Saw this article when it came out and the figure that 23% of households here have a net-worth in excess of US$1m troubled me as being too high. All the income data I see says that average household income in Singapore is around SG$4,000 per month.
The only way I can see they have come up with this figure is through the proportion of Private Housing in Singapore and assumption that the base price is close to US$1m.
If that is the basis of their assessment, I think they should look at what ever optimistic property bulls forecast for singapore. Worth reposting an earlier point I made that SG will be the richest place on earth.
"Instead, what I would like you to do is post each of the 33 year y-on-y growth rates from 1975 to 2007 along with the property values (PPPI I guess) so that we can see how SG property has performed over the long run. This will help us all understand the current state of the property market versus the long-term market cycles, and where we are on the current property market cycle."
Forget all that mumbo jumbo you are asking for. Let's keep it simple. A semidetached costing 30k-50k (I know because my father bought it for 30k) in early 1970s is not worth around 2 million. A bungalow worth 200k in 1978/79 is now worth around 5 million. You go and do the calculations on what is the yearly return.. Much more than 7%. Who cares about the ups and downs as long as in the long term prices go up and as shown in the local context it has gone up a lot and more of this is to come over the next 25-30 years.
We LLs are in for the long term and speculators are not going to bother to come into this forum and waste their time because it is not going to make any difference doing so to their investments if they are caught. The long term investors like us think about 20 years down the road and we are going to end up making a handsome profit.
Opps, sorry about mumbo jumbo. Lets keep it simple just like you and long term owner want. Lets use your simple examples. I fired up Excel and this is what I came up with.Your dad's semidetached
: outstanding investment. Estimated compound growth rate of 13.15% based on the data you provided. Since past performance is a perfect indicator of future performance in Unique Singapore your dad's apartment will be worth $7,790,698.15 in another 10 years, and in 20 years it will be worth $26,799,208.08, and in 30 years it will be worth $92,186,546.06Singapore Bungalows
: also outstanding investments. Estimated compound growth rate of 11.75% based on the data you provided. Since past performance is a perfect indicator of future performance in Unique Singaporean Bungalow will be worth $19,018,611.18 in another 10 years, and in 20 years it will be worth $ 57,763,582.14, and in 30 years it will be worth $ 175,440,330.06.
This is very simple and clear. It is obvious that I have been completely wrong about Singapore property. I got myself all confused about silly complicated stuff like: business and market cycles, timing, bubbles, recessions, property supply and demand, speculation, money supply, affordability, interest rates, currency rates, inflation rates, population growth, GDP growth, etc. when all I had to do was look at the last 30 years to know what the next 30 years will look like.
It stands to reason that the last 2 years performance will indicate what the next 2 years performance will be like - is that how it works?
So if I want to retire in 20 years time with $26.7m all I need to do is find a $2m property in Singapore to buy ASAP. Correct?
We established that your dad's semidetached is a better long investment than a Good Class Bungalow. I figured out that your dad's semidetached will be worth more than the GCB in the year 2090, when it is worth $56,846,610,488 and the typical GCB is worth $56,624,070,956
Using this data as base for all Singapore, plus LTO POPn POPf population growths rates and the goal of 6m pop by 2045, SG property sector alone will be worth: $804,338,816,197,627 by 2045. That's SG$804 trillion. To put this into perspective, today US economy is est to have a net worth of $59 trillion. For simplicity lets assume the SGD is at parity with USD. Very likely that little Singapore will have greater wealth and assets than the entire US sooner than we think.