- Singapore Property Weekly Issue 62

This discussion thread is for forum members to discuss and learn and share with one another on anything related to the Property Market.

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Post by lootster »

Just to share the below newsletter I've received from


In Memory of Dennis Ng (1969-2012)

Dear Readers,

On July 26, at the age of 43, Dennis Ng passed away from a heart attack. Dennis was a great personal finance teacher, author and entrepreneur (he started businesses such as mortgage broker and training firm He shared his knowledge freely and was a valued guest contributor to, as well as one of the gurus featured in Secrets of Singapore Property Gurus. He was also a friend.
In honor of his memory we have postponed our regular articles, and in this week’s issue of the Singapore Property Weekly we have linked to all the articles that Dennis has contributed to While the man is
gone, his knowledge and sharing will stay on and continue to help many people on their path to financial freedom.

Mr. Propwise

Articles on by Dennis Ng:

Investing In Properties Through A Real Estate Investment Trust (REIT)

Singapore Property Market Outlook for 2012 and 2013

Robert Kiyosaki’s Definition Of Assets And Liabilities Are Wrong

What the Raised Income Ceiling Means For the Property Market

Is it easier to get rich investing in stocks or properties?
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Post by candy_chia »

Where Will the Property Market Go in 2013?
By Aktive Learning | – Thu, Dec 27, 2012 2:15 PM SGT
By Mr. Propwise

It’s that time of the year where we sum up what happened in 2012 and peer into 2013 to divine where the market may go. While I’m not a fan of forecasting (the type that says “the market will fall by 5% in the second quarter”) because I believe that the future is not knowable with any certainty, I do think it’s important for investors (and really anyone looking to buy a sell a property) to take stock of where we are in the market cycle and analyze the factors that affect the supply and demand of property to make a good decision.

A quick summary of 2012
We had two additional rounds of property control measures by the Government in September and October 2012, aiming to cap the proliferation of shoebox units and tighten mortgage financing respectively, bringing the total measures to six since the first round in September 2009.

Have the measures worked? Well to some extent, yes. The URA Property Price Index (PPI) has risen by a muted 1.0% in the first three quarters of 2012 versus 5.6% over the same period in 2011, so the upward acceleration in prices has been halted. But prices are at a level that many feel are too expensive and unaffordable, thus breeding some discontent.

The other standout trend in 2012 was the spiraling out of control of industrial property prices. In 3Q2012 the Industrial Property Price Index registered a stunning 8.8% quarter-on-quarter growth to hit 183.3, an all-time high, the twelfth quarter of growth. The Industrial Property Price Index has already risen by 26.7% in the first three quarters of 2012, and an astonishing 102.8% since 3Q2009, versus just 34.9% for the residential PPI over the same period. Industrialists with thin margins are going to have a tougher time funding their real estate needs.

Plentiful supply in 2013 and beyond…

The URA has collated that a total of 93,800 private housing units (including about 9,800 EC units) that will be constructed over the next few years, with about 43% or 40,000 of those (including 3,400 EC units) still yet to be sold.

Based on the URA data collated by, residential completions will peak in 2015 at 23,667 units based on the private residential supply pipeline, or a 47% increase over the completion expected in 2013. Despite this, the government has kept the land supply relatively constant (at least so far based on the 1H13 Government Land Sales Programme), perhaps in an effort to prevent the perception of a squeeze in the supply of land that could lead to higher prices.
…has been matched by a strong demand for property

While the large increase in supply sounds scary, it is worth pointing out that demand has been very strong for the past few years, and has continued to be strong so far this year as well.

I completely agree that a low interest rate environment is supportive of property prices, and with interest rates close to zero, borrowing money to reach for yield sounds like a rational idea. The problem is that given we’ve had interest rates hovering close to zero for several years now since the Global Financial Crisis, Many People are Starting to Believe that interest rates will be Low FOREVER.

