Not sure if anyone is still following the prediction, but it’s looking really good for me from where I stand. Let’s take a look at the latest URA PPI figures:
The figures have changed since the last update due to the change in the methodology that URA uses to calculate the PPI. Most significantly, they have re-based the index to 2009 from 1998. For congruence, I have recalculated the PPI figures back to 1Q 2012. They have also stopped issuing figures for different sub-categories of housing.
As you can see, up to June 2015, the index has fallen a MASSIVE 2% from our base period 1Q12. Hardly the 30 – 50% fall that was envisioned by the forumer. Unless something drastic happens in the next 6 months, my crystal ball prediction is looking pretty safe. Yay!
Join me again early next year for my victory lap!
Centauri78 is not a licensed financial advisor. The information contained here is purely personal opinion, and whilst I make every attempt to ensure the accuracy and reliability of the information, this information should not be relied upon as a substitute for formal advice or as basis for investment.
If you have been following the blog, you may recall a prediction that I made a while back in August 2012 with regard to the residential property market, as measured by the URA housing price index. The prediction was for prices to rise for a couple of years from the beginning of 2012, and for prices to stagnate thereafter. Now that the first period of the prediction is over, let’s take a look as to where the market is now. Continue reading “Interim Review of Crystal Ball Prediction”→
If there’s part I, there must at least be a part II, right? Of course!! If you’ve been waiting for this sequel, sorry I’ve kept you waiting for so long. I hope I pack enough of a punch here to be worth your waiting time!
So anyway, some of you out there may be thinking that you’re nice and comfortable living in your rental place and moving’s such a hassle. However, property ownership still sounds like a good option to hedge against rising rentals. Well, certainly, you can do both! However, there are a few options, and correspondingly, there are a couple of questions you have to ask. Continue reading “An idea to explore if you’re renting (Part II)”→
This article isn’t about property, but I thought since I’d written about property shares and REITs previously, this may be relevant to some of our readers.
While I am a proponent of investing for income, one thing that irritates me to no end when I read it in articles written by income investors is the concept of yield over original cost.
I read an article a while back by an ex-financial advisor. In it, he was saying how while he was still a rookie, he advised his client to switch from a low-yielding share to another counter having a higher yield. The client refused, saying that while the yield is low, it is actually giving her more than her original buy price each year, or more than 100% yield over original cost! The author, unjustly shamed, took this “lesson” and presented it as a truth of income investing.
I imagine that in every tenant’s mind, there comes a time when they will question whether it is better to continue renting or to buy a home. After all, rent paid is basically water under the bridge, lost forever. If they were going to pay anyway, wouldn’t it be better to pay your own mortgage and build equity? Just about everywhere, home ownership is the cornerstone of the [insert country name here] Dream.
Of course, there are pros and cons to renting vs owning. Here’s a quick (non-exhaustive) rundown of the main pros and cons:
Over the last 4 weeks since we restarted The Straits Times Property News Heat Map, news flow has actually been pretty slow. With 53 articles talking about the property market in 4 weeks, that’s an average of 13.25 articles per week or 1.89 articles per day. In Season 1 (9 Sep 12 – 19 Jan 13), there were 273 articles in 19 weeks, or 14.37 articles per week, or 2.05 articles per day on average.
With interest rates staying at all-time lows, mortgage loans have been so affordable that the government has almost been forced to throw measure after measure at the property market to cool demand. However, conventional wisdom tells us that this abnormally protracted period of low interest rates cannot last, and that interest rates should revert to its long-term mean of about 2 – 2.5% pa, or implied mortgage rates of around 3.5% pa vs current mortgage rates of around 1.1% pa. It doesn’t really sound like much until you actually calculate your monthly payments in dollar terms. For every $1 million of loan of 30-year tenure, the monthly payment is going to increase from $3,263 to $4,490, a whopping 38% increase!
Now that the government has clamped down on buying and selling of property, perhaps it is time to look at other ways you can invest in property. One of these ways is to buy shares of companies that deal with property, whether as developer, contractor or owner-manager. Some such counters are Capitaland (developer), Ho Bee (developer), Wee Hur (developer, contractor), Suntec REIT (owner-manager).
Last week, Finance Minister Tharman Shanmugaratnam gave his Budget Speech for 2013. Amongst the main themes of the speech, the most glaring to me was the re-distribution of costs from the lower-income/lower-wealth group to the higher-income/higher-wealth group. This is a natural progression in a maturing economy and should be expected. Of the items listed as part of this theme, those that pertain to the property market are: