View Full Version : Property is getting quite hot now
Buyers are out in full force.
By Romesh Navaratnarajah:
May 4, 2012 - PropertyGuru.com.sg
The long Labour Day weekend has paid off for many public and private projects in the country, with property buyers turning up at showflats in full force and snapping up units.
For instance, the 447-unit Pasir Ris One DBSS (Design, Build and Sell Scheme) project was oversubscribed even before submissions of e-applications ended.
Despite the high prices, the 99-year leasehold project has seen strong take-up. The developer SingXpress Land is selling a three-room (700 sq ft) unit from S$390,000 to S$490,000, which works out to around S$557 psf to S$700 psf. For a five-roomer (1,130 sq ft), prices range between S$650,000 and S$770,000, or around S$575 psf to S$681 psf.
According to analysts, the higher prices put it in direct competition with Watercolours, an EC (executive condominium) project located in the same area. In addition, sources said that the 99-year leasehold, 416-unit EC is already oversubscribed even with applications closing on Monday.
A 743 sq ft two-bedroom unit is going at between S$500,000 to S$600,000 while a three-bedder with a built-up area from 915 sq ft is priced in the range of S$600,000 and S$700,000.
Over at Yishun, the 665-unit 1 Canberra EC (pictured) by MCC Land recorded 500 e-applications. Prices for standard three-bedders range between S$680,000 and S$880,000 while a four-bedder unit is estimated to cost around S$860,000 to S$970,000.
Mass market private condos have also driven healthy sales.
Of the 200 units released at the SeaHill by Far East Organization, some 145 were sold at an average price of S$1,311 psf. MCL Land’s Ripple Bay also sold 505 units from the 679 homes released at an average price of S$870 psf.
http://www.propertyguru.com.sg/property-management-news/2012/5/32970/mass-market-units-see-strong-demand-over-labour-da
thats because we have a good credible gov unlike our neighbouring country...
http://www.youtube.com/watch?v=U0uSAqHuYSg&feature=g-vrec
:cool:
Sleepyhead
05-05-12, 10:18
So true.. Despite Singapore's many flaws... The good far outweighs the bad.. For now...
I just wish property prices are at more affordable levels so that people like me can buy somewhere to call home without signing off my salary to the bank for the next 30-40 yrs!
And that is assuming my salary remains at today's level. With the open door policy.. Increasing competition, rising inflation, anything can happen!
Sianzzzz.
So true.. Despite Singapore's many flaws... The good far outweighs the bad.. For now...
I just wish property prices are at more affordable levels so that people like me can buy somewhere to call home without signing off my salary to the bank for the next 30-40 yrs!
And that is assuming my salary remains at today's level. With the open door policy.. Increasing competition, rising inflation, anything can happen!
Sianzzzz.
quite true..
slave to 30-40yr loan.. definitely not advisable...:scared-3:
Sleepyhead
05-05-12, 10:36
Actually... Even in our neighboring country, house prices have risen in line with Singapore. Of course the quantum is smaller... But % wise it's the same or thereabouts..
So people there too have to slave for 30-40 years if they want to own a home...
IMHO, better to slave in Singapore where the political environment is stable.. Rather than over there where things may just explode anytime?
So in conclusion... BUY! BUY! BUY!!!
Hahahhahaha.....
:D
Actually... Even in our neighboring country, house prices have risen in line with Singapore. Of course the quantum is smaller... But % wise it's the same or thereabouts..
So people there too have to slave for 30-40 years if they want to own a home...
IMHO, better to slave in Singapore where the political environment is stable.. Rather than over there where things may just explode anytime?
So in conclusion... BUY! BUY! BUY!!!
Hahahhahaha.....
:D
True. Even in Sarawak, properties prices r rising rapidly.
True. Even in Sarawak, properties prices r rising rapidly.
Ya, it is the hottest among all states
The same happens to other part of Asia
I've spoken to people from Taiwan, Korea, HK, Malaysia, China. If you asked them how long they need to pay back the home mortgage loan. The reply is about 30yrs. That's why you'll hear these two words 房奴 when you discuss property to people from China or Taiwan.
rattydrama
05-05-12, 11:58
isnt it scary, just few years ago, many people I know say want to clear their loan within 15 years... as early as possible, now taking more and longer term is like a in thing.
better keep cash for rainy days.....at least few years :D :D
I know of people who leverage on property investment to become multi-millionaire. Just more difficult & risky now.
