Housing Cracks

For the past 2 years I have been ranting about sustainability issues of Singapore's housing market. Until recently, I had been regarded as some kind of lunatic. However these days, the tone of people around generally changed from, "You can never lose buying properties in the long run," to "I'm beginning to be afraid what you said will come true." What do you mean what I said will come true? I am not a seer with a crystal ball trying to predict the future.

Life happens in a cycle. If you tell me the sun is rising tomorrow, it is hardly a prediction. But how can we compare human activities to nature? Why not? In both aspects, there are stable and unstable cycles. The sun rising approximately every 24 hours as stable as human stupidity. Unstable forces of nature such as volcano eruptions exist to confuse human beings, who thought they could break every single DNA of nature. So far we have only achieved modest forecasting nowhere near precision. Similarly economists thought they can understand why and how the global numbers work. More often than not, it has been hindsight wisdom more than often than anything else, though they will like to believe and portray themselves otherwise. Market forces such as property or stock are unstable but they are by no mean coincidences. Their instability betrays the fact that they run on cycles. It is very easy for human beings to forget because we tend to base our forecast on recent data.

So are you still convinced buying a property in Singapore bao jiak? Probably so. This rental yield dip is just a minor glitch. Property prices will bulldoze these meaningless obstructions and rocket. Property investment will always be profitable "in the long run." Remember, human stupidity is as sure as the sun rise. This is as good as saying there will be no more earthquakes happening in the world because it has been long long time ago before the last one happened. Cycles never end. If you are caught at the wrong end of a long cycle, chances are you won't live to see that "long run profit."

Some article even claims that loss of foreign talents is affecting private property rentals. I'm sure our Millionaire ministers will pick that up and tell Singaporeans, "I told ya so." Actually they are wrong. Our property market is supported based on aggressive artificial demand. No institution can hold back a natural free market forever. Complacency has been giving way for significant over-supply. With demand slowed slightly because the MIWs want to save their arses for 2016, the market is doomed for a 1997 repeat. Even if it doesn't anytime soon, it will eventually in a much worse manner when our population hits 6.9 million and the government runs out of ideas to further boost the economy by pumping in numbers. The biggest balloon burst the loudest.

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