#1: Property Market Crash or Shift Prediction in 2023 ? (Part 1)

Melvin Lim
00:00:00,000 –> 00:00:01,960
– Happy new year to everybody

Melvin Lim
00:00:01,960 –> 00:00:04,960
and we are in the first week of 2023.

Melvin Lim
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By the time you’re watching this

Melvin Lim
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perhaps it’s towards the end of January,

Melvin Lim
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but I want to just wish everybody a very warm welcome to 2023

Melvin Lim
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because this year is going to be pretty interesting as well

Melvin Lim
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and that’s what we’re going to talk about

Melvin Lim
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on Singapore’s real estate market

Melvin Lim
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and some predictions and forecast that we have

Melvin Lim
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on the real estate market for the next 12 months.

Melvin Lim
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So let’s go.

Melvin Lim
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Alright, so we’re doing

Melvin Lim
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Nuggets On The Go Episode 1 for 2023,

Melvin Lim
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and let’s have a look at this recap.

Melvin Lim
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This was the news that came out about last month.

Melvin Lim
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Of course if you have seen the latest interest rate,

Melvin Lim
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if you have been hunting for a home,

Melvin Lim
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you’ll realise that the rates have shot up the roof,

Melvin Lim
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and in fact any fixed rates nowadays is like 4.25%, 4.5%.

Melvin Lim
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In fact, if you can get 4.25% it’s considered very low already.

Melvin Lim
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Floating rates already inching towards 4%,

Melvin Lim
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there’s still one more rate hike to go.

Melvin Lim
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So 2022, we had seven rounds of rate hike.

Melvin Lim
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These seven rounds were one of the fastest increments

Melvin Lim
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in the history of Federal rate hikes.

Melvin Lim
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So 2022 is really an incredible year

Melvin Lim
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because not only was it a year of the black swan

Melvin Lim
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where we had the cryptocurrency crash,

Melvin Lim
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we had the stock market crash,

Melvin Lim
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we had tech firm stocks all also called dipping

Melvin Lim
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from all time highs,

Melvin Lim
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and of course we also have the Ukraine War

Melvin Lim
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that started towards the tail end of 2021.

Melvin Lim
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2022 was considered the black swan year

Melvin Lim
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that everything just happened one shot together.

Melvin Lim
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So what’s going to happen in 2023?

Melvin Lim
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Of course there’s a lot of different kind of

Melvin Lim
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schools of thoughts and different analysts

Melvin Lim
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are giving different kinds of forecasts and predictions.

Melvin Lim
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Some analysts are saying that the stock market will rebound

Melvin Lim
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after the Fed pivot,

Melvin Lim
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some predict a recession in the US.

Melvin Lim
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A lot of analysts and banks are very certain

Melvin Lim
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that recession will happen in the US,

Melvin Lim
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and of course that is one of the coinciding factor

Melvin Lim
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of why Fed will pivot as well

Melvin Lim
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because inflation has peaked according to analysts

Melvin Lim
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and when inflation peaks,

Melvin Lim
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Fed also don’t want the inflation so-call to go to a level

Melvin Lim
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whereby it’s unsustainable

Melvin Lim
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that is why they also cannot maintain high rates

Melvin Lim
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for a very long time,

Melvin Lim
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they will need to bring down the rates

Melvin Lim
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to a more palatable kind of level

Melvin Lim
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in case the rate hikes will cause the US

Melvin Lim
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to slip into a very deep recession for a very long time,

Melvin Lim
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and that’s the reason why Fed will pivot.

Melvin Lim
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There might be still one more round to go,

Melvin Lim
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probably in March or April,

Melvin Lim
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and then the forecast is that once that round hits the roof

Melvin Lim
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Fed will then monitor the inflation figures.

Melvin Lim
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If it’s brought down to a very nice level,

Melvin Lim
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then they might monitor how the economy goes,

Melvin Lim
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but of course the next round of things

Melvin Lim
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that might happen is this,

Melvin Lim
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so this was the news that came out just about

Melvin Lim
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on the 2nd of Jan.

Melvin Lim
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So when we look at this, Michael Burry,

Melvin Lim
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a very famous investor

Melvin Lim
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that was made famous by the show “The Big Short”.

Melvin Lim
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So if you were to look at this,

Melvin Lim
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he made this statement on his Twitter account.

Melvin Lim
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So basically he says that

Melvin Lim
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Fed will cut and government will stimulate

Melvin Lim
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because he says that while inflation has peaked,

Melvin Lim
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it’s likely to pick up again

Melvin Lim
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in response to government stimulus.

Melvin Lim
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So he’s forecasting another round of government stimulus

Melvin Lim
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and what is government stimulus?

Melvin Lim
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Government stimulus means QE (Quantitative Easing).

Melvin Lim
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So what’s happening right now

Melvin Lim
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is that we are experiencing QT (Quantitative Tightening) for the entire 2022 and 2023,

Melvin Lim
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but he’s forecasting that QE might happen again

Melvin Lim
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because the government will then need

Melvin Lim
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to stimulate the economy to save the economy from recession.

Melvin Lim
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So we might go through this entire cycle of QE again

Melvin Lim
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and when that happens,

Melvin Lim
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what does all this mean

Melvin Lim
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for the Singapore real estate market?

Melvin Lim
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Because we recognise that most of the time

Melvin Lim
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there’s this kind of like behaviour

Melvin Lim
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when it comes to property purchase, property investing,

Melvin Lim
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vis-à-vis the stock market performance.

Melvin Lim
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Because I don’t know whether is it just Singapore

Melvin Lim
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or whether is it like a global kind of thing,

Melvin Lim
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but a lot of people coincides the stock market performance

Melvin Lim
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as well as rest estate performance,

Melvin Lim
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and that is of course true in some countries

Melvin Lim
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because if they look at certain countries,

Melvin Lim
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for example in certain states in America

Melvin Lim
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when interest rates rise

Melvin Lim
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and of course usually when interest rates rise, like last year,

Melvin Lim
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stock market will correct itself.

Melvin Lim
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When interest rates rise, naturally purchasing power drops

Melvin Lim
00:04:01,600 –> 00:04:04,160
and people will forecast that the real estate market

Melvin Lim
00:04:04,160 –> 00:04:05,000
will start to dip,

Melvin Lim
00:04:05,000 –> 00:04:05,800
and that’s exactly what happened

Melvin Lim
00:04:05,800 –> 00:04:07,080
in certain states in America,

Melvin Lim
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but not every state experienced a dip in pricing,

Melvin Lim
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only in certain states.

Melvin Lim
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When it comes to Singapore,

Melvin Lim
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that mentality also transpose itself right into Singapore

Melvin Lim
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because people love to time the stock market.

Melvin Lim
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We need to ask ourselves,

Melvin Lim
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should we follow this method?

Melvin Lim
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Should timing the stock market

Melvin Lim
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be similar to using this exact method

Melvin Lim
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to time the Singapore market?

Melvin Lim
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Because a lot of people in Singapore,

Melvin Lim
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a lot of Singaporeans in Singapore

Melvin Lim
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they have portfolio diversification in equity stocks

Melvin Lim
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as well as in real estate properties

Melvin Lim
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and they like to link them both together.

Melvin Lim
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And we need to understand this key concept,

Melvin Lim
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and what is this key concept is that

Melvin Lim
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we need to understand that there’s always a laggard effect

Melvin Lim
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when it comes to rest estate

Melvin Lim
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because real estate is largely illiquid in nature.

