My economic model for Singapore Property

[Limwsv]

This one only time can tell and I'm in no position to comment on your investment decisions.

 

Your opinion on how property prices will go in the future is as good as mine. Main thing is that if you have the conviction and have already done the homework, you should go for it. Fortune favours the bold.

 

I only wish to discuss assumptions and logical consistency of the model you put up.

 

Yep, you are correct about those assumptions.. and I think I have been pretty upfront on them...

 

I choose to believe that Singapore will continue to exist in some form or another in the next 100 years.  Hopefully, we can escape the kind of winnowing that afflict Detroit, Birmingham and so on...  but we are in a pretty special position since the founding of Singapore and we have keep evolving our position vis a vis the world for the last two hundred years.

 

First as a port for spices, then a bunker for steam ship, a manufacturing hub and port for the Malayan hinterlands, and when that went, as a cheap pro-capitalist low-cost manufacturing, then a electronics manufacturing hub, then a financial capital hub and home for the rich of the world.  And even the current government cannot claim credit for all the evolution that this land has went through in 200 years.

 

As an independent nation, we have a lot of say how we want to chart our course and is very responsive to the changing global environment.  With us embedded inside ASEAN and TPF, hopefully we will succeed in jumping to the next point of our evolution.  Maybe we can become Brussel of EU?

 

As I have stated elsewhere, I am not a gambling man, and my logic lead me to a conclusion that property is a very safe bet.  And as you have point out, I am prepare to be tied to this country economics.  Let's explore where my logic fail me, but please, we are looking at time windows of multi-decades, around 20 - 40 years into the future.

Edited December 31, 2015 by Limwsv

[Karoon]

I think the pioneer govt got the property game right. Buy land cheap (forced acquisition), invest in hdb apartments, lease out to owners who pay upfront or max 30 years loan, and make them think it's theirs. Rolling in cash, repeat after 99 years.

[Showster]

Steady analysis.
 
Direct, frankful and to the point.

 

Yep, you are correct about those assumptions.. and I think I have been pretty upfront on them...
 
I choose to believe that Singapore will continue to exist in some form or another in the next 100 years.  Hopefully, we can escape the kind of winnowing that afflict Detroit, Birmingham and so on...  but we are in a pretty special position since the founding of Singapore and we have keep evolving our position vis a vis the world for the last two hundred years.
 
First as a port for spices, then a bunker for steam ship, a manufacturing hub and port for the Malayan hinterlands, and when that went, as a cheap pro-capitalist low-cost manufacturing, then a electronics manufacturing hub, then a financial capital hub and home for the rich of the world.  And even the current government cannot claim credit for all the evolution that this land has went through in 200 years.
 
As an independent nation, we have a lot of say how we want to chart our course and is very responsive to the changing global environment.  With us embedded inside ASEAN and TPF, hopefully we will succeed in jumping to the next point of our evolution.  Maybe we can become Brussel of EU?
 
As I have stated elsewhere, I am not a gambling man, and my logic lead me to a conclusion that property is a very safe bet.  And as you have point out, I am prepare to be tied to this country economics.  Let's explore where my logic fail me, but please, we are looking at time windows of multi-decades, around 20 - 40 years into the future.

[edwin15]

Yep, you are correct about those assumptions.. and I think I have been pretty upfront on them...

 

I choose to believe that Singapore will continue to exist in some form or another in the next 100 years.  Hopefully, we can escape the kind of winnowing that afflict Detroit, Birmingham and so on...  but we are in a pretty special position since the founding of Singapore and we have keep evolving our position vis a vis the world for the last two hundred years.

 

First as a port for spices, then a bunker for steam ship, a manufacturing hub and port for the Malayan hinterlands, and when that went, as a cheap pro-capitalist low-cost manufacturing, then a electronics manufacturing hub, then a financial capital hub and home for the rich of the world.  And even the current government cannot claim credit for all the evolution that this land has went through in 200 years.

