Has Singapore's property bubble already burst?

[Poomer]

The banks can lose money if the property prices fall is sustained. When the market falls and the mortgagee cannot make the monthly loan payments then after some time the banks would have to take possession of the property and eventually auction it off. In a falling market the bank may not recover the amount loaned because during such times the initial reserve price may not be met and they would have to just sell it to the highest bidder.

http://budgeting.thenest.com/pay-after-repossession-20126.html
Once you sign a loan contract, you are obligated to pay the entire amount owed on your car. Repossession doesn't negate that contract. If you can't afford the car and the bank repossesses it, you still owe the balance of the loan. Typically, the bank sells the car at auction if you can't afford to pay the past-due balance. You are obligated to pay the loan company the difference between what you owe and what the car sells for. For example, if you owe $10,000 on your car but it sells at auction for $6,000, you still owe the loan company $4,000. The lender may let you make payments, but it's more likely the company will sue you for the amount in full.

I'm not even incl. interest that they've earned in the past, nor the interest on the o/s sum after they repo. How the fuck is the bank going to make a loss, unless everyone goes bankrupt?

 

[Poomer]

Yes the cost of borrowing is low at the moment but I think 3% may not be 3% after deducting for loan repayments, sinking fund, tax and later on doing some maintenance of your unit. I am not a landlord so I dont exactly know but I think the yield is less than 3% unless renting out HDB unit.

For those who bought their houses in the 80s or 90s, they could be getting 8-20% rental yields. For example a 4 room flat in tampines in early 1990s was maybe $130k, you can rent it out for $2,400 a month for it. The rental yield is 22% per annum, before tax. After tax, maybe 20% or so?

If you bought a 4 room BTO flat in Tampines 5 years ago, at $400,000, chances are you'll get to rent it out at $2.6k a month because everything is new. The rental yield is still close to 7.8%, maybe 7% after tax.

Only catch is if you rent out your house, where are you gonna stay?

The fact is this sort of yield cannot be achieved by private properties. That said, if we take into comparison that 40% of Singaporean are earning $2k or less, HDB's are still relatively expensive. A recent study showed that a fresh graduate couple will need 7 years of their pay to pay off the flat, need we talk about a secondary school dropout? Thus HDB is overpriced for homeowners who stay, but actually very reasonable for landlords. Considering that one of the goals of HDB housing is affordable housing, I would say they've failed badly, as at it's core, a HDB is supposed to be affordable housing for the masses. The high rental yields only highlight a gaping problem in planning by the PAP government. By allowing public housing to be rented out to foreigners (which shows that they didn't plan well enough to build enough houses) - they allowed it maybe a decade back, they have effectively allowed the housing prices to rise above wage increment, condemning an entire generation to slaving their entire lives for their first home. They are not propping the market up with a few measures, as they know homeowners who bought their flats in the last couple years will turn on them once the property drops. I pray that another 20% drop in property prices in 2015 or 2016, I'm sure it'll help their popularity immensely once homeowners realise that they paid through their nose for something worth less.

 

[Cestbon]

not yet burst. When interest rate reach 4 % then really start to burst.

 

[Poomer]

not yet burst. When interest rate reach 4 % then really start to burst.

When interest reach 4% people will start to jump from highrises, swim in reservoirs.

 

[numero uno]

not yet burst. When interest rate reach 4 % then really start to burst.

If you read the article carefully http://www.cnbc.com/id/102126028 , for high end properties it has already burst!! 30-50% drop if you take from teh peak at 2007. Sentosa and prime orcahrd road aprtments are going at a 30% discount at least and no takers as all funds have dreid up. going by historical trends, crashes usually start at high end properties , then intermediate sub urban $1-2 million apartments then low end EC or HDB are last to be hit which is why the garmen would not be bothered to support the market. mreover it is short of funds to do so ala CPF problem. the phenomenon is seen world wide. Buckle your seats and be prepared for a wild ride. all you need is just a full blown ebola outbreak or some stupid terror act like 911 or even US to increase interests rates or China to clamp down on its shadow banking/laundering and then boom ......... a perfect storm in the making.

 

[po2wq]

bubble oredi bursted oni wen u c many many ppl tiao lao ... :o

 

[SgGoneWrong]

When interest reach 4% people will start to jump from highrises, swim in reservoirs.

Sorry to burst your bubble, aust interest rate over 4% and rental yield is lower than that yet no one commit suicide.

Really feel very sian to hear the same thing over from a bunch of people praying for higher interest rates, ebola, etc to buy cheap. It's like waiting for old bastard LKY to die, we die already maybe he still not dead.