Melvin Lim
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We might not even feel the effect

Melvin Lim
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if the recession in the US is short-lived

Melvin Lim
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and sometimes whatever policy that happens in the US,

Melvin Lim
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it takes a longer duration

Melvin Lim
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to kick into effect into Singapore.

Melvin Lim
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And Singapore, we have to understand

Melvin Lim
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that we are living on a very different landscape,

Melvin Lim
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we’re so small with so many cooling measures.

Melvin Lim
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This time around, even though when we look at this,

Melvin Lim
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we had a close to like a 18.75% dip since the start of 2022

Melvin Lim
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all the way towards the end of 2022

Melvin Lim
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this is like -18.75% in the S&P 500 price index.

Melvin Lim
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We came up with this chart as well

Melvin Lim
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to look at S&P 500 with Singapore real estate price index.

Melvin Lim
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So these three lines right here,

Melvin Lim
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you got to see the landed property price index,

Melvin Lim
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you got to see the condo apartment price index,

Melvin Lim
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you got to see the HDB price index

Melvin Lim
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and this has a dip of -18%.

Melvin Lim
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This line here is the start of 2022

Melvin Lim
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and of course for the entire 2022

Melvin Lim
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these three lines here,

Melvin Lim
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if we talk about the private residential market,

Melvin Lim
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they increase by 8.4%,

Melvin Lim
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it’s the latest news that came out.

Melvin Lim
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So why is it that the S&P 500 dip -18%

Melvin Lim
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real estate pricing locally still increased by 8.4%?

Melvin Lim
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Can we correlate them?

Melvin Lim
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Is timing the market effective for the real estate market?

Melvin Lim
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What if we are wrong

Melvin Lim
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and what if we’re hoping that the rest estate market

Melvin Lim
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will dip but it didn’t dip?

Melvin Lim
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When we look at this,

Melvin Lim
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then let me just come out of these three.

Melvin Lim
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Similarly, this is 2022,

Melvin Lim
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this is of course 2022 as well,

Melvin Lim
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there’s a line here.

Melvin Lim
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So here an increment of 8.4%,

Melvin Lim
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here, a dip of -18%.

Melvin Lim
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So everybody’s trying to forecast for 2023,

Melvin Lim
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will the Singapore real estate price index start to drop

Melvin Lim
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in reaction to this dip last year?

Melvin Lim
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We need to understand that this is

Melvin Lim
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if we were to use this same methodology

Melvin Lim
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into the real estate asset investment kind of mindset,

Melvin Lim
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this is essentially called timing the market

Melvin Lim
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and we’re going to talk about timing the market.

Melvin Lim
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We’ve talked about a lot in our NOTG episodes before

Melvin Lim
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and is timing the market effective

Melvin Lim
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in Singapore’s real estate market?

Melvin Lim
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So we need to understand that there are different strategies

Melvin Lim
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when it comes to different types of asset investing.

Melvin Lim
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Investing in the stock market

Melvin Lim
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is very different from real estate market,

Melvin Lim
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they are very different in pricing behaviours

Melvin Lim
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and stock market is essentially very volatile,

Melvin Lim
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which presents opportunity for timing the market.

Melvin Lim
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Of course there’s like the dollar-cost averaging,

Melvin Lim
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DCA approach, like you know different technical analysis,

Melvin Lim
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different value investing

Melvin Lim
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so-called investors they talk about,

Melvin Lim
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you know, you should always stay in the market

Melvin Lim
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if you love that stock,

Melvin Lim
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if you love the fundamentals of the company,

Melvin Lim
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you think that there’s growth,

Melvin Lim
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you think that the fundamentals are good,

Melvin Lim
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you should always stay in the stock,

Melvin Lim
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you don’t have to worry about recession

Melvin Lim
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that usually last about one or maybe one and a half years.

Melvin Lim
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You should stay in the market,

Melvin Lim
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you should buy the dip.

Melvin Lim
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So usually people like to talk about all this kind of stuff

Melvin Lim
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and the rationale is that stock market

Melvin Lim
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being more liquid in fashion,

Melvin Lim
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liquid means that you can enter and exit very easily.

Melvin Lim
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And because our Fed is volatile,

Melvin Lim
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there’s more room to time the market for exit and re-entry.

Melvin Lim
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If you want to dollar-cost average,

Melvin Lim
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of course you will re-enter at the dips.

Melvin Lim
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You are proposing that this company will do very well

Melvin Lim
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in the mid to long term,

Melvin Lim
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you want to stay in the market,

Melvin Lim
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that is good of course.

Melvin Lim
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So it depends on your own strategy

Melvin Lim
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of investing in stock market.

Melvin Lim
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But when it comes to real estate,

Melvin Lim
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we have to understand that it is very illiquid

Melvin Lim
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and to enter and exit a real estate asset it takes time.

Melvin Lim
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When you put it in the market,

Melvin Lim
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sometimes you don’t get to sell the property

Melvin Lim
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for 3 to 6 months.

Melvin Lim
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Some people even take up to 9 to 12 months to sell a home

Melvin Lim
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depending on the difficulty level

Melvin Lim
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and of course depending on the economy as well,

Melvin Lim
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sometimes buying the property,

Melvin Lim
00:08:01,120 –> 00:08:02,920
of course buying a real estate is extremely easy.

Melvin Lim
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You can just walk into the showroom,

Melvin Lim
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you can buy immediately,

Melvin Lim
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but it takes three months to complete a transaction.

Melvin Lim
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But when you want to exit,

Melvin Lim
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it is much more difficult because you need to prep the home.

Melvin Lim
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The home has so-called deteriorated

Melvin Lim
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in terms of renovation through time,

Melvin Lim
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you need to refresh, repaint,

Melvin Lim
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you need to strategise your marketing,

Melvin Lim
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you need to find the right buyer.

Melvin Lim
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Of course some homes are very easy to exit

Melvin Lim
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because they’re very rare or the quantum is very palatable.

Melvin Lim
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You know, it can be sold in one week, one month

Melvin Lim
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and one day we’ve done all sorts of home selling before.

Melvin Lim
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Of course you can check out our YouTube channel,

Melvin Lim
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we’ve done over 1,600+ Home Tours.

Melvin Lim
00:08:32,320 –> 00:08:36,240
And it is unwise to time the real estate market

Melvin Lim
00:08:36,240 –> 00:08:38,400
because this is essentially a very stable asset,

Melvin Lim
00:08:38,400 –> 00:08:39,920
people use it as a store of wealth

Melvin Lim
00:08:39,920 –> 00:08:43,240
and if you were to use the same methodology approach

Melvin Lim
00:08:43,240 –> 00:08:46,200
of the stock market to pump it into the real estate market

Melvin Lim
00:08:46,200 –> 00:08:47,760
and you are waiting at the side lines,

Melvin Lim
00:08:47,760 –> 00:08:48,600
you might be renting,

Melvin Lim
00:08:48,600 –> 00:08:51,760
you might be paying rental for 12, 24, 36 months already.

Melvin Lim
00:08:51,760 –> 00:08:53,040
And of course it’s a side topic,

Melvin Lim
00:08:53,040 –> 00:08:54,240
but I’m going to do an episode on

Melvin Lim
00:08:54,240 –> 00:08:58,760
what is the sweet spot of weighing rental

Melvin Lim
00:08:58,760 –> 00:09:02,280
versus biting the bullet to go into the market.

