Results 1 to 22 of 22

Thread: Property price will stay in a tight range in next 5y

  1. #1
    Join Date
    Feb 2011
    Posts
    8,926

    Default Property price will stay in a tight range in next 5y

    This thread is to balance extreme views from Mr Basic and Mr BJ

    One camp of people think US stock market will stay in a tight range for next 5y with near zero growth, getting annual return of 5% will be a challenge too.

    If that is the case, with all the CM1-CM5, SG property market will also stay in a tight range for next 5y with not much capital appreciation to talk about, range trading the stock market e.g. between 2,400 to 3,000 may be the best strategy going forward?

    And what would be that tight range? Land bid seems to point to OCR land @ 350-400psf thus translating to selling price around 850-900psf ... RCR will probably command 1000-1300psf, CCR from 1300psf onwards

    What is your opinion? Please share ...
    Ride at your own risk !!!

  2. #2
    Join Date
    Feb 2011
    Posts
    8,926

    Default

    Jim Rogers:

    Stocks Like In The 1970`s: Big Sideways Trading Range For Many Years
    Stocks, in my view, in most countries are like they were in the 1970s. In the 1970s stock markets, and economies around the world did not do very much and were in a big sideways trading range for many years. We are in that kind of period now.
    Ride at your own risk !!!

  3. #3
    Join Date
    Feb 2011
    Posts
    8,926

    Default

    Return of 4-5% will be the norm going forward according to Pimco's boss


    "I think most asset classes are attractive but will only provide 4 percent to 5 percent returns going forward," Bill Gross said.

    Pimco's economic growth forecast is based on the investment firm's "new normal" outlook for the economy.

    Investors can get higher returns — closer to 7 percent or 8 percent — by investing in high-yield or "junk" bonds, but only if they are willing to take on extra risk, Gross said.

    "You can’t produce more (return) than the economy itself is producing," he said. "We tried that for the last 20 to 30 years."

    Instead of counting on higher returns, people will simply have to continue to work, Gross said.

    "Pensioners and even those employed in their late 50s and late 60s, will extend that employment so they can continue to survive," he said.

    The economic picture won't change without an industrial policy directed at increasing clean energy, infrastructure spending and manufacturing, areas that can produce jobs, Gross said.

    "We have to be competitive relative to global leaders such as China, and that means reinitiating our manufacturing thrust, not just in clean energy and infrastructure, in goods we export to world, in terms of being an exporter rather than a consumer," Gross said. "That really is the future of the United States and more policy should be directed at that."
    Ride at your own risk !!!

  4. #4
    Join Date
    Apr 2010
    Posts
    15,307

    Default

    Quote Originally Posted by phantom_opera
    This thread is to balance extreme views from Mr Basic and Mr BJ

    One camp of people think US stock market will stay in a tight range for next 5y with near zero growth, getting annual return of 5% will be a challenge too.

    If that is the case, with all the CM1-CM5, SG property market will also stay in a tight range for next 5y with not much capital appreciation to talk about, range trading the stock market e.g. between 2,400 to 3,000 may be the best strategy going forward?

    And what would be that tight range? Land bid seems to point to OCR land @ 350-400psf thus translating to selling price around 850-900psf ... RCR will probably command 1000-1300psf, CCR from 1300psf onwards

    What is your opinion? Please share ...
    This is my biggest fear.....market see saw coupled wif high inflation.....

    Keep cash also die pain pain.....

    Prolly keep some ppty and cash lor.....if eu nvr crash, rental shd hold for sg ?

    Hold on to existing ppty and stay as a landlord aso not too bad?

    But pls dun buy anymore ppty

  5. #5
    Join Date
    Dec 2009
    Posts
    6,003

    Default

    Quote Originally Posted by devilplate
    This is my biggest fear.....market see saw coupled wif high inflation.....

    Keep cash also die pain pain.....

    Prolly keep some ppty and cash lor.....if eu nvr crash, rental shd hold for sg ?