 

As an independent nation, we have a lot of say how we want to chart our course and is very responsive to the changing global environment.  With us embedded inside ASEAN and TPF, hopefully we will succeed in jumping to the next point of our evolution.  Maybe we can become Brussel of EU?

 

As I have stated elsewhere, I am not a gambling man, and my logic lead me to a conclusion that property is a very safe bet.  And as you have point out, I am prepare to be tied to this country economics.  Let's explore where my logic fail me, but please, we are looking at time windows of multi-decades, around 20 - 40 years into the future.

 

 

Your logic doesn't fail you and what I like about you is that you never fudge on data or assumptions.

 

My discussion is mainly directed on the shortcomings of the model you have presented.

 

I agree with you that Singapore has a lot going for her however that is also not my discussion.

 

My point is that the model you have presented makes an unfair initial assumption that leads the conclusion. And the worst thing of this assumption is that it gets weaker the longer you look into the future which is what your model pertains to look at. Note, I'm not giving any opinion on the assumption itself but just its place relative to the model.

 

To provide an example; I can have a model to project the stock price of any company using say discounted future revenues and cash flows. But if I make the assumption from the start that this company is under good management and will be under good management in the future and will remain a viable concern for the long run, this model will likely come to the conclusion that the company stock is a a buy and hold.

 

My opinion is that your model needs to look one step before the main assumption to be more relevant. 

[Limwsv]

Your logic doesn't fail you and what I like about you is that you never fudge on data or assumptions.

 

My discussion is mainly directed on the shortcomings of the model you have presented.

 

I agree with you that Singapore has a lot going for her however that is also not my discussion.

 

My point is that the model you have presented makes an unfair initial assumption that leads the conclusion. And the worst thing of this assumption is that it gets weaker the longer you look into the future which is what your model pertains to look at. Note, I'm not giving any opinion on the assumption itself but just its place relative to the model.

 

To provide an example; I can have a model to project the stock price of any company using say discounted future revenues and cash flows. But if I make the assumption from the start that this company is under good management and will be under good management in the future and will remain a viable concern for the long run, this model will likely come to the conclusion that the company stock is a a buy and hold.

 

My opinion is that your model needs to look one step before the main assumption to be more relevant. 

 

Sorry, you lost me... what initial assumption have i used that is not supportable by historical data or reasonable projection?

[Enye]

This thread is about selling Singapore as an attractive destination for property investment

 

Nothing to do with economic modelling

 

Should change title

 

 

[Throttle2]

Three of the same feathers flock together.

Each praising and agreeing with the other

 

Muayhahahahahah

[Showster]

Being direct is better than attacking what one wants to buy right? 

 

I want to buy Rolex. I think Rolex is good. But I can't afford it now. And I don't think it's price will fall. I just need to save more. To me, that is direct.

 

Three of the same feathers flock together.
Each praising and agreeing with the other

Muayhahahahahah

 

[Throttle2]

Base on TS's belief. Anytime is a good time to buy properties becos in the long run, it will be up, be it 10yrs or 30, 40yrs. That in the long run prices will go up will most likely hold true, And i dont think we dispute that.

 

However, most of us (if not all) in this forum have limited resources and entering (and exiting) the market at the right opportune can make a very significant difference. That i also believe, none of us here will be silly enough to dispute.

 

Therefore for the astute person with a decent pot of funds, the Singapore property market is slow moving enough and simple enough to execute and make above inflation type returns.

 

Sure, there is a 10yr life for a COE, one may argue, but it is this same basis of timing, that TS has made so much analysis on and concluded that it is too high to enter COE, isnt it?

 

Your Honor and members of the Jury, I rest my case.

Muayhahhahaha.

Edited December 31, 2015 by Throttle2

[Throttle2]

Being direct is better than attacking what one wants to buy right?

 

I want to buy Rolex. I think Rolex is good. But I can't afford it now. And I don't think it's price will fall. I just need to save more. To me, that is direct.

attacking? Nah..

 

Stating the obvious, guilty i am. Heeeee

[Enye]

Base on TS's belief. Anytime is a good time to buy properties becos in the long run, it will be up, be it 10yrs or 30, 40yrs. That in the long run prices will go up will most likely hold true, And i dont think we dispute that.