Melvin Lim
00:09:02,280 –> 00:09:04,440
Let’s say for example, if you need to pay ABSD,

Melvin Lim
00:09:04,440 –> 00:09:06,080
or you’re a PR, you’re a foreigner,

Melvin Lim
00:09:06,080 –> 00:09:07,560
you’re really thinking about this

Melvin Lim
00:09:07,560 –> 00:09:08,840
and you know you’ve been paying rental

Melvin Lim
00:09:08,840 –> 00:09:10,160
for maybe three years already,

Melvin Lim
00:09:10,160 –> 00:09:11,000
it’s really painful

Melvin Lim
00:09:11,000 –> 00:09:13,280
and now rental rates has surged so much,

Melvin Lim
00:09:13,280 –> 00:09:14,480
it’s getting very ridiculous

Melvin Lim
00:09:14,480 –> 00:09:16,080
instead from the tenants’ point of view,

Melvin Lim
00:09:16,080 –> 00:09:18,920
but for the landlords, all the landlords are really enjoying

Melvin Lim
00:09:18,920 –> 00:09:20,160
the high rental rates right now.

Melvin Lim
00:09:20,160 –> 00:09:22,160
I’m going to do a separate episode to talk about

Melvin Lim
00:09:22,160 –> 00:09:23,080
what is the sweet spot

Melvin Lim
00:09:23,080 –> 00:09:24,920
in terms of the number of years and months

Melvin Lim
00:09:24,920 –> 00:09:27,480
that you will need to do that flip to buy.

Melvin Lim
00:09:27,480 –> 00:09:30,120
Because if you were to prolong beyond that sweet spot,

Melvin Lim
00:09:30,120 –> 00:09:33,000
then essentially it’s not worth it to continue renting anymore

Melvin Lim
00:09:33,000 –> 00:09:36,360
because by renting you are just servicing the mortgage

Melvin Lim
00:09:36,360 –> 00:09:37,680
and you’re servicing the mortgage interest

Melvin Lim
00:09:37,680 –> 00:09:38,520
for your landlord.

Melvin Lim
00:09:38,520 –> 00:09:40,560
You’re technically like the customer.

Melvin Lim
00:09:40,560 –> 00:09:41,960
Of course you get to use the space,

Melvin Lim
00:09:41,960 –> 00:09:44,880
but by not owning real estate in Singapore,

Melvin Lim
00:09:44,880 –> 00:09:46,920
and real estate Singapore is a very different ballgame

Melvin Lim
00:09:46,920 –> 00:09:48,520
because we have very high ownership rate,

Melvin Lim
00:09:48,520 –> 00:09:50,120
90% of people own homes right here,

Melvin Lim
00:09:50,120 –> 00:09:53,240
it’s a very different landscape and prices, rental,

Melvin Lim
00:09:53,240 –> 00:09:54,640
they behave very differently.

Melvin Lim
00:09:54,640 –> 00:09:56,560
Now I want to talk about this fact here that is

Melvin Lim
00:09:56,560 –> 00:09:58,480
real estate has a very different thing,

Melvin Lim
00:09:58,480 –> 00:10:01,160
it eats inflation for breakfast.

Melvin Lim
00:10:01,160 –> 00:10:03,400
What do I mean by eating inflation for breakfast is that

Melvin Lim
00:10:03,400 –> 00:10:06,400
real estate rides on this thing called inflation

Melvin Lim
00:10:06,400 –> 00:10:08,040
and inflation we bring out the two kinds of inflations.

Melvin Lim
00:10:08,040 –> 00:10:09,760
One is CPI inflation,

Melvin Lim
00:10:09,760 –> 00:10:11,600
one is called asset inflation.

Melvin Lim
00:10:11,600 –> 00:10:14,440
Asset inflation is being pushed by QE (Quantitative Easing)

Melvin Lim
00:10:14,440 –> 00:10:16,960
and the amount of money that’s flooded into the market.

Melvin Lim
00:10:16,960 –> 00:10:18,440
So when there’s no more money,

Melvin Lim
00:10:18,440 –> 00:10:20,840
we call it M2 supply that is being created,

Melvin Lim
00:10:20,840 –> 00:10:23,400
asset prices will bump up

Melvin Lim
00:10:23,400 –> 00:10:25,760
and usually this bump up is extremely fast.

Melvin Lim
00:10:25,760 –> 00:10:27,720
It can just bump up in one to two years

Melvin Lim
00:10:27,720 –> 00:10:29,680
just like what we experienced in the last two years

Melvin Lim
00:10:29,680 –> 00:10:30,920
for the landed property market.

Melvin Lim
00:10:30,920 –> 00:10:34,040
And real estate being a very tangible asset,

Melvin Lim
00:10:34,040 –> 00:10:35,560
it eats inflation for breakfast.

Melvin Lim
00:10:35,560 –> 00:10:36,720
Now the key rationale is because,

Melvin Lim
00:10:36,720 –> 00:10:38,640
firstly this is a safe haven.

Melvin Lim
00:10:38,640 –> 00:10:40,000
People like to pump money into real estate

Melvin Lim
00:10:40,000 –> 00:10:41,160
to store their wealth.

Melvin Lim
00:10:41,160 –> 00:10:43,800
And if you notice, millionaires, billionaires,

Melvin Lim
00:10:43,800 –> 00:10:45,880
they get very wealthy over the years

Melvin Lim
00:10:45,880 –> 00:10:48,360
because they own a lot of real estate

Melvin Lim
00:10:48,360 –> 00:10:50,440
and the real estate just increase in pricing

Melvin Lim
00:10:50,440 –> 00:10:51,280
while they sleep,

Melvin Lim
00:10:51,280 –> 00:10:52,560
while they carry on their business,

Melvin Lim
00:10:52,560 –> 00:10:54,120
while they carry on their professional life.

Melvin Lim
00:10:54,120 –> 00:10:58,000
And asset prices actually eats inflation for breakfast.

Melvin Lim
00:10:58,000 –> 00:11:00,720
There’s one more thing that’s happening below the scene,

Melvin Lim
00:11:00,720 –> 00:11:04,080
behind the scene is that your mortgage, your debt,

Melvin Lim
00:11:04,080 –> 00:11:06,840
and in real estate your debt is considered a good debt

Melvin Lim
00:11:06,840 –> 00:11:08,640
because this is considered a leverage point.

Melvin Lim
00:11:08,640 –> 00:11:13,040
Banks love to loan people when it comes to buying a property

Melvin Lim
00:11:13,040 –> 00:11:15,440
and they love to give out mortgages because why?

Melvin Lim
00:11:15,440 –> 00:11:17,440
Because if you cannot pay your mortgage for three months,

Melvin Lim
00:11:17,440 –> 00:11:18,320
they take your property.

