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The typical Singaporean cannot just count on the removal of cooling measures to invest in real estate

It’s been a while since my last post.

Today, let’s talk about this real estate report from Property Guru.

 I almost vomited out my breakfast after reading how these self-proclaimed authorities give “golden advice” on property cooling measures removal for the general public.

I hope you reading it after, will not cleanse your breakfast/lunch/dinner contents from your stomach.

I re-quote:

Dr Chua Yang Liang, Research Head at JLL Southeast Asia, said,

“(Singapore’s housing prices) are close to a trough with economic conditions steady and physical market conditions balancing … The gap between the prime and non-prime market has narrowed and when economic conditions improve, we should expect the high-end market to pick up.”

Can you easily understand the above gibberish from your 1st read? I’m not sure about you but I certainly don’t. I had to read and re-read and re-re-read the statement, and I still don’t get any sense.

Dr. Chua holds an academic doctorate. One can’t blame him for sounding “sophisticated” and “intelligent” with confusing words you need to look up in the economic dictionary:

“Close to a trough”?

“Physical Market Conditions”?

“Balancing”?

“Economic conditions Steady”?

He can save all the headaches by simply saying “Now is a good time to buy for price appreciation (speculation)”.

If you want to sell something to an audience, relate the point to the simplest form in their terms.

But we’ve to forgive him since he’s an academic and not an investor or salesman.

He reminds me of my boring economics lecturer during my school days reading a full text right out of the chunky textbook!

In any successful investments, you don’t need to sound intelligent or have a 150 IQ or a ‘Dr’. behind your name.

You just need “street-common sense”.

‘Street-Common’ sense is different from ‘intelligent’.

I know of “doctors” and “professors” and other more intelligent “sounding” species than myself make nonsensical investment decisions.

“Street-common sense” tells us even though prices in high-end have dropped quite drastically, rentals have dropped WORSE on global economic concerns and an over-supply and cost-cutting expats!

It tells us that even if the high-end market do pick up later (which I personally think otherwise), it is still an extremely speculative investment for any buyers with low rentals and high prices.

High-end market is a sunny beach (as long as it remains sunny) meant for the Rich (UHNW) and market punters to get a sun tan. (Some get sun-burn and worse skin cancer. If it rains, you look like a panda)

Such markets are not for the serious guy on the street looking to build sustainable wealth.

When giving a public online commentary read by both the Rich and Middle-Class, is Dr Chua Yang Liang’s ‘advice’ meant to serve the interest’s of the Rich and vested parties?

He may want to act more responsible and specific in his future statements.

I re-quote:

Selena Ling, Head, Treasury Research and Strategy, OCBC said,

“I think the earliest we may see some unwinding of measures will be 2017 because we haven’t quite reached the double-digit price correction that they want.”

She’s a ‘Researcher’. She produce research by studying data, stats and numbers on paper. Anyone can give future “fore-casts” if you have a degree in stats or economics.

Wait… fortune tellers don’t have academic degrees and blabber sophisticated sounding economic terminologies.

The REAL market never works like it looks on paper. If it does, anyone would have easily foreseen 9/11, 1997 Asian Financial Crisis or the 2008 Global Financial Crisis or the Sub-Prime Mortgage Crisis.

Being a REAL investor with street-sense is different from being a ‘Researcher’ with prestigious academic qualifications.

The former is a tough gutsy soldier fighting a war in the trenches getting bloodied and the possibility of ‘death’ .

The latter is a keyboard warrior who sits in the comfort of her/his ivory tower and receives a regular paycheck from a nanny.

From history, there are many reasons the government remove cooling measures such as during severe market downturns and to revive a ‘ghost’ market. A Double-digit price correction is never the only reason. There may be other political reasons as well.

And how in the ‘bloody’ sense can Selena “foresee” that we may see some unwinding of cooling measures in 2017?

So besides being a full-time ‘Researcher’, she’s taking on the role as a part-time ‘Weather Forecaster’? Is she not paid enough as Head, Treasury Research and Strategy at OCBC?

If so, she might want to consider switching career as a “Paper Strategist” receiving a regular paycheck to being a ‘Full-Time’ Property investor/entreprenuer in the trenches to grow her wealth.

But I know “academics” and “researchers” will never consider risky ventures with no certainty.

They prefer to sit in the comfort of their air-conditioned ivory towers typing at keyboards and writing paper reports with datelines while drinking Starbucks coffee, than getting sweat and bloodied in the trenches where the real war is.

When it comes to the more falsifiable measure of wealth, public media, salesmen and ‘experts’ perpetuate obnoxious get-rich myths.

Some are true, some are true only to a certain extent so you need to read beyond the fine prints and most are just fantasies skilfully made-up for plain public entertainment like fiction books and Hollywood movies.

In reality, the typical Singaporean cannot just count on the removal of cooling measures to invest in real estate for retirement or wealth building. There’s a degree of tunnel vision among current property buyers with cash savings and property being the “Get-Rich” investment of choice.

All asset classes’ performance will rise and fall as the current softening of the global economy and low deposit rate environment show us.

Real estate is long-term (decades) and requires much more effort and sweat to see it “happen” than just betting on price speculation and cooling measure removal.

Also, funding enough for retirement or grow “Wealth” involves more than investing alone. Serious retirement savers require long-term positive financial habits, a strong character (not kiasi/kiasu), good lifestyle habits and many more positive traits shown by truly wealthy individuals.

 

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About the Author

Gerald Tay Author, entrepreneur, professional investor and loving father, runs crei-academy.com with a tongue-in-cheek approach to property investment - and himself. He is widely regarded in the industry as 'The Common-Sense' Investor. Gerald writes with passion and straight-forwardness, disclaiming wild claims and impractical investment strategies behind lies and ignorance pervasive in the property industry for vested interests. His well-known statement, "All I did is to value my investments with science, logic and common sense.'

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