Record $653,000 for 4 room flat

[drifter]

I agree on the sour grape part...but then again, why throw away money like that ??? He will be very lucky if he could find another sucker to buy over his flat if one day he decides to sell it. Damn bodoh !!!

because hes a rich stupid FT ...he could afford to be bodoh ..

 

[R4g3]

WHat is the COV? why didn't ST report about it?

 

[johnny333]

Smart born-&-breed Singaporeans should be contented buying HDB flat ranging not more than $400k. ..

Smart, born-&-bred Sporeans will be a minority in Spore. Other than the falling birth rate, many will be leaving for greener pastures

 

[borom]

The world economy

Dangerous froth

Nov 12th 2009 | WASHINGTON, DC
From The Economist print edition

Asset prices could push central bankers off course long before any bubbles burst

THE post-crisis challenge for central bankers has long seemed easy to describe. They must steer between the shoals of short-term deflation and the longer-term risk of accelerating consumer prices. But recently a new concern has cropped up: that loose monetary conditions are creating dangerous bubbles in all manner of assets, from oil prices to Asian apartments, that could capsize the global recovery.

Asset prices have certainly risen impressively. The S&P 500 index is up by 62% from its low on March 9th; the MSCI index of emerging-economy shares has climbed by 114% from its nadir of a year ago; the price of oil is 155% higher than it was in December 2008. Gold prices set a new record of over $1,120 an ounce on November 12th (see article). Chinese house prices rose at their fastest pace in 14 months in October.

However, these rebounds have followed even more dramatic slumps, so asset-price levels are less eye-popping. Gold apart, commodities are still well below the peaks of mid-2008. The earnings multiple for Shanghai’s A-share index is less than half the level it reached during the 2007 bubble. American shares may be richly valued relative to earnings, but they are less unhinged than in earlier booms. According to Smithers & Co, a research firm, the price-earnings ratio for America’s S&P 500 on a cyclically adjusted basis is about 40% above its long-term average, compared with over 100% in the late 1990s.

There are other reasons for calm. Earlier this year investors were in panic mode. Much of the rebound since then reflects a return to more normal risk appetites. Nor is today’s asset boom fuelling the kind of leverage that made the bust so awful. Bank lending is contracting in America and weak elsewhere in the rich world. In Asia, property-related borrowing is heavily curtailed compared with America’s pre-crisis boom. And from Singapore to Seoul, the authorities are demanding higher down-payments from borrowers and restricting lending to developers (see article).

Nonetheless, it would be a mistake to be too sanguine. Another violent drop in share prices could have disproportionate effects on confidence and hence demand. Equally important, frothy asset prices could cause damage long before any bubbles burst, by increasing the risk that central bankers make mistakes.

This risk is most obvious in those countries—mostly emerging markets—where domestic conditions call for tighter monetary policy. China is Exhibit A. With a vigorous domestic recovery under way, China ought to tighten soon, before asset prices bubble out of control. But China is loth to allow the yuan to appreciate rapidly. And it will not be pressured by high consumer-price inflation, as it was in 2008. Thanks largely to soaring pork prices, China’s annual inflation rate reached almost 9% early that year. Today it is negative and few expect consumer prices to rise by much more than 3-4% in 2010.

Asset-price rises are also a problem for emerging economies with flexible exchange rates. Many have seen their currencies soar as foreign money pours in. Raising interest rates to tighten domestic monetary conditions can attract yet more foreign money. Increasingly countries are turning to controls on capital inflows. Brazil has already introduced a 2% tax on foreign portfolio investments to stem the rise in the real. On November 10th Taiwan banned foreign investors from putting money into Taiwanese fixed-term deposits. More such measures are likely, increasing the chance of distortions.

In weak, rich economies the danger is not too little too late, but too much too soon. Jumps in asset prices risk causing premature inflation jitters. Oil prices, especially, pose a danger. In recent months year-on-year headline inflation rates in most of the world’s big economies have been negative, largely because oil prices have been far below the heights of mid-2008. That is about to change dramatically, as the slumping oil prices of late 2008 and early 2009 affect the comparisons.

In America headline consumer prices fell by 1.3% in the year to September. By December they could be up by 3%. Even if oil prices stay around $80 a barrel, these “base effects” could keep America’s headline inflation above 2% for much of the first half of 2010. Many expect commodity prices to continue rising. Analysts at Goldman Sachs expect a barrel to cost $95 by the end of next year. Long-dated futures contracts are now flirting with the $100 mark.

An energy-driven headline inflation rate of 3% hardly spells disaster. Core inflation, which strips out jumpy food and fuel prices, is low, at 1.5%, and falling, thanks to the huge amount of slack in the economy. With a jobless rate of 10.2% and oodles of idle capacity, America still faces a bigger threat from deflation than from inflation.

The risk is that higher headline inflation is misinterpreted as a sign that policy is too loose. Judged by the “breakeven” rate between inflation-protected and other Treasury bonds, financial markets’ estimates of long-term inflation have jumped of late, although consumers’ expectations have remained stable (see chart). Worries about the size of America’s budget deficit and fears about the potential politicisation of the Federal Reserve are rising. (A proposal released this week by the Senate Banking Committee which strips the Fed of supervisory powers and introduces political appointments to the regional reserve-bank boards hardly helps). There is a danger that higher headline inflation will be misread, even as rising energy costs sap demand.