Melvin Lim
00:11:18,320 –> 00:11:20,400
There’s also a nice leveraging point in the sense that

Melvin Lim
00:11:20,400 –> 00:11:21,880
you pump in 25% down payment,

Melvin Lim
00:11:21,880 –> 00:11:23,040
you have skin in the game,

Melvin Lim
00:11:23,040 –> 00:11:25,680
the bank will loan you 75% as long as you have proof of income,

Melvin Lim
00:11:25,680 –> 00:11:27,120
you have a stable salary,

Melvin Lim
00:11:27,120 –> 00:11:28,120
you have a stable business,

Melvin Lim
00:11:28,120 –> 00:11:31,920
you have a stable kind of inflow of income every month,

Melvin Lim
00:11:31,920 –> 00:11:34,320
the bank find that you’re suitable to loan you the mortgage,

Melvin Lim
00:11:34,320 –> 00:11:36,800
they will loan to you because there is a collateral

Melvin Lim
00:11:36,800 –> 00:11:39,520
on the mortgage itself which is the physical property.

Melvin Lim
00:11:39,520 –> 00:11:40,560
They can always take the property,

Melvin Lim
00:11:40,560 –> 00:11:41,400
they can auction it off.

Melvin Lim
00:11:41,400 –> 00:11:44,120
Mortgage being a good debt has one more effect

Melvin Lim
00:11:44,120 –> 00:11:46,080
is that it’s eroded by inflation as well.

Melvin Lim
00:11:46,080 –> 00:11:48,520
So take note that the money that you’re holding,

Melvin Lim
00:11:48,520 –> 00:11:49,680
the currency that you’re holding on hand

Melvin Lim
00:11:49,680 –> 00:11:55,040
is eroding in its value through time because of inflation.

Melvin Lim
00:11:55,040 –> 00:11:56,280
The $100 that you have,

Melvin Lim
00:11:56,280 –> 00:11:58,120
or the $1,000 that you have in the bank,

Melvin Lim
00:11:58,120 –> 00:12:00,000
in two years time it’s going to be worth less.

Melvin Lim
00:12:00,000 –> 00:12:02,760
You’re going to only be able to buy lesser things

Melvin Lim
00:12:02,760 –> 00:12:03,600
in two years time.

Melvin Lim
00:12:03,600 –> 00:12:06,480
The $1,000 you have will get weaker

Melvin Lim
00:12:06,480 –> 00:12:08,360
over the next 5 to 10 years.

Melvin Lim
00:12:08,360 –> 00:12:10,640
So that also means that this 75% loan

Melvin Lim
00:12:10,640 –> 00:12:11,520
that you’re loaning from the bank,

Melvin Lim
00:12:11,520 –> 00:12:15,960
is going to get lower in value in terms of the absolute value

Melvin Lim
00:12:15,960 –> 00:12:18,080
that you’re going to have in the next 5 to 10 years.

Melvin Lim
00:12:18,080 –> 00:12:20,040
So that is the reason why mortgage rate

Melvin Lim
00:12:20,040 –> 00:12:21,480
is also eroded by inflation

Melvin Lim
00:12:21,480 –> 00:12:24,240
and that is forming this V curve right here.

Melvin Lim
00:12:24,240 –> 00:12:25,840
So your asset pricing is going up

Melvin Lim
00:12:25,840 –> 00:12:27,960
but your mortgage is going down

Melvin Lim
00:12:27,960 –> 00:12:29,960
in terms of its value itself.

Melvin Lim
00:12:29,960 –> 00:12:31,280
So technically speaking,

Melvin Lim
00:12:31,280 –> 00:12:32,520
when you look at this component,

Melvin Lim
00:12:32,520 –> 00:12:33,680
this is a fantastic thing

Melvin Lim
00:12:33,680 –> 00:12:36,400
of why people love to own real estate in the world.

Melvin Lim
00:12:36,400 –> 00:12:39,240
2023, what is going to be the forecast

Melvin Lim
00:12:39,240 –> 00:12:40,640
before we end this episode.

Melvin Lim
00:12:40,640 –> 00:12:43,440
Now 2023, a lot of people are waiting at the side lines

Melvin Lim
00:12:43,440 –> 00:12:46,440
because they are hoping to see the impact

Melvin Lim
00:12:46,440 –> 00:12:49,680
of the high interest rates that we have right now

Melvin Lim
00:12:49,680 –> 00:12:51,000
and everybody’s waiting at the sidelines,

Melvin Lim
00:12:51,000 –> 00:12:52,440
and 2023 is going to be the year

Melvin Lim
00:12:52,440 –> 00:12:55,200
with at least close to about 40 new launches coming up

Melvin Lim
00:12:55,200 –> 00:12:56,680
because there’s been so much en bloc

Melvin Lim
00:12:56,680 –> 00:12:58,560
and government land sales in the past years.

Melvin Lim
00:12:58,560 –> 00:13:00,600
But if you were to look at some of the latest news,

Melvin Lim
00:13:00,600 –> 00:13:03,440
our government is monitoring the market very closely

Melvin Lim
00:13:03,440 –> 00:13:04,920
and just by looking at this news,

Melvin Lim
00:13:04,920 –> 00:13:06,880
you know that our government knows

Melvin Lim
00:13:06,880 –> 00:13:08,680
that amount of land is not enough

Melvin Lim
00:13:08,680 –> 00:13:12,080
because the unsold housing stock has hit a 15 year low

Melvin Lim
00:13:12,080 –> 00:13:13,400
and just last month

Melvin Lim
00:13:13,400 –> 00:13:16,120
our government is pumping up the amount of GLS

Melvin Lim
00:13:16,120 –> 00:13:18,840
because they know that developers’ appetites are so strong

Melvin Lim
00:13:18,840 –> 00:13:20,120
through the strong bidding last year,

Melvin Lim
00:13:20,120 –> 00:13:21,720
developers are hungry for land

Melvin Lim
00:13:21,720 –> 00:13:24,080
because they’ve already cleared a lot of their launches

Melvin Lim
00:13:24,080 –> 00:13:25,240
in the past few years.

Melvin Lim
00:13:25,240 –> 00:13:27,240
A lot of properties are also going to TOP,

Melvin Lim
00:13:27,240 –> 00:13:29,480
this few years, this shows a sign that the market

Melvin Lim
00:13:29,480 –> 00:13:32,680
is hitting a signal that the developers want more land

Melvin Lim
00:13:32,680 –> 00:13:34,680
and there’s a lot of underlying demand in the market.

Melvin Lim
00:13:34,680 –> 00:13:35,520
Of course if you look

Melvin Lim
00:13:35,520 –> 00:13:37,520
at the latest launch right here as well,

Melvin Lim
00:13:37,520 –> 00:13:40,320
you also notice that, you also ask yourself this question,

Melvin Lim
00:13:40,320 –> 00:13:41,600
like where are all these buyers coming from?

Melvin Lim
00:13:41,600 –> 00:13:44,200
You know, I thought that 2022 wasn’t a good year,

Melvin Lim
00:13:44,200 –> 00:13:46,120
but where are all these buyers coming from?

Melvin Lim
00:13:46,120 –> 00:13:48,000
So I want to end this episode with this key thing

Melvin Lim
00:13:48,000 –> 00:13:49,400
and then we’ll move into the second episode

Melvin Lim
00:13:49,400 –> 00:13:51,920
talking about part two of our forecast for 2023.

Melvin Lim
00:13:51,920 –> 00:13:54,080
Now we want to dive into the mindset

Melvin Lim
00:13:54,080 –> 00:13:56,240
of the existing owners and investors

Melvin Lim
00:13:56,240 –> 00:13:59,560
because this will give us a very nice sort of thinking

Melvin Lim
00:13:59,560 –> 00:14:01,920
on the behaviours of existing property owners

Melvin Lim
00:14:01,920 –> 00:14:04,360
as well as people that are waiting on the side lines

Melvin Lim
00:14:04,360 –> 00:14:05,280
hoping to buy a property.

