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Singapore: A good long term investment?

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From an AsiaXpat thread about Forest Island, in Malaysia, near Singapore

 

> https://hongkong.asiaxpat.com/forums/hong-kong-property-finance/threads/4e5b219c-1d73-4fec-997d-4134945a0c08/dream+home+in+malaysia+-+forest+city/

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Singapore is still in the down-phase of the 18 year cycle.

I cannot see much enthusiasm in Forest City, until the cycle is Zooming Up again

 

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(from the article):

"Samuel Tan, executive director at KGV International Property Consultants, said approvals for all new serviced apartments in Johor have been frozen since 2014 and existing projects were introducing more affordable properties at around 600,000 ringgit instead of 800,000 to 1 million ringgit.

“Given the oversupply, we don’t foresee any recovery until 2019 for high-rise projects,” Tan said. He said China’s capital controls were only significant to the Chinese-owned projects.

The glut of properties being built in Johor has also affected local developers, Petaling Jaya-based Tropicana Corp. is giving a 25 percent rebate on the list price of homes they are marketing an interest-free, 36-month deferred payment plan. Resale asking prices of properties in Johor have dropped 2 percent in the past two years, according to real estate listings website PropertyGuru.com.

Yu, the buyer from Guangzhou, worries that the thousands of apartments still to be built at Forest City will be hard to sell without Chinese buyers."

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> https://www.bloomberg.com/news/features/2017-06-22/the-100-billion-city-next-to-singapore-has-a-big-china-problem

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There was no look back however...

 

 

More on that Morgan Stanley -- double by 2030 -- call in the above video

 

 

And another one... Excerpt: """in my view, when the fundamentals are right,

you could still get returns of 500pct"""" ???

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Singapore Property Stocks Hammered

Singapore’s renewed clampdown on speculative property demand sent real estate stocks reeling on Friday, as analysts predicted the end of a nascent home price rebound and the deflation of a buoyant market for collective sales.

The tightened rules, rolled out a day after the central bank noted “euphoria” in the property market, sharply increase buyers’ stamp duties for entities such as developers. Singapore’s benchmark Straits Times Index dropped as much as 2.5 percent Friday as property developers and banks led declines, with City Developments Ltd. and UOL Group Ltd. sliding more than 16 percent each.

City Developments Ltd ... SG:CDL- update :

3FRMHuS.png

UOL Group Ltd. ... SG:UOL / U14.SI ... chart : 5yrs :

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As major property markets from New York to Sydney show signs of cooling, Singapore and Hong Kong prices are on a tear, causing unease among local policy makers. In Singapore, a sudden rebound in speculative demand, stoked by record land bids and redevelopment deals, threatened to undo years of carefully implemented curbs that had given the city-state an edge over Hong Kong in quality of living.

https://www.bloomberg.com/news/articles/2018-07-05/singapore-steps-up-property-cooling-measures-after-strong-gains

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FTSE Straits Times Index / SG:STI ... All Data :

cbN8rQY.gif

Singapore’s Stock Market Correction is Here: What Investors Should Do Now

Chin Hui Leong

Shares of property developers fell sharply after the Singapore government announced new measures to cool down a heated property market.

The new set of rules include higher stamp duties and tighter requirements around the loan-to-value limits on residential property purchases. Before the implementation, the Monetary Authority of Singapore (MAS) had warned of “euphoria” and “excessive exuberance” in the property market.

As of 10:45 am today, shares of City Developments Limited (SGX: C09) and UOL Group Limited (SGX: U14) had fallen 15.8% and 12.5%, respectively. CapitaLand Limited‘s (SGX: C31) shares also dived 4.1%. Singapore’s banks, which provide housing loans, were not spared either. DBS Group Holdings Ltd (SGX: D05) fell almost 3% while its peers Oversea-Chinese Banking Corporation Limited (SGX: O39), and United Overseas Bank Ltd (SGX: U11) dropped 2.6% and 3.3%, respectively.

As a whole, the Straits Times Index (SGX: ^STI) fell by over 2%, pushing Singapore’s stock market deeper into a market correction.

We Meet Again, Market Correction

A correction is often defined as a fall of 10% or more.

As it stands, Singapore’s stock market is down 12.4% from its high. The sharp decline sounds like a horrible thing to happen, but it also quite a common occurrence in the Singapore stock market. The diagram below shows the maximum decline from peak-to-trough for the Straits Times Index for each year between 1993 and 2016, a period of 24 years.

ppj0Iz4.png

Here are some odds to chew on: Of the 24-year period above, all but three years saw a 10% decline or more. To simplify, nine out of every 10 years saw a more than 10% fall from peak-to-trough. That’s a high probability.

With that in mind, I would argue that investors should get comfortable with market corrections as it is likely to happen again in the future.

However, what should investors do in response?

> MORE: https://sg.finance.yahoo.com/news/singapore-stock-market-correction-investors-035544020.html

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