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Singapore Shows Asia How To Crack Down on Housing Bubble

avatar
10 yrs ago

Our government / Reserve Bank could take a leaf out of Singapore's book

Singapore, the city-state that banned chewing gum to curb litter, is showing the rest of Asia how to cool a housing bubble.

The government this year ramped up efforts to bring down property prices that surged to a record, adopting some of its strictest measures, including a cap on debt at 60 percent of a borrower’s income, higher stamp duties on home purchases and an increase in real-estate taxes. The combination and timing of the curbs is the most comprehensive among governments battling housing bubbles, according to Vishnu Varathan, an economist at Mizuho Bank Ltd

http://www.bloomberg.com/news/2013-10-15/singapore-shows-asia-how-to-crack-down-on-housing-bubble.html

Shudda bought an apartment near Orchard Road when I had the chance.

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AMID all the palaver about a housing bubble, National Australia Bank has dusted off its database and developed an in-house formula that rebuts any suggestion of an unsustainable blowout in residential housing prices.

For want of a better name, we'll call it the "Oster Algorithm", because its parent is NAB's methodical chief economist Alan Oster.

Based on his formula, Oster concludes that if borrowers today were to gear up like their predecessors in the early 1980s, before the peak of that boom in mid-1989, then the current jump in house prices has a long way to go.

All other factors being equal, prices across the nation could surge another 12 per cent, or 20 per cent in Sydney.

Today's oz

Music to my years. What about Brizzy prices ?

Well I guess they are in the rest of the nation so12 per cent

Where you have an ever increasing introduction of rules & licensing, as well as a plethora of Public Servants to ever complicate & increase inefficiency to serve their importance, all added to the Government income from the Housing Industry, the annual increase in the value of homes is a fact, not a bubble.  My family own some Town Houses & Villas  that are currently worth around $435K each.  All we need now is for another builder to build another block nearby, which will cost $435 to construct & sell for $500K & our properties will jump by $50K.  That is a fact of life in this Nanny State.  It is not a bubble.  In answer to Jaguar, it was only about 11 years ago that the stupid Gov., of NSW introduced an exit tax & sent the investers to Queensland just after a couple of quiet years in NSW.  On that occasion the work was in Brisbane & they stayed there.  It is all over now & they are flocking back to Sydney following the start of our 14 year cycle.  Barry O'Farrell is stuffing things up so badly that we are likely to have a Labor Gov., again & their inefficiency will send the investors back to Brisbane & save your arse.  In short, you should have sold a year or 2 back.  At this stage, stay put & don't make the Real Estate agencies & your State Gov., richer.  Bear in mind that every dollar that you actually recover is actually tax free.

there are many who believe australia has a very big land bubble, e.g.

Nobel Prize winner warns on Australian housing bubble.

On Monday, Yale Professor Robert Shiller picked up a Nobel prize in economics for his research into housing asset bubbles. He needs no introduction to frequent readers here – we often publish his Real House Price Index. His research lead to warnings in 2005 that the United State housing market was in a bubble.

He used his prize to warn of the rise of global house price bubbles, singling out China, Brazil, India, Australia, Norway and Belgium.

http://www.whocrashedtheeconomy.com/

there are more lively discussions on the property market on this site:

http://australianpropertyforum.com/forum/3210735/

Kika you have to look at each market separately and in Australia there are markets for each location dependent on supply and demand. 

In Australia as a whole our housing market is roughly divided into three one third rent one third own their own home and one third have a mortgage. The mortgage market is further divided into investment properties which are mortgaged to the hilt for tax purposes . And those upgrading . 

The ones that are affected are those wishing to e ter the market stats show that the young have a preference for inner city living and apartments . This means they combine two incomes and delay a family . We distort prices by having such a huge tax on purchase .

Quote Innes " Barry O'Farrell is stuffing things up so badly that we are likely to have a Labor Gov., again & their inefficiency will send the investors back to Brisbane & save your arse.  In short, you should have sold a year or 2 back.  At this stage, stay put & don't make the Real Estate agencies & your State Gov., richer.  Bear in mind that every dollar that you actually recover is actually tax free."

Yes it will only be a matter of time before investors start chasing better yields and cap growth elsewhere. For the life of me I can't understand why anyone would want to live in Sydney not Brisbane.

Your comment about every dollar recovered being tax free makes no sense. Capital gains tax is at marginal tax rate on 50 %of gains if held over one year.