Well, my friends, forever is a very long time, and if there’s one thing I’m certain about, it is that interest rates will not stay low forever. Do remember that the current low interest rate environment is an abnormal situation, one put in place to support a weak growth environment in the Developed World. Behaviorally, we human beings tend to extrapolate the current situation into the future, but markets don’t work like that.

What could possibly happen to reverse the low interest rate environment?

1) One possibility is a recovery of US growth.

2) Another is a spike in inflation.

3) In the 1970s the US was plagued by a combination of spiraling inflation and weak economic growth, otherwise known as stagflation. It took a strong Fed chairman by the name of Paul Volcker to beat the inflation monster, but at the cost of a recession, and he did it by hiking the federal funds rate rates to a peak of 20% (!) in June 1981. If that happens again, it will certainly be a disaster for property.

But beware of the Black Swans
A reader recently wrote to me to sum up his view of where the market would go in 2013: “Property prices are unlikely to correct at all in 2013 given the liquidity and low interest rates.”

And here’s my response to him: “One of the favourite Latin phrases that economists like to use is ‘ceteris paribus’, i.e. all else being equal, to assume away any other inconvenient or unknown variables. So ceteris paribus, yes seems like prices are unlikely to correct.

But markets have a funny way of throwing a curveball when you least expect it – things like
~~ a recession (GDP growth is already slowing) and unemployment,
~~~ an inflation shock, or
~~~~ a new crisis (whether financial or otherwise, e.g. epidemics).

And given where we are in the cycle, I think the market is vulnerable as lots of buyers have already committed.”

As members of know, we are currently in the Late Bull stage of the Property Market Cycle Model, when property price increases start to slow down after a steep run up during the Early Bull Market Phase, and is an indicator that we are nearing the peak of the cycle.

In other words, the DOWNSIDE RISK is GREATER than the Upside, and anyone thinking of buying a property now should be very Cautious when doing so. ... 43209.html
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Re: - Singapore Property Weekly Issue 62

Post by candy_chia »

Feb Sales Plunge – Has the Storm Arrived?
18 March 2013
By Mr. Propwise

By now you’ve read the scary headlines – new home sales in February “plunged” by 65% on a month-on-month basis to 708 units (excluding Executive Condominiums), versus the 2,013 units sold in January. Sounds like a big drop doesn’t it?

Looking more closely at February sales

But when you start drilling down deeper into the numbers, a somewhat different picture emerges. For one, developers only launched 261 units in February. In other words, they sold 271 percent more units than they launched. Otherwise known as the Developer Monthly Sell-Through Rate, the ratio of units developers sold versus what they launched is a gauge of how quickly developers are selling their launches and of how hot the market is. You can see this statistic tracked over time in the chart below (courtesy of

Figure 1 – Developer Monthly Sell-Through Rate till February 2013 (from
From this perspective, things don’t look so gloomy (at least from the developers’ perspective).

Likely due to the combination of
~~ the Chinese New Year holidays and
~~~ the seventh round of cooling measures announced by the government in January,

developers held back on their launches in February, not wanting to be the “victims” of poor sentiment.

But yet they managed to sell many more units than they launched. A Sell-Through Rate of above 100 percent means that developers are de-stocking their inventory (i.e. have fewer units in total to sell), which will likely lead them to be more bullish. Indeed, if we look at developer inventory levels, they have fallen for nine months in a row to 4,878 units from a peak of 7,312 units in May 2012.

Figure 2 – Developer Inventory Levels till February 2013 (from

Imagine you are a developer. Despite all the scary policy noise the government is making, your units are still selling like hotcakes, you don’t have that much debt on your balance sheet, and the number of units you have left to sell (i.e. your inventory) is falling to relatively low levels. You wouldn’t feel too bearish on the market, would you? In fact, you might even want to go out and bid and pay a fairly high price for a new piece of land so you will have more property to sell.

Yet a chill has descended on the resale market

However if we look at the resale market, things are indeed gloomy.

As an aside, I believe

- the resale market is mainly driven by buyer sentiment,
- whereas the primary market can often be powered along in a different direction by the sales and marketing machines of developers and property agents, using various gimmicks (e.g. discounts, smaller unit sizes etc) and hype (e.g. playing up the 6.9 million population target etc) to create a buying frenzy among unsuspecting buyers.

Resale transactions, which do not benefit from this, were down an estimated 68% in February. Of course, this fall is exacerbated by the Chinese New Year holiday and shorter month of February.

But there’s no doubt a chill has descended on the resale market, and is not likely to go away anytime soon.

~~ Egged on by government pronouncements of how prices Must Stop Going Up,

