A few CCR transactions sold at a loss (reported in The Edge)

[dtrax]

One plausible scenario: he took a GBP 1.47mil loan to buy a S$4.34mil hoot in 2007 (doesnt matter how many LTV he paid since the exchange rate is the same). Fast forward 2015, he found our he made a stupid mistake and decided to offload and return home. Got back $3.125mil and after covert back to GBP, he gets back GBP 1.5mil

Add net profit from rental less stamp duty and all other fees, there might be some money to be made... not the best hoot but at least no bloodshed.

[hopeful]

One plausible scenario: he took a GBP 1.47mil loan to buy a S$4.34mil hoot in 2007 (doesnt matter how many LTV he paid since the exchange rate is the same). Fast forward 2015, he found our he made a stupid mistake and decided to offload and return home. Got back $3.125mil and after covert back to GBP, he gets back GBP 1.5mil

Add net profit from rental less stamp duty and all other fees, there might be some money to be made... not the best hoot but at least no bloodshed.

this again begs the question: why is this finance guy not using leverage? why is he putting so much money on the table?

is this an example of a carry trade?
Unlikely as interest rates in UK are mostly similar/higher than Singapore's. (from tradingeconomics)

I find it funny:
if he is risk adverse, why is he putting so much money down for an overseas (our friendly singaporean doctor in this forum take a 100% loan to get her house in JB)
if he is risk loving, why is he putting so much money down (not much of leverage, returns are less on sum invested basis)

[teddybear]

He probably has more than enough in GBP to pay the S$ property fully in cash but didn't!!!!!!!!!!!!!

Could be double-carry trade and he make use of his financial knowledge on leverage and currency exchange to his advantage to the fullest!!

Let's analyze this scenario:
1) buy a very very expensive property in Singapore, most expensive he can get in S$.
2) Borrow in S$, up to 95% loan (even though he has the cash to pay the property in full!) and at preferential rate lower than what you and I can get, may be at 1% p.a. (because bank's employee may be able to get).
3) Take these 95% loaned in S$, convert to GBP at say GBP1:S$1.5.
4) Put the loaned S$ and his own GBP into GBP stocks, with dividend of 4% (note: LSE has many listed stocks yielding dividend of 4% or even much more! Better than SGX listed stocks!)
5) Sell GBP stocks at profit of 40% return, sell GBP at GBP1:S$1.75, collect a total of 15% total dividends returns from the capital.
6) Pay back the S$ mortgage loan.

Looks like above case would make him quite a handsome profit isn't it?

You can compare to hypothetical case if he paid the S$ property in full by converting from GBP to S$ initially (at GBP1:S$1.75)............

Obviously what he did compared to hypothetical case is absolutely correct decision (just that simple-minded people don't see that he can make money this way)!

this again begs the question: why is this finance guy not using leverage? why is he putting so much money on the table?

is this an example of a carry trade?
Unlikely as interest rates in UK are mostly similar/higher than Singapore's. (from tradingeconomics)

I find it funny:
if he is risk adverse, why is he putting so much money down for an overseas (our friendly singaporean doctor in this forum take a 100% loan to get her house in JB)
if he is risk loving, why is he putting so much money down (not much of leverage, returns are less on sum invested basis)

[hopeful]

.....
3) Take these 95% loaned in S$, convert to GBP at say GBP1:S$1.5.
.....

How does step 3 works again?
i never get to see any of the mortgage money. The money goes straight to developer

[teddybear]

Sorry, mixed up....
3) shouldn't exist.........
Above just hypothetical case study and analysis...........

How does step 3 works again?
i never get to see any of the mortgage money. The money goes straight to developer

[hopeful]

Sorry, mixed up....
3) shouldn't exist.........
Above just hypothetical case study and analysis...........

if 3 doesnt exist, then the rest 4,5,6 also dont exist.

my story is:
this finance guy did take max loan of 90%/95%.
however he get 1 or 2 "margin call" from bank (however improbable that "margin call" is to us - maybe his mortgage is from Citibank ).
The 1st "margin call" he top up, playing for time, thinking that property price will increase rather than see his equity evaporates.

Sometime later, another "margin call". This time, either he didnt have the resources anymore and/or he didnt see the light at the end of tunnel, so sell his stake instead of adding more money into a depreciating property.
So in the end, his equity is mostly wiped out. No forex gains at all.

Anybody else have other stories ?

[teddybear]

Another story (many people used such strategy!):

Again, He probably has more than enough in GBP to pay the S$ property fully in cash but didn't!!!!!!!!!!!!

He make use of his financial knowledge on leverage and currency exchange to his advantage to the fullest!!