The same happens to other part of Asia
I've spoken to people from Taiwan, Korea, HK, Malaysia, China. If you asked them how long they need to pay back the home mortgage loan. The reply is about 30yrs. That's why you'll hear these two words 房奴 when you discuss property to people from China or Taiwan.
I know of people who leverage on property investment to become multi-millionaire. Just more difficult & risky now.
Those were the good old years:doh:
Actually... Even in our neighboring country, house prices have risen in line with Singapore. Of course the quantum is smaller... But % wise it's the same or thereabouts..
So people there too have to slave for 30-40 years if they want to own a home...
IMHO, better to slave in Singapore where the political environment is stable.. Rather than over there where things may just explode anytime?
So in conclusion... BUY! BUY! BUY!!!
Hahahhahaha.....
:D
It may rise the same % but the Malaysians as it is, have it better as their purchasing power parity is in a better position than most Singaporeans.
Sleepyhead
05-05-12, 14:10
Huh! How do you conclude that Malaysians have higher purchasing power?
A fresh grad earns SGD2500 and MYR2500 respectively.
A plate of chickenpox rice is SGD 3.00 and MYR 4.50 respectively.
Who has the higher purchasing power?
ikan bilis
05-05-12, 14:16
Huh! How do you conclude that Malaysians have higher purchasing power?
A fresh grad earns SGD2500 and MYR2500 respectively.
A plate of chickenpox rice is SGD 3.00 and MYR 4.50 respectively.
Who has the higher purchasing power?
their condo may be in range of MYR200K-500K only, car also much cheaper... :scared-3: :beats-me-man:
their condo may be in range of MYR200K-500K only, car also much cheaper... :scared-3: :beats-me-man:
Agreed. Depends on where you want to live in malaysia, even a small terrace can be had for rm$200k. And mind you.. these people who live in there are working as blue collar workers.
Housing is the largest expense for almost all and if you can minimize on that expense, your quality of living will definitely increase even if one is receiving sgd 2500 and the other rm 2500.
In any case, I still find our 3 & 4 rms affordable for two degree holders who are working. Most can pay it off in 10yrs.
I know of people who leverage on property investment to become multi-millionaire. Just more difficult & risky now.
To get rich with property, you have to have more than 1 property. Where you stay doesn't count.:)
To avoid being enslaved to the bank for 30years, you need >2 investment properties. When and if the price doubles eventually.... sell one off and repay the bank fully with money to spare. (or keep both since its so lowly geared):p
Aiyah... now not so easy with 40% LTV....:simmering:
the good old days without CMs.... deferred payment with 20% down. Can hoot properties 5 times the downpayment.....:(
You are absolutely right. Properties bought till Lehman brothers are meant to be kept for good passive income. Rather difficult after it.
To get rich with property, you have to have more than 1 property. Where you stay doesn't count.:)
To avoid being enslaved to the bank for 30years, you need >2 investment properties. When and if the price doubles eventually.... sell one off and repay the bank fully with money to spare. (or keep both since its so lowly geared):p
Aiyah... now not so easy with 40% LTV....:simmering:
the good old days without CMs.... deferred payment with 20% down. Can hoot properties 5 times the downpayment.....:(
You are absolutely right. Properties bought till Lehman brothers are meant to be kept for good passive income. Rather difficult after it.
We don't have much good option but to keep them. Even if we sell, we can't buy another one to replace it withoug incurring ABSD. And we can't get the same level of leverage. Rather resigned to having to hang on to them. Bought the last one just days before the last CM. Won't be buying any more until such time they revise the ABSD.
Rental yield of bought then are fetching rental yield of at least 5%. Not those bought in the last 2 years.
We don't have much good option but to keep them. Even if we sell, we can't buy another one to replace it withoug incurring ABSD. And we can't get the same level of leverage. Rather resigned to having to hang on to them. Bought the last one just days before the last CM. Won't be buying any more until such time they revise the ABSD.
Huh! How do you conclude that Malaysians have higher purchasing power?
A fresh grad earns SGD2500 and MYR2500 respectively.
A plate of chickenpox rice is SGD 3.00 and MYR 4.50 respectively.
Who has the higher purchasing power?
