Transcription
So we're going into a season. If you are planning to switch property, you should only switch towards a stronger asset. I call it the our money supply has not decreased. It has not even stagnated. It has increased. This portion here was the 11 rounds of red card. So money supply tightened, quantitative tightening. Now it's increasing. There's going to be a lot of people that will take profit from the equities, cryptocurrency. And what is going to happen next?
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For the very first time, I love where I'm meant to be.
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Welcome back to NOTG. Today we're doing an update on the market. Importantly, what's going to happen in the next few months. Now, there is a very important news that's going to happen in September. By the time you're watching this, I hope that it's still August. Our editing team should be getting this out pretty quickly. So, what's going to happen is that there is a lot of pressure to change the chairman of the Federal Reserve, which is Jon Pal. So, uh Trump, of course, President Trump is putting a lot of pressure in the sense of reducing interest rates. Now there's already a lot of forecast in terms of the amount of liquidity injection into the market uh in terms of the upcoming quantitative easing that usually happens together with the fat rate cut because the mechanism for the rates to go down is that there's going to be injection into the market whether is it obvious or behind the scenes uh through buying off bonds buying out government debts and all that that happens on basically um a global and national basis.
So basically take note that in all countries, every country have their own central banks. Whenever they decide to inject liquidity in the economy, we call it quantitative easing. When they want to tighten it, what they will do is they will first raise interest rate and then they will tighten the liquidity in the market. So when there is liquidity in terms of injection of money supply in the market, what's going to happen is that the money supply is going to be expanded. when money supply is expanded. Basically, how you can track money supply is just very simple. You just need to head on to uh trading economics. Just type money supply M2 money supply Singapore. All right. And you will realize that our money supply is actually coinciding with the trend graph in US. So in fact in uh the last year itself in the last few months just by the last one year if you can see our money supply has not decreased it has not even stagnated it has increased it's always increasing in a sense because why we're very tight to the US market. So if I to type money supply USA you can also see basically what happens to the money supply. All right. So now it has jacked up. All right. So basically this portion here was the 11 rounds of rate cut. So money supply tightened, quantitative tightening. Now it's increasing because rates are going down. Now rates are still stable. The only thing is that what uh President Trump wants to achieve is that he wants the Fed to reduce interest rate and there's a lot of pressure on it. Of course, the latest meeting that just happened uh a couple of days back is that they would they didn't cut their rates. All right, but September, there's already a lot of pressure that rates will start to be cut in September. In fact, they're forecasting about two rounds uh basically towards the end of the year. So, what will happen is that uh this is the forecast all the way up to 27 27. So, we're going into a season probably in the next two years of low interest rate environment.
For those of you who have not refinanced your package, do not refinance. Now, of course, disclaimer, that's my own advice and personal opinion. Talk to your banker, talk to your mortgage broker, they know better. But my own forecast is that if you haven't refinanced, do not refinance now. Rates are low. You get 1.99% right now in the month of August 2025. But in September, October, I think it's going to be even lower. Likely, my forecast is that we'll see 1.5%. And maybe next year we might even see 1.25%. So we're going back to a low interest rate environment. Remember coming to the screen very clearcut. How do you identify what market we are? If it's a sellers market compared to a buyers market. The key functional difference is what is this? Sellers market means that sellers has oh I would say sellers caught a shot. All right. Sorry. sellers call the shots. Okay? Meaning that if I'm a I'm a property owner, I have real estate on hand, I have inventory, I have a couple of properties, I call the shots. I don't need to be fearful of the market because there's a lot more buyers. So, there's more buyers and I know the buyers are for more. And why are they for more? Because this is a low interest rate environment. So when the market is in an interest rate environment that is low, purchasing power increases. Why? Because for buyers to buy properties, their mortgage is lower and they feel that it's a good time to buy. And because when interest rates are low, everybody now wants to start to look at real estate because they know that well mortgage is cheap, mortgage is low and basically fixed D rates are low, bond rates are low. It's better for me to buy real estate, leverage, and then of course hunt for properties that will appreciate. And because of this sellers call the shots. All right. And usually in this environment price will start to move upwards. And of course developers will also track is this a low interest rate environment? If it is let's launch and let's be more aggressive. All right.
