The first thing I read as I opened my email, "The Chinese property market looks likely to weaken because the government has indicated it wants prices to fall." - from The Edge Midweek.
What? Does that spell trouble for our property market? Will prices in Hong Kong and Singapore follow suit, or rather, will our governments follow suit?
Quite on the contrary, to me. I have mentioned this point on the Skyscraper's forum before - we actually need to thank the Chinese government on imposing measures preventing bubbles for our increased demand back home.
Most of the Chinese investors who want a piece of the property pie will either invest in China itself, or cross the border over to Macau and Hong Kong. No wonder you see Hong Kong property market sky-rocketing even as Hong Kongers themselves are priced out.
And China is no short of millionaires. So what happens to the rest (or the rest of the money for that matter). They come to Singapore. Buying properties to hedge against the threat of inflation is a very common reason, and the Chinese know all too well about that. With global inflation looming due to the massive stimulus put into the market last year, China's own inflation figures might just be set to shoot off the charts should economic (runaway)growth be uncontrolled.
Not only that. Singapore's prime property indexes are still quite a distance below Hong Kong's and China's, which makes us more attractive as an investment option. But not everyone will flock here like a herd of geese immediately - we need a spark, a big bang to increase Singapore's visibility, to set things into motion.
And the answer to that? The two mega Integrated Resorts at Sentosa and Marina Bay. Now, do we have all the elements for a bull run yet?
March 3, 2010
March 2, 2010
From homeowners to landowners
Land is the best and only way to go. It's official now.
All this time I was really toggling back and forth between a condo unit and a landed property. But as things are going, I am quite sure land is the way to go.
Previously, Singapore's growth model has always been powered by population growth. When locals stopped producing at optimum levels, foreigners came into play. Today, we have over a million foreigners in our midst - that's a lot for a country with a total population of only 5 million.
Here's the story - foreigners come and go. When they are here for a short period, they will need to rent. For locals, buying any second or third property will make good investments. When foreigners are here for a longer period or if they happen to be investors, they will buy up our local property. They cannot, however, qualify to buy land (with exceptions approved by SLA). This leads to condos and apartments always stealing the limelight when it comes to price appreciation in bull runs.
Now, the tables are turned.
The Government has turn down the tap for foreigners, coupled with the decrease in foreigners coming in over the past year or so, we can already see some effects. In some areas, landed home prices are now at its all time high. Yes, higher than the 1997 high some people thought will never be achieved.
And that's not the end of the story. Because you will say...its crazy..if landed prices are at a new high, why go in now?
If we follow the Economic Strategies Committee's recommendations, you will find an interesting topic called 'increasing efficiency of land use through exploration of subterranean land rights'. Through this particular recommendation and 38 others mentioned in the same report, we can see that the Government is now going back to basics - land, as a driver of increasing productivity and subsequently, growth in the long term.
This can only mean land in Singapore will become more valuable - not only because now there is an socio-political emphasis on it, but because bringing in something as 'far-fetched' as subterranean land rights will benefit landowners. Now, not only you own what you build above the land, you can own what is built beneath it. In the name of greater efficiency, your assets can be theoretically doubled.
As a disclaimer, I would like to emphasise on the need to invest on Freehold land, instead of just any land like those tagged with a 99-year lease. For with the Government starting to micromanage land uses, you know that they will only come up with shorter leases in the future, which makes Freehold land even more valuable.
Perhaps that sounds too airy fairy for you now.. but looking at how things are going, the term 'landowners' might very well takeover as the new pet word for journalists and writers alike in Singapore.
All this time I was really toggling back and forth between a condo unit and a landed property. But as things are going, I am quite sure land is the way to go.
Previously, Singapore's growth model has always been powered by population growth. When locals stopped producing at optimum levels, foreigners came into play. Today, we have over a million foreigners in our midst - that's a lot for a country with a total population of only 5 million.
Here's the story - foreigners come and go. When they are here for a short period, they will need to rent. For locals, buying any second or third property will make good investments. When foreigners are here for a longer period or if they happen to be investors, they will buy up our local property. They cannot, however, qualify to buy land (with exceptions approved by SLA). This leads to condos and apartments always stealing the limelight when it comes to price appreciation in bull runs.
Now, the tables are turned.
The Government has turn down the tap for foreigners, coupled with the decrease in foreigners coming in over the past year or so, we can already see some effects. In some areas, landed home prices are now at its all time high. Yes, higher than the 1997 high some people thought will never be achieved.
And that's not the end of the story. Because you will say...its crazy..if landed prices are at a new high, why go in now?
If we follow the Economic Strategies Committee's recommendations, you will find an interesting topic called 'increasing efficiency of land use through exploration of subterranean land rights'. Through this particular recommendation and 38 others mentioned in the same report, we can see that the Government is now going back to basics - land, as a driver of increasing productivity and subsequently, growth in the long term.
This can only mean land in Singapore will become more valuable - not only because now there is an socio-political emphasis on it, but because bringing in something as 'far-fetched' as subterranean land rights will benefit landowners. Now, not only you own what you build above the land, you can own what is built beneath it. In the name of greater efficiency, your assets can be theoretically doubled.
As a disclaimer, I would like to emphasise on the need to invest on Freehold land, instead of just any land like those tagged with a 99-year lease. For with the Government starting to micromanage land uses, you know that they will only come up with shorter leases in the future, which makes Freehold land even more valuable.
Perhaps that sounds too airy fairy for you now.. but looking at how things are going, the term 'landowners' might very well takeover as the new pet word for journalists and writers alike in Singapore.
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