    Hold on to existing ppty and stay as a landlord aso not too bad?

    But pls dun buy anymore ppty
    Too many rental units coming up from next year onwards. Large rental units of condos will be in trouble. The yield advertised by the developers or agents will not materialise as there could be months of empty unit: "in-between tenants"?

  6. #6
    Join Date
    Nov 2008
    Posts
    8,013

    Default

    Quote Originally Posted by hyenergix
    Too many rental units coming up from next year onwards. Large rental units of condos will be in trouble. The yield advertised by the developers or agents will not materialise as there could be months of empty unit: "in-between tenants"?
    Well the number of foreigners renting instead of buying will also increase... that will serve as a buffer... as govt continues to welcome foreigners into our shores....

  7. #7
    Join Date
    Feb 2011
    Posts
    8,926

    Default

    DP raised a good point, if Dow continues this range of 10k-12.2k, inflation will stay around 4-5%, property rental yield could drop to 3-3.5% due to more supply coming into market in 2012 with mortgage rate around 1.5% ... effective yield could be super low at 1-1.5% without capital appreciation for next few years

    You still need your roof ... but property investment may lose out to range trading in stock market or commodities like gold or trading bonds (look at how US 10y bond yield drops back to 1.85% from 2.05% in a few days)

    Pimco is betting on US's mortgage-backed securities

    Warren Buffet is betting on selective stocks like IBM .. he seems to think Dow will not crash below 10k

    China/HK property, after this round of manipulated correction, will probably stay flat for years to come too .. MY property is playing catching up

    How to get 5% annual return ... CPF if continue to give 4% return is actually not bad
    Ride at your own risk !!!

  8. #8
    Join Date
    Apr 2010
    Posts
    15,307

    Default

    Quote Originally Posted by phantom_opera
    DP raised a good point, if Dow continues this range of 10k-12.2k, inflation will stay around 4-5%, property rental yield could drop to 3-3.5% due to more supply coming into market in 2012 with mortgage rate around 1.5% ... effective yield could be super low at 1-1.5% without capital appreciation for next few years
    effective yield is higher as long int rate stays below nett yield

    Quote Originally Posted by phantom_opera
    You still need your roof ... but property investment may lose out to range trading in stock market or commodities like gold or trading bonds (look at how US 10y bond yield drops back to 1.85% from 2.05% in a few days)
    it takes an expert to make money within tight trading range......

    common folks becomes the losers......lol

  9. #9
    Join Date
    Nov 2008
    Posts
    9,217

    Default

    Have not experienced empty units even in 1997, 2003 and 2008. Location is the most crucial factor for rental.
    Quote Originally Posted by hyenergix
    Too many rental units coming up from next year onwards. Large rental units of condos will be in trouble. The yield advertised by the developers or agents will not materialise as there could be months of empty unit: "in-between tenants"?

  10. #10
    Join Date
    Aug 2009
    Posts
    2,988

    Default

    Phantom to get 5% still can what. Last week CAPL bond traded around 5%. this week may still be higher, dun say I never give hint ok

    If Europe does not tank, yea SG pty will be range bound. Low interest rate and low LTV thanks to CM4 ensures there are less desperate sellers. As a matter of fact, it should even go up. But PAP's new stance had vetoed that growth. As LHL hinted, going forward will be 2% GDP at best, and pty market will be dead water.

    If Europe tanks... (although I think there is no way it will), major recession will be coming and pty mkt will see a down trend until the next recovery.

    And to DC, obviously ONLY when in down time ppl start to realize location location location. Some of the 2011 launches are in such poor locations , ppl only look at how "cheap" they are. Things are " cheap" for a reason

  11. #11
    Join Date
    Feb 2011
    Posts
    8,926

    Default

    Quote Originally Posted by DC33_2008
    Have not experienced empty units even in 1997, 2003 and 2008. Location is the most crucial factor for rental.
    Like amk said, we buy properties mainly because of potential capital appreciation, if going for 3% rental might as well buy high dividend stock like SingTel or even STI ETF ... manage tenants also consume your precious time, time is money
    Ride at your own risk !!!