 

[Cestbon]

If you read the article carefully http://www.cnbc.com/id/102126028 , for high end properties it has already burst!! 30-50% drop if you take from teh peak at 2007. Sentosa and prime orcahrd road aprtments are going at a 30% discount at least and no takers as all funds have dreid up. going by historical trends, crashes usually start at high end properties , then intermediate sub urban $1-2 million apartments then low end EC or HDB are last to be hit which is why the garmen would not be bothered to support the market. mreover it is short of funds to do so ala CPF problem. the phenomenon is seen world wide. Buckle your seats and be prepared for a wild ride. all you need is just a full blown ebola outbreak or some stupid terror act like 911 or even US to increase interests rates or China to clamp down on its shadow banking/laundering and then boom ......... a perfect storm in the making.

Price drop useless. Because the owner still able to hold on to the property if they will make loan payment as in agreement.
If interest rate increase to 4% or even higher. That mean owner need to fork out extra interest rate month payment. Those unable to fork out different will force to sell or bankrupt.

 

[chootchiew]

Pls standby for superman to jump off pinancle.

some gals are "waiting for superman to pick her up, in his arms...ar...ar...arms. . yeah !"

 

[zeebjii]

Sorry to burst your bubble, aust interest rate over 4% and rental yield is lower than that yet no one commit suicide.

Really feel very sian to hear the same thing over from a bunch of people praying for higher interest rates, ebola, etc to buy cheap. It's like waiting for old bastard LKY to die, we die already maybe he still not dead.

It's not praying when the outcome is a certainty. Interest rates rising is a certainty. Old fart dying is also a certainty.

 

[Narong Wongwan]

If you read the article carefully http://www.cnbc.com/id/102126028 , for high end properties it has already burst!! 30-50% drop if you take from teh peak at 2007. Sentosa and prime orcahrd road aprtments are going at a 30% discount at least and no takers as all funds have dreid up. going by historical trends, crashes usually start at high end properties , then intermediate sub urban $1-2 million apartments then low end EC or HDB are last to be hit which is why the garmen would not be bothered to support the market. mreover it is short of funds to do so ala CPF problem. the phenomenon is seen world wide. Buckle your seats and be prepared for a wild ride. all you need is just a full blown ebola outbreak or some stupid terror act like 911 or even US to increase interests rates or China to clamp down on its shadow banking/laundering and then boom ......... a perfect storm in the making.

Good to see Sbf resident billionaire still hard at work talking down the market.
Posting from A380 wifi again? Muahahaha

 

[SgGoneWrong]

It's not praying when the outcome is a certainty. Interest rates rising is a certainty. Old fart dying is also a certainty.

All these are certainty no doubt, but a matter of when.
One can talk down the market for 10 yrs and finally get it right one day.
Back to the same point, it's like waiting for old bastard LKY to die but we may die before him.

 

[SgGoneWrong]

Good to see Sbf resident billionaire still hard at work talking down the market.
Posting from A380 wifi again? Muahahaha

He appears each time there's a chance to talk down the market, then bring in Ebola. Now also bring back old topic terrorism. I think he waited very long for market to crash to buy in.

 

[Poomer]

Sorry to burst your bubble, aust interest rate over 4% and rental yield is lower than that yet no one commit suicide.

Really feel very sian to hear the same thing over from a bunch of people praying for higher interest rates, ebola, etc to buy cheap. It's like waiting for old bastard LKY to die, we die already maybe he still not dead.

Sorry to burst your bubble, but Australia's interest rate is 2.5%. The thing is they have been having interest rates near 4 to 7% for the last 15 years. We had 1% interest for most of the last 15 years. The 97 crisis is largely forgotten, with the easy money going around these days. Singaporeans are taking 1% interest for granted, and some people have already overextended themselves.

http://www.tradingeconomics.com/singapore/interest-rate
http://www.tradingeconomics.com/australia/interest-rate

 

[AhMeng]

PAP will not let it burst lah...these PAP MIWs have self investments to protect lah..

 

[numero uno]

Good to see Sbf resident billionaire still hard at work talking down the market.
Posting from A380 wifi again? Muahahaha

wahhahahaha. who needs to talk down prop market . use your brains lah, you just need to short the properties developers and reits counters repeatedly since start of the year enough already . No hard work leh. only push a few buttons. wahahahaha.

