Monday, November 8, 2010

Uncle Sam just pushed property prices up!

Hi guys! We just made the front page of Business Times today with our acquisition of Prime Centre. I was pleasantly surprised as we just completed the transaction last Thursday when I was in Beijing.

For those of you who have been following this blog, I made the prediction a couple of months ago that the government’s cooling measures will have little impact on prices and I have been right. Prices have not come down and in fact, have been slowly inching up.

Why the continued optimism? Its all because of Uncle Sam. The European and US Federal Reserve has been printing tons of money. What we dubbed QE2 in reality is the Western nations trying to export its problems to Asia. All this money will be flowing into Asia like a tidal wave. Why? Who in their right mind will want to hold US dollar denominated assets when the currency is depreciated at such an alarming rate.

This is tantamount to kicking yourself in the ass. If I have free or cheap money, I will be buying Asian assets. At the very minimum, if I do not lose money, I would have made from the currency angle. Thus many fund managers will be using US denominated loans to buy Asian stocks or property.

There will be asset price inflation over the next six months because there is SO much liquidity in the market right now and so few assets for sale. I did not just snap up Prime Centre, I also bought a freehold landed property at Bt Timah over the weekend too. Prices are still reasonable, and they will not be so reasonable over the nest few months.

In fact, Uncle Sam just gave me an extra push for my property portfolio. So for all you out there, don’t say I did not give you advance warning! Go get some assets that I told you to buy in class!

Your Friend,
Andy Ong