Melvin Lim
00:14:05,280 –> 00:14:07,680
Perhaps you have been waiting for the past 24 months

Melvin Lim
00:14:07,680 –> 00:14:10,360
because you have exited maybe in 2020 or 2021

Melvin Lim
00:14:10,360 –> 00:14:12,160
and you are hoping that the market will crash

Melvin Lim
00:14:12,160 –> 00:14:13,680
so they you can come in and buy cheap.

Melvin Lim
00:14:13,680 –> 00:14:15,200
Now everybody hopes for that to happen,

Melvin Lim
00:14:15,200 –> 00:14:17,960
but just have a look at our pricing for the past 10 years

Melvin Lim
00:14:17,960 –> 00:14:19,680
had the market really crashed?

Melvin Lim
00:14:19,680 –> 00:14:21,600
And watch our previous episode

Melvin Lim
00:14:21,600 –> 00:14:24,400
on why we think that the Singapore market is different

Melvin Lim
00:14:24,400 –> 00:14:26,200
because we have 13 round of cooling measures

Melvin Lim
00:14:26,200 –> 00:14:27,240
pumped into the price.

Melvin Lim
00:14:27,240 –> 00:14:28,480
We are very sticky right now

Melvin Lim
00:14:28,480 –> 00:14:30,880
in terms of the stickiness of our pricing.

Melvin Lim
00:14:30,880 –> 00:14:32,760
Nobody’s selling their property cheap.

Melvin Lim
00:14:32,760 –> 00:14:37,280
Has high interest rate last year in 2022 changed behaviours?

Melvin Lim
00:14:37,280 –> 00:14:39,600
Will people start to fire sale their property in 2023?

Melvin Lim
00:14:39,600 –> 00:14:41,600
Will developers start to drop prices in 2023?

Melvin Lim
00:14:41,600 –> 00:14:44,520
And that will help us to end our episode today.

Melvin Lim
00:14:44,520 –> 00:14:45,720
Now let’s have a look, quick recap.

Melvin Lim
00:14:45,720 –> 00:14:48,560
Last seven rounds, only one round 97,

Melvin Lim
00:14:48,560 –> 00:14:50,680
but these rounds that I’ve been circling right here

Melvin Lim
00:14:50,680 –> 00:14:53,040
has no dip in pricing where interest rate rise.

Melvin Lim
00:14:53,040 –> 00:14:53,880
The reason is because

Melvin Lim
00:14:53,880 –> 00:14:55,280
there has been so many cooling measures.

Melvin Lim
00:14:55,280 –> 00:14:56,520
So I want to ask you this question,

Melvin Lim
00:14:56,520 –> 00:14:58,920
if you currently own one to two properties,

Melvin Lim
00:14:58,920 –> 00:15:00,960
so now we’re in January, 2023,

Melvin Lim
00:15:00,960 –> 00:15:02,320
let’s say you have two properties,

Melvin Lim
00:15:02,320 –> 00:15:03,400
one you’re staying,

Melvin Lim
00:15:03,400 –> 00:15:04,600
one you have been renting out.

Melvin Lim
00:15:04,600 –> 00:15:07,600
What will happen when you see this news article tomorrow.

Melvin Lim
00:15:07,600 –> 00:15:10,160
So take note, this is a fictitious news article,

Melvin Lim
00:15:10,160 –> 00:15:11,400
I just edited a little bit.

Melvin Lim
00:15:11,400 –> 00:15:14,800
So it’s just for this little mini illustration

Melvin Lim
00:15:14,800 –> 00:15:15,960
that we are doing together.

Melvin Lim
00:15:15,960 –> 00:15:16,800
So you suddenly see

Melvin Lim
00:15:16,800 –> 00:15:18,960
that all the banks are cutting interest rate to 1.5%.

Melvin Lim
00:15:18,960 –> 00:15:22,920
Now what will be your mindset if you’re a property owner

Melvin Lim
00:15:22,920 –> 00:15:26,400
and let’s say you are planning to exit one of your properties

Melvin Lim
00:15:26,400 –> 00:15:27,320
or maybe two of your properties

Melvin Lim
00:15:27,320 –> 00:15:28,960
because you want to upgrade to a landed home example.

Melvin Lim
00:15:28,960 –> 00:15:31,560
This will be what will be going through your mind.

Melvin Lim
00:15:31,560 –> 00:15:33,000
If you own one to two homes,

Melvin Lim
00:15:33,000 –> 00:15:35,880
you will definitely increase your asking price now

Melvin Lim
00:15:35,880 –> 00:15:38,840
because now you know that the buyer demand is much higher.

Melvin Lim
00:15:38,840 –> 00:15:40,680
Everybody want to come in and buy properties now

Melvin Lim
00:15:40,680 –> 00:15:41,880
because interest rate is so low.

Melvin Lim
00:15:41,880 –> 00:15:44,360
So as an existing owner of two properties,

Melvin Lim
00:15:44,360 –> 00:15:46,280
even if you want to sell, you will sell high.

Melvin Lim
00:15:46,280 –> 00:15:47,120
Second question,

Melvin Lim
00:15:47,120 –> 00:15:49,760
if you’re a property buyer investor waiting on the sidelines

Melvin Lim
00:15:49,760 –> 00:15:51,840
because you have sold your property last two years,

Melvin Lim
00:15:51,840 –> 00:15:54,040
or maybe you have not purchased a property before

Melvin Lim
00:15:54,040 –> 00:15:55,320
but you’re trying to time the market,

Melvin Lim
00:15:55,320 –> 00:15:57,160
you’re waiting for the market to dip.

Melvin Lim
00:15:57,160 –> 00:15:58,560
What will happen tomorrow morning

Melvin Lim
00:15:58,560 –> 00:15:59,920
when you see this news that interest rate

Melvin Lim
00:15:59,920 –> 00:16:00,880
is now more than 5%,

Melvin Lim
00:16:00,880 –> 00:16:02,160
this is what will go through in mind.

Melvin Lim
00:16:02,160 –> 00:16:04,280
You’ll tell yourself that you want to quickly buy now

Melvin Lim
00:16:04,280 –> 00:16:05,720
because interest rate is so low

Melvin Lim
00:16:05,720 –> 00:16:07,240
and you know that you have to buy now

Melvin Lim
00:16:07,240 –> 00:16:10,160
because if you don’t buy now prices are to shoot up again,

Melvin Lim
00:16:10,160 –> 00:16:11,160
so you want to buy now.

Melvin Lim
00:16:11,160 –> 00:16:12,000
But the question is,

Melvin Lim
00:16:12,000 –> 00:16:13,920
will you be too late by then?

Melvin Lim
00:16:13,920 –> 00:16:15,560
Because remember the first question,

Melvin Lim
00:16:15,560 –> 00:16:16,720
all the existing owners

Melvin Lim
00:16:16,720 –> 00:16:17,960
that are holding onto properties right now,

Melvin Lim
00:16:17,960 –> 00:16:19,520
they will not sell cheap anymore,

Melvin Lim
00:16:19,520 –> 00:16:21,840
they will want to raise the asking price

Melvin Lim
00:16:21,840 –> 00:16:22,960
because the demand is back.

