In Nov 12, when i was analyzing Q3 prices, i mentioned a bubble forming in the industrial zone and that cooling measures round 7,8,9 and 10 are on its way.
On my blog post on D Leedon on Jan 3rd, i said the government will probably need to step in again.
Well, here you go. On Jan 11, the government introduced one of its most "comprehensive" property cooling measures, covering HDB, ECs, Industrial units and Condominiums with effect from 12th Jan.
Deputy Prime Minister and Minister for Finance Mr Tharman Shanmugaratnam said: "The reality we face is that interest rates are extraordinarily low, globally and in Singapore, and continue to add fuel to our property market. We have to take this further round of measures now, to check recent market trends and avoid a more serious correction in prices further down the road."
Will it work this time? Frankly your guess is as good as mine.
In my post on 24 Nov 2012, i mentioned that you need another global financial crisis for prices to retreat. My view remained the same. The prices will not fall unless we see a sharp drop in the stock market due to company failures. Only a drastic fall in investors sentiments will we see a meaningful correction. Alternatively, you need a dramatic increase in borrowing costs (i.e. interest rates) but I don't see that happening soon either.
Will Round 7 will be effective in killing off the investors' demand, especially those who already owned one property? My gut feel is "Don't Count on it". The government has not plugged one loophole in preventing current one home owners from getting more "loan" out of their first property to pay the down payment for the second property but it may dampen sentiments in a "knee-jerk" reaction.
The Car is foaming as well!
Not only are we seeing bubbling record prices in property, we can witness that in COE prices where Cat A prices hit a record high of $92,100.With BMW and Mercedes trying to game the "CAT A" category and a falling quota, it is no wonder that Cat A prices are where they are right now! In my view, the government should not allowed loans to be "borrowed" against the COEs. It just doesn't make sense and a car bubble is foaming right now....if the government don't stop that, the prices will cross the $100k soon and that will exceed the value of my entire SRS portfolio as of 31 Dec 2012? It's pretty crazy.
12 comments:
The car COE prices are insane. I agree with you that car owners should not be allowed to finance the cost of COEs.
I think an effective method to keep COE prices in check is to get car owners to pay 3/4 or the full COE amount, and finance the rest of the cost (I don't think the stamp duties for properties can be financed as well right?). This measure will probably not affect the rich as they are probably already paying off the car in cash.
Yeah. Probably too crazy ! Maybe it is an effective way to get more people to use public transport.... :)
COE category need to be priced based. One category for low-priced cars. COE will naturally be a resonable % of car price for this category if there is sufficient quota there.
It is good for the government to stop a bubble from forming, or getting bigger if one is already formed.
However, I do not think prices will drop significantly.
Unfortunately, the measures to boost the population appears weak. From the Straits Times, it is clear the young parents think more can be done. How about 25k off your housing loan for each child born in that property you live in ?
I think I read something like if population does not grow, the workforce will shrink by 2020. If no immigration, the population will shrink by 2025. Even if they manage to get Singaporeans to have babies now, the work force will shrink from 2020 onwards since the babies born now will not even become teenagers by then.
Now can everyone understand why the cap on foreigners will not be lifted? Need to encourage Singaporeans to increase productivity and be more self reliant.
If foreigners not coming in droves, so many residential units coming in 2015 and interest rates rising in 2015, then a perfect storm is in the making. Now can understand why cooling measure has to be implemented?
A perfect storm indeed...
Car prices seems to be reaching an all time high
Ya, agree with that!
What can be done to solve this issue?
is singapore becoming a place that it's ppl are suffering to sustain?
Well, that is arguable, but do take note that while working hard to make ends meet, do not miss out on things that are important
Yes, true to that
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