  12. #12
    ikan bilis's Avatar
    ikan bilis is offline i'm Buaya ! Girls BEWARE !!...
    Join Date
    Apr 2011
    Posts
    1,385

    Default

    too much liquidity around for next few years... and also due to this huge and high speed liquidity, market tends to be volatile of boom and crash ... so every1 need to place his/her own best bet very carefully liow...


    what me think....
    a) residential condos
    - if at very low net yield of 3.5%, mortgage rate of 2.5%....
    - "geared yield" (of say 67% LTV) quick estimated to be 3.5% + 1% + 1% = 5.5%
    - "geared yield" (of say 80% LTV) quick estimated to be 3.5% + 1% + 1% + 1% + 1%= 7.5%
    - think cashflow is the more critical thing to watch out
    - landed and MM might still have rooms for capital gain
    b) Commercial properties
    - Industrial & office properties are like in bubble stage now
    - Think Retail space and Shop house are better bet with stable yield and capital gain
    - should still possible of getting high geared yield of 10+%
    c) Oversea properties
    - ha... not my cup of tea so me never think much about it... unless I really have few S$mil sitting around else not worthwhile for me to spend so much time on oversea real estates. me small fish swims in this small red pond only.
    - for those who had gone m'sia, hope you also huat big...
    d) Reit
    - Some very stable big-cap reits like CapitaMallTrust is giving ~5.6% yield
    - AscottReit (regional service apartments) is giving high ~9.1% yield. SuntecReit also around 9.1% yield
    - Think Reit price depressed now due to economy slowing down and too much rights issuing.
    e) Stock
    - Some of those utility, commodity, oil & gas stocks would provide good yield and price resilient in adverse market conditions
    f) cash, forex, bond, gold
    - ha... me small fish got smaller brain so only go for very simple FD, Real Estate and Stocks,.... No forex, bond or gold….

    everyone must find out the type of investment that suits him most for next few years... for me as 1 small little fish, i will hold tight tight to those real estates already positioned, collecting rentals, and play-play small/tikam-tikam on Reits, that's all...


    => good luck to every1 and me myself also... welcome to this new world flooded with $$... invest also die, don't invest also die...




  13. #13
    Join Date
    Nov 2008
    Posts
    9,217

    Default

    3% rental yield is considered as low. Good tenants need very little or no time to manage.
    Quote Originally Posted by phantom_opera
    Like amk said, we buy properties mainly because of potential capital appreciation, if going for 3% rental might as well buy high dividend stock like SingTel or even STI ETF ... manage tenants also consume your precious time, time is money

  14. #14
    Join Date
    Feb 2011
    Posts
    8,926

    Default

    Quote Originally Posted by DC33_2008
    3% rental yield is considered as low. Good tenants need very little or no time to manage.
    3% net yield ...But there exists a huge gap between stocks and properties ... it is probably more attractive now to take profit in properties and dump into stocks ... arbitrage opportunities just getting more obvious after CM4/CM5

    Of course if property is fully paid up, one can choose to take a stock loan instead

    Again range trading stocks require skills, not everybody's cup of tea
    Ride at your own risk !!!

  15. #15
    Join Date
    Mar 2009
    Posts
    1,327

    Default

    Quote Originally Posted by devilplate
    This is my biggest fear.....market see saw coupled wif high inflation.....

    Keep cash also die pain pain.....

    Prolly keep some ppty and cash lor.....if eu nvr crash, rental shd hold for sg ?

    Hold on to existing ppty and stay as a landlord aso not too bad?

    But pls dun buy anymore ppty

    I cannot agree more of what u mention esp ppty as it is uncertain now in micro and macro environment...

  16. #16
    Join Date
    Feb 2011
    Posts
    8,926

    Default

    CAPL stock broken support at 2.35-2.4 range, signal further down side to come



    City Development is more resilient as it has less exposure to China but one worrying thing is the high volume registered immediately after CM5 .. .it is huge
    Ride at your own risk !!!

