Wonder where are those migrants, new birth, school leavers, divorcees, etc that are supposed to take up all these unsold units?

Keeping vacant unit be it developer or flipper incur cost e.g. bank interest rate, opportunity cost, service change, cukai pintu, etc. those who have cash flow to sustain may try to add extra cost to asking price. those who doesn't, pressure could be unbearable.

This post has been edited by icemanfx: Nov 15 2017, 01:38 AM

Believe no one could deny there is over supply of property in kv and over supply will get worst in the next few years. until over supply is consumed, it is unrealistic to hope price to rise.

This post has been edited by icemanfx: Nov 15 2017, 11:37 AM

Property price dropped in sg a few years ago didn't adversely effect the aggregate economy. only those stretched flippers will be in financial trouble. life of the rest of working population remain as normal.

Property is illiquid, price takes years to bottom.

vacant property incur cost e.g. bank interest, service charges, assessment, etc. property price stagnant mean cost increased or incurring loss.

most bought property with bank loan, incurring loss may be a small matter, ability to make loan repayment/sustain negative cash flow could be a burden to many.

This post has been edited by icemanfx: Nov 15 2017, 11:51 AM

Most people buy on sentiment/peers pressure/herd behaviour/blinded by greed, numbers is meaningless to them.

This post has been edited by icemanfx: Nov 15 2017, 12:55 PM

Current oil price is unlikely to rise further. most china funded projects flow back to china, local benefit little. mrt2 construction add little cash to the general public.

Time will tell.

If he could afford to hold, his kids milk powder won't be an issue. IF

The trick is to buy and sell before the herd.

This post has been edited by icemanfx: Nov 15 2017, 02:58 PM

Provided if he can let goes 3-4 at profit and still have $ left after paying banks.

How many of these over stretched investors are around?


This post has been edited by icemanfx: Nov 15 2017, 02:50 PM

Property is illiquid, price takes years to bottom. You may get more than what you wish after bank interest rate rise.

This post has been edited by icemanfx: Nov 15 2017, 09:40 PM

What about majority of property between 1q16 and 3q17?



This post has been edited by icemanfx: Nov 15 2017, 11:57 PM

Before u.s subprime crisis 2008, there were a few warning e.g by Prof Robert J. Schiller but was ignored.

Property is illiquid, price takes years to bottom. Unlike stocks or commodity, doesn't has a tipping point as such.

How many of these investors are around? U.s subprime crisis 2008 was largely started by these flippers.

Provided can find tenant.

No vendor is willing to sell at below mv. Only those put effort could find below mv prize.

If price could rise irrationally during bull run, price could similarly drop irrationally during bear crawl.

To those earned in RM, USD value is irrelevant.

This post has been edited by icemanfx: Nov 16 2017, 05:34 AM

Residential property constituted 25% to 30% of most banks loan portfolio. Banks don't revalue collaterals unless borrower defaulted.

Property price dropped by 30% won't crash the banking system unless many borrowers are subprime but bank will be more cautious in lending to residential e.g 70% margin of finance.

If many borrowers are subprime, many property price drop will be significantly more than 30%.

Volume drop could mean either less supply or less demand. Since over supply is a common knowledge, mean volume dropped is caused by less demand.

In market economy, over supply or less demand will follow by price drop. Likewise during the bull run, price follow demand rise.

This post has been edited by icemanfx: Nov 16 2017, 11:11 AM

Price rise during bull run showed property price is not inelastic. Hence, it is natural for price to drop with demand.

In practice, holding unsold property incur cost and loan repayment is a burden. It would be a relief to off load early at lower price.

Development charge, assessment, etc are dbkl income. It is dbkl interest to have more development.

In market economy, best regulated by the market itself.

Developer won't be building more if investors didn't snap up. Current oversupply could and should only blame on greedy developers and investors.

For most gomen, providing affordable housing is more important than ensuring profits for property investors.

"Self made" by developer or property investor?

Those investors with gold and silver mountains backing don't impose risks. The issue is with over stretched investors.

At peak of u.s subprime crisis, housing loan relinquishing rate was about 9%. It doesn't take many over stretched flippers to cause property price to tumble.

With household debt at about 90% of gdp and many wages didn't rise faster than inflation rate, not many have sustainable cash flow to keep paying loan repayment.

How many investors are overstretched could only tell when the last of dibs project is vped next year. Given easy credit before 2014, number of overstretched investors are likely more than most expected especially after interest rate rise.

Most bought property with bank loan i.e incurring bank interest and need to make loan repayment. If property price doesn't rise faster or higher than loan interest incurred is a financial loss. If one doesn't make loan repayment consistently could end up in foreclosure.

Property is not the only investment opportunity available and certainly not all weather investment especially oversupply is increasing and bank interest is on uptrend.

No vendor is willing to sell below perceived market value.

At current market sentiment, it is more likely for vendor to budge in particularly after bank interest rate rise.

There will be shortage after oversupply is digested. The question is after how many years?

Banning new approval with effects those developer that bought land bank for development. Unless lands were bought without borrowing, it could be a burden. On the other hand, developer could change design to avoid ban.