~~~ buyers’ expectations for a correction have increased, and

~~~~ the “bid-ask spread” between what sellers want to sell for and what buyers are willing to pay has widened.

I’ve been looking up asking prices of some projects and they’re still sky high, 10 to 15 percent above the last transacted prices. Perhaps Cyprus and the potential knock-on effects might help to moderate seller expectations?

March Madness and the heavy hand of the government

As of now it looks like new home sales will rebound strongly in March. Anecdotally, just from strong sales at the launches of projects like Sennett Residences, d’Nest and Urban Vista, March numbers will easily surpass February by a large margin. These projects mainly appeal to local mass market buyers and investors, where demand for property is still strong.

The fundamental cause of the current continued bullishness in the market is the

~~ sustained low interest rate environment.

~~~ Versus close to zero percent interest in the bank,

~~~~ the promise of high rental yields
in the range of four percent for the one to two bedroom units in these projects has proved too alluring for people who are looking to put their cash to work.

It remains to be seen whether this siren song of attractive yields sung by the developers and property agents will lure unsuspecting buyers to crash upon the rocks of financial hardship if and when the market corrects.

Meanwhile, given how strongly the government has come out to talk down the property market since the

- January measures (including the Budget 2013 measures to discourage high end property investment), and
- have thus put their credibility on the line to show that they have control over the situation,

- the continuing bullishness in the sector will be a source of embarrassment for them.

Watch out for more measures – rocky coasts ahead!

By Mr. Propwise, founder of, a Chartered Financial Analyst and resident real estate analyst at, a site to help property owners and investors make profitable decisions in uncertain times. ... 19509.html
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Re: - Singapore Property Weekly Issue 62

Post by lootster »

Have been pondering who is the real guy behind the name, "Mr Propwise" ? :roll:
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Post by candy_chia »

Property Renting Tip #1: Are You Landlord Material?
APRIL 4, 2013

Do you have what it takes to be a Landlord?

The responsibilities of a Landlord are considerable.

~~ It’s not just about providing a space for your Tenants.
~~~ There are rents to collect, repairs to attend to and maintenances to deal with.
~~~~ You also have to handle unsatisfactory Tenants and consider the relevant laws.

(1) As a Landlord you have to recognize that your Tenants are your Customers and they are the ones paying or covering part of the mortgage loan for you. So do treat your Tenants nicely and provide a clean, safe and functional house for them to enjoy their stay.

(2) It is a good practice to stay engaged with your Tenant regularly to be aware of the condition of the house they are staying in.
Regardless of how well-built the house is, there is bound to be wear-and-tear and it may need repair and rectification from time to time. Bad weather tends to lead to more wear-and-tear and may even cause some structural problems to your house. Address the problems early and rectify it as soon as possible.Spending some money upfront will help to avoid expenses on big ticket items in the future.

(3) We are not saying you have to check on your Tenant on a monthly basis – once a quarter is more than sufficient.

(4) It is necessary to keep a safe distance with your Tenants. Being too close may give your Tenants a chance to delay or avoid paying rent!

By Eileen Tan and Ui Wei Teck, property investors and authors of Enjoying Mid-Life Without Crisis. This tip and dozens more are from their book. ... -material/
Ms Tan wrote:Landlord Material

Do you have the Landlord material? The responsibilities of a landlord are considerable – there are unsatisfactory tenants to evict, rents to collect, repairs and maintenance to attend to, and laws to consider.

Landlord has to remember your tenant is paying your loan mortgage for you, so do your best in providing a clean, safe and functional house for your tenant to enjoy the stay.

All the Best,
Eileen Tan ... %3F#p19618
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Re: - Singapore Property Weekly Issue 62

Post by candy_chia »

Personally, I find that this is a thought-provoking phrase, "Smart investors know how to Make Money BOTH Ways, Amateurs ONLY During Boom Times" and it motivates me towards becoming a "smart investor" one day, whether in property or equity. :D

Much Success can be attributed to INACTIVITY.

MOST investors CANNOT Resist the Temptation to Constantly Buy and Sell.”

- Warren Buffett


4 Commonly Believed Property Investment Myths
By Aktive Learning | – Mon, Sep 17, 2012

By Gerald Tay (guest contributor)
Here are four of my all-time favourite Conventional Wisdom Myths for the ordinary investor.

I define an ordinary investor as anyone who’s
~~ holding a full-time back-breaking job, dependent on a job for income,
~~~ maybe has a family to support, has some money to invest,
~~~~ dreams of becoming wealthy one day, and
~~~~~ wants badly to get out of the rat race.