Sorry I cant stop laughging on a humid saturday afternoon.... What is chickenpox rice..??
Sorry I cant stop laughging on a humid saturday afternoon.... What is chickenpox rice..??
Is it those which you can find in Malacca? Chicken rice in a ball shape.. so is called chickenpox rice... :D
Is it those which you can find in Malacca? Chicken rice in a ball shape.. so is called chickenpox rice... :D
You just gave me a second fit of laughter... Tanks everybirdy tanks
Sleepyhead
05-05-12, 15:39
ROTFL!! :)
Stoopid auto correct! And I sure didn't notice it till now!
Wakakakakaka! I also cannot stop laughing now!
It may rise the same % but the Malaysians as it is, have it better as their purchasing power parity is in a better position than most Singaporeans.
Lets say a white collar in M'sia who is earning RM15000 per month.. come to S'pore searching for a MM unit cost $600k for an investment.. you think he still has the purchasing power over here?
On the other hand, a white collar in S'pore who is earning S$12000 per month wish to by a landed in JB worth RM600k.. do you think he can afford one?
Sleepyhead
05-05-12, 16:10
Repeat post
Rental yield of bought then are fetching rental yield of at least 5%. Not those bought in the last 2 years.
I don't think you should calculate rental yield based on WHEN you bought it.
It should always be pegged against current price/value of the property.
If price goes up and up, your rental yield will drop signalling to you that you should sell the property NOW when the price is high.
Imagine if your property price went up by 100% but rental income only increased by 10%, it is not wise to keep the property. And you will not be able to see it if you pegged your yield to your initial purchase price.
That is important if you intend to sell, i.e. buyers will be looking for. A fully-paid up property will receive net rental income as passive income. IMO: Good properties are bought to be kept and not to be sold.
I don't think you should calculate rental yield based on WHEN you bought it.
It should always be pegged against current price/value of the property.
If price goes up and up, your rental yield will drop signalling to you that you should sell the property NOW when the price is high.
Imagine if your property price went up by 100% but rental income only increased by 10%, it is not wise to keep the property. And you will not be able to see it if you pegged your yield to your initial purchase price.
That is important if you intend to sell, i.e. buyers will be looking for. A fully-paid up property will receive net rental income as passive income. IMO: Good properties are bought to be kept and not to be sold.
trying to learn something here :)
what is good property? pardon me...
Allthepies
05-05-12, 18:24
The cost of living is definitely higher in Malaysia for those staying in city. A plate of fried kway teow cost MYR$5 dollar in Penang city. It may seem dammed cheap to a Singaporean due to strong sing dollar, but definitely not cheap to a local. That why so many malaysians come here to work. If not will be the other way around, many singaporeans will go there to work
We don't have much good option but to keep them. Even if we sell, we can't buy another one to replace it withoug incurring ABSD. And we can't get the same level of leverage. Rather resigned to having to hang on to them. Bought the last one just days before the last CM. Won't be buying any more until such time they revise the ABSD.
They can keep the absd. Just revise the LTV back to 80%. I will be happy.
That is important if you intend to sell, i.e. buyers will be looking for. A fully-paid up property will receive net rental income as passive income. IMO: Good properties are bought to be kept and not to be sold.
??? like that why bother talking about yield if you never intend to sell???
Even if the property can sell for 100million while the rental is 1k/month?
After all I thought the question on every property investor mind is whether to sell or continue to rent out.
See my response within ().
??? like that why bother talking about yield if you never intend to sell??? (Owner interested in net passive income while buyer interested in rental yield)
Even if the property can sell for 100million while the rental is 1k/month? (
Be realistic. Will this ever happen?
After all I thought the question on every property investor mind is whether to sell or continue to rent out.
trying to learn something here :)
what is good property? pardon me...
Good property is property you brought at $535,000 in June 2006 and value at $1,500,000 now and rent out for $4100 per month.
See my response within ((Owner interested in net passive income while buyer interested in rental yield)).
This statement is fundamentally WRONG. Both is interested in yield.
Why should not the owner be interested in Yield?
If the property price has went up so much that its yield has fallen, the owner will be interested to sell it and invest in something else that generates more income.
EVERYONE is interested in yield...
Good property is property you brought at $535,000 in June 2006 and value at $1,500,000 now and rent out for $4100 per month.
That is not just good. That's excellent! By your definition of good. No one can find a good property now.
