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Thread: S'pore property prices may continue climbing: survey

  1. #151
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    Quote Originally Posted by howgozit
    To me the question is simple so the answer must be simple.

    Does rental yield affect value of property? Mostly Yes

    Does value of property affect rental yield? Mostly Not

    Therefore : Does rental yield affect property value more than property value affects rental yield? Mostly Yes

    As to why CCR is still commands premium despite low rental yields is a different question.

    And why do certain property command a higher rental than others? Is it because tenants are uninformed or too generous? or is it because tenants sees values in the property. such as location, facilities, amenities transport etc?

  2. #152
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    Such is life. Haha



    Quote Originally Posted by HP65
    You ho sim try to share with young punk how to make $$ but instead of being thankful, try to act smart and tell you that all the $$ you make is not real but imaginery

    Let him continue to play with his real world and we can continue to enjoy our imaginery world based on `historical cost' like masterkey suggested.

  3. #153
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    Quote Originally Posted by HP65
    You ho sim try to share with young punk how to make $$ but instead of being thankful, try to act smart and tell you that all the $$ you make is not real but imaginery

    Let him continue to play with his real world and we can continue to enjoy our imaginery world based on `historical cost' like masterkey suggested.

    sharing ideas how to make money? from someone who doesnt even care or understand the value of money?

    Most people in this forum only likes to talk up their own properties and district while at the same time keeping quiet about potential lobang until the get their hands on it.

  4. #154
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    Quote Originally Posted by Jadey
    And why do certain property command a higher rental than others? Is it because tenants are uninformed or too generous? or is it because tenants sees values in the property. such as location, facilities, amenities transport etc?
    Ok.. so now we are moving into a different question.

    The answer is yes, yes, yes and yes. All are factors and if enough tenants feel or think the same way, what we have is called demand. And the availabilty of what landlords can provide is called supply.

  5. #155
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    Quote Originally Posted by Jadey
    sharing ideas how to make money? from someone who doesnt even care or understand the value of money?

    Most people in this forum only likes to talk up their own properties and district while at the same time keeping quiet about potential lobang until the get their hands on it.
    yup deep down inside we are all self centred greedy people... ...sad but TRUE

  6. #156
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    Quote Originally Posted by Regulators
    China is the biggest creditor of US and is it the west that own most of the US govt bonds or asia? US is only good for stabilising the world and act as a big brother, but china can do quite well without US if one day things come to that stage. Just ask yourself most of what you use in your daily lives, how many of those things are made in USA? I agree when it comes to computers, it is very hard to do without microsoft and google/yahoo, but apart from that, asia is quite self sufficient.
    The answer is the US and west, both governmental and private own most of the debt. I hear this argument over & over on so many boards & I never stops amazing me the difference between perception and reality is.

    China is biggest SINGLE creditor - overall foreign ownership is 28% China's slice will not be 100% of that as Japan owns half as much and the UK a big chunk too.

    In fact European banks hold over 2/4 of a trillion US debt.

    http://upload.wikimedia.org/wikipedi...es_by_year.gif

    If you want to stick to simple anecdotes then no-ones going to stop you of course...... but the real picture is far more complicated.

  7. #157
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    Quote Originally Posted by howgozit
    Ok.. so now we are moving into a different question.

    The answer is yes, yes, yes and yes. All are factors and if enough tenants feel or think the same way, what we have is called demand. And the availabilty of what landlords can provide is called supply.

    We are not moving anywhere, we are still debating if rental drives the value of property or vice versa.

    I do think that value in the property drives rental because if tenants or investors doesn't see value in the property, then you would be able to command high rental.

  8. #158
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    Quote Originally Posted by EBD
    The answer is the US and west, both governmental and private own most of the debt. I hear this argument over & over on so many boards & I never stops amazing me the difference between perception and reality is.

    China is biggest SINGLE creditor - overall foreign ownership is 28% China's slice will not be 100% of that as Japan owns half as much and the UK a big chunk too.

    In fact European banks hold over 2/4 of a trillion US debt.

    http://upload.wikimedia.org/wikipedi...es_by_year.gif

    If you want to stick to simple anecdotes then no-ones going to stop you of course...... but the real picture is far more complicated.
    Genuine qns: when US defaults, can they choose which creditor to default on? As in, only China and Japan debts will be defaulted but continue to service those of US and EU?

  9. #159
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    Quote Originally Posted by Jadey
    We are not moving anywhere, we are still debating if rental drives the value of property or vice versa.

    I do think that value in the property drives rental because if tenants or investors doesn't see value in the property, then you would be able to command high rental.
    sometimes it does, sometimes it doesnt. Is not an exact science.

  10. #160
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    Quote Originally Posted by proper-t
    Since the weekend is coming. Just for fun, I have added the long term ppi chart updated to 4Q 09.

    No offense to anyone but for those people who keep saying that they are waiting for the next dip to buy, here is something interesting to note.

    Almost every dip in the curve is higher than the one before. If you had waited since 1986 (index 33), the next small dip would have been in 4Q90 (index 56.4). If you missed that one, the next dip is in 4Q98 (100). If you still did not get a unit then, you could have picked one up in 4Q04 but index at 113.8. You had just missed the last dip in 2Q09 but the index is at 133.3.