  17. #17
    Join Date
    Nov 2009
    Posts
    102

    Default

    I was advised for investment : Singapore dollars & Gold


  18. #18
    Join Date
    Feb 2011
    Posts
    8,926

    Default

    Why WP never demands PAP to give inflation-protected bond iBond like HK government ... pay 6% very solid

    iBond第一期年息率可望有6厘

    HK政府明天公布最新通脹率。經濟師普遍預期,上月份的消費物價指數,升百分之五點八至五點九。而政府早前發行的通脹掛債券(iBond),將計及明天的數字,以訂出頭六個月的派息率。按目前數字推算,第一期年息率最少有六厘,即每手派息三百元,回報率跑贏外匯基金債券,及同樣被視為抗通脹的黃金。


    東方匯理高級策略師張淑嫻說,考慮通脹放緩因素,估計iBond平均每年回報都有四至五厘,認為持有iBond的投資者可以「坐」到到期日收取利息,但其二手市場造價已升逾百分之七,認為未有iBond的投資者不值得追入。

    Hong Kong’s first inflation-linked bond sale may be boosted by faltering stock and property markets as residents of the city run out of options to protect their savings against surging consumer prices.
    The government is selling as much as HK$10 billion ($1.3 billion) of the three-year iBonds to its citizens from this week until July 19. The first coupon due Jan. 30, 2012, may be 5 percent, compared with almost zero for time deposits at local banks, Credit Agricole CIB estimated on July 5.
    “I’m definitely interested because we can hardly earn anything from our deposits,” said Tang Kit Ying, 62, a housewife in Hong Kong. “Equities may give better returns but are riskier too. The iBonds seem safer with the government’s backing.”
    Ride at your own risk !!!

  19. #19
    Join Date
    Apr 2010
    Posts
    15,307

    Default

    how to pay 6% where SA only pay 4% and totally cannot take out at all!!! zzzzzzzzzzzzzzzzz

  20. #20
    Join Date
    Aug 2009
    Posts
    2,988

    Default

    Speaking of HK, in these few weeks the market sentiments are coming back. A couple of new sales , especially the "OCR" ones, are doing quite well. Psf in S$ terms is 1200 to 1400 range. Also just like SG before the CM, secondary market very quiet, mostly primary market actions.

  21. #21
    Join Date
    Feb 2011
    Posts
    8,926

    Default Article from Bill Gross Pimco: can ultra cheap money do more harm

    Gresham’s law needs a corollary. Not only does “bad money drive out good,” but “cheap” money may as well. Ultra low, zero-bounded central bank policy rates might in fact de-lever instead of relever the financial system, creating contraction instead of expansion in the real economy. Just as Newtonian physics breaks down and Einsteinian concepts prevail at the speed of light, so too might easy money policies fail to stimulate at the zero bound.
    Historically, central banks have comfortably relied on a model which dictates that lower and lower yields will stimulate aggregate demand and, in the case of financial markets, drive asset purchases outward on the risk spectrum as investors seek to maintain higher returns. Near zero policy rates and a series of “quantitative easings” have temporarily succeeded in keeping asset markets and real economies afloat in the US, Europe, and even Japan. Now, with policy rates at or approaching zero yields and QE facing political limits in almost all developed economies, it is appropriate to question not only the effectiveness of historical conceptual models but entertain the possibility that they may, counterintuitively, be hazardous to an economy’s health.

