Time to cash out?

[Ringo33]

Been doing some thinking after the recent announcement of cooling measure on cars purchase, extra taxes on luxury cars, revision of property tax on highend property, as well as recent comment from Tharman on housing prices. It seems like this government is very determine to cool the property prices on the highend segment, as such I am thinking if this is a good time to cash out since price is unlikely to gain much while there is a higher risk of interest rate rising, CM8 and softening of rent.

[mcmlxxvi]

If you have nothing better to work on with your 'cash out', suggest to maintain status quo.

[Laguna]

Talk is one thing, action is another thing.
DC gone up UP
quote on construction workers : cut
levy on construction workers : UP UP UP
GLS price : UP. UP. UP
HDB price : UP

[Rosy]

Again, those who feels they are overleveraged due to cheap money please do the neccesary actions to deleverage.

Those who feel otherwise can remain status quo but i myself will not be buying anymore properties locally.

[Ringo33]

Talk is one thing, action is another thing.
DC gone up UP
quote on construction workers : cut
levy on construction workers : UP UP UP
GLS price : UP. UP. UP
HDB price : UP

What you are highlighting are the effects of low interest rate and thats exactly the reason why I am fearing that government might surprise the market by pulling out the mother of all CM to raise interest rate.

What they have done to the car industry is extremely drastic and it only goes to show their determination of our government to slow inflation while they tries to restructure the economy.

[Laguna]

What you are highlighting are the effects of low interest rate and thats exactly the reason why I am fearing that government might surprise the market by pulling out the mother of all CM to raise interest rate.

What they have done to the car industry is extremely drastic and it only goes to show their determination of our government to slow inflation while they tries to restructure the economy.

PM Lee had a very long explanation of S$ interest rate earlier. The implication is much higher.

For car : it is all CMs combined into one....

[chiaberry]

Even if you want to cash out, you may not be able to find a buyer to meet your expected price. I know of somebody who put up a CCR property (near Newton) for sale, got an offer 2% below asking price, did not accept the offer immediately and the buyer changed mind over the weekend.

[Rosy]

I believe MAS do not have the capacity to raise interest rate right? what we are seeing now is the rise of bank spread or those board rate.

[Rosy]

A much higher than expected interest rate spike may also trigger an economic slowdown or recession in Singapore. It not only affects cars and properties.

[price]

What you are highlighting are the effects of low interest rate and thats exactly the reason why I am fearing that government might surprise the market by pulling out the mother of all CM to raise interest rate.

What they have done to the car industry is extremely drastic and it only goes to show their determination of our government to slow inflation while they tries to restructure the economy.

i guess u gotta understand the idea behind low interest rates...

also, how many % of car buyers are affected by this mere LTV CM? How many buyers in the first place stretches max loans when purchasing their cars? People driving up car prices are not the rich ones. There were just too many marginal buyers who are buying cars when they cant really afford to which drove up the prices.

[Laguna]

Like most countries, Sg reserve is mostly in US$.....

[Ringo33]

A much higher than expected interest rate spike may also trigger an economic slowdown or recession in Singapore. It not only affects cars and properties.

not necessary. A spike in interest rate might result in correction of property prices hence bring down the cost of living as well as cost of business (assuming commercial and industry property also affected).

I believe the property has now become a very big cost burden not just for residents, but also for many businesses in Singapore, hence the "gain" from this might actually outweigh the cost of borrowing for businesses.

[pool100]

Even if you want to cash out, you may not be able to find a buyer to meet your expected price. I know of somebody who put up a CCR property (near Newton) for sale, got an offer 2% below asking price, did not accept the offer immediately and the buyer changed mind over the weekend.

Go and check out the listings in propertyguru. There are more and more units listed for sale and the number is increasing daily. I know because I've been monitoring since CM7. People are thinking of cashing out and selling based on the current trend.

[Ringo33]

Go and check out the listings in propertyguru. There are more and more units listed for sale and the number is increasing daily. I know because I've been monitoring since CM7. People are thinking of cashing out and selling based on the current trend.

Very hard to say lah. this could be seasonal effect of CNY . Did you compared it with the past years?

[Rosy]

not necessary. A spike in interest rate might result in correction of property prices hence bring down the cost of living as well as cost of business (assuming commercial and industry property also affected).

I believe the property has now become a very big cost burden not just for residents, but also for many businesses in Singapore, hence the "gain" from this might actually outweigh the cost of borrowing for businesses.

A spike will cause a market shock. Many companies are surviving on cheap credits. A drop in biz cost in terms of rental will only come later which is often too late.

However if it is a gradual increase of interest rates, then it is a complete different story altogether.

[RCT]

I believe MAS do not have the capacity to raise interest rate right? what we are seeing now is the rise of bank spread or those board rate.

MAS have the right to do that... Just don't follow US Interest Rate... And take back the right to adjust interest rate.... Just one simple statement.... But of course I believe this will not affect those personal loan...

[Ringo33]

A spike will cause a market shock. Many companies are surviving on cheap credits. A drop in biz cost in terms of rental will only come later which is often too late.