    I leave it to all of you to draw your own conclusions about "waiting for next dip to buy".. Like I said, this is just for fun but pretty interesting when you start to analyse trends.


    Thats a useless chart..

    Unless something drastic happends..in a long term every dip will always be higher then before..even if world crashed at 2008..it couldnt have gone to 1930.. right? 1000$ will never buy you car again..right?
    So comparing 1980 to 2011 is comparing apple to orange..

    When you buy a house then you put your money into it..there is a lost of opportunity cost...

    Ofcourse singapore has grown tremendously during past decades.. so prices have rises like that too...

  11. #161
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    Quote Originally Posted by Jadey
    We are not moving anywhere, we are still debating if rental drives the value of property or vice versa.

    I do think that value in the property drives rental because if tenants or investors doesn't see value in the property, then you would be able to command high rental.
    don't quite understand your statement.

  12. #162
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    Quote Originally Posted by Jadey
    We are not moving anywhere, we are still debating if rental drives the value of property or vice versa.

    I do think that value in the property drives rental because if tenants or investors doesn't see value in the property, then you would be able to command high rental.
    Tenants and investors sometimes consider different things. For example whether it is FH or 99LH is transparent to the tenant.

    For example 2 condos side by side, same developer/architect/design/layout/facing ...etc but one is FH the other 99LH. Naturally the value of the FH is higher, but how can the landlord convince his tenant that he should pay more than the neighbouring condo?

  13. #163
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    Quote Originally Posted by howgozit
    Tenants and investors sometimes consider different things. For example whether it is FH or 99LH is transparent to the tenant.

    For example 2 condos side by side, same developer/architect/design/layout/facing ...etc but one is FH the other 99LH. Naturally the value of the FH is higher, but how can the landlord convince his tenant that he should pay more than the neighbouring condo?
    Not possible. Tenants won't care whether it's FH or LH.

  14. #164
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    Quote Originally Posted by kane
    Not possible. Tenants won't care whether it's FH or LH.
    Precisely, so the value of the property doesn't drive its rental.

  15. #165
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    Quote Originally Posted by howgozit
    Precisely, so the value of the property doesn't drive its rental.
    another example, compare apts of similar size in town and further from town. The quantum difference is probably double. But you would never get twice the rental for somewhere near town.

  16. #166
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    Quote Originally Posted by Jadey
    Thanks for offering to share..can I get your expert opinion on this.

    Does rental drives value of property or value of property drives rental?
    Supply and demand are the main drivers for both

  17. #167
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    Quote Originally Posted by howgozit
    Tenants and investors sometimes consider different things. For example whether it is FH or 99LH is transparent to the tenant.

    For example 2 condos side by side, same developer/architect/design/layout/facing ...etc but one is FH the other 99LH. Naturally the value of the FH is higher, but how can the landlord convince his tenant that he should pay more than the neighbouring condo?
    your thinking is illogical and your english is worse.

    "transparent to the tenant"? You meant to say "irrelevant to the tenant."

    Second, as many others have said, tenants of course don't care whether the unit is FH or LH. he is going to be there only for two years. But the landlord certainly cares. If he holds the unit as a FH unit, his stream of rental income would be longer, which makes the unit more valuable.

    get it? sheesh!!!

  18. #168
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    Quote Originally Posted by SpinCity
    Supply and demand are the main drivers for both

    Totally agree.

  19. #169
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    Quote Originally Posted by stalingrad
    your thinking is illogical and your english is worse.

    "transparent to the tenant"? You meant to say "irrelevant to the tenant."

    Second, as many others have said, tenants of course don't care whether the unit is FH or LH. he is going to be there only for two years. But the landlord certainly cares. If he holds the unit as a FH unit, his stream of rental income would be longer, which makes the unit more valuable.

    get it? sheesh!!!
    Whoah.... English and Economics lesson at one go.

    Thank you for correcting my poor English.

    Anyway the question posed by Jadey (as I understand it) was whether the value of the property drives up the rental yield. To which my reply was "no", using FH and LH as an example. What is illogical about it? Please enlighten.

  20. #170
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    So the question of rental drive property price or property price drive rental is not a valid one to begin with. They are correlated, but are driven by different forces.

    In business school, you sometimes can see professors put in so much effort in teaching how to price a option, how to calculate cost of equity, ..... but they never work in the industry one day before. Those concepts are valuable, but in reality you just need to pick up your telephone to call the ECM desk to get the cost of equity of certain company, and the number from ECM most likely will be different from you calculated. In school, they may teach you one thing, but in the real world, people just do it differently

    Back to the rental yield. Does it make sense to use current rent and current market value of the property to calculate? to me, it does have its merit but unfortunately the market value is unknown until an option to purchase is exercised. It is still a good indicator on how hard your property is working for you but at the end of the day it is just a theoretical number.

