Bear and Bull?

While browsing through the CNA forums today I spotted a phrase which really tickled me.

"Kow Bear Kow Bull"

Chances are you wouldn't get the joke unless you understood Hokkien. ;)

Had a good chuckle and it made my day.

Young Couples Hit By Hot Flat Resale Market

Sun, Jul 22, 2007

The Straits Times

WAITING a year to purchase a five-room flat in Bukit Merah has cost marketing executive Zubaidah Salim $118,000. The 25-year-old and her software engineer fiance had put off buying a flat there last year.

Since then, they have watched the average price of a five-room Housing Board resale flat rise from $349,000 to $467,000. Said Miss Zubaidah: 'We feel like kicking ourselves for not buying a flat last year. Resale prices are so high now that I don't think we're able to afford a five-room flat any more.' Refusing to budge from their $400,000 budget, the couple have decided to wait for property prices to dip and stay with their parents for the time being.

The red hot HDB resale market has been particularly tough on newlyweds who are scouting around for their first matrimonial flat, said property agents. Most are in their 20s, have worked no more than five years, and do not have much in their Central Provident Fund (CPF). At a time when home-sellers are asking for as much as $100,000 cash-over-valuation, young buyers find themselves edged out of the resale market, especially in the popular central areas like Queenstown, Bukit Merah and Tiong Bahru.

HDB figures released last week showed that 70 per cent of resale flats sold from April to last month were above valuation. The average cash paid over the valuation price was $10,000. In the central areas, buyers were paying an average of $20,900 over valuation. Said DTZ agent Vincent Tung: 'Young couples don't have that much cash or CPF funds. Unlike other buyers, they don't have the option of upping their budget.' As a result, many have no choice but to buy a flat from HDB or stay with their parents while waiting for HDB resale prices to dip.

Freelance designer Diana Ho, 30, knows what it is like to miss out on a good deal. Last year, she and her husband were contemplating buying a HDB maisonette in Lengkong Tiga, Kembangan. Thinking the $410,000 tag was too high, they decided to wait for the price to fall. It went up by $60,000 instead. Said Ms Ho, who is now staying with her parents in Tampines: 'We might just buy a flat from HDB now since it's cheaper. But this means our flat will be in outlying areas like Sengkang.' Realtor ERA's division director S. Abdullah Hamid is even advising his young clients against buying a resale flat now. 'If you don't add to demand, prices will soon come down,' he said. Many young couples see buying from HDB as their only option for now.

Freelance writer Ryan Lim, 30, and his sales executive wife want a flat in Bukit Merah but are avoiding resale flats even though they have a healthy $400,000 budget. Said Mr Lim: 'We might make a loss if we try to upgrade or sell the flat in the future when prices are not so high.' In the meantime, they are living with his parents at their four-room flat in Bukit Batok. Teacher Rosvina Hamzah and her husband recently bought a five-room Bukit Merah flat for just $362,000 from HDB. Said the 28-year-old: 'Buying a resale flat was our first option. But buying from HDB has proven to be a much better deal.'

Bull Market Has Years Of Life Left?

THANK you, Straits Times, for confirming my nagging suspicion that this must be the most bullish and durable economic cycle that Singapore will experience for many a year to come.

As a contrarian, I can't decide whether it was the article on 'Surging asset prices could trigger 'big shock' worldwide' or ''Poster girl' had to empty piggy bank for son's $100 medical bill' that put the proverbial nail in the bear's coffin (ST, June 30).

These articles are proof that bull markets 'climb a wall of worry'.
First, I would like to know where all the risk managers were right before the 1997 Asian crisis. Were they prescient enough to call that event?
Second, people need to understand that bull markets are neither born of the same fundamentals nor do they die the same deaths: there is a very wide gulf between the fundamentals in place right now and those prior to 1997 and no one is wise enough to predict when and how the current bull run will end.

The mere fact that there is so much liquidity and that this liquidity will eventually feed inflation suggests strongly that more debt and more investment in hard assets is a better approach. Sitting on cash could very well be a slow path to reduced wealth in the next five to seven years.
Singapore experienced eight years of sliding to dormant property prices while its economy dodged a number of bullets, from the reverberations of 9/11 to the Sars epidemic.

From 2000, while property prices in the UK, Australia and the US rose steadily and while the economic juggernauts in China and India roared on ceaselessly, Singapore sauntered along in fits and starts.
And now a mere three years into this recovery and Singaporeans cannot believe it. It's as if they can't stand prosperity!

It seems a better bet that an eight-year bear cycle will be followed by a bull cycle of at least equal if not longer duration and that its vigour will equal or exceed the severe malaise from 1997-2003.
There will be air pockets along the way and surely no one should be leveraged beyond economic prudence, but to rain on the parade at this stage is severely premature.

The time to sell will be when risk managers see little or no risks and contrite 'poster girls' from the 1997 Asian crisis have a change of heart and start showing up at those show flats on Orchard Road.

Christopher A. Bobin
ST Forum July 4 2007