Now buyers market was basically what happened in the last two years 2023 2024. Why? Because we had very very high interest rate. There's 11 rounds of rate hike. I call it the buyers market. In fact, it was from 2022 to about the start point of 2024. 2024 till end basically we went back to quite a stable interest rate environment at about 2 odd% 3%. All right, 2.0. So buyers market means that buyers call a shot. Buyers can take your time to hunt for properties high interest rate environment. So why is it important to note which market you are in is because now towards 2027 this is going to be a sellers market. Now when you enter into a sellers market low interest rate environment take note if you are planning to switch property you should only switch you should only switch if you are going towards towards a stronger asset I call it the next stronger asset NSA. If you are going to a weaker asset, let's say you are switching to a weak asset, you want to switch from, let's say, a lended to a HDB because you want to liquidate and you want to basically retire, pay off, and maybe after you pay off a HGB, you have some pocket of funds, let's say $3 million you want to park into maybe a dividend stock and stuff like that. keep cash because you want to retire your 55 65 zone. You should only do it when the sellers market is into its mid-run phase. That means don't be so like anxious to quickly sell a property because we are just starting to get enter into the sellers market in the year 2025 to 2027. So maybe you should only sell in the year 2026. Let the market run first. Let the formal kick in first because your strong asset, let's say is a condo or landed will still have room to appreciate in price. This will have room to appreciate in price in a formal market in a sellers market. All right? And you are the seller, you call a shot. All right?
Now, if you are not downsizing to a weaker asset to fully pay something to retire like a HDB or a smaller condo and stuff like that and you are thinking about appreciation, you still want to grow a portfolio, you want to expand, then what you should do is that you should not time the market because a sellers market for example, let's say now you own a HDB and and you want to move towards a landed or you want to move towards a condo or new launch or whatever, you need to identify the strength of the asset. This is definitely a weaker asset than condominiums because uh if you have been following us, there's three different strengths. HDB 1.2 million quantity. There's new BTOs coming every month and of course condos 378,000 condos in the whole Singapore 10,000 new units every year and of course landed property 73,000 is not increasing in supply so landed properties are the strongest apex all right we call it the apex property so landed is apex condos and then of course HDB is the base all right so importantly note that the strength go upwards this is rank one two three in terms of strength. I'm talking about the strength of the assets in terms of the stability and appreciation. And if you are going from a weaker asset to a stronger asset, basically you should do it anytime that you're ready. You don't time the market. And you should do it especially when you're entering into a sellers market. Why? Because the stronger asset is going to move up faster than the weaker asset. All right? So the stronger asset is going to move up faster. Why does it move up faster? firstly is stronger. Number two, if you are shifting to a bigger one, you should also move. For example, you are shifting from a 900 ft² condo to a,500 ft² condo. All right? Assuming if price were to move up by 100 psf, this guy is going to appreciate by 150k. This guy appreciates by 90k. So all the more you should faster move over to the stronger and bigger guy. Now, if you are moving to a landed, you should also not time the market. Move whenever you are ready. All right? So, don't time the market because we're entering into a sellers market. Okay?
Now, something to take note is also for equities. I believe what is going to happen is that now the S&P index is very strong. Cryptocurrency is going alltime high. There's going to be profit taking in Q4. So I forecast my own so-called like uh based on my readings is that September towards December is going to be a season that there's going to be a lot of people retail investors that will take profit from the equities cryptocurrency and what is going to happen next? They wouldn't keep cash most of the time. They're going to shift basically some of it into real estate. And that's usually the funneling process. The three-step process is that they will take out their profit, keep inside a stable store of wealth and likely in Singapore is going to be real estate. And of course, we have already separated ourself from all the red card cycle. Basically, we have red cards, red cards, red cards. But every time we go red cards, price increase. The last round was very strange. We have 11 rate increase but price increase because globally when interest rate increase price will come down for example in the US but in Singapore because of the 16 rounds of cooling measures and we are so small and our population are still increasing year on year and we are such a global wealth hub status and later I'm going to show you some statistics as well is that now we're entering back into a red cut season. I think our prices is going to scale up further and hopefully it doesn't attract more cooling measures. The government already signal already all right last month new reset back to four years seller st duty even though that has no impact but it just show us that government is really putting a lot of focus to see what's going to be the impact of the rate cuts because if the price will escalate too fast new cooling measures might come in and of course touchwood what new cooling measures can they can they come in again is that there's only a few mechanism that's left right either you adjust LTV ABSD is already so much already. So max um what else? LTV TDSR further stringent there's not much calibration left all right they already calibrated uh BSD progressively like four to six% now and then now sell time do you back to four years there's a little cuts left on their hands so we just need to wait and see but what I'm trying to say is that if you have not really start planning this is the best time to start planning to take advantage of the low interest rate and before any cooling measures might come in okay
Now overall in Singapore. I'm going to share some updates is that the average holding period is pretty healthy. Um, a lot more for firsttime buyers are going straight into brand new condos rather than HDB. That is pretty interesting. And of course, the proportion of younger buyers, they're entering into brand new homes is also increasing. Now, this could be based on maybe people are doing better, more professional jobs in the younger age bandwidth and then they recognize that private property is a way to go. they want to own an asset class with a store of wealth or maybe they are getting married later. Uh, they buy one under each name first then get married later. So that could be a couple of reasons as well and the condo ownership is going up on a year-to-year basis. All right. So depicted by this red bar graph. So basically Singapore is in a stage whereby condo ownership is getting very very popular. A lot of people are recognizing this asset class and most importantly is that we have already delinquent ourself from the foreigners support level. All right. So ever since 2018 with TDSR sorry with ABSD coming in 5.4% 4% of foreigners contribute to the total residential transactions perm 65% of Singaporeans 14% of PR bar just have a look at 2024 83% of the condos are being stamped up by Singaporeans PR is about 15% about the same foreigner dropped to 1.22% 22% but there's no impact on price with this all these 16 dots of cooling measures and ABSD it continues to go up gradually at a very healthy pace and always remember 88,000 estimated condos and apartments are owned by foreigners companies and PR foreigners and company they will never sell they might but they cannot buy back all right so motivation to sell is very low they buy back they have to pay 60% ABSD Singaporeans 28 80,000 units plus minus are owned by Singaporeans. All right, so there's not a lot. We always think there's a lot of condos. There's not a lot because HDB has 1.2 million. Condos has 370,000. Lendered is 73,000. All right. And sometimes in Singapore, we are just worried about our own property price, which of course is one of the most expensive cities in the world. But take note while you're worried, people are coming in to buy. All right? because we are listed based on the latest Henley private wealth migration report 2024. Nine reasons why high netw worth families love Singapore and we have been ranked the top three with the most high net worth inflows into us last year and of course on the last 10 years basis every year there's 32,000 PR granted PR 5% ABSD they will definitely buy all right and then of course naturalized citizens no ABSD once the PR foreigner get the local passport immediately they will start to buy properties. All right. And most of the time because high net worth, they will definitely go for condos or lended homes. So basically what is happening is that while we worry about the market, new buyers are entering into the market.
So this episode basically what I want to share is that the key takeaway is that we're shifting into the sellers market. ready yourself, do your homework, start to prep and plan for your journey because the most important thing is that you don't want to miss this phase that you can take advantage as an investor. Lower interest rates and what's going to likely happen is that once developers, home sellers get confident, they're going to start asking future prices. All right. So, if you are in the season that are ready to really hunt for investment through proper research, data and frameworks, of course, you can click on the link right down below for onetoone consultation with our PB team. We're very happy to share insights with you, work out your structure, work out your journey as well on how we plan for our clients. Of course, with that, I'm going to see you on the next NOTG episode. We're going to come back with more episode to analyze the market because it's going to very exciting in the next couple of months. And we'll see you soon.
You sure what you're doing? No regrets. You feel complete. Happy for you. Good. Happy for you. Good. It's good to to journey with somebody you like. Love. Yes.