Right on the mark!

Hi guys, its been such a long time! I have been traveling a lot, in fact, I was in Bangkok till yesterday. I have been so blessed that I caught the two days on calm in this protest-happy country. I do wish them all the best as they are a very lovely bunch of people. I have been fighting crisis after crisis, but it is the faith that the Good Lord has given me opportunities to do all this that drives me on. I have often reflected why I have to face so many trials, I always try to do the right thing but I suppose different people have different perspectives.  Life is challenging but I suppose you have to bulldoze your way through.

In my last entry, I shared with you that the residential sector will come down and well I have been right on the mark. The real estate sector is dependent on cheap liquidity and the government cooling measures has prevented further speculation. And with foreign demand cooling off due to additional higher stamp duties, the market will face intense headwinds in the months ahead. I know that many bought Duo(the combined Temasek and Khazanah development) which did very well at launch but those who are successful in getting units should be rather careful at this stage. I really do not like the feng shui of the place and for $2000 plus psf, I have many other options that are far more attractive.

The world’s economies seem to be reporting better economic numbers. This bode well for Singapore due to our reliance on the international economies. However, with money flows trending the other way around as they hunt for better returns, well I am not too positive on asset prices.

Till the next blog, take care and God bless!

Your Friend

Andy Ong

09/12/13

The property market in perspective…

I was at my long time lawyers place yesterday. They have acted for me in all my transactions until the professional liability insurance could not support us anymore. However, we have become very good friends in the process. They were all lamenting the lack of deals in the market. The banks are taking forever to process deals and many deals are being aborted as financing becomes scarce. As I had predicted in earlier posts, this round of new government measures WILL BE EFFECTIVE.

There is still activity in the market as Chinese money is still hunting for investments. I suspect the recent crackdown on corruption in China has something to do with this. Chinese officials and their cronies are preparing for ‘what if’ situations. The structures they have set up looks a little dodgy and they are targeting mainly commercial property and there is no ABSD that increases the price of their transactions for them. Do not underestimate the amount of money flowing in from this source as I estimate the amount to be staggering.

What is the bottom line then? Residential will be very muted especially if that asset class’ demand is domestically driven. Why? The drying up of financing will impact local Singaporeans’ ability to buy. This is because they are very dependent on bank loans. Think of landed properties where only Singaporeans and selected PRs are allowed to participate.  

I am also grim for HDBs as many workers are being sent back as the government is serious about winning the popular vote and cutting the quotas of workers. Those with employment passes are also being targeted as the minimum salary level has increased and the newly implemented job bank will require certain regulations to be passed before companies are able to hire them. The strong rental for HDBs has been propping up the upgraders market for mass market homes. I have been reiterating this for quite some time and I hope you do keep tab.

Commercial properties will still be selectively strong as foreigners are able to pay full cash! Yup, you did not hear me wrong, no financing. I certainly hope that the international economy do not collapse as any shrinkage of the economy will have everyone heading for the exit with no one to pick up the slack.

Till the next entry, take care and God Bless!

Your Friend,

Andy Ong

01/10/13

Give thanks for our blessings!

Life in the fast lane is interesting but all of us should put things in perspective. We all need perspective as we lose ourselves in this world of material chase. Only when traumatic events occur that we start to cherish the people around us. We really need to treasure the people around us a little more. As we chase for material things, we may have neglected them. Sadly, we leave behind all our material possessions when we have to depart eventually. We should stop and smell the roses and thank the people around us who loves us, try it and I am sure that you will be a happier person too

Till the next blog, take care and God bless!

Your Friend

Andy Ong

01/10/13

Fed tapering, my 2 cents worth

The world is looking forward to the US Federal Reserve’s decision to what they should do with their QE program. Well, I am not too bothered whether are cutting US$10 or 15 billion off their current program. This is the current consensus amongst economists. To me this is a non-event. Why? Any form of QE is a stimulus to the economy, whether it be US$1 or 100 billion. The US economy has been trying to recover from the global financial crisis. In fact, the bulk of that money has not been deployed to the real economy and instead sent financial assets to even greater heights.

This is because banks are afraid to lend to the main street firms except the very big names. And these guys do not even need cash in the first place. The Microsofts and Apples of the world have more cash than what they know to do with. In fact, they are borrowing to fund dividend payments at home as they do not want to attract tax should they repatriate their overseas income. This is the irony of the situation. All that hot money created by the Fed is screwing our markets.

Why am I not that concerned? The markets have long taken into account this eventuality. Our stock markets have been doing well due foreign money trying to find a home. In fact, the South East Asian markets have done well. They felt the pinch 3 months ago when these funds pulled back but have since seen fund flows coming back. Be very careful as this might be a very temporary recovery. The US economic recovery is slowly trying to gain ground, but I have not seen very solid numbers backing up a firm economic picture. If you want to know what signals to be watching out for, try non-farm payrolls stripping out all the one offs and window dressing. Events that will cause long term cost of borrowing to rise are indicators that I am watching very carefully.

I am seeing a lot of Chinese money coming in to support medium to large sized property transactions. I will share my observations as to why in the next blog. Quality commercial will be ok for the next couple of quarters but I do hope the government will monitor the residential sector very carefully. Or an unforeseen international economic event might cause mass panic given the exposure of Singaporeans.

For those investing in Singapore and Malaysia, I need to point out to you that both economies are not doing that great and companies will face challenges. Singapore’s non-oil domestic exports are not picking up and the newly elected PM of Malaysia are now contending with reining in the financial excesses pre election. The whole Iskandar region has done well with international money flowing in but deals are slowing drastically. In fact, many sellers have dropped their asking prices for land by as much as 20% in the last 3 months. Invest with your eyes open!

Tomorrow is Mid Autumn, I would like to wish you a Happy Mooncake Festival. This weekend is F1, so do enjoy the glamour and glitz. Many thanks for your many boxes of moon cakes, and I wish you health and wealth.

Till the next blog, take care and God bless!

Your Friend

Andy Ong
18/09/13