Let's analyze this scenario:
1) buy a very very expensive property in Singapore, most expensive he can get in S$ (hope property gain).
2) Borrow in S$, up to 95% loan (even though he has the cash to pay the property in full!) and at preferential rate lower than what you and I can get, may be at 1% p.a. (because bank's employee may be able to get).
3) Convert his own GBP CASH to S$ at GBP1:S$3.1 (in 2007).
4) Put his converted S$ into stocks like REITs, with dividend of average 5% p.a. in 2007.
5) Sell S$ stocks at profit of 35% return, collected dividends return over about 7 years or 35% from the capital in 2014.
6) Sell the property (loss S$1.2m or 30%) and Pay back the S$ mortgage loan in 2014.
7) Convert his own S$ back to GBP at GBP1:S$2.1 in late 2014.
8) Tally his profit is >100% of his capital!

Looks like above case would make him quite a handsome profit isn't it?
Profit >100% from his investment, loss about 30% from property, so his total investment is a GAIN of >70%! Wow!!! Pon pee pee!

You can compare to hypothetical case if he paid the S$ property in full by converting from GBP to S$ initially (at GBP1:S$3.1)............

Obviously what he did compared to hypothetical case is absolutely correct decision (just that simple-minded people don't see that he can make money this way)!

if 3 doesnt exist, then the rest 4,5,6 also dont exist.

my story is:
this finance guy did take max loan of 90%/95%.
however he get 1 or 2 "margin call" from bank (however improbable that "margin call" is to us - maybe his mortgage is from Citibank ).
The 1st "margin call" he top up, playing for time, thinking that property price will increase rather than see his equity evaporates.

Sometime later, another "margin call". This time, either he didnt have the resources anymore and/or he didnt see the light at the end of tunnel, so sell his stake instead of adding more money into a depreciating property.
So in the end, his equity is mostly wiped out. No forex gains at all.

Anybody else have other stories ?

[hopeful]

......

Obviously what he did compared to hypothetical case is absolutely correct decision (just that simple-minded people don't see that he can make money this way)!

Not only that, he sold MBS on his Sentosa condo. So the MBS bagholders are the ones taking the 30% loss, not him.
I heard this from 2 brothers talking about this matter in a coffeeshop, cursing this fellow because they are the bagholders.

In addition, he use his financial knowledge on leverage and currency exchange to do forex trading. I dont think his gains >70%. At leverage of 100:1, i think his gains are more like 100x.

[hopeful]

to repeat an observation made much earlier:
from the short discussion, forummers here seems to have a mental block about losses in property investment.
losses in property, likely a gain in forex.
sell at loss, likely a de-coupling.

i think because most people have the view that property investment is a 99% guarantee make money.
for them to accept that people do lose money would shake their confidence in their own property investment, and they would second guess themselves.

[teddybear]

No mental block lah, I already said he lost about 30% of his capital on his Sentosa property!
Didn't I said before here that NEVER ever buy Sentosa property?!

Luckily he made back the losses from his forex and stock investments!
I believe many people among us do the same too!

So lesson learnt:
1) Never pay down your properties, always borrow to the MAX!
2) Use the cash on your hand to invest in other assets (diversify) instead of paying down your property loan!
3) Don't be stupid to pay 50% downpayment for your property! If people force you to do so, just just forsake buying property! It becomes NO LONGER WORTH THE INVESTMENT! Let the property price crash first before buying!
4) Don't be stupid to pay 15% ABSD, few RICH is willing to do so! Let the property price crash and ensure ABSD has been removed before buying!
5) Don't have to hold S$, if you think it is losing value!
6) What else?
7) End result-1: Property price in Singapore sure CRASHED! CCR property price already crashed! OCR property price CRASH is COMING!!!!!!!!!!!!!!!!!!!!
8) End result-2: S$ is going to crash too! Soon we will be looking at US$1 to S$1.60 exchange rate?

to repeat an observation made much earlier:
from the short discussion, forummers here seems to have a mental block about losses in property investment.
losses in property, likely a gain in forex.
sell at loss, likely a de-coupling.

i think because most people have the view that property investment is a 99% guarantee make money.
for them to accept that people do lose money would shake their confidence in their own property investment, and they would second guess themselves.

[Sandiwara]

No mental block lah, I already said he lost about 30% of his capital on his Sentosa property!
Didn't I said before here that NEVER ever buy Sentosa property?!

Luckily he made back the losses from his forex and stock investments!
I believe many people among us do the same too!

So lesson learnt:
1) Never pay down your properties, always borrow to the MAX!
2) Use the cash on your hand to invest in other assets (diversify) instead of paying down your property loan!
3) Don't be stupid to pay 50% downpayment for your property! If people force you to do so, just just forsake buying property! It becomes NO LONGER WORTH THE INVESTMENT! Let the property price crash first before buying!
4) Don't be stupid to pay 15% ABSD, few RICH is willing to do so! Let the property price crash and ensure ABSD has been removed before buying!
5) Don't have to hold S$, if you think it is losing value!
6) What else?
7) End result-1: Property price in Singapore sure CRASHED! CCR property price already crashed! OCR property price CRASH is COMING!!!!!!!!!!!!!!!!!!!!
8) End result-2: S$ is going to crash too! Soon we will be looking at US$1 to S$1.60 exchange rate?

9) Don't ever buy Pure Gold in Singapore. The buying price and selling price in the same shop is around 26.x% profit for the shop.

