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Buoyant property prices a sign of
rising debt as opposed to rising wealth?
January 6th, 2011 | Author: Contributions
With property prices escalating into no man’s land, we see paper wealth rise
with the proportion of debt. This is brought about by loose housing policies
coupled with the loose granting of Permanent Residence to foreigners, this
diabolic formula creates a surge in demand, and inflates prices way
beyond their actual value and affordability.
The transfer of underlying debt from one hand to the other will bring
about a potential bubble that is difficult to sustain. When the term
“sustains” means, either we build more properties or either we keep
bringing in more foreigners to try and maintain the bubble or
prevent the bubble from bursting.
“Property mindset” likely falls into 2 herds , as in herd mentality,
first mindset would be to buy as I need a place to stay even if
the prices are out of reach, second mindset is to buy and flip
the property as the prices are going up.
With these mindset trends and the artificial surge in demand,
prices will keep going up and debt will keep going up to keep
up with the buyer’s appetite. In the end the obvious will happen,
the bubble bursts, sending properties prices crashing through the
ceiling, and the last one holding the paper rich property will be
“debt poorer”, this is worse when you are servicing your bank
loan for a property that is beyond your purchased price,
compound that by the many who fall into this window,
and we have the domino effect.
Who pays the heavy price and burden of having to swallow
a situation like the above, it is likely the younger generation
of Singaporeans who are fresh out in the job market and have bought a home.
With wages falling behind and the influx of foreigners depressing
wages further, Singaporeans are likely to take up the “rising debt”
of housing when buying properties.
It’s a sad state of affairs that will soon rear its ugly head for
many Singaporeans, unless we understand the current policies
and how it impacts us, like what our Senior Minister Goh Chok Tong
said about “nett happiness”, something like as long as the majority is happy, it’s ok.
Well Singaporeans, it’s for you to decide if you want to be on the happy
or unhappy side? I decided that I want to move from the unhappy side
to the happy side, so I will vote for change, to make sure my children
have a better future, and I have to add this, there is such a thing as
“Total Happiness” as long as I don’t let others formulate policies that
make me poorer by creating an unfair playing field.
Best wishes and Happy New Year!
.
Singaporean
rising debt as opposed to rising wealth?
January 6th, 2011 | Author: Contributions
With property prices escalating into no man’s land, we see paper wealth rise
with the proportion of debt. This is brought about by loose housing policies
coupled with the loose granting of Permanent Residence to foreigners, this
diabolic formula creates a surge in demand, and inflates prices way
beyond their actual value and affordability.
The transfer of underlying debt from one hand to the other will bring
about a potential bubble that is difficult to sustain. When the term
“sustains” means, either we build more properties or either we keep
bringing in more foreigners to try and maintain the bubble or
prevent the bubble from bursting.
“Property mindset” likely falls into 2 herds , as in herd mentality,
first mindset would be to buy as I need a place to stay even if
the prices are out of reach, second mindset is to buy and flip
the property as the prices are going up.
With these mindset trends and the artificial surge in demand,
prices will keep going up and debt will keep going up to keep
up with the buyer’s appetite. In the end the obvious will happen,
the bubble bursts, sending properties prices crashing through the
ceiling, and the last one holding the paper rich property will be
“debt poorer”, this is worse when you are servicing your bank
loan for a property that is beyond your purchased price,
compound that by the many who fall into this window,
and we have the domino effect.
Who pays the heavy price and burden of having to swallow
a situation like the above, it is likely the younger generation
of Singaporeans who are fresh out in the job market and have bought a home.
With wages falling behind and the influx of foreigners depressing
wages further, Singaporeans are likely to take up the “rising debt”
of housing when buying properties.
It’s a sad state of affairs that will soon rear its ugly head for
many Singaporeans, unless we understand the current policies
and how it impacts us, like what our Senior Minister Goh Chok Tong
said about “nett happiness”, something like as long as the majority is happy, it’s ok.
Well Singaporeans, it’s for you to decide if you want to be on the happy
or unhappy side? I decided that I want to move from the unhappy side
to the happy side, so I will vote for change, to make sure my children
have a better future, and I have to add this, there is such a thing as
“Total Happiness” as long as I don’t let others formulate policies that
make me poorer by creating an unfair playing field.
Best wishes and Happy New Year!
.
Singaporean