Vince Reinhart of the American Enterprise Institute worries about a replay of the summers of 2007 and 2008. On both occasions a weaker dollar, rising oil prices and a “decoupled” world economy made America’s central bank more hawkish. Although it did not raise rates, “inflation jitters” were pervasive. The European Central Bank actually raised rates in July 2008.

History will not repeat itself exactly. But bubbly asset prices do risk overreaction from rich-world central bankers. That may temper worries in the emerging world but at the risk of pushing the global economy back into recession. Central bankers ignore asset prices at their peril. But dealing with them is not easy either.

http://www.economist.com/businessfinance/PrinterFriendly.cfm?story_id=14853108

At the personal level I don't think the buyer is rich or clever/smart.
Which rich fella stays in a HDB 4 room flat?

Will a smart fella pay such ridiculous prices for a 99 year leasehold property with lots of restrictions?

Appears to be a case of a guy trying to get his money out quickly -for reasons many familiar with Indonesia will not find surprising.

I'm more concerned about the asset bubble and the impact when central banks start to raise interest rates.

 

[SamuelStalin]

When they could not service the loan....Banks, HDB, Town Coucil, PUB, Sing Power, MDA...LTA...ah long-san....then the quake on a scale of 9.9 will hit....now, it looks so rosy...

They can just jump down. Very few people can survive a fall from such a great height.

 

[SamuelStalin]

because hes a rich stupid FT ...he could afford to be bodoh ..

You know, a price like that for a used, non-virgin flat. Flat-imitates ie condos are his enemy.

Shit (in the backward ugly West) has value to different people.

 

[allanlee]

Another record akan datang....... this PRC businessman offered $700K to purchase a 75 sq metre 4-room HDB pigeon hole in Toa Payoh Central :p The valuation was only $418K but the seller tried his luck and asked for that price

The PRC initially wanted to buy a unit at The Peak but decided on this resale unit lpcated nearby to The Peak because the design was so much better, price was cheaper and no need to wait for completion to move in........ pending HDB approval and we'll have a new record for 4-rm pigeon hole

 

[Stage 5]

Now private housing can't even fight with 4 room hdb.,,. why would anyone choose a 4 room pigeonhole which is essentially a wasting asset that can't be collateralize, verses fixed asset private condo with all the condo facilities is nuts.

 

[Blazars]

Now private housing can't even fight with 4 room hdb.,,. why would anyone choose a 4 room pigeonhole which is essentially a wasting asset that can't be collateralize, verses fixed asset private condo with all the condo facilities is nuts.

Agreed! This pigeon hole is only a roof over head. I really dont understand why would anyone pay so much. Mayb the indon guy tot he can pass the pigeon hole to his decendants after he is gone. Only one word to describe him- stupid.
!&!!

 

[commoner]

the seller probably take the money and buy a condo of the same size

 

[Frankiestine]

I agree on the sour grape part...but then again, why throw away money like that ??? He will be very lucky if he could find another sucker to buy over his flat if one day he decides to sell it. Damn bodoh !!!

They never learns....after the first sucker started it at Bishan then the next was the one at Jalan Membina area and now another sucker.....

 

[diversifyx2]

Only one word - STUPID

 

[streetsmart73]

one big quake comes, everything gone!

hi there


1. bro tee, i hope that was not a curse from you.
2. wow! at that price, hdb is still very affordable.
3. sinkies boleh !!!!!!!!!!!!!!!!

 

[SamuelStalin]

Smart, born-&-bred Sporeans will be a minority in Spore. Other than the falling birth rate, many will be leaving for greener pastures

The terms "Smart" and "Singaporeanese" are mutually exclusive, thank you.

 

[Stage 5]

the seller probably take the money and buy a condo of the same size

Yah, but the seller better act fast I believe the market for condos of the same size will up to at least 1 million very soon.

 

[Echo_O]

WHat is the COV? why didn't ST report about it?

They did. $68k

 

[Sinkieloser]

The buyers, a male Indonesian permanent resident and a Singaporean woman, could have bought a condominium unit in an outlying area for the price.

But they were won over by the location, just five minutes walk from Queenstown MRT station, and on the top, 40th floor of the block, with unblocked views of greenery from all windows.

WAhahahhah!! might as well say, they will totally memerized till they drool by the location. Give me a break..

 

[SIFU]

WAhahahhah!! might as well say, they will totally memerized till they drool by the location. Give me a break..

CB kia tonychat,

WTF is 'memerized'??

kena seduced by mermaid huh

english lousy like fuck..

mesmerize lah:oIo:

 

[theblackhole]

this is good for the seller...and also good for hdb...also good for singapore....

i better live in a hut lah with my salary....can't even afford anything now...not even a bed!!!

 

[Sinkieloser]

The terms "Smart" and "Singaporeanese" are mutually exclusive, thank you.

i could not have said it better.