Sunday April 20, 2008

Property prices softening fast in Singapore

goldclubasia.com :

After rocketing to dizzying heights last year, the private homes market has stalled because of the global credit crunch - an external factor that took the market by surprise. The withdrawal of the deferred payment scheme last year has also dampened demand somewhat. Sales volumes and interest have fizzled out just as quickly as the market surged last year. While many players hang on to the notion that strong fundamentals - low interest rates, for instance - will support the market, sentiment has fast melted away :

1 Growth in home prices weakens
2 Launches are held back
3 Collective sales have died down
4 Investor funds pull out or hold off
5 Sellers hand out discounts galore
6 Agents less sought after, ads dwindle
7 Buyers toss in low bids to test the waters

- The housing bust and credit crunch originating from the US are starting to bite here. The big news that people over here in Singapore have been pointing to : "Kuwait Finance House, which agreed last December to buy 97 Goodwood Residence units for $818.4 million from GuocoLand, allowed the purchase option to lapse."

Well. I've got a friend and fellow investor who has gone long the Singapore housing market (he bought an investment/rental apartment recently) and another who is short Singapore real estate (having sold off his condo earlier and is now renting). As for myself, I maintain a kind of neutral stance. I'm staying in my 5-room HDB flat and I'm not buying, and I'm not selling.

I await with wry amusement for my personal prediction of a certain crossover to occur : the resale price of my HDB flat dropping to or below the price at which I bought it new at the so-called "government subsidized price". So-called because it isn't that much of a subsidy and that's another long story by itself. But so far the figures are as follows : in order for this to occur, the resale price will have to drop by 25-30% from current prices. If this housing crisis continues to worsen, as it is in the US, I'd say the crossover might actually have a good chance of coming to pass.

See also :

1. Singapore property market losing momentum
2. Say goodbye to the days of million-dollar HDB flats
3. Singapore economy stuck in mud : inflation rising, M3 falling, GDP crashing - the stagflation formula

(2008-04-20 21:12:28 SGT) [Biz] Permalink

Crude oil hits record $117, breaking records 5 days in a row

This article belongs to the NYMEX crude oil price records story arc.

Crude oil futures surged to a new trading record of $117 a barrel on Friday [18 Apr 2008] following an attack on a key pipeline in Nigeria. The rally capped a week of record highs fueled by supply woes and the dollar's weakness relative to other major currencies. Light, sweet crude for May delivery spiked to a new trading record of $117 in after-hours electronic trading Friday on the New York Mercantile Exchange [NYMEX]. It was the fifth day in a row crude prices set new records.

- This past week has been absolutely smashing. Records-wise, that is. We were at $110.14 Friday last week, and this past Friday, the closing price was $116.69, a jump of $6.55 or 5.9%. All through the week, oil has been breaking one record after another every single trading day.

The next potential resistance level looks closer to $130 than $120. With ongoing currency devaluation, the sky is the limit but for the foreseeable future the next resistance levels after that are around $150, $180 and $200. Support levels are around $110, $100, $90 and $85.

This past trading session has also witnessed a divergence where the gold price got hammered by over $30 to drop down from around $944 to close out at $916.20. It looks like there has been some intervention going on to prevent a total meltdown of USDX, the US Dollar Index, from the 72 consolidation level down to 70 or below.

Stepping back a bit, here's the 3-year historical crude oil price chart :

See also :

1. Oil rises to record $115.21 on unexpected inventory drop
2. Crude oil hits $114.08 record as investors turn to commodities
3. Crude oil rises to record $112.48 on falling dollar
4. Oil hits $111.00 high, breaking records 7 trading days in a row

(2008-04-20 17:46:03 SGT) [Energy] Permalink

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