And so I’m house-hunting again, this time very determined to buy a place for myself. This is the second time I’m trying to buy something here: I visited a few properties to invest back in 2009, but dropped my investigation when the market started to rebound in the most brutal way. Unlike locals I’m mostly looking at the secondary market as I want something now, not in 3 years. And once again I’m facing one of the worst plague of Singapore’s real-estate market: fake sellers.
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Funny how things go: the first hand-phones were massive brick-like devices, that manufacturers have been striving to shrink as much as possible. This resulted in phones like the skinny Motorola Razr (the old one, not the new!), which I still have lying around in a cupboard somewhere. Now, in an attempt to offer more screen area, phones are growing bigger again, now spearheaded by the Samsung Galaxy Note and its 5,3″ inches screen (in the photo next to my old HTC Desire and it’s 3,7″ screen).
I hesitated a long time to go for such a large phone (or is that a small tablet?). Went back to the store twice to play with it, trying to see how ridiculous I looked trying to make a call with what is almost a tablet. But now that I took the plunge I’m pretty much in love with my Note: the screen is huge, super detailed (1280×800 pixels, as much as a laptop), contrasted and bright. It’s so good it makes using any smaller phone painful! The rest of the phone is pretty much an oversized Galaxy S II, in other words there’s not much to complain about. I can’t say much about the stylus: it’s a good device but scribbling on the screen doesn’t feel natural to me.
It’s a real joy to browse the Web, use applications, read long articles (crisp text!) or play games on this screen. Typing with the virtual keyboard also becomes easier thanks to the much larger keys. So I do not know if I look ridiculous making calls with it, but I’m definitely not caring any more!
Just like in the good old days, Channel NewsAsia has a report on people being paid to queue overnight at a new property launch. The real-estate bubble in Singapore is still alive and kicking despite the government measures to cool it down, a sagging stock market and gloomy economic outlook.
So it’s another quarter and another bunch of real-estate numbers that look pretty much the same as six month ago. The same observations stay true: non-landed is up but slowing down, landed properties are however still skyrocketing. This can’t end well…
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Inflation is back on the radar, and the world economy is still a bit wobbly with quantitative easing here and sovereign debt crisis there, so it’s no wonder some investors worry about not loosing their shirt and turn to gold as not just a new bubble to ride but as a form of wealth protection. Being a “hard asset”, real-estate can also be seen as a form of wealth protection: after all, no matter how bad the economy gets, a house remains a house (well, assuming property laws are still enforced, which historically hasn’t always been the case). It has often been argued that the Chinese real-estate bubble is caused by local investors trying to preserve their capital from high inflation and who lack other investment alternatives, could it be the case in other countries as well ? Continue reading
As URA has released definitive Q3 prices for Singapore’s real estate market, I’m posting a quick updated graphic. This is interesting as it will show the effect (or lack of) the governement’s latest cooling measures.
A few notable things:
Following my previous post about inflation, I was surprised to see that Singapore Airline’s bond public offering was such a big success that they decided to increase allocation. The bonds offer a fixed 2.15% yield with a 5 year maturity.
Two months ago, I was discussing investments with my banker, and the options I had available in this age of low rates. He casually mentioned one of his new bank products: a bond in Singapore Dollars that would offer 2.5% yearly. I reminded him that Singapore’s inflation was over 3%… in other words, I would actually loose money by investing in the bond!
It is interesting that a lot of, if not most, people do not think of inflation when considering investments and savings. This is a big mistake as in my previous anecdote, it can turn a profitable investment into a loosing one. It is a mistake encouraged by the whole financial industry as most performance numbers (stock index, fund performance, etc.) are given in nominal currency rather than inflation adjusted, making the numbers look bigger than they really are. Regular people will do this too, claiming they have made “this much money” by buying a house 30 years ago for pennies and selling it today. Yes, but how much are those pennies worth in today dollars?
Let me start this article by diving right in and showing you the real estate prices in Singapore, quarter by quarter, as collected by the Urban Redevelopment Authority.
Pretty interesting right? Back in July 2009 I was actually thinking of buying a property there to take advantage of the prices finally going down. After a handful of visits I had to give up: things were becoming way too crazy for me. Prices would suddenly go up between the moment the ads were posted and the moment I would set a foot in the property for a visit. In one instance where I was trying to negotiate a condominium unit, the seller decided to raise his original asking price, rather than lower it to reach me halfway as you would expect in any negotiation. For the record, that property still hasn’t sold one year later, but the price has been raised again…