There is tons of information out there on how to invest in property: the internet, books, seminars, newspapers, financial “gurus”, property “experts” and even your next-door neighbour. Most of this “information” contains a grain of truth and a lot of misinformation.

How do the “gurus” fool so many people for so long? How do they get people to believe in what they’re selling even after it has been proven time and time again to be a bad idea? I just realized one day how dumb the conventional wisdom is and questioned why everyone believes in it.

Many ordinary investors have been fed with investment “knowledge” that is often unusable, impractical or even nonsensical, by those with only self- interest to gain from a sale or “experts” who know no more than the man on the streets.

Here are the four Conventional Wisdom Myths for the Ordinary Investor:

1. Buy and Hold a Property because it’s a Good Long-Term Investment

Just like equities and other investments, the word “Long-Term” is often misused and misunderstood by many. It’s often uttered by salespeople who are out of touch with the changing dynamics of our highly volatile world. I mean, it’s sure going to be a long term investment for you… if you buy at the wrong price or the wrong property.

Any long-term investment may lose money for an investor if he or she is insufficiently educated (think mutual funds).

Assuming that an ordinary investor is lucky, his “anyhow invested” property goes up in value with the inflation rate. But he or she has already lost periods of great opportunities to invest (during property down-turns) that will give exponential growth of passive income (cash flow) to help him or her to get out of the rat race. The opportunity cost is too high.

Even a dead fish will swim downstream. A property that goes up in value by the inflation rate is called inflation growth and not investment growth.

A great property investment will always reward a smart investor with greater than inflation returns plus a good positive cash flow every month.

The baby boomers in the USA are now facing a retirement crisis because they foolishly believed that property was always a good long term investment for retirement. However, the 2008 US mortgage crisis proved fatal and dashed those retirement dreams. They actually believed that such an event would never occur within their lifetime!

2. Buy, Hold and Sell Property for Capital Gains

You’ve heard people who boast about how they make a fortune buying and selling properties, and you’re eager to learn how they do it. What if I say this strategy is no different from gambling? And you don’t need to learn to gamble. I rather you go buy 4D or TOTO which is a lot less expensive (of course the odds are different).

I call this the Buy, Hold and Pray strategy.