    Importantly, Gresham’s corollary is not another name for “pushing on a string” or a “liquidity trap”. Both of these concepts depend significantly on perception of increasing risk in credit markets which in turn reduce the incentive of lenders to expand credit. Rates at the zero bound do something more. Zero-bound money – credit quality aside – creates no incentive to expand it. Will Rogers once fondly said in the Depression that he was more concerned about the return of his money than the return on his money. But from a system wide perspective, when the return on money becomes close to zero in nominal terms and substantially negative in real terms, then normal functionality may breakdown.
    A good example would be the reversal of the money market fund business model where operating expenses make it perpetually unprofitable at current yields. As money market assets then decline, system wide leverage is reduced even if clients transfer holdings to banks, which themselves reinvest proceeds in Fed reserves as opposed to private market commercial paper. Additionally, at the zero bound, banks no longer aggressively pursue deposits because of the difficulty in profiting from their deployment. It is one thing to pursue deposits that can be reinvested risk free at a term premium spread – two/three/even five year Treasuries being good examples. But when those front end Treasuries yield only 20 to 90 basis points, a bank’s expensive infrastructure reduces profit potential. It is no coincidence that tens of thousands of layoffs are occurring in the banking industry, and that branch expansion is reversing industry wide.
    In the case of low yielding Treasuries the Gresham’s corollary at first blush seems illogical. If a bank can borrow at near 0 per cent then theoretically it should have no problem making a profit. What is important, however, is the flatness of the yield curve and its effect on lending across all credit markets. Capitalism would not work well if Fed funds and 30-year Treasuries co-existed at the same yield, nor if commercial paper and 30-year corporates did as well. It is not only excessive debt levels, insolvency and liquidity trap considerations that delever both financial and real economic growth; it is the zero-bound nominal yield, the assumption that it will stay there for an “extended period of time” and the resultant flatness of yield curves which are the culprits.
    Conceptually, when the financial system can no longer find outlets for the credit it creates, then it de-levers. The point should be understood from a yield as well as a credit risk point of view. When both yield and credit are at risk from the standpoint of “Gresham’s law,” the mix can be toxic. The recent example of MF Global emphasises the concept, as does the behaviour of depositors in some struggling European economies. If an investor has money on deposit with an investment bank/broker that not only appears to be at risk but returns nothing, then why maintain the deposit? Perhaps an investor would be more comfortable with a $100 bill at home in a mattress than a $100 bill on deposit with a broker – Securities Investor Protection Corporation notwithstanding. If so, system wide delevering takes place as opposed to the credit extension historically necessary for an expanding economy.
    Historical examples and central bank staff models will likely not validate this new Gresham’s corollary. Fed chairman Ben Bernanke blames policy rate increases in the midst of the 1930s for an economic relapse, and a lack of credit expansion for Japan’s lost decades 60 years later. But all central banks should commonsensically question whether ultra-cheap money continually creates expansions as opposed to destroying liquidity, delevering and obstructing recovery. Gresham as opposed to Keynes may become the applicable economist of this new day.
    Ride at your own risk !!!

  22. #22
    Join Date
    Feb 2011
    Posts
    8,926

    Default

    Bank of America shares fell beneath $5 for the first time since 2009, as bank stocks suffered heavy selling, pushing the S&P 500 to the brink of 1,200 for the first time since November.
    BofA shares closed at $4.99, a fall of 4 per cent on the day, after trading as low as $4.92.

    => Seems like bank stocks do not move the Dow so much already ... the weighting has changed
    Ride at your own risk !!!

Similar Threads

  1. Cooling measures could crimp property price appreciation for two years, stay en bloc
    By reporter2 in forum Singapore Private Condominium Property Discussion and News
    Replies: 0
    -: 17-12-21, 10:21
  2. Price range to consider
    By Yuki in forum Singapore Private Condominium Property Discussion and News
    Replies: 67
    -: 07-06-14, 12:41
  3. Property is for you to hold tight tight, keep long long....
    By ikan bilis in forum Singapore Private Condominium Property Discussion and News
    Replies: 54
    -: 30-12-12, 19:03
  4. What price range ?
    By wt_know in forum Singapore Private Condominium Property Discussion and News
    Replies: 118
    -: 09-03-11, 13:57
  5. Hold on tight to your property. It’s gonna be helluva ride…
    By Zeng Han Jun in forum HDB, EC, commercial and industrial property discussion
    Replies: 7
    -: 02-09-08, 20:18

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •