +1. Or as we Londoners would say... Innit.
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Post by JR8 » Fri, 15 Nov 2013 10:31 am

It shouted at me of the youth who professes to hate the private club, on whose waiting list his application for membership, still forlornly sits years later.

Property can certainly dive. Consider Detroit as a tragic example. Or Manchester, or Liverpool.

I think the ‘bank of m+d’ is an interesting concept. When I was younger it was a very rare thing, families just didn’t have that kind of disposable cash. Now for the fortunate they do. I don’t particularly favour that equity-rich parents can advantage their children thus, whereas the less well off cannot, there is a self-perpetuation to it. But if I can lend my children 100k today, rather than leaving then (100k-40% tax) in my will, then, why not? My father loaned me £10k for 6 months, with interest lol, 17 years ago. Acorns and oak trees. It completely changed the path of my entire life.

‘Knightsbridge, Sloane Square, Notting Hill, Chelsea, Primrose Hill, Hampstead, St John's Wood’. Good grief, those are some of the most expensive postcodes in the world! What next, Little Jonny from Idaho demands a right to buy an ‘8-room’ on Madison?

You’re right, late 90s, I was paying 9% [8.99%], and it had been worse. That really gave the market a bit of a shake out. But the costs get passed on, so rent was relatively high too.

Prices fall, only in areas where people have to sell (often due to the economy/employment etc). ‘The market price’ is determined by a surprisingly small proportion of the potential market, maybe just 5%. For areas you mention, what happens to property prices is largely irrelevant.

Best tip I was ever given: ‘Never sell property, you don’t ever need to’. [The logic being that in doing so realise your purchase costs, and that with remortgaging, you can get much of your equity out].

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Post by Wd40 » Fri, 15 Nov 2013 10:45 am

Although world over in major cities property prices are high, the thing that makes Singapore the worst is that interest rates are so low here compared to anywhere in the world, relative to inflation.

In other countries, atleast you can put money in a fixed deposit and earn a decent return and you dont get the missed out feeling, especially if you have like say 25-50% of the capital required to buy a house and you put it in a bank and earn interest and rental yields in most countries are not as high as Singapore.

In Singapore, because they use exchange rate to control inflation rather than interest rates, the savers are really penalized. They need to get deposit rates up to 4% and mortgage rates upto 6% here and then I bet you there wont be that left out feeling anymore. People saveup and put their money in bank deposits and the interest that is risk free is good enough.

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Post by AngMoG » Fri, 15 Nov 2013 10:50 am

JR8 wrote:
Strong Eagle wrote:An interesting take on the situation.

http://www.todayonline.com/singapore/fa ... correction
Heavens, agh!

So in summary 'I'm 20-something, it's my right to own a condo in D9/10/11. The world is clearly in imminent crisis if I can't. Prices are insane, and must fall, so that er, er... I can then buy. Once I buy then I'll celebrate prices rising at 50% a year, as by then it'll be entirely fair and justified, and if you can't oso afford then sorry that's just how it works right'.

The article is laden with such gaudy meretricious verbiage (see?), I had to try and stop myself laughing, imagining this uptight limp-wristed quitter-prig sitting in McDonalds Knightsbridge getting stuck into another 'I'm entitled' 1000 word piece for the SG media.
Also, what I found very enlightening is how the "writer" readily quotes the ratios of apartment price to avg household income in other cities, but leaves out the ratio in Singapore, which is likely to be a lot higher than those mentioned. I mean, average private property (what is this? 2/3-bedroom?) in SG would probably be around 1 - 1.5million or so (let's say 1.25), and average income is around S$5,000 or so I think. Do the math...

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Post by Mi Amigo » Fri, 15 Nov 2013 10:52 am

Wd40 wrote:They need to get deposit rates up to 4% and mortgage rates upto 6% here and then I bet you there wont be that left out feeling anymore. People saveup and put their money in bank deposits and the interest that is risk free is good enough.
If they did that, my guess is there would certainly be a 'correction', as all those highly leveraged 'owners' panicked about their mortgage payment increases.
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Post by JR8 » Fri, 15 Nov 2013 10:59 am

Hehehe :)

I don’t think corrections gain ‘informed popular opinion’. In fact if anything, bubbles form when someone would hang you from a tree for merely suggesting such a possibility.