Melvin Lim
00:16:22,960 –> 00:16:24,720
Third question, if you’re a developer,

Melvin Lim
00:16:24,720 –> 00:16:27,000
you have a couple of launches that you want to launch in 2023,

Melvin Lim
00:16:27,000 –> 00:16:29,760
you wake up tomorrow as the owner of all these launches,

Melvin Lim
00:16:29,760 –> 00:16:31,640
you’re the boss of all these launches,

Melvin Lim
00:16:31,640 –> 00:16:32,840
you own land,

Melvin Lim
00:16:32,840 –> 00:16:33,680
you meet your architects,

Melvin Lim
00:16:33,680 –> 00:16:34,560
you have a team

Melvin Lim
00:16:34,560 –> 00:16:37,160
and you are maybe a small developer or a big developer.

Melvin Lim
00:16:37,160 –> 00:16:39,560
You wake up with this news on the table,

Melvin Lim
00:16:39,560 –> 00:16:41,520
what will you do as a developer?

Melvin Lim
00:16:41,520 –> 00:16:43,400
You will definitely increase your launch price

Melvin Lim
00:16:43,400 –> 00:16:45,840
because you know that the buyer’s demand is now back.

Melvin Lim
00:16:45,840 –> 00:16:47,760
There’s no fear of not being able to sell,

Melvin Lim
00:16:47,760 –> 00:16:49,640
no fear of not being able to clear units

Melvin Lim
00:16:49,640 –> 00:16:50,560
in the next five years.

Melvin Lim
00:16:50,560 –> 00:16:51,480
Fourth question,

Melvin Lim
00:16:51,480 –> 00:16:54,560
if you have just bought your property January, 2022

Melvin Lim
00:16:54,560 –> 00:16:57,600
for your own stay for your family and you wake up tomorrow

Melvin Lim
00:16:57,600 –> 00:16:59,160
and suddenly you see that the interest rate

Melvin Lim
00:16:59,160 –> 00:17:01,680
now increase to 5% or even 6%,

Melvin Lim
00:17:01,680 –> 00:17:02,480
my question is,

Melvin Lim
00:17:02,480 –> 00:17:03,760
will you fire sale your home

Melvin Lim
00:17:03,760 –> 00:17:05,720
that your kids are enjoying every day?

Melvin Lim
00:17:05,720 –> 00:17:06,960
And it’s so near to the school,

Melvin Lim
00:17:06,960 –> 00:17:09,240
this is really for your shelter,

Melvin Lim
00:17:09,240 –> 00:17:10,880
it’s for you to build your family,

Melvin Lim
00:17:10,880 –> 00:17:12,360
for you to really let your family

Melvin Lim
00:17:12,360 –> 00:17:15,040
have a nice and safe place to to live in

Melvin Lim
00:17:15,040 –> 00:17:16,200
and enjoy the space.

Melvin Lim
00:17:16,200 –> 00:17:17,320
Will you fire sale your home?

Melvin Lim
00:17:17,320 –> 00:17:19,720
I don’t think so because you and your wife are working,

Melvin Lim
00:17:19,720 –> 00:17:21,080
you have CPF,

Melvin Lim
00:17:21,080 –> 00:17:21,960
you have some savings,

Melvin Lim
00:17:21,960 –> 00:17:23,560
you know CPF is not savings in cash,

Melvin Lim
00:17:23,560 –> 00:17:24,960
there’s no need for you to fire sale the home.

Melvin Lim
00:17:24,960 –> 00:17:26,520
I mean worse come to worst,

Melvin Lim
00:17:26,520 –> 00:17:28,160
even if one of you were to lose their job,

Melvin Lim
00:17:28,160 –> 00:17:30,880
most people will be able to at least service the mortgage

Melvin Lim
00:17:30,880 –> 00:17:33,040
for the next 6 to 12 months to find another job.

Melvin Lim
00:17:33,040 –> 00:17:34,880
I mean, why do you need to fire sale your home?

Melvin Lim
00:17:34,880 –> 00:17:36,480
This is what will be going through your mind

Melvin Lim
00:17:36,480 –> 00:17:39,240
is that you might have already lock in a fixed package

Melvin Lim
00:17:39,240 –> 00:17:41,480
at the start of the year at maybe 2.5%.

Melvin Lim
00:17:41,480 –> 00:17:43,280
You’re ready to hold this property for three years

Melvin Lim
00:17:43,280 –> 00:17:44,160
because when you buy,

Melvin Lim
00:17:44,160 –> 00:17:46,080
you are already have the pre-knowledge

Melvin Lim
00:17:46,080 –> 00:17:47,560
that you have to hold it for three years.

Melvin Lim
00:17:47,560 –> 00:17:49,560
You have paid 25% down payment

Melvin Lim
00:17:49,560 –> 00:17:50,520
and 4% Buyer’s Stamp Duty,

Melvin Lim
00:17:50,520 –> 00:17:51,920
you have skin in the game,

Melvin Lim
00:17:51,920 –> 00:17:54,000
you have 29% down into this home.

Melvin Lim
00:17:54,000 –> 00:17:55,080
This is for your own stay,

Melvin Lim
00:17:55,080 –> 00:17:56,040
your kids are happy here,

Melvin Lim
00:17:56,040 –> 00:17:57,360
there’s no need for you to fire sale your home.

Melvin Lim
00:17:57,360 –> 00:17:58,280
Fifth question,

Melvin Lim
00:17:58,280 –> 00:18:02,400
if you have just bought a second property in January, 2022,

Melvin Lim
00:18:02,400 –> 00:18:03,560
which was 12 months back,

Melvin Lim
00:18:03,560 –> 00:18:04,680
and you have paid ABSD

Melvin Lim
00:18:04,680 –> 00:18:07,920
and you saw this news now in December, 2022,

Melvin Lim
00:18:07,920 –> 00:18:09,800
my question is, will you still fire sale your home?

Melvin Lim
00:18:09,800 –> 00:18:10,920
And why will you do that?

Melvin Lim
00:18:10,920 –> 00:18:13,120
Because let’s say you are a single property investor,

Melvin Lim
00:18:13,120 –> 00:18:13,960
you’re not married,

Melvin Lim
00:18:13,960 –> 00:18:15,120
you have a property for your own stay

Melvin Lim
00:18:15,120 –> 00:18:16,200
and you bought and you pay,

Melvin Lim
00:18:16,200 –> 00:18:17,800
you bite the bullet, you pay a ABSD

Melvin Lim
00:18:17,800 –> 00:18:19,240
to own a second property to rent out.

Melvin Lim
00:18:19,240 –> 00:18:21,200
When you see a high interest rate environment,

Melvin Lim
00:18:21,200 –> 00:18:22,160
will you fire sale?

Melvin Lim
00:18:22,160 –> 00:18:24,680
No you won’t because you already know

Melvin Lim
00:18:24,680 –> 00:18:25,880
that you have to hold for three years.

Melvin Lim
00:18:25,880 –> 00:18:28,120
The worst thing is that because you bite the bullet,

Melvin Lim
00:18:28,120 –> 00:18:29,640
you have so much skin in the game,

Melvin Lim
00:18:29,640 –> 00:18:30,960
you paid 17% ABSD,

Melvin Lim
00:18:30,960 –> 00:18:32,160
you paid 4% Buyer’s Stamp Duty,

Melvin Lim
00:18:32,160 –> 00:18:33,960
you paid 55% down payment

Melvin Lim
00:18:33,960 –> 00:18:36,120
because you can only loan 45% from the bank

Melvin Lim
00:18:36,120 –> 00:18:37,480
and your monthly instalment is so low,

Melvin Lim
00:18:37,480 –> 00:18:39,120
you will continue to rent out,

Melvin Lim
00:18:39,120 –> 00:18:40,720
there’s no urgency to sell.