As my late multi-millionaire grandfather put it,
~~ “Amateurs invest on Capital Gains.
~~~ TRUE-Blue investors invest on IMMEDIATE Cash Flow.


Nobody knows or can predict the future, not even the gurus.

A good investment Makes Money for the investor on the Buy, not on the Sell.

You should prioritize cash flow over capital gains.

Your immediate cash flow return should be at least on par or greater than current inflation rate. If you wish to, you should be able to buy a good investment property, hold for passive cash flow and never sell!

3. You Can Make Millions Investing In Property

Anyone who wants to sell you overnight success or wealth is NOT Interested in your Success; they are interested in your Money.

Enough of over-hyped marketing gimmicks from seminar “gurus”! Unless you are a property developer who buys a piece of land, builds and sells multiple units wholesale, you can almost never make millions by simply being an ordinary retail investor.

It’s a complete myth that one needs to make millions in property investment to become rich. As an ordinary investor, you don’t want to become a millionaire on paper; you want enough passive income to get you out of the rat race. And you don’t have to buy multiple properties (it’s a bonus if you can) to retire wealthy.

Just one or two great income generating properties with reasonable returns will be enough.

4. You Must Invest Constantly to Beat Inflation

Never invest for the sake of investing. Invest only because you want to, not because you need to. Invest when the investment makes sense. If it doesn’t, don’t invest!

Billionaire Donald Trump says it clearly, “Sometimes your best investments are the ones you don’t make."

I’m personally out of the Singapore property market for now (that’s why I’ve more time to write articles like this).

Currently, I‘ve cash sitting in the bank deposits with low returns.

Am I even concerned about inflation? No. Why waste your money buying over- inflated assets with returns that barely beat the current inflation rate? It’s safer for it to be in the bank (at least I know my money will be there) than to risk losing it.

But when it’s time to buy, I’ll go in big time. Is it not risky, you might ask? Not if one is educated enough to see and ride on opportunities when presented.

Who’s naked when the tide turns?

There are many today who are buying on hopes of capital gains in a booming property market. Let’s see who stands naked when the tide turns.

===> Smart investors know how to Make Money BOTH Ways, Amateurs ONLY During Boom Times.

Invest on common sense and logic. Invest With your Head, NOT your heart. Be a smart property investor.
By guest contributor Gerald Tay, CEO and Chief Trainer at CREi Academy Group.

Posted courtesy of, a Singapore property blog dedicated to helping you understand the real estate market and make better decisions. Click here to get your free Property Beginner’s and Buyer’s Guide. ... 24689.html
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Re: - Singapore Property Weekly Issue 62

Post by ngtfook »

Warren Buffett makes money in 1 simple way... Buy Low Sell High (or Never Sell). :) :)
Personally, I find that this is a thought-provoking phrase, "Smart investors know how to Make Money BOTH Ways, Amateurs ONLY During Boom Times" and it motivates me towards becoming a "smart investor" one day, whether in property or equity.
Price is what you pay; Value is what you get
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Re: - Singapore Property Weekly Issue 62

Post by candy_chia »

Maybe that's why Warren Buffett is so unique & can maintain his "round table" award (top 3 in Forbes ranking) all these years, with exception of 2013.

However, how many people can practise such an extreme investing strategy of ignoring the fluctuations for decades? :shock:

It is already amazing that I manage to hold my shares portfolio for nearly 6 months, I must extend my stamina till DJIA reaches 75% optimism.

Step by step, I will master the skill 功夫 to develop patience & eradicate my fear to pickup bargain stocks during the bear markets like Ray (ngtfook), ein55, KYH & many other experts who are still quite humble to share their valuable experience. :D

"Carlos Slim is once again the world’s richest person, followed by Bill Gates. Amancio Ortega of Spanish retailer Zara moves up to No. 3 for the first time. He is the year’s biggest gainer, adding $19.5 billion to his fortune in one year. He moves ahead of Warren Buffett, despite the fact that the U.S. investing legend added $9.5 billion to his fortune. This is the first year since 2000 that Buffett has not been among the top 3."

Forbes|3/04/2013 @ 6:58AM ... d-figures/
ngtfook wrote:Warren Buffett makes money in 1 simple way... Buy Low Sell High (or Never Sell). :) :)
Personally, I find that this is a thought-provoking phrase, "Smart investors know how to Make Money BOTH Ways, Amateurs ONLY During Boom Times" and it motivates me towards becoming a "smart investor" one day, whether in property or equity.
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