Good property is property you brought at $535,000 in June 2006 and value at $1,500,000 now and rent out for $4100 per month.
at 1.5mil $4k/month that is around 3.2% yield.
minus off property tax, maintenance, agent fee you get 2.8%?
Is it better off to sell of the property and get 1.5million and invest in other things?
Is it hard to make 2.8% returns through other stuff like bonds/stocks?
Is it hard to make 2.8% returns through other stuff like bonds/stocks?
With leverage the yield is much higher. With other assets, ordinary folks can't get an leverage so easily and so high gearing.
With leverage the yield is much higher. With other assets, ordinary folks can't get an leverage so easily and so high gearing.
Many ordinary folks who have make $ through property investment don't know so much theory. They just know if got good location, near MRT even better, new launch, just be early bird, get choice unit, if can get loan, jus wacked & buy...:D
Just different in the definition of yield. You do it your way and I do it my way.
This statement is fundamentally WRONG. Both is interested in yield.
Why should not the owner be interested in Yield?
If the property price has went up so much that its yield has fallen, the owner will be interested to sell it and invest in something else that generates more income.
EVERYONE is interested in yield...
Is it hard to make 2.8% returns through other stuff like bonds/stocks?
Yes. If you have stock broker friends, they'll tell you the truth :D
With leverage the yield is much higher. With other assets, ordinary folks can't get an leverage so easily and so high gearing.
And the loss can be much higher as well. Many "not-so-ordinary" folks declared bankrupt after they made the wrong bets.
Many ordinary folks who have make $ through property investment don't know so much theory. They just know if got good location, near MRT even better, new launch, just be early bird, get choice unit, if can get loan, jus wacked & buy...:D
Property investment is easier to understand: location, location, location
at 1.5mil $4k/month that is around 3.2% yield.
minus off property tax, maintenance, agent fee you get 2.8%?
Is it better off to sell of the property and get 1.5million and invest in other things?
Is it hard to make 2.8% returns through other stuff like bonds/stocks?
2.8% returns isn't hard. just go buy some good corporate bonds - coupon yield about 5-6% per annum.
By Romesh Navaratnarajah:A two-storey bungalow located at Ocean Drive in Sentosa Cove (pictured) has been put up for sale at a whopping price of S$108 million, which works out to around S$9,000 psf.
Multiple listings of the 103-year leasehold property were listed on PropertyGuru in the past month, with a total of three agents marketing the property – an indication that the seller hopes to close the deal soon.
Apart from the price being negotiable, the advertisements stated that the property is sited on a land area of almost 20,000 sq ft – the largest on
Sentosa Cove. In addition to having six bedrooms, sea views and its own swimming pool, it is within close proximity to Harbourfront MRT station, the central business district (CBD) and VivoCity mall.
Commenting on the high asking price, Robert Jones, one of the agents' marketing the property on behalf of the seller, said: "The site is huge, being located on two plots and has sea views."
According to Jones, the bungalow which is owned by a Singaporean, has not seen much interest and has been marketed for about a month.
"The lack of interest isn't surprising," said Tejaswi Chunduri, Regional Analyst at PropertyGuru.
"Such a high asking price is unusual and despite the various facilities and perks like the sea view, pool and prestigious location, sale prices for other projects in the area have paled in comparison to what's being asked," she added.
The previous record for a sea-fronting bungalow on Sentosa Cove was for a home at Cove Drive back in February this year, which was sold for S$39 million. This works out to about S$2,448 psf for a land area of 15,929 sq ft. The 99-year leasehold property has five bedrooms, a spacious living area and an entertainment room.
The sale price for the Ocean Drive bungalow is expected to beat the S$39 million mark.
9000psf!!!!!!?????????????
CMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCMCM
2.8% returns isn't hard. just go buy some good corporate bonds - coupon yield about 5-6% per annum.
"Good" is subjective. The bond price fluctuates daily and the bonds may get "written down".