[bargain hunter]

and this is the price that an individual owner needs to sell at for The Vermont on Cairnhill

Sold 2 MAR 2015 12A CAIRNHILL RISE #13-04 1,335sq ft 1,985psf
Bought 18 FEB 2011 2,173psf

[bargain hunter]

Sommerville Park sold back at same psf

Sold 3 MAR 2015 79 FARRER DRIVE #12-01 1,948sq ft 1,386psf
Bought 21 APR 2010 1,386psf

[Sandiwara]

and this is the price that an individual owner needs to sell at for The Vermont on Cairnhill

Sold 2 MAR 2015 12A CAIRNHILL RISE #13-04 1,335sq ft 1,985psf
Bought 18 FEB 2011 2,173psf

Almost the same as if They were renting the place 5k/month for 4 year

[teddybear]

Strongly agreed!

Gold, to me, is never an investment! There are still lots of gold reserves to be digged up!
More as expenditure for accessories only!

9) Don't ever buy Pure Gold in Singapore. The buying price and selling price in the same shop is around 26.x% profit for the shop.

[pmet]

Agreed! Never buy goal for investment. Don't follow the path of China and India into gold hording, they have money to loose you dont. Gold at the end of the day is just an overpriced piece of metal. The recent scams around the world and Bitcoin show how foolish people whom have been tricked into investing Gold are. Expect < USD$1000 for Gold to come. Buy USD with all your SGD if you can, it will appreciate further. Even if it crashes, you can go on a long holiday in the States. If Gold crashes, either you hold on to a piece of toilet paper, or start cooking the metal in soup!

SGD will depreciate further when the EM currencies start to spiral down into a bottomless pit (1997 repeats). Long USD and sell SGD/OCR!

[bargain hunter]

ESPADA

Sold 11 MAR 2015 48 ST. THOMAS WALK #29-02 377sq ft 2,652psf
Bought 26 MAY 2010 2,801psf

MM also kenna

[bargain hunter]

Nassim Jade

Sold 12 MAR 2015 3 NASSIM ROAD #03-07 2,325sq ft 2,086psf
Bought 2 FEB 2011 2,108psf

[Werther]

Nassim Jade

Sold 12 MAR 2015 3 NASSIM ROAD #03-07 2,325sq ft 2,086psf
Bought 2 FEB 2011 2,108psf

Luckily not a big loss - small change $50grand

[bargain hunter]

yah, swee swee after 4th year sell, no ssd.

Luckily not a big loss - small change $50grand

[bargain hunter]

read that straits trading, who bought 14 units of holland collection from lippo in 2011 at 50m+ has sold it for around the same price to Gordon Tang (Haiyi holdings). around 1600psf. seems to be seeing a bit of nibbling here and there.

[bargain hunter]

Botanika

Sold 16 MAR 2015 50 HOLLAND ROAD #04-04 2,196sq ft 2,152psf
Bought 26 NOV 2010 2,300psf

Should be thankful still can sell at 2152psf.

[bargain hunter]

not a loss but something new:

biggest quantum for Clermont Residence so far:

16 MAR 2015 3 WALLICH STREET #51-10 NEW SALE 1,625sq ft STRATA 3,238psf $5,263,580

[bargain hunter]

Reflections

Sold 13 MAR 2015 33 KEPPEL BAY VIEW #20-98 2,530sq ft 1,898psf
Bought 4 MAY 2007 1,938psf

[Werther]

Thanks for the update.

Seems losses are more manageable now...

Heard many interests coming back to St Regis.. Buyers from overseas are back after news broke on the big loss unit in papers.

[bargain hunter]

Sold 18 MAR 2015 40 CAIRNHILL ROAD #11-15 1,302sq ft 2,419psf
Bought 16 APR 2010 2,957psf

the unit which received a highest bid of 2.94m in the Feb auction has been sold for 3.15m in a private treaty sale.

Updates from Jones Lang Laselle Auction

#11-15 The Laurels 1302 sq ft Asked 3.3m Open 2.8m, withdrawn after being bid up to 2.94m as it is below the reserve price. Mortgagee seller bought on 16 APR 2010 $3,851,316. bank unwilling to accept 23.7% discount.

[bargain hunter]

Ardmore II

Sold 27 MAR 2015 2 ARDMORE PARK #13-04 2,024sq ft 2,323psf
Bought 12 JAN 2010 2,549psf

[bargain hunter]

Watermark

Sold 25 MAR 2015 3 RODYK STREET #06-19 1,324sq ft 1,699psf
Bought 11 JAN 2013 1,699psf

either de-coupling or lost stamp duty left right centre.

[bargain hunter]

Waterfall Gardens

Sold 26 MAR 2015 10 FARRER ROAD #07-08 2,196sq ft 1,512psf
Bought 16 MAR 2007 1,565psf

[bargain hunter]

1st casualty at Duo Residences

Sold 18 MAR 2015 1 FRASER STREET #30-17 1,432sq ft 1,676psf
Bought 10 DEC 2013 2,049psf