BIS Report

[Confirms]

This confirms what we were all suspecting - volumes coming down, prices moderating, and trending towards an eventual decline.

[SG property]

I think some of you here have never come close to buying a property in SG, even during the last downturn? First, loans is usually at max 80%. This is no matter what, an Asian country with a different view on leverage with high savings level. There is a lot of liquidity in this market. Many locals take much smaller loans. In addition, mortgage rate is not 2%! It is in the region of 4%-5% for most - introductory rate is usually 3.5% for the first year - after that it moves with market. Banks are known to increase interest at 100bp per year. Those advertised low rates or "zero interest" are usually gimmicks for the first year which the bank will claw back in later years.

I think the actual property price index for Q2 would be higher than 0.4% increase because it appears the last 2 weeks of Jun 08 has strengthened.

[Confirms]

Other global property markets that eventually tanked also showed similar trends. On a quarterly basis, the UK first showed slowing inflation, then stagnancy, then 0.9% decline, then a 9% decline this quarter.

You can always argue that Singapore is small, it behaves differently, etc. etc.

[Shocking]

Shocking that property prices are still rising, considering all that negativity in the market.When are the DPS buyers going to dump their properties en-masse as predicted by many? If not now then when?
Well I guess these bears like Kubes will have to wait forever.

[PPI is....]

based on
1) stock market value
2) GDP growth
3) Interest rates

google   "NWS_Property.pdf" comes from sg government site


seems volume and actual transactions have nothing to do with it.
Also PPI uses something like the last 12 quarters of data for smoothing effect.

So it is possible for PPI to go up while actual transaction prices are going down if there has been a huge upsurge in the last 3 years but stagnation or falling prices in the last couple of quarters.

Prices are generally down from 6 months ago looking at real transactions. Believe what you want from PPI vs reality.

[No paddle]

To SG Property:

CT never said that interest rates were 2%.  What he said was assuming rates were to increase by 2% (which is very likely if MAS is trying to prevent inflation).  This then makes servicing the morgage debt much more expensive and at the same time, if the economy is slowing, then the demand for property will go down, rents will decrease (as we expats leave in droves) leaving you greedy SG Property owners up sh#t creek without a paddle.

Does that make it any clearer??

[....]

mr paddle - probably reasonable comments, aside from the fact that MAS does not generally use interest rates to control fiscal and monetary policy, rather it uses management of the SGD currency basket.

[Lost cause]

mr paddle - probably reasonable comments, aside from the fact that MAS does not generally use interest rates to control fiscal and monetary policy, rather it uses management of the SGD currency basket.

Dont waste your time trying to explain to Mr Paddle. All expats here believe that monetary policies all over the world should follow what the western countries are doing. The whole world revolves around the west. Theyir myopic mind cannot understand anything else or believe in other variations of monetary policies.

[No paddle]

Thanks ... I do realise that MAS uses exchange rates rather than interest rates to control the economy, but the end result is the same: increase FX value of SGD and the interest rate will go up.

Also interesting that you assume I'm a Mr....?

[....]

m(r)(rs)(iss) paddle.

use of the interpretation act analysis - the male embraces the female.

not necessarily - the sgd has been appreciating against most currencies, particularly the usd, yet the swap rate for sgd vs usd is at a pretty low level - 1.4 -1.6 % when I last checked.

[zoomfin]

does owning a little farm in Australia help? i think it does.

It would certainly help provided your Aus farm is near reliable water resources!   

[tipped]

BIS warns the worst is far from over

"The current market turmoil is without precedent in the postwar period," it said. "With a significant risk of recession in the US, compounded by sharply rising inflation in many countries, fears are building that the global economy might be at some kind of tipping point.

"These fears are not groundless. The magnitude of the problems yet to be faced could be much greater than many now perceive.

I just read on Perez Hilton.com that Starbucks is closing 500 stores and cutting 7% of its workforce. Times are getting tough.

[No paddle]

... quote
"not necessarily - the sgd has been appreciating against most currencies, particularly the usd, yet the swap rate for sgd vs usd is at a pretty low level - 1.4 -1.6 % when I last checked."

Precisely, so that means that the only way is up and that's going to hit those who have bought recently where it hurts.

[....]

maybe, but not necessarily.  That's the beauty of the markets - if we actually knew the answer, we'd all be considerably richer than we are today - hindsight is wonderful thing