"Good" is subjective. The bond price fluctuates daily and the bonds may get "written down".
by the time dbs' bonds get written down, it's kaputzz for singapore's economy. good isn't subjective by the way, just get bonds with good ratings
DBS' bonds lousy yield lei. Good ratings may still go bankrupt and disappear, the property will never disappear. :D
You see how many of the US banks disappeared and shareholders and bond holders got nothing back? US still around, same can happen to Singapore. The banks may be bailed out, but all shareholders and debt holders are wiped out first. :scared-3:
by the time dbs' bonds get written down, it's kaputzz for singapore's economy. good isn't subjective by the way, just get bonds with good ratings
DBS' bonds lousy yield lei. Good ratings may still go bankrupt and disappear, the property will never disappear. :D
You see how many of the US banks disappeared and shareholders and bond holders got nothing back? US still around, same can happen to Singapore. The banks may be bailed out, but all shareholders and debt holders are wiped out first. :scared-3:
that's true, but i doubt many or any of these banks are backed up by a quasi-govt sovereign fund like DBS. the day when DBS defaults on its bond obligations, Singapore would be kaputzz and property values should kaboomzz likewise.
in addition, no matter how lousy the coupon rate is, it is still better than 2.8%.
phantom_opera
07-05-12, 15:49
The more open / transparent the market is, the higher the rate of the bond the more risky it is ... no free lunch .... would DBS @ 7% any less risky than OLAM @ 7% ??
The more open / transparent the market is, the higher the rate of the bond the more risky it is ... no free lunch .... would DBS @ 7% any less risky than OLAM @ 7% ??
since these are hypothetical discussions, it is only logical to assume that one would choose whichever has a better rating, since both offers the same coupon rate
must also take into account that Singaporeans do not park their savings/monies with a commodities trader.
DBS' bonds lousy yield lei. Good ratings may still go bankrupt and disappear, the property will never disappear. :D
You see how many of the US banks disappeared and shareholders and bond holders got nothing back? US still around, same can happen to Singapore. The banks may be bailed out, but all shareholders and debt holders are wiped out first. :scared-3:
According to basic but property fool.
According to teddy buy anything other than property is fool.
Both same same. Portfolio should be diversified with all asset class.
Property had a bull run doesn't mean other asset class all bad
:doh:
According to basic but property fool.
According to teddy buy anything other than property is fool.
Both same same. Portfolio should be diversified with all asset class.
Property had a bull run doesn't mean other asset class all bad
:doh:
Whenever I see the word "diversify" in a financial advice article, I stop reading it! Better to specialise at something than to be a jack of all trades but master of none. Advisers will tell us to diversify so that we will need their services. They are banking on people being too lazy to do their own research.
I don't trust advisers. Whether I make or lose money, they still earn!
Whenever I see the word "diversify" in a financial advice article, I stop reading it! Better to specialise at something than to be a jack of all trades but master of none. Advisers will tell us to diversify so that we will need their services. They are banking on people being too lazy to do their own research.
I don't trust advisers. Whether I make or lose money, they still earn!
Diversify means buy one in CCR, one in OCR, etc.
One 1BR, one 2BR, 1 3BR. haha!
Financial advisers are advising you to give them their commissions.
If you read BEHIND THE LINE (not betwee), you will realise that whatever they advise, it means income to them.
They never tell you to buy property unless they are selling it for someone.
They never tell you money hold tight tight and put in FD.
This type call Financial Advisers?
DKSG
Last time Financial Advisors even better, they are advisor only representing all products from 1 single company! :doh:
Diversify means buy one in CCR, one in OCR, etc.
One 1BR, one 2BR, 1 3BR. haha!
Financial advisers are advising you to give them their commissions.
If you read BEHIND THE LINE (not betwee), you will realise that whatever they advise, it means income to them.
They never tell you to buy property unless they are selling it for someone.
They never tell you money hold tight tight and put in FD.
This type call Financial Advisers?
DKSG
When a person "diversify" in knowledge ("jack of all trades"), will he earns more or less?
Same for investments! :p
The worst are those fund managers (REITs considered in this category), you lose money your problem, they continue to collect management fees from you year-in year-out! :banghead:
Whenever I see the word "diversify" in a financial advice article, I stop reading it! Better to specialise at something than to be a jack of all trades but master of none. Advisers will tell us to diversify so that we will need their services. They are banking on people being too lazy to do their own research.
I don't trust advisers. Whether I make or lose money, they still earn!
I always consider the motivation behind their advice. They can't be advising from the goodness of their heart! :o
Some companies collect the fee quarterly... :2cents::2cents:
I always consider the motivation behind their advice. They can't be advising from the goodness of their heart! :o
Dont advise from goodness of heart or lungs or liver nevermind, BUT they are advising based on their commissions !
