Bubble? What Bubble?

[phantom_opera]

Why do u think everything is so expensive and your money seems like not enough always???

It is simply due to M3 growth

2003 (millions)
Jan 190,001.1

2012 (millions)
Mar 462,461.7
_______________
The magic ratio is 2.43, means our total money in circulation has increased by 2.43X since 2003 Jan

If GLS OCR in 2003 reserve price is 200psf, today it has to be 480psf
If GLS RCR in 2003 reserve price is 400psf, today it has to be 972psf
If GLS CCR in 2003 reserve price is 600psf, today it has to be 1440psf

Otherwise, we are not selling our lands at market value, otherwise the Chief Valuer must be fired for not doing its duty

As for the construction cost, it could be even WORSE due to rise of commodities prices, 300psf is bare minimum now. So any OCR project land bid is 500psf, construction cost is 300psf, developers must sell above 1000psf.

So our property market is healthy, no bubble, it simply represents the M3 growth. For property to become cheaper, money supply must become less ... you can pray in the face of money printing machines operating at full speed in the whole world

=========

If your salary is 6k today, it simply has the purchasing power of 3k in 2003 or less

A cup of kopi was 50 cents, now is > $1, Toast Box kopi is $1.60 .. food in hawker centre price not up by 2.4 X but size is halved :-) Only prices of computers or TVs are becoming cheaper due to technology advance. As for cars, COE is damn cheap now at $60k as 60k = 30k in 2003 :p

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[ikan bilis]

aiya... cannot suka suka count like that 1.... from 2003 to now we like have about double in population?... :tsk-tsk:

but i do admit my loan bubble from 300K to >1mil... sigh.. :scared-3: :scared-3: :scared-4:

[roly8]

no bubble la..

just buy la..

:D:D:D

[carbuncle]

Thats y we using ipad to tcss here right? Most economical

[avo7007]

It's like saying that flooding is acceptable and understandable because there is increase in water supply.:D

[carbuncle]

It's like saying that flooding is acceptable and understandable because there is increase in water supply.:D

More like ... In order to make property affordable once again, lower all wage of workers

[phantom_opera]

Ha ha ha I am not trying to be economist ... simple thing like MV = PY I know and our GDP did X 2 from 2003-2012

Now I am just curious, how does the Chief Valuer determine the reserve price and the acceptable bid only

May be the Chief Valuer is using something close to "simply peg to M3" formula, who knows??

[proper-t]

So do you think the property price index is due for a quantum leap?

Many have lamented that we are near the all-time highs for residential property but looking at the historical price index chart, there have been inflection points where property prices have broken through their historical highs and after that have never looked back. Even though there are corrections, the historical prices are never seen again.

I don't know about you guys but it seems like we are near that inflection point whereby we will break through the previous ceiling.

Certain factors seem to point to that occuring :

1. The changed dempgraphics, infastructure and import/export patterns
2. Population figures have increased exponentially since the last high
3. Interest rates are at a historical low
4. Money supply is at an all-time high
5. Govt interventions have not had the desired effect


Does the phrase "wah lau...it was dirt cheap last time" seem familiar. Our "ridiculous & crazy prices" of today will be the 'dirt cheap" of tomorrow...

[maisonjai]

if can issue 10 yr bond for my place, redeem now at half price of what i paid in early 2000 or 1/4 of today's price......haha

[JohnTan]

I tend to like and agree with your rough estimation of M3 and property prices. Naturally there will be outliers that do not conform to this broad thrend, times when property might be undervalued as compared to M3 but generally all ASSETS will increase as M3 increases.

If you have read the death of money, not everything increases at the same pace as inflation, some more some less, but everything did increase many folds to the shock of all.

Just my 2 :2cents: worth.

BTW if you dont know how to calculate your own taxes from IRAS then dun bother trying to understand m3 and its effects.



Why do u think everything is so expensive and your money seems like not enough always???

It is simply due to M3 growth

2003 (millions)
Jan 190,001.1

2012 (millions)
Mar 462,461.7
_______________
The magic ratio is 2.43, means our total money in circulation has increased by 2.43X since 2003 Jan

If GLS OCR in 2003 reserve price is 200psf, today it has to be 480psf
If GLS RCR in 2003 reserve price is 400psf, today it has to be 972psf
If GLS CCR in 2003 reserve price is 600psf, today it has to be 1440psf

Otherwise, we are not selling our lands at market value, otherwise the Chief Valuer must be fired for not doing its duty

As for the construction cost, it could be even WORSE due to rise of commodities prices, 300psf is bare minimum now. So any OCR project land bid is 500psf, construction cost is 300psf, developers must sell above 1000psf.

So our property market is healthy, no bubble, it simply represents the M3 growth. For property to become cheaper, money supply must become less ... you can pray in the face of money printing machines operating at full speed in the whole world

=========

If your salary is 6k today, it simply has the purchasing power of 3k in 2003 or less

A cup of kopi was 50 cents, now is > $1, Toast Box kopi is $1.60 .. food in hawker centre price not up by 2.4 X but size is halved :-) Only prices of computers or TVs are becoming cheaper due to technology advance. As for cars, COE is damn cheap now at $60k as 60k = 30k in 2003 :p

============

[amk]

I remember MAS said circa 2011 that, when there is huge amount of money supply in the market, "asset inflation is inevitable".

[august]

More like ... In order to make property affordable once again, lower all wage of workers

u are not wrong! wages of low income earners have stagnated for over a decade, but hdb prices keep rising.
on the other hand top earners have doubled and tripled their income which explains luxury condo prices. :D

[Mr.Keh]

If your salary is 6k today, it simply has the purchasing power of 3k in 2003 or less

============

Thats true.

[phantom_opera]

ING analyst warned of inflation

This guy very tactful ... ha ha ha

Condon was also unsure on the question of whether the Monetary Authority of Singapore (MAS) should use interest rates as its monetary policy tool rather than the current exchange rate policy.

“I would hesitate to give advice to the MAS as this is a central bank that has really delivered the goods. I think they are really putting their head on the issue,” he said.

[phantom_opera]

M3 up again

2005
Jul 220,700.1

2011 Jul 438,553.0

2012
Apr 458,498.9
May 460,456.2
Jun 460,663.7
Jul P 466,368.3

yoy growth is about 6.4%

relative to 2005 July, up 112% :eek:

[phantom_opera]

Using rule of 72

1993 July to 2005 July 2x ... so 72/12y = 6% pa
2005 July to 2012 July 2x ... so 72/7y = 10.3% pa

:scared-1: :scared-4: :doh: :banghead: