Market Review and Trends
Don’t get caught in a bubble – Part 3
By Eight percent per annum  •  June 26, 2008
By: Jay The 3rd bubble that we will talk about would be Singapore's own property bubble in 1996-1997. This is the most interesting example bcos it is the only 1 in my 3 examples whereby prices have surpassed the previous peak. However that doesn't mean that investors who invested at the peak did ok. In fact most people will still be under water. But at least, they have much better chance to recover their capital even though their compounded return will still be quite miserable. The Singapore property bubble actually started in 93-94 when Asia experienced tremendous boom. In fact, four economies were given a very special name - Asian Tigers (or was it Dragons?) due to their spectacular double digit growth. They are of course, our beloved motherland, Korea, Hong Kong and Taiwan. Even so the rest of the region enjoyed high growth. Singapore properties were snapped up by Malaysians, Indonesians, Taiwanese and closer to 1997, of course, the Hong Kongers, who feared major upheavals following Hong Kong's return to China. Well that's of course just part of the story. Many many factors came into play and even today we cannot say for sure what caused the spectacular rise and fall of the Little Red Dot's real estate prices. Besides that foreign demand story, the other factor would of course be the lack of supply of property at that time. Back in the early 90s, HDB was lagging behind the curve (as usual) and cut down on building new flats even though demand for flats remained high as the economy grew. So, young couples were made to wait 4-5 yrs for their flats after they get married. And meanwhile the Govt expects more babies when young couples have to dunno-live-where for 4-5 yrs after getting married. Read more... Don't get caught in a bubble series Don't get caught in a bubble - Part 1 Don't get caught in a bubble - Part 2
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By Eight percent per annum
8% Value Investhink is a value investing / critical thinking knowledge platform with the goal to share knowledge, help understand investing and finance, and help develop critical thinking skills. One important objective would be to help others understand the concept of value and avoid overpaying, especially for property.
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