 

[silversurferlostinspace]

http://budgeting.thenest.com/pay-after-repossession-20126.html
Once you sign a loan contract, you are obligated to pay the entire amount owed on your car. Repossession doesn't negate that contract. If you can't afford the car and the bank repossesses it, you still owe the balance of the loan. Typically, the bank sells the car at auction if you can't afford to pay the past-due balance. You are obligated to pay the loan company the difference between what you owe and what the car sells for. For example, if you owe $10,000 on your car but it sells at auction for $6,000, you still owe the loan company $4,000. The lender may let you make payments, but it's more likely the company will sue you for the amount in full.

I'm not even incl. interest that they've earned in the past, nor the interest on the o/s sum after they repo. How the fuck is the bank going to make a loss, unless everyone goes bankrupt?

bad debt bank. cpf opt-out scheme. 5% basereturns. huat.

 

[SgGoneWrong]

Sorry to burst your bubble, but Australia's interest rate is 2.5%. The thing is they have been having interest rates near 4 to 7% for the last 15 years. We had 1% interest for most of the last 15 years. The 97 crisis is largely forgotten, with the easy money going around these days. Singaporeans are taking 1% interest for granted, and some people have already overextended themselves.

http://www.tradingeconomics.com/singapore/interest-rate
http://www.tradingeconomics.com/australia/interest-rate

Aust bank interest rate is above 4%. U must be a bank yourself to borrow at 2.5% from reserve bank. 1-4% is no big deal to the rich sinkies and fts. U wait long long. U guess which will happen first, old bastard LKY meets his maker first or sg property to crash first?

 

[numero uno]

Aust bank interest rate is above 4%. U must be a bank yourself to borrow at 2.5% from reserve bank. 1-4% is no big deal to the rich sinkies and fts. U wait long long. U guess which will happen first, old bastard LKY meets his maker first or sg property to crash first?

hahahha. why get angry at Poomer for speaking the truth? getting hot and flustered over interests rates. how pathetic you can get. you and alot of people are just sitting on a time bomb. tahts what poomer is saying and I agree. you see , I know people in banking and in past few years there has been alot of con men who hatched all these get rich via property speculation . you know those that says buy 5-6 properties with low interests and rent it out and sit and shake legs , everything "rosy" picture. well the truth is alot of idiots are caught now. things in ife are not that easy. they can't sell as there are no buyers and high end properties have already drop 30% at least. low end 10% at least. banks are telling me alot of these loans are behind in payment. usually they give 6 month grace or resructure the loan with higher interests. Now come the interesting part where at least Poomer makes sense. Both his prediction is a certainity come in 1-2 years time. in fact interests rates would definitely go up soon next year and then everything would unravel fast>>higher mortagge>>negative equity>> repo>>auctions>>vicious cycle. Dirty funds from China are drying up and getting transferred out as Xi is clamping on corruption for next 6 years!!!! go to most show rooms and you see empty rooms and desperate prop agents like you talking crap. the MIW are not that stupid after all. they know that's why all these sudden restrictions and refusal to lift them. you knwo what ? You and alot of people of course are in denial and trying to talk up the market. pity it is just amount to a lonely desperate plea. as you know the market is in shits when these useless property agents are becoming hawkers and taxidrivers overnight. not discounting the fact it would get worse as alot of crap news like europe and US still in the dumps . as for me , my risks is zero and and I do not have any mortgage at all as all my prop are paid in full. you know interests rates in singapore are indeed going up when suddenly alot of banks are offering 1.3 to 1.8% for FDs. wahahahh

 

[numero uno]

http://budgeting.thenest.com/pay-after-repossession-20126.html
Once you sign a loan contract, you are obligated to pay the entire amount owed on your car. Repossession doesn't negate that contract. If you can't afford the car and the bank repossesses it, you still owe the balance of the loan. Typically, the bank sells the car at auction if you can't afford to pay the past-due balance. You are obligated to pay the loan company the difference between what you owe and what the car sells for. For example, if you owe $10,000 on your car but it sells at auction for $6,000, you still owe the loan company $4,000. The lender may let you make payments, but it's more likely the company will sue you for the amount in full.

I'm not even incl. interest that they've earned in the past, nor the interest on the o/s sum after they repo. How the fuck is the bank going to make a loss, unless everyone goes bankrupt?

very true. at long last somebody who makes sense. that's why banks hardly go bankrupt. when they do it is usually an insider trading in high risks forex. the banks are cheats. they have everything covered in fine print. either way they always win . only last resort is a person declares bankrupt and even then the OA would look at his assets and dispose of all except his HDB flat. then only would the bank declare it as "write-offs" bad loans which is rare.thats why loan sharks (whch learn from banks) are a thriving business. they also never lose when calculating interests and residual loans. only thing is that they lend you based on trust and would give hell is late payments. seems alot of stupid people take out loans from banks without undertsnding these fine points .