Wrong Jaguar.  You claim that you are down 20 to 30% & I did say  "....every dollar that you actually recover is actually tax free."  If you make that back up, you have not made any capital gain.  Also, if you sell WITHIN  one year of signing the purchase contract, you are up for capital gains of YOUR marginal personal tax rate.  If you hold for MORE than 1 year from the same date, you are up for 15% of your capital gains.  You also did not mention if the properties were new when you bought them?  Either you made up the story about buying in Brisbane or you badly need another accountant.

You're a rude bugger arent you Innes

See previous posts below. I dont make things up. I mentioned that my propertires are all above water & sitting on capital gains.

 

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innes
avater
16th Oct 2013
9:01pm

You should have sold at the peak, a year or so back.  You have had a magic 10 years & it is now Sydney's turn.  The 14 year cycle is here & the next 3 or 4 years are going to be fantastic for my family.  Isn't it good to be able to call everybody that disagrees with you foul names & at the end of the day the final judgement is shown in the bottom line. BTW,  I rented in Orchard Rd., in the 70s' & wasn't stuck with a property that was returning the owner less than 2%.  My 2 Singaporian partners bought me out with US dollars cash.

 Jaguar
avater
16th Oct 2013
9:09pm

Too right Innes. Actually some parts of Brizzy are down 30% from the peak. I'm hoping prices climb 10% so I can offload 1 or 2. I'm one of the lucky ones who still has cap gains and can live of the rent.

you must miss Singers. I love their food. I often head down to Sunybank for good Singaporean tucker. 

I apologise Jaguar.  I commented, based on memory, rather than going back to read your actual thread.  I am still curious to know where residential property would be down up to 30% in Brisbane.  I am constantly in touch with a number of agents in Brisbane, looking for bargains & I have noted that the burbs have held up well from the bubble peak.  The worst hit areas seem to be the very popular area around Anne St., where I would say it is 7 to 10% off the top.  Even an off the plan purchase from Harry Triguboffe 2 years ago would only be down 10%.  You did not comment on the tax rates.

no worries Innes

Some parts of Logan city have suferred big falls

The suburbs from Logan south to the Gold Coast have been hit the hardest , so agents tell me.

I stayed away from Logan after selling up a property in 2006 thank god

http://au.ibtimes.com/articles/504536/20130909/australia-s-property-crash-gold-coast-homes.htm#.UmXUk3BHKS8

My marginal tax rate is 37% at the moment, so my CGT  is 18.5%.

I now know why I was not aware of the area with the big drop.  I would never be interested in property in the Logan area, for reasons that you would be very aware.  High end Gold Coast has taken a hiding, but I would never touch property in a resort area.  Brisbane will rebound after the next NSW Election.  You should be watching consolidation properties in the Valley for future high rise.

Trouble brewing in HK property market.

Is Australia next ?

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Barclays Plc joined UBS AG and Bank of America Corp. in forecasting a Hong Kong property slump, predicting home prices will fall at least 30 percent by the end of 2015 as income growth stalls and supply increases.

A “downward spiral of home prices is likely” as developers and homeowners adjust expectations, analysts Paul Louie and Zita Qin wrote in a report today. They assigned a “negative” rating to the Hong Kong property sector and said office prices will drop 20 percent.

http://www.bloomberg.com/news/2013-10-28/hong-kong-home-prices-to-drop-30-by-2015-end-barclays-says.html

Sydney market to boom as prices recover from nine year lull and wages rise 

Source Pete

Hong Kong investors flood to Sydney . Clearance rates 86 per cent 

Source Pete

Ifyou are not living in Sydney you are camping out 

Source Paul Keating 

Asia somewhere you fly over on the way to Europe 

Source Paul Keating 

I agree with the likely outcome in HK Jaguar, but not the reasoning.  Development is still going gangbusters in HK & the longest bridge in the World will be completed in 2015 from Hk to Macau & over to Zhuhai on the mainland.  Zhuhai real estate prices have almost trippled in the last 4 years, but they are still way below HK & wealthy busnessmen are already buying there in growing numbers.  If you get oversupply & an exodis at the same time, the bubble will burst again.  There are going to be some real bargains out around Lantau Island when the developers start going belly up.

I'm surprised that buyers from the mainland are not buying up big in HK.

Was in HK last November. Did not notice overly agressive  development in Lantau - sleepy hollow really compared to rest of HK

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