I used to be a member of a property/landlords/investors forum many years ago (a busy place, maybe 100-200 posts a day just on that one sub-forum). There was a guy, and his entire thing was ‘the market is going to crash, and you will get burned. I’ve ‘STR’d’ I shall be vindicated [sold to rent, a doomster strategy].’ He was a highly eloquent writer, and so attracted a coterie of fellow-doomsters. Birds of a feather flock together, as they say. On and on he went day after day, year after year. Well, 20 years later the market is up 500% and he’s still wrong :)

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Post by JR8 » Fri, 15 Nov 2013 11:11 am

AngMoG wrote:Also, what I found very enlightening is how the "writer" readily quotes the ratios of apartment price to avg household income in other cities, but leaves out the ratio in Singapore, which is likely to be a lot higher than those mentioned. I mean, average private property (what is this? 2/3-bedroom?) in SG would probably be around 1 - 1.5million or so (let's say 1.25), and average income is around S$5,000 or so I think. Do the math...
It reeks of the fury, of not being entitled to guzzle on the riches that others are guzzling on. It is greed masquerading as virtue.

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Post by PrimroseHill » Fri, 15 Nov 2013 4:14 pm

Mask of jealousy more likely.
There had been some rather simple property rules that I have adopted through the years. Location location location. Buy the worst house in the your preferred location. Know your market and do your research.
This guy and many others, have to get out of the "those pesky foreigners" mentality. Prime London properties buyers I would say majority are foreigners or those "nasty bankers that ruined the country". This time of the year, days of old, Evening Standard would have published articles about how much Goldman's bonus pot will be and how many properties in Chelsea/St John Wood/Hampstead these people will be buying.
Look at Billionaire Row. Classic example.
Both my husband and I looked at properties to rent and to buy as soon as we landed. We found that rental market is rather bouyant. Landlords here control everything and quite a few of the rental properties aren't that well maintained despite being in the pre-requisite D9/10/11. Yet the rental prices are quite high. Then end of last year, the downward pressure of the rental were felt a bit.
More interestingly is/was the buying and selling of the private residential market. I have to admit, I didn't look into buying a HDB. And I admit I bought in those D9/10/11 areas. I found that whilst housing prices continues to rise it is mostly in the suburbs not in the central region. These areas the prices have become more stablised, sellers have become more realistic. However, what I saw whilst house hunting were the unrealistic prices asked by the sellers - I did the renovation work back in 1980s so in today's money thats 2 trillion dollars please. I will be shocked, amzement that avocado bathroom suite or those shell like basin in bathroom and the estate agents were like its beautiful isn't it. Come on, roof is leaking, the peach coloured bathroom suite at Sommerville was vile and not worth the asking proce that the seller wanted thats why it has been empty for 2years and the price have dropped 3times but still no sale.
All because of cheap mortgage rate. Our deposit in the banks aren't earning interest. Savings arent earning interest. When interest rate rises, I wonder how many have actually over leaveraged? It is almost like a sense of sheer desparation on some of these 20 something just to get on the ladder, it seems that would buy anything.
Talked to an graduate intern and her mantra is get married young and buy a HDB as soon as they can, so not to lose the govt subsidy. The sense of entitlement

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Post by Mi Amigo » Fri, 15 Nov 2013 5:07 pm

PrimroseHill wrote:The sense of entitlement
... and xenophobia will be the downfall of this country.

[Sorry, couldn't resist completing your sentence.]
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Post by JR8 » Fri, 15 Nov 2013 6:23 pm

Interesting dichotomy isn't it? They need the xenophobia, to motivate the disinterested.

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Post by Beeroclock » Fri, 15 Nov 2013 8:50 pm

If I was young again and couldn't get on the property ladder , instead of whining about the unfairness of it all, I'd try and find a way to get there. Perhaps punt the share market as I doubt govts will be imposing share market cooling measures so the trend will continue up until the misguided QE and super low rates environment is adjusted.

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