However if it is a gradual increase of interest rates, then it is a complete different story altogether.

I am not too sure about that. AFAIK, many companies, especially SME are complaining about COE prices, high cost of industrial property and rent etc.

Impossible for a sudden spike, but once it is obvious that government is changing course, I believe many investors will panic and cut lost is they have to.

[price]

I feel only certain groups are cashing out. If you have the holding power, why cash out when u can't buy back at the same prices now? Especially with the new ltvs and absds

[radha08]

i guess u gotta understand the idea behind low interest rates...

also, how many % of car buyers are affected by this mere LTV CM? How many buyers in the first place stretches max loans when purchasing their cars? People driving up car prices are not the rich ones. There were just too many marginal buyers who are buying cars when they cant really afford to which drove up the prices.

so what happens now to those who spent 100 over K to buy a bread/butter car... ...debted for next 10 years...

[Rosy]

MAS have the right to do that... Just don't follow US Interest Rate... And take back the right to adjust interest rate.... Just one simple statement.... But of course I believe this will not affect those personal loan...

I am not sure how easy will it be from transition point of view. Not an expert in this field. Any financial analyst to give any comments?

[Ringo33]

I feel only certain groups are cashing out. If you have the holding power, why cash out when u can't buy back at the same prices now? Especially with the new ltvs and absds

Investor should always balance their investment portfolio once in awhile and you cannot rely on holding forever theory to maximize your returns, unless your property still offers reasonable rental yield.

The price correction like the one we see in 2008 only comes very rarely and one should always be equipped and loaded for bottom fishing.

[Rosy]

so what happens now to those who spent 100 over K to buy a bread/butter car... ...debted for next 10 years...

They should have realised that when they buy the car and already calculated the yearly depreciation and expenses throughout the next 10years. So when COE drop, they cannot afford to change car thats all as they will need to top up the difference. They can still continue to drive till the loan breakeven.

[price]

Investor should always balance their investment portfolio once in awhile and you cannot rely on holding forever theory to maximize your returns, unless your property still offers reasonable rental yield.

The price correction like the one we see in 2008 only comes very rarely and one should always be equipped and loaded for bottom fishing.

Yep agreed, bullets must always be ready at the right time.

[price]

People are shouting for interest rates to rise only because they would wanna see prices fall. So they could pick up some cheap deals? After than they would wish prices to go up again so they could cash out on their "cheap deals"

[Rosy]

Investor should always balance their investment portfolio once in awhile and you cannot rely on holding forever theory to maximize your returns, unless your property still offers reasonable rental yield.

The price correction like the one we see in 2008 only comes very rarely and one should always be equipped and loaded for bottom fishing.

I believe rebalancing of property portfolio is not necessary for those who only owns a few. However, i constantly rebalance my equities portfolio.

[RCT]

I am not sure how easy will it be from transition point of view. Not an expert in this field. Any financial analyst to give any comments?

It is really easy for them.. It is whether they want to do it a not.. as our GDP depend on property a lot.... Anyway we are going to stop using US interest rate soon.. the government is already looking at this.. It was on Bloomberg news... Maybe coming out soon. Just not sure what will the new interest setting rules... With so much loan with our banks, if interest increase, the banks will huat big big... All the loan slave will have to work harder and save more to feed the banks...

But I believe the government do not need to use the interest rate yet as most of our buyers are quite low on cash. So a further tightening in LTV should do the job.. For example, second property LTV goes to 80%.. third property LTV goes to 100%... With 40% in cash.. I believe it will be job done...

And you should know with higher LTV, it just benefit the rich more as price will drop and only they can afford...

[Rosy]

People are shouting for interest rates to rise only because they would wanna see prices fall. So they could pick up some cheap deals? After than they would wish prices to go up again so they could cash out on their "cheap deals"

After buying, they will want interest rate to fall back.

[Leeds]

Investor should always balance their investment portfolio once in awhile and you cannot rely on holding forever theory to maximize your returns, unless your property still offers reasonable rental yield.

The price correction like the one we see in 2008 only comes very rarely and one should always be equipped and loaded for bottom fishing.

You have already gotten the answer; just looking for someone to contradict you.

[Rosy]

It is really easy for them.. It is whether they want to do it a not.. as our GDP depend on property a lot.... Anyway we are going to stop using US interest rate soon.. the government is already looking at this.. It was on Bloomberg news... Maybe coming out soon. Just not sure what will the new interest setting rules... With so much loan with our banks, if interest increase, the banks will huat big big... All the loan slave will have to work harder and save more to feed the banks...

But I believe the government do not need to use the interest rate yet as most of our buyers are quite low on cash. So a further tightening in LTV should do the job.. For example, second property LTV goes to 80%.. third property LTV goes to 100%... With 40% in cash.. I believe it will be job done...

Is it on the news? I only read about the US sibor thingy. It does not mean to stop basing on US sibor rate from what i understand.

[Rosy]

You have already gotten the answer; just looking for someone to contradict you.

He already decided to cash out.

No right or wrong as it also depends greatly on individual circumstances and age as well.