The one that I talk to recently told me to buy an insurance policy to protect my wealth !
Upon further checks, I realised the amount of commission they get for selling me that policy! I decide to buy a property instead! hahahaha!
DKSG
Dont advise from goodness of heart or lungs or liver nevermind, BUT they are advising based on their commissions !
The one that I talk to recently told me to buy an insurance policy to protect my wealth !
Upon further checks, I realised the amount of commission they get for selling me that policy! I decide to buy a property instead! hahahaha!
DKSG
Ya, I said can'T be from goodness :D
Rich people don't need life insurance :cool:
When a person "diversify" in knowledge ("jack of all trades"), will he earns more or less?
Same for investments! :p
Agree that it's similar.
Typically, a person with more years of experience in a specific field gets paid more than a person with same number of years of experience but spread across different fields. However, the former runs the risk of being unemployed. It's his duty to himself to be aware and to stay relevant. Can't be that hard if he knows what he is doing!
Many ordinary folks who have make $ through property investment don't know so much theory. They just know if got good location, near MRT even better, new launch, just be early bird, get choice unit, if can get loan, jus wacked & buy...:D
totally agree:)
Ya, I said can'T be from goodness :D
Rich people don't need life insurance :cool:
Agree that it's similar.
Typically, a person with more years of experience in a specific field gets paid more than a person with same number of years of experience but spread across different fields. However, the former runs the risk of being unemployed. It's his duty to himself to be aware and to stay relevant. Can't be that hard if he knows what he is doing!
rich people who only use cash and no leverage may not need life insurance but those rich folks who leverage to the hilt, they are honestly better of with some life policy to protect their mortgage liabilities. the people left behind may not have the same earning power.
totally agree:)
last time 80% ltv can hoot until go nuts. now 60%... not so easy.
Some folks lagi better, 20 years ago, don't need to care anything, don't even need to know English to read the S&P, just buy any properties anywhere and they still making lots of money now! :p
Many ordinary folks who have make $ through property investment don't know so much theory. They just know if got good location, near MRT even better, new launch, just be early bird, get choice unit, if can get loan, jus wacked & buy...:D
Some folks lagi better, 20 years ago, don't need to care anything, don't even need to know English to read the S&P, just buy any properties anywhere and they still making lots of money now! :p
they just bet by the simple axiom: location, location, location.
"Property is getting quite hot now" should be "fed money is Shrinking"
#1 — Y2K. Between October 6, 1999 and January 12, 2000, the Fed pumped in $73 billion in three months (based on the Fed’s measure of the U.S. monetary base).
#2 — 9-11. In the days immediately following the attacks through September 19, 2001, Greenspan rushed to pump $40 billion into the U.S. economy — one of the largest amounts ever recorded for such a short period.
#3 — QE1. In response to the debt crisis of 2008-2009, the Fed embarked on its first round of “quantitative easing” — buying bonds to pump more money into the economy.
As a direct result, the monetary base exploded by $1.3 trillion from September of 2008 to February of 2009.
That was nearly 18 times larger than the Y2K episode and 32 times larger than the 9-11 money pumping.
#4 — QE2. Bernanke’s Fed just announced a second round of quantitative easing (QE2) slated to be smaller than the first — $600 billion.
So based on the idea that it’s smaller, apologists for the Fed want you to believe that all is OK — that it’s nothing more than a “relatively moderate” maneuver.
http://www.moneyandmarkets.com/fed-money-printing-getting-even-wilder-2-41151
http://images.moneyandmarkets.com/1905/chart.gif
Slow-cooking Inflation
By Andy Xie 03.20.2012 14:05
Central bankers wedded to money growth, bubbly stocks and globalization are today's inflationary ingredients
Enjoy reading: http://english.caixin.com/2012-03-20/100370448.html
More to come after new French president ask French to spend to boost economy.
And the loss can be much higher as well. Many "not-so-ordinary" folks declared bankrupt after they made the
I'm merely pointing out a simple mistake made by wind30 computing the yield from pty investment. It's much higher than 2.8%.
As to getting burned from leveraged investment, of course every one can get burned.
My main point is this: pty business is the ONLY way an ordinary middle class can get a cheap high leverage. To get rich, you really need leverage.
