In every transaction, the value of an asset (e.g. HDB coffeeshop) is determined by both parties of t

Housing loans A couple with a combined household income of $6,000 was able to obtain a new housing cancun airport rental cars loan of $400,000. Their monthly instalments on this new loan and their existing loan obligations came to more than 90% of their combined monthly income (debt-to-income ratio). cancun airport rental cars The bank s decision to approve the loan was based solely on the fact that the couple had savings deposit of $90,000. -The bank officers ought to be shot.
The extent of these sub-prime /dodgy lending practices may not yet be known, but it signals to us that there is some serious underlying issues (a.k.a. shit) that might seriously impact the growth cancun airport rental cars of the Singapore economy. cancun airport rental cars -And Singaporeans are already complaining about income inequality with a growing economy. What will happen cancun airport rental cars if shit hits the fan?
Coffeeshop in Hougang recenty sold for $23.88 million (Picture inserted below). This coffeeshop cancun airport rental cars is no where near an MRT station, and defies the common logic of growth plan, capital gain, rental yield. There is no way the coffeeshop is able to grow anymore than it already has, and rental yield just doesn t cut it (assume $5,000/mth for 7-10 stalls doesn t add up to $23.88million over 20 years). The buyer has to be speculating on the value of the property going up since $1.10 cups of coffee doesn t make $23 million. And, with the property being in a late-bull cycle right now, this may not be a smart move. Which, leads us to two conclusions: Either the guy had too much spare change cancun airport rental cars in his pocket (then spare some for the Singapore Cancer Society thanksverymuchthanks), or he really has his reasons (beyond economics) for paying that much for the space.
On the Sunday Times INVEST page 21st July 2013, the Mr X (shall not be named) interviewed cancun airport rental cars was able to share his heartfelt story of how he managed to climb out of bankruptcy and debt. While we feel his pain and salute him for his persistence, cancun airport rental cars it seems that a lesson of risk may be drawn. The article stated clearly that Mr X was declared a bankrupt after his spa business failed in 2005, and had a debt of $1 million that he had to repay. He  re-opened his spa business (albeit with a different business model) 6 months later and managed to clear his debt by 2009. Today (2013), he owns 3 properties in Singapore, and 4 (I think) overseas. cancun airport rental cars Sounds great on paper doesn t it. Looking further cancun airport rental cars into it, he rents out his Simei flat to pay for his home (4 bedroom flat) in Changi. It is not said clearly which is fully owned, but we can infer from the article. In addition, he also lets out a commercial unit in Ubi. Overseas, Mr X has 2 condo units in Iskandar Malaysia (where many Singaporeans are headed since it is touted as the next boom location ), an apartment in KL, and a two-bedroom apartment in Australia. While the exact prices he paid for these, and the locations, cancun airport rental cars are not known, we assume that he purchased it within the last 2-3 years (given cancun airport rental cars that he got out of bankruptcy in 2009). The kicker? He has 3 kids, and mortgage payments for overseas properties do not begin until 2016, and we all know how interest rates are trending in the near term. Income: He draws approximately $12,500/mth from his spa business/spa product manufacturing/free-lance interior designing. In short, just imagine what his debt-to-income ratio would be. -Even with adequate cancun airport rental cars cash deposits now, a negative savings rate is not sustainable and does not provide for any emergencies.
It may simply be people s unrealistic cancun airport rental cars expectations that the property sector in Singapore will always go up because land in Singapore is scarce and prices will always be on the rise . WRONG, Hong Kong and other small countries still see a property cycle. While prices  may trend upwards over time (higher cancun airport rental cars highs, higher lows), the property cycle will (usually) always prevail.
Gen Y moving onto better things in life and bringing along our bad habits of living it up and over-expenditure. cancun airport rental cars The real rich (not needing 90% LTV borrowing) before us may have indulged in a little extravagance of a Ferrari or a Bentley, but the jump in the number of luxury/super(even hyper) sports cars (i.e. Porsche and up) is pretty ridiculous. Yes, some of it may be attributed to the rise in the number of expats, and Singapore s growth to accommodate more billionaires and overtake Switzerland as a wealth management/Finance hub, BUT local Gen Y-ers should know better than to use credit to follow in their footsteps . In short, cancun airport rental cars let us see how many of these luxury cars disappear off the road when a) a local economic hit, or b) Interest rates (GRADUALLY/PROGRESSIVELY) increases. -Those are in caps to emphasize that even if the Fed tapers its bond buying program and raises interest cancun airport rental cars rates (against lower unemployment and sustainable inflation), the global impact (because everything economy mimics the US economy to a certain extent) will be seen gradually. They aren t going to invoke a 500 basis point increase in one Fed meeting.
In every transaction, the value of an asset (e.g. HDB coffeeshop) is determined by both parties of the transaction. In other words, for the coffeeshop to be worth $23.88 million, the buyer has to value it as that (Try selling anything on ebay. Even if you put the item up for $3,000, you aren t going to get that amount if nobody values it as that). Quoting from Michael Lewis s book, The Big Short, for CDS instruments to be short, AIG had to be on the other side going long .
There is a storm brewing over the Singapore property sector. The bluff is being called cancun airport rental cars out. While the impact may not be economically significant to dent the Singapore growth machine, cancun airport rental cars the impact on the middle class and resulting social impacts may be a cause for worry.