    From theory, a person can easily mistakenly think that in Singapore property tax is based on the property value if he/she does not own a property in here, or never rent out a property here before. In other countries, some do use the current property value, some may have other basis. Just like a finance professor who may be very good at academic theories but never works one day in industry, he/she may be able to talk a lot but the world actually operates different. Only when you've receive a property tax bill from Singapore IRAS, then you will start to understand how property tax works. Of course, some rich landlords may never look at the bill and just pay for it.

    To all of the professors, please don't feel offended, you are great!

  21. #171
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    I am not rich, I examine the prop tax bill from IRAS, I still don't know how it works.



    I can only guess they use a theory called Hao Hsiao 101.

  22. #172
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    Quote Originally Posted by masterkey
    I am not rich, I examine the prop tax bill from IRAS, I still don't know how it works.

    Pick up your phone and call IRAS lor. They will give you the formula

  23. #173
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    Quote Originally Posted by SpinCity
    Pick up your phone and call IRAS lor. They will give you the formula
    no leh, they happily give formula of X% x AV. But never say how to arrive at AV leh.

    What number you called?


  24. #174
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    Quote Originally Posted by howgozit
    Whoah.... English and Economics lesson at one go.

    Thank you for correcting my poor English.

    Anyway the question posed by Jadey (as I understand it) was whether the value of the property drives up the rental yield. To which my reply was "no", using FH and LH as an example. What is illogical about it? Please enlighten.

    My question was "Does rental drives value of property or value of property drives rental" not rental yield.

    Does anyone have an example of 2 side by size projects, one LH one FH and both are about the same size and age. Would be nice to make a comparison,

  25. #175
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    Quote Originally Posted by Jadey
    My question was "Does rental drives value of property or value of property drives rental" not rental yield.

    Does anyone have an example of 2 side by size projects, one LH one FH and both are about the same size and age. Would be nice to make a comparison,
    Hope you don't mind I putting it out again

    rental and property value are correlated, but they don't drive each other directly
    Supply and demand are the main force driving them

  26. #176
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    AV is the value as if the unit is rented out for 1 year. But IRAS also clever. They take lower percentile of the rental so you cannot argue much. Imagine one project average rental is 3k a month (36k a year), they tell you 28k AV. Then you lan lan pay happily.




    Quote Originally Posted by masterkey
    no leh, they happily give formula of X% x AV. But never say how to arrive at AV leh.

    What number you called?


  27. #177
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    One question,

    How will IRAS determine the AV of a private property if there is no past records of rental transaction in that development? ie. all are owner occupied?

  28. #178
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    Quote Originally Posted by rockinsg
    Thats a useless chart..

    Unless something drastic happends..in a long term every dip will always be higher then before..even if world crashed at 2008..it couldnt have gone to 1930.. right? 1000$ will never buy you car again..right?
    So comparing 1980 to 2011 is comparing apple to orange..

    When you buy a house then you put your money into it..there is a lost of opportunity cost...

    Ofcourse singapore has grown tremendously during past decades.. so prices have rises like that too...
    Don't tell me you are one of those waiting for the 'dip'.

    You may pooh pooh the chart but there are a few good lessons to be learnt.

    1. There is no point in saying ' I wait until prices go back down to 19XX's (the low years) prices.

    2. If you analyse each dip and and look at the average decrease in each dip, then this could be a great proxy to buy. Why? because, if you wait for a benchmark past year's price to be reached or the absolute 'low' of the dip (which no one can predict), you will miss the boat and then lament whilst the curve continues on its upward trend.

    3. If you compare this chart with our inflation rate over the years. It will also show what a great inflation hedge property is over the long term.

    4. Your remark about opportunity cost is somewhat misguided. Opprtunity cost has to be looked at in terms of investment horizon. Sure, some alternative investments may reap you better gains over short-term horizons but in terms of a long term investment horizon, property can't be beat. This chart is testament to that statement. Of course, it all boils down to timing your entry point (see item 2)and your holding power.

  29. #179
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    Quote Originally Posted by masterkey
    no leh, they happily give formula of X% x AV. But never say how to arrive at AV leh.

    What number you called?

    For commercial properties it is easier to find out the AV
    office and shopping mall, it shall be the rental income
    Hotel, it shall be the income from room, plus the rental income from commercial space. The 2nd part is more complicated to explain here but if you google IRAS about property tax, you shall be able to find the details.

    For residential, the AV should be determined based on the rental in the area. IRAS may do a survey or collect data from the leases which the stamp duty is paid for. If you are really interested in the details, call them or google, please

  30. #180
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    IRAS is clever. Apart from nearby condos, they wait for 3-6 months before sending you property tax. So those project just TOP, you won't know how much your property tax will be until like 6 months down the road. I guess they also lazy to entertain refunds so they make sure you have nothing to argue with them. That is a pretty good system.




    Quote Originally Posted by SpinCity
    For commercial properties it is easier to find out the AV
    office and shopping mall, it shall be the rental income
    Hotel, it shall be the income from room, plus the rental income from commercial space. The 2nd part is more complicated to explain here but if you google IRAS about property tax, you shall be able to find the details.

    For residential, the AV should be determined based on the rental in the area. IRAS may do a survey or collect data from the leases which the stamp duty is paid for. If you are really interested in the details, call them or google, please

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