Melvin Lim
00:18:40,720 –> 00:18:42,520
In fact, I think you might be enjoying

Melvin Lim
00:18:42,520 –> 00:18:43,600
passive income right now.

Melvin Lim
00:18:43,600 –> 00:18:45,480
So leave a comment below if I’m right

Melvin Lim
00:18:45,480 –> 00:18:47,160
to say that you’re actually enjoying

Melvin Lim
00:18:47,160 –> 00:18:48,000
passive income right now,

Melvin Lim
00:18:48,000 –> 00:18:49,440
because rental rates have shot up so high.

Melvin Lim
00:18:49,440 –> 00:18:51,920
Your spouse and yourself you own one property each,

Melvin Lim
00:18:51,920 –> 00:18:54,720
one for your own stay and one for investment.

Melvin Lim
00:18:54,720 –> 00:18:56,160
So both of you, de-coupled,

Melvin Lim
00:18:56,160 –> 00:18:58,080
one is for own stay, one is for investment.

Melvin Lim
00:18:58,080 –> 00:18:59,280
Maybe you own a 3-bedder for stay,

Melvin Lim
00:18:59,280 –> 00:19:00,600
you own a 2-bedder for rental.

Melvin Lim
00:19:00,600 –> 00:19:02,760
Will you fire sale your home today

Melvin Lim
00:19:02,760 –> 00:19:03,960
because interest rate is so high?

Melvin Lim
00:19:03,960 –> 00:19:05,600
Similarly, you already home for three years,

Melvin Lim
00:19:05,600 –> 00:19:07,280
you have paid 29% for both of properties.

Melvin Lim
00:19:07,280 –> 00:19:09,680
You are using CPF to service this property,

Melvin Lim
00:19:09,680 –> 00:19:10,720
to service this property,

Melvin Lim
00:19:10,720 –> 00:19:12,040
they’re collecting good rental,

Melvin Lim
00:19:12,040 –> 00:19:12,880
there’s no need for you to sell.

Melvin Lim
00:19:12,880 –> 00:19:14,400
Even if you lose your job,

Melvin Lim
00:19:14,400 –> 00:19:16,400
you can still use rental to pay for the mortgage.

Melvin Lim
00:19:16,400 –> 00:19:18,000
That’s the last thing, sorry,

Melvin Lim
00:19:18,000 –> 00:19:20,120
is that if you are from overseas

Melvin Lim
00:19:20,120 –> 00:19:22,560
and you are already owning three to four properties

Melvin Lim
00:19:22,560 –> 00:19:23,840
in Singapore, will you fire sale your home?

Melvin Lim
00:19:23,840 –> 00:19:25,560
No, the the answer is this,

Melvin Lim
00:19:25,560 –> 00:19:27,960
you already pay ABSD over the years,

Melvin Lim
00:19:27,960 –> 00:19:30,120
you will never sell all the properties

Melvin Lim
00:19:30,120 –> 00:19:31,680
because if you were to sell

Melvin Lim
00:19:31,680 –> 00:19:33,000
and you buy back another property,

Melvin Lim
00:19:33,000 –> 00:19:34,280
you’ll be hit by the new ABSD.

Melvin Lim
00:19:34,280 –> 00:19:36,000
You’ll continue to collect rent,

Melvin Lim
00:19:36,000 –> 00:19:37,560
you will let your Singapore currency

Melvin Lim
00:19:37,560 –> 00:19:39,920
appreciate against your native currency,

Melvin Lim
00:19:39,920 –> 00:19:41,440
which works well for you

Melvin Lim
00:19:41,440 –> 00:19:43,520
and that is an added advantage for foreign property investor.

Melvin Lim
00:19:43,520 –> 00:19:47,720
And we’ve just concluded all the six different categories

Melvin Lim
00:19:47,720 –> 00:19:50,200
of demographics of property owners

Melvin Lim
00:19:50,200 –> 00:19:52,480
as well as one of the demographics

Melvin Lim
00:19:52,480 –> 00:19:53,920
is people waiting on side line.

Melvin Lim
00:19:53,920 –> 00:19:55,760
So I think if you’re waiting on the side line,

Melvin Lim
00:19:55,760 –> 00:19:57,800
we need to look at the whole picture together

Melvin Lim
00:19:57,800 –> 00:19:59,880
is that we need to look at the existing people

Melvin Lim
00:19:59,880 –> 00:20:01,000
holding onto properties

Melvin Lim
00:20:01,000 –> 00:20:02,560
because they’re holding power

Melvin Lim
00:20:02,560 –> 00:20:05,640
determines the price and valuation point

Melvin Lim
00:20:05,640 –> 00:20:07,920
of the Singapore property price index.

Melvin Lim
00:20:07,920 –> 00:20:10,080
And if you look at who is currently owning the properties,

Melvin Lim
00:20:10,080 –> 00:20:12,560
based on the statistic in the last few years,

Melvin Lim
00:20:12,560 –> 00:20:14,280
we no longer need to depend on foreigners

Melvin Lim
00:20:14,280 –> 00:20:16,200
on the property price index

Melvin Lim
00:20:16,200 –> 00:20:18,880
because 76% plus 21% of the properties

Melvin Lim
00:20:18,880 –> 00:20:21,000
that are done deal in the last year,

Melvin Lim
00:20:21,000 –> 00:20:22,080
in the last few years actually

Melvin Lim
00:20:22,080 –> 00:20:23,800
are done by Singaporeans and PR,

Melvin Lim
00:20:23,800 –> 00:20:25,200
and that is an extremely high percentage

Melvin Lim
00:20:25,200 –> 00:20:26,640
because a lot of people thought that

Melvin Lim
00:20:26,640 –> 00:20:29,280
we need to have foreigners investors coming in

Melvin Lim
00:20:29,280 –> 00:20:30,840
to buy our property to push our pricing,

Melvin Lim
00:20:30,840 –> 00:20:34,280
but actually this is a reverse picture already

Melvin Lim
00:20:34,280 –> 00:20:35,560
because of all the cooling measures.

Melvin Lim
00:20:35,560 –> 00:20:38,760
In fact we became sort of like a self-sustaining

Melvin Lim
00:20:38,760 –> 00:20:39,640
kind of country right now.

Melvin Lim
00:20:39,640 –> 00:20:41,240
Most of you are buying properties,

Melvin Lim
00:20:41,240 –> 00:20:43,000
they are people already in Singapore,

Melvin Lim
00:20:43,000 –> 00:20:44,280
they are locals

Melvin Lim
00:20:44,280 –> 00:20:48,040
and this is a very strong base fundamental pool

Melvin Lim
00:20:48,040 –> 00:20:50,400
of buying power that we have in the market right now.

Melvin Lim
00:20:50,400 –> 00:20:51,240
Last but not least

Melvin Lim
00:20:51,240 –> 00:20:53,760
is that we have to understand this very important fact

Melvin Lim
00:20:53,760 –> 00:20:55,800
is that we churn out this chart.

