Are rising home prices such a bad thing?

[batman1]

Well,sinkees if u think there is nothing wrong with rising home prices,vote for the MIW for higher property prices !

 

[unicando]

hm...dun touch the current hdb system, to be fair. can be better...juz introduce non-investment grade lower price EL (entry level) 2/3/4 room hdb flat option. this mean they are (1) 50yr or shorter lease, (2) buy/sell thru hdb only, no open mkt resell option, (3) cannot rent out (4) only for citizen for at least 5 yr and the male partner must have served ns (5) no carpark lot option. this shd ensure average young household can focus their resources in rasing their kids and take care of their aged parents also. stay home mom or dad option is then possible if single income is financially viable...

 

[borom]

Singapore’s Property Market Headed Towards a Perfect Storm?
Published: Sunday, 29 May 2011 | 11:35 PM ET , CNBC.com Asia Pacific

When a country registers a 15 percent growth rate ...Singapore’s housing market has been cashing in on this big time - prices have rebounded 50 percent in just two years,.....and cooling measures by the government have done little to calm them.

At a recent real estate conference organized by the NUS, which explored the theme “Will the boom never end,” Chua Chor Hoon, Head of South East Asia Research at..DTZ, said the Singapore residential market is not likely to decline much because of strong economic growth. But, she also outlined a worst-case scenario, which could unfold as early as 2013-2014. "If all the ingredients come together it will make a perfect storm,".....

These ingredients include falling demand, more supply and higher interest rates all kicking in together. ..... Most analysts, however, expect interest rates to begin moving higher later this year.

Second, in 2014 an unprecedented number of housing units are expected to enter the market..... 32,359 units will be completed over 2013 and 2014 that is 85 percent more than the 17,501 units expected over 2011 and 2012.

Add to this the fact that Singapore’s price-to-rent ratio has increased from 20 in 2009, during the financial crisis, to 25 currently, ....That means it will take 25 years for a homebuyer to recover, through rents, what he paid for the house. As a result, Chua says, people investing in this market often have a short-term view looking to “flip” the property for capital gains.

Foreign buyers are also helping boost Singapore’s property market, especially at the high end.....foreign buyers of private homes in the first quarter of 2011 touched a record high of 16 percent. But Chua points out that this could drop, if the government further tightens immigration rules.

“Local concerns about high housing prices and the influx of foreigners that were magnified during the recent General Election will be a catalyst for the review of immigration and housing policies, which could dampen demand in the residential market in the coming months, ” Chua wrote...

While growth forecasts....over the next five years at 4-6 percent will support the property market ... one cannot rule out another unforeseen external crisis like the financial meltdown, which could also lead to a market crash. While the bulls might find it hard to believe that something like that can happen again....
“We always think this time it will be different, but it never is.”

http://www.cnbc.com/id/43191167

Good article except that I think it will take average 30 years to recover from rent and not 25 (price to rent ratio)-if nett of conservancy charges(usually payable by landlord), renovation, unoccupied period(in between tenants) and agents fees.Compare to say equities/bonds (brokers commission of 0.275% x 2).

 

[singveld]

What about the young and future generation, how they are going to afford property?

 

[LonewolfAlfa]

What about the young and future generation, how they are going to afford property?

maybe they could get a job and buy a 3 room BTO?

 

[tchinkoo]

Rising home pricing is only good for PR n FT !!!!