Current Affairs
Three property investment mistakes you should avoid in 2015
No matter what your new year resolutions are, it’s time you said goodbye to your bad habits in property investment. If you are buying a private home in 2015, avoid making these three common mistakes.
Mistake #1: Rush in and get burnt.
According to URA, there are 88,627 uncompleted private residential units, including Executive Condominium (ECs) in the pipeline. As at 3rd Quarter 2014, 28,120 units (excluding ECs) are launched but remain unsold. For public flats, Housing Development Board (HDB) will launch another 16,900 Built-to-Order (BTO) flats this year.
Do the math. Ninety percent of resident households already own their homes. Population growth in Singapore is a record-low 1.3 percent in 2014. For the past five years, the annual increment in the number of resident households ranges from 3,000 to 22,500. Assuming there are two persons in each new household, every year only 1,500 to 11,250 new homes are needed.
Among the 81.9 percent HDB dwellers who have plans to upgrade to condominiums, the sale of their home is deterred by depressing HDB resale prices. Furthermore, buyers of HDB flats and ECs have to pass the 30 percent Mortgage Servicing Ratio (MSR), just like many owners with multiple properties have their hands tied by Total Debt Servicing Ratio (TDSR).
Foreign buyers have to bite the bullet for higher Additional Buyer’s Stamp Duty (ABSD) and lower loan-to-value (LTV). In 2014, growth of foreigners has slowed down to 2.9 percent. Foreign employment growth also dropped to 3 percent.
Even if you build, they won’t come.
Leave developers solve their problem. But don’t let their problem become yours. You don’t want to be left holding a hot potato.
The property market slowdown is just starting. Patience is key if you are looking for a real bargain. Sit back and wait for the demand to dry up.
Mistake #2: Be caught unprepared.
We’ve heard the Fed talking about raising interest rates too many times. Just when everyone grows tired of the cry wolf game, the untamable animal is getting ready to attack in 2015. It stalks the prey silently in the dark. And when it finally attacks, it bites agilely and furiously, pouncing on it repeatedly in a short period of time.
Take an example from one of my rental properties. In mid-2005, I was still paying an interest rate of 1.3 percent. After three to four rounds of interest rate revisions, with the step-up rate of a variable-rate loan, the rate had already been raised to 4 percent by end of 2006.
If you are contemplating buying a private home, rather than using the arbitrary 3.5 percent interest rate from TDSR, you are not being too conservative to use 4 percent for your calculations.
For those who have an existing home loan, call the banks now to ask for their latest housing loan packages. Don’t wait till your bank send you the letter on interest rate revision.
Paying higher interest takes effect the following month, but repricing and refinancing will take time to process. Even after approval, it needs another three months to be effective. You have no choice but to pay higher interest before the adjustment takes place.
(For more about refinancing and repricing, read my blog post “Getting the most out of housing loans”)
Mistake #3: Expect to get rich quick with properties.
If someone tells you that you can buy properties with little money or using other people’s cash, don’t be too carried away.
They promise to share with you where the money is. But these ‘profitable investment opportunities’ and ‘undervalued assets’ are most likely unsold units of overseas property projects being marked-up and marketed to you.
I have received countless proposals from overseas developers who want to market these projects to our Property Club Singapore members. Some even put forward the commission they will offer