For the rich, they dun need pty to get leveraged. Last week UOL did a 3yr bond swap rate plus 200. The rich can borrow 100% at swap rate plus 100 then buy this bond, earn the 100bps totally risk free (ok let's assume Mr Wee is not going to fail). An ordinary person cannot do that. See how the rich get richer ? Doesn't even need to spend a single cent. ROI is infinity ;)
Oh I see, thanks for enlightening. :cheers1:
Pity the middle-income working class, it used to be that they can profit from properties but now govt clamp down so much (with 60% LTV, SSDs, ABSDs etc) that they also can't make easy profit any more and have to bear much more risks. :o
I'm merely pointing out a simple mistake made by wind30 computing the yield from pty investment. It's much higher than 2.8%.
As to getting burned from leveraged investment, of course every one can get burned.
My main point is this: pty business is the ONLY way an ordinary middle class can get a cheap high leverage. To get rich, you really need leverage.
For the rich, they dun need pty to get leveraged. Last week UOL did a 3yr bond swap rate plus 200. The rich can borrow 100% at swap rate plus 100 then buy this bond, earn the 100bps totally risk free (ok let's assume Mr Wee is not going to fail). An ordinary person cannot do that. See how the rich get richer ? Doesn't even need to spend a single cent. ROI is infinity ;)
Oh I see, thanks for enlightening. :cheers1:
Pity the middle-income working class, it used to be that they can profit from properties but now govt clamp down so much (with 60% LTV, SSDs, ABSDs etc) that they also can't make easy profit any more and have to bear much more risks. :o
I'm merely pointing out a simple mistake made by wind30 computing the yield from pty investment. It's much higher than 2.8%.
As to getting burned from leveraged investment, of course every one can get burned.
My main point is this: pty business is the ONLY way an ordinary middle class can get a cheap high leverage. To get rich, you really need leverage.
For the rich, they dun need pty to get leveraged. Last week UOL did a 3yr bond swap rate plus 200. The rich can borrow 100% at swap rate plus 100 then buy this bond, earn the 100bps totally risk free (ok let's assume Mr Wee is not going to fail). An ordinary person cannot do that. See how the rich get richer ? Doesn't even need to spend a single cent. ROI is infinity ;)
phantom_opera
08-05-12, 21:38
I'm merely pointing out a simple mistake made by wind30 computing the yield from pty investment. It's much higher than 2.8%.
As to getting burned from leveraged investment, of course every one can get burned.
My main point is this: pty business is the ONLY way an ordinary middle class can get a cheap high leverage. To get rich, you really need leverage.
For the rich, they dun need pty to get leveraged. Last week UOL did a 3yr bond swap rate plus 200. The rich can borrow 100% at swap rate plus 100 then buy this bond, earn the 100bps totally risk free (ok let's assume Mr Wee is not going to fail). An ordinary person cannot do that. See how the rich get richer ? Doesn't even need to spend a single cent. ROI is infinity ;)
amk, I assume you are talking about this:
SINGAPORE (Dow Jones)--UOL Group Ltd. (U14.SG) Friday said it has priced S$175 million in notes due 2015, and S$75 million in notes due 2017, under its S$1 billion multicurrency medium-term note program.
The three-year notes will bear an interest rate of 2.493%, while the coupon on the 5-year notes is 3.043%.
Can the rich borrow at 1.5% without any collateral from the bank to invest in the 3y note at 2.5%? How? You need a tie up with certain banks when issuing such bond right?
The rich can. The LTV is on a global asset basis.
amk, I assume you are talking about this:
SINGAPORE (Dow Jones)--UOL Group Ltd. (U14.SG) Friday said it has priced S$175 million in notes due 2015, and S$75 million in notes due 2017, under its S$1 billion multicurrency medium-term note program.
The three-year notes will bear an interest rate of 2.493%, while the coupon on the 5-year notes is 3.043%.
Can the rich borrow at 1.5% without any collateral from the bank to invest in the 3y note at 2.5%? How? You need a tie up with certain banks when issuing such bond right?
Can. The bank will lend you cost of fund plus a spread and currently, it is still around 1.2-1.5%. The tenure can be wkly, mthly, yearly and you only PAY the INTEREST, not the principal. Actually, even the interest you can defer paying as you can ask them to roll it over to the new loan.
You only repay the principal when you sell your bond and nett off the difference.
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