Property Prices Are Too High


If you think property prices are too high, you are not alone.

The URA indexes for rest of central region and outside central region are at an all-time high.

According to the new NUS Singapore Residential Price Index (SRPI), its index for non-central region has also surpassed way beyond the 2007 peak.

A little advice for those looking for their first home: If you can’t wait, try to buy within your means. Never assume that interest rates will always stay low.

When even the above-average earners feel they can’t afford a home, something must be wrong and something ought to be done.

And the government has indeed implemented several cooling measures, including releasing more land for sale, lowering the mortgage loan-to-value limit from 90% to 80% (a reversal of the 2005 relaxation), and imposing a stamp duty on properties flipped within a year.

Nobody knows if property prices will stay high or even go higher. But we can make an educated guess.

If we look back to 2005, the year when the government implemented policy changes to boost the property market, we will see that policies take time to have an impact.

In 2005, the government relaxed the restriction on foreign ownership of apartments (no more 6-storeys rule), upped the maximum loan-to-value limit from 80% to 90%, reduced the cash down payment from 10% to just 5%, and allowed non-related singles to jointly purchase residential properties.

Also in 2005, the government gave the green light for the 2 integrated resorts.

The effects of all these took about 2 years to weave into the property market, when prices went up a steep slope in 2007 before finally reaching a record high in 2008.

Of course, other factors also played a part, like a buoyant US economy and its subprime traps.

In a similar way, the effects of recent policy changes will take time to affect the market.

When do you think the property market will face a correction?


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  1. Hi poor but surviving, I agree with you. Even if we assume one must get a bank loan for the HDB flat, it’s still a mere 2-3% for now. If one is able to invest and get a return more than that, then investing should be a better choice.

    I see that you’ve just bought a flat with your wife, that’s great! Me too.

  2. Sunny borrowed 55k from parents, but did not reveal how much savings he’s got before moving to SG. If he has $150-200K savings, then it would not be inconceivable that he can manage to pay up his debt in 3.5yrs.

    He could have 2-3mths of bonus per annum too.

  3. Ok, I am now convinced that not only people who respond to me can’t read, they can’t reason too.
    People who borrow from their parents are either young (and still have low income) or don’t have good income. Either way how could the person have a 150K to 200K savings?

    Just ask yourself, if you have a 150K to 200K savings, and there is a 300K HDB, would you borrow from your parents? And if you have that amount of money, paying off your loan in 3.5 years is lousy. And please don’t say that he has better opportunities, etc because from what he writes it’s clear that it’s his biggest aim to pay off the HDB Loan as soon as possible, otherwise why not pay it off in 20-30 years since the interest rate on HDB is so low?

    To ys: is stating the truth a personal attack? So if someone get all Cs in O/A Level and is told to be “academically challenged” i.e. not up to standard, is it an insult of just an inconvenient truth?

  4. marginaluser on

    It’s funny how people have to compare themselves to others to make themselves feel happy or even contented.

    The power of envy, whoah !

  5. Ah, I thought ??? has disappeared, but now he/she has come back with another onslaught of personal attacks.

    ???: After reading your most recent post, I’m also convinced that you view the world through your own set of twisted logic that deviates significantly from the usual norm. Your quantum leaps of logical deductions based on vacuous assumptions amazes me. And regarding the personal attack issue, I see that you cannot argue within the confines of the initial issue (i.e. the savings for HDB loan issue), but you have to bring in an unrelated “example” to illustrate your point. And this “example” of yours, are you speaking from personal experience?

  6. Well. Actually I only borrow $220k from the bank at a flooding rate of 2.58, 2.88 and 3.58% for the first three years. At the time I still have about $100k in my saving account. In 2008, when the financial crisis outbreak, I decided to paid up my loan earlier. To some of you, maybe my move is a stupid one but I think it’s good to secure my shelter when I still under employ. Yes, I might make more money if I invest the money into stock market, but who knows? For your information, I cash my money from FX and Stock. Did not earn much lah.

  7. I am 39 years old now. Been here in 1998. Almost bankrupt in 2002. Why I still borrow money from my parents? I did not!
    They force me to accept the money! They think this is the better way to spend the money.
    Yes, I finally own my base and the nest move is to invest more or to start my own business again.

  8. I post my story here just to share with others that if you really want to own your shelter, it is still doable!

  9. Hi Sunny, welcome back. I calculated you paid up $165K in about 3.5 yrs, so that’s approx. $4K per month. Amazing.
    I just bought a HDB flat and am slowly paying the housing loan (I didn’t have your foresight to buy in 2006).

  10. i think it’s not a good idea to have the bulk of one’s cash locked into the residence property, not least because it’s hard to get back the cash (even after selling, you gotta buy another for staying).

    since interest rates are low, i would not be in a hurry to repay my housing loan and instead i will find good investment opportunities – not in property as property prices are at all time high, but in stocks as stock prices around the world are still very much volatile.

    property is a strange thing. the world economies are obviously still not doing well and yet you see record prices in asia, no thanks to unprecedented pump priming and quantitative easing meted out in unison during the lehman crisis. it’s a side effect.

  11. Have to stop this evil bubble from getting bigger and wiping all your cpf/saving away. One can consider migrate for good. Sg is not so safe afterall. Look around Sg neighbours. Who can she trust?

  12. Today the Minister’s remarks that the property market will “stabilise” in 3 – 5 years’ time from now, means that the huge majority of ppl here are wrong.

    If the market is only going to “stabilise” & not cool down, then basically that means there will not be any correction !

  13. Where will the price head for in 2012?Interesting that the postings in 2010 habe cried foul of the price increase. No sign of drop yet thus far. Sigh!

  14. ministers aren’t oracles. there’s one who said flash floods come once every 50 years. do you believe him? mah bow tan also said flats are affordable, so why did khaw boon wan contradict him with cooling measures?

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