 

However, most of us (if not all) in this forum have limited resources and entering (and exiting) the market at the right opportune can make a very significant difference. That i also believe, none of us here will be silly enough to dispute.

 

Therefore for the astute person with a decent pot of funds, the Singapore property market is slow moving enough and simple enough to execute and make above inflation type returns.

 

Sure, there is a 10yr life for a COE, one may argue, but it is this same basis of timing, that TS has made so much analysis on and concluded that it is too high to enter COE, isnt it?

 

Your Honor and members of the Jury, I rest my case.

Muayhahhahaha.

Yes TS can make so much analysis on Coe prices and timing his car purchase appropriately

 

But come to property investments, suddenly no analysis needed. all blind faith on Singapore's progress in the long term

 

 

[Porker]

Yes TS can make so much analysis on Coe prices and timing his car purchase appropriately

 

But come to property investments, suddenly no analysis needed. all blind faith on Singapore's progress in the long term

 

 

[Limwsv]

Yes TS can make so much analysis on Coe prices and timing his car purchase appropriately

 

But come to property investments, suddenly no analysis needed. all blind faith on Singapore's progress in the long term

 

 

Edited December 31, 2015 by Limwsv

[Throttle2]

Aiyo TS,

 

No need to explain so much lah.

Its like you are experiencing cognitive dissonance and need to reassure yourself.

 

One thing is for sure, your Principal Gardens location is a decent one compared to many others which are priced similarly. So i personally also think that its ok. Not the best or greatest deal but decent lah.

 

Perhaps you need to learn to be more confident of yourself and quit your longwinded explanations.

You'll feel better after that.

 

Like i said, your money your decision your life.

If you make a load, you wont share it with us.

If you screw up, we aint gonna help you either.

 

Enjoy the holidays

 

Muayhahahaha

[Limwsv]

Aiyo TS,

 

No need to explain so much lah.

Its like you are experiencing cognitive dissonance and need to reassure yourself.

 

One thing is for sure, your Principal Gardens location is a decent one compared to many others which are priced similarly. So i personally also think that its ok. Not the best or greatest deal but decent lah.

 

Perhaps you need to learn to be more confident of yourself and quit your longwinded explanations.

You'll feel better after that.

 

Like i said, your money your decision your life.

If you make a load, you wont share it with us.

If you screw up, we aint gonna help you either.

 

Enjoy the holidays

 

Muayhahahaha

 

Enjoy your holidays too... 

 

As for all this bubbling, it's sharing... I have 100% assurance in my decision with my purchase of the property.  If you are following, all these came about because we are discussing lifestyles and cars.  Enye always like to dig and dig and dig, so I oblige him.

[Enye]

Ho... you're back... I thought you had said that you have said your final piece in the other thread? So you want to start the discussion again?

 

I am not sure where your idea that I have not done my analysis and that the purchase is done on blind faith comes from. Sufficient information has been shared with you on how the decision is made. So, if you want to continue in that vein, sure, by all means...

 

But I doubt that we can continue to have any meaningful conversation since you are no longer listening... just emoting your own fear in taking a leap forward in buying additional property.

 

The objective is never to buy at the lowest point, and even for the car, I have been prepare to buy at 100K back at beginning of 2015, knowing that COE will drop further by 2016 and 2017. So, I am not sure why you'll seems to think that I am seeking for the lowest price.

 

If you firstly agree that property in the long run will appreciate for my time window, then any point can be a starting point. But there are starting points and then starting points. Properties like cars have unique characteristics that make them not completely substitute-able.

 

So, a condo in Yishun is not equivalent of a condo in Orchard road, even if in terms of facilities, structure and price they are identical.

There are those that are seeking for the bottom point to enter the property market, am not doing that because it requires exquisite timing.

 

All it takes is a couple of rate hikes and massive outflow of funds towards USA and you may have the government lifting the current restriction. Then the market will lift-off. No one, not even the minister himself is sure when they will make that decision.