Melvin Lim
00:20:55,800 –> 00:20:57,000
The existing people,

Melvin Lim
00:20:57,000 –> 00:20:59,120
so in Singapore there’s 340K

Melvin Lim
00:20:59,120 –> 00:21:01,200
current stock of condos and apartments,

Melvin Lim
00:21:01,200 –> 00:21:04,080
and we’re talking about condos and apart strata units.

Melvin Lim
00:21:04,080 –> 00:21:05,280
260K are owned by Singaporeans,

Melvin Lim
00:21:05,280 –> 00:21:09,480
70K of these units are owned by foreigners and PR.

Melvin Lim
00:21:09,480 –> 00:21:11,800
What this means is that PR and foreigners

Melvin Lim
00:21:11,800 –> 00:21:12,760
they have more skin in the game

Melvin Lim
00:21:12,760 –> 00:21:14,040
because PR pay 5% ABSD,

Melvin Lim
00:21:14,040 –> 00:21:16,680
foreigners pay between 12%, 17%,

Melvin Lim
00:21:16,680 –> 00:21:19,040
all the way to currently 30%.

Melvin Lim
00:21:19,040 –> 00:21:21,720
It was 25%, increased to 30%.

Melvin Lim
00:21:21,720 –> 00:21:24,120
So over the years foreigners have a lot of skin to give.

Melvin Lim
00:21:24,120 –> 00:21:25,920
Now the mindset of that foreigners and PRs

Melvin Lim
00:21:25,920 –> 00:21:27,000
holding onto property in Singapore

Melvin Lim
00:21:27,000 –> 00:21:29,240
is that they have a lot more stickiness

Melvin Lim
00:21:29,240 –> 00:21:30,320
and they will not sell

Melvin Lim
00:21:30,320 –> 00:21:32,120
because if they were to sell and buy back again,

Melvin Lim
00:21:32,120 –> 00:21:34,360
they’ll be hit with a fresh round of ABSD

Melvin Lim
00:21:34,360 –> 00:21:35,720
at the latest highest realm.

Melvin Lim
00:21:35,720 –> 00:21:37,360
So technically speaking,

Melvin Lim
00:21:37,360 –> 00:21:39,000
if you want to buy a property in Singapore,

Melvin Lim
00:21:39,000 –> 00:21:42,840
you have to wait for this pool of current owners

Melvin Lim
00:21:42,840 –> 00:21:44,280
to release their units in the market,

Melvin Lim
00:21:44,280 –> 00:21:46,640
and this is a dwindling pool

Melvin Lim
00:21:46,640 –> 00:21:48,280
because there’s lesser people

Melvin Lim
00:21:48,280 –> 00:21:50,280
that are willing to let go of their units

Melvin Lim
00:21:50,280 –> 00:21:51,080
that they’re holding.

Melvin Lim
00:21:51,080 –> 00:21:52,960
And of course then you have to depend on new launches,

Melvin Lim
00:21:52,960 –> 00:21:55,680
you have to wait for existing Singaporeans

Melvin Lim
00:21:55,680 –> 00:21:57,600
that want to upgrade their portfolio or downgrade.

Melvin Lim
00:21:57,600 –> 00:21:58,760
And what does this means is that

Melvin Lim
00:21:58,760 –> 00:22:02,800
this entire picture then form a new level of stickiness

Melvin Lim
00:22:02,800 –> 00:22:03,960
in the entire market.

Melvin Lim
00:22:03,960 –> 00:22:05,360
To sum up this episode,

Melvin Lim
00:22:05,360 –> 00:22:08,280
part one of our forecasts and predictions for 2023 is that

Melvin Lim
00:22:08,280 –> 00:22:11,160
2023 is going to be a very interesting year

Melvin Lim
00:22:11,160 –> 00:22:12,800
because this is going to be a year

Melvin Lim
00:22:12,800 –> 00:22:15,400
that we will see a U-shaped turn

Melvin Lim
00:22:15,400 –> 00:22:17,040
and that is what we call a shift.

Melvin Lim
00:22:17,040 –> 00:22:18,360
And if you’re not ready for the shift,

Melvin Lim
00:22:18,360 –> 00:22:19,800
you’re trying to time the market

Melvin Lim
00:22:19,800 –> 00:22:20,760
and when the shift comes

Melvin Lim
00:22:20,760 –> 00:22:21,840
and you want to enter the market,

Melvin Lim
00:22:21,840 –> 00:22:24,360
you might be further priced out of the market.

Melvin Lim
00:22:24,360 –> 00:22:27,440
It is better sometimes to enter the market,

Melvin Lim
00:22:27,440 –> 00:22:29,560
really deep dive, do your homework,

Melvin Lim
00:22:29,560 –> 00:22:30,480
do your analysis,

Melvin Lim
00:22:30,480 –> 00:22:31,280
really deep dive,

Melvin Lim
00:22:31,280 –> 00:22:32,760
enter the market so that by the time

Melvin Lim
00:22:32,760 –> 00:22:34,440
when you flip open the newspaper tomorrow

Melvin Lim
00:22:34,440 –> 00:22:36,360
and when Fed decide to cut their rates,

Melvin Lim
00:22:36,360 –> 00:22:38,160
and everybody wants to increase their price,

Melvin Lim
00:22:38,160 –> 00:22:40,080
you will not be caught by surprise

Melvin Lim
00:22:40,080 –> 00:22:41,520
because you’re already in the market

Melvin Lim
00:22:41,520 –> 00:22:43,160
and that is the time that you can let your property

Melvin Lim
00:22:43,160 –> 00:22:45,240
benefit upwards with asset inflation

Melvin Lim
00:22:45,240 –> 00:22:47,200
because you are already in the market.

Melvin Lim
00:22:47,200 –> 00:22:48,560
So I want to end this episode,

Melvin Lim
00:22:48,560 –> 00:22:51,640
part one on forecasts and predictions for 2023.

Melvin Lim
00:22:51,640 –> 00:22:53,520
I just want to wish you a wonderful year ahead.

Melvin Lim
00:22:53,520 –> 00:22:55,800
Thank you for follow PropertyLimBrothers over the years

Melvin Lim
00:22:55,800 –> 00:22:57,320
and we hope that our Nuggets On The Go series

Melvin Lim
00:22:57,320 –> 00:22:58,160
has helped you,

Melvin Lim
00:22:58,160 –> 00:22:59,040
whether you’re traveling on the road

Melvin Lim
00:22:59,040 –> 00:23:00,360
listening to our Spotify,

Melvin Lim
00:23:00,360 –> 00:23:02,280
or you are at home watching this on YouTube.

Melvin Lim
00:23:02,280 –> 00:23:03,720
And thank you for staying tuned with us.

Melvin Lim
00:23:03,720 –> 00:23:04,680
My name is Melvin Lim,

Melvin Lim
00:23:04,680 –> 00:23:06,520
CEO and co-founder of PropertyLimBrothers

Melvin Lim
00:23:06,520 –> 00:23:08,880
and we’re very happy to have a new season

Melvin Lim
00:23:08,880 –> 00:23:10,000
for Nuggets On The Go.

Melvin Lim
00:23:10,000 –> 00:23:11,720
So we’ll see you on the next episode.

Melvin Lim
00:23:11,720 –> 00:23:13,080
Stayed tuned, cheers.