 

However, Principal Garden has good location going for it, near Chinatown, CBD and Orchard Turn. And it's priced attractively lower than it's neighbouring projects that have been launched within the year.

 

If you have gone to the showrooms, you can see the counterpart developer desperately trying to draw the crowds over next door to its project. I did not take the bait... why? Because it price way higher than what I can at Principal Garden

 

I probably can wait a couple more months but how much further will property prices fall within that time? And will I still be able to buy the unit with the location, facing and layout that I desire?

 

Anyway, I doubt you will be convinced since you are looking at it from a accounting practice approach, trying to figure out NPV and so on.

Hopefully you don't belong to the group of people that I don't really like in all the company I have work so far, ie the FC. Which only knows how to balance the books but don't understand how to build a business.

 

They can tell you that you are short of another 10 million in your sales pipeline but totally clueless that by restricting expenses, you cannot cover the hole in the pipe.

I have never worked in a company whose executives make business investment decisions based on blind faith and wordy justifications.

 

the first things executives ask their analysts are how much will the company make(npv), what is the rate of return(atror) and when do I expect payback. The detailed cash flows used to obtain the previously mentioned numbers would have taken into account all financial assumptions made including the macroeconomic environment. From the basic model, different sensitivities are then developed.

 

These are what business executives right up to c suite executives ask on every single investment they are considering. Accounting people are not even involved in such analyses.

 

But like what t2 said, it's your money. Invest it in whatever way you like. And yeah continue to dislike the fc group.

 

 

[Porker]

Ho... you're back... I thought you had said that you have said your final piece in the other thread? So you want to start the discussion again?

 

I am not sure where your idea that I have not done my analysis and that the purchase is done on blind faith comes from. Sufficient information has been shared with you on how the decision is made. So, if you want to continue in that vein, sure, by all means...

 

But I doubt that we can continue to have any meaningful conversation since you are no longer listening... just emoting your own fear in taking a leap forward in buying additional property.

 

The objective is never to buy at the lowest point, and even for the car, I have been prepare to buy at 100K back at beginning of 2015, knowing that COE will drop further by 2016 and 2017. So, I am not sure why you'll seems to think that I am seeking for the lowest price.

 

If you firstly agree that property in the long run will appreciate for my time window, then any point can be a starting point. But there are starting points and then starting points. Properties like cars have unique characteristics that make them not completely substitute-able.

 

So, a condo in Yishun is not equivalent of a condo in Orchard road, even if in terms of facilities, structure and price they are identical.

There are those that are seeking for the bottom point to enter the property market, am not doing that because it requires exquisite timing.

 

All it takes is a couple of rate hikes and massive outflow of funds towards USA and you may have the government lifting the current restriction. Then the market will lift-off. No one, not even the minister himself is sure when they will make that decision.

 

However, Principal Garden has good location going for it, near Chinatown, CBD and Orchard Turn. And it's priced attractively lower than it's neighbouring projects that have been launched within the year.

 

If you have gone to the showrooms, you can see the counterpart developer desperately trying to draw the crowds over next door to its project. I did not take the bait... why? Because it price way higher than what I can at Principal Garden

 

I probably can wait a couple more months but how much further will property prices fall within that time? And will I still be able to buy the unit with the location, facing and layout that I desire?

 

Anyway, I doubt you will be convinced since you are looking at it from a accounting practice approach, trying to figure out NPV and so on.

Hopefully you don't belong to the group of people that I don't really like in all the company I have work so far, ie the FC. Which only knows how to balance the books but don't understand how to build a business.

 

They can tell you that you are short of another 10 million in your sales pipeline but totally clueless that by restricting expenses, you cannot cover the hole in the pipe.

Brudder next time I do M&A and need a CEO to build up the business I look for you. You sound like an expert in building businesses lah

[Enye]

Brudder next time I do M&A and need a CEO to build up the business I look for you. You sound like an expert in building businesses lah ð

You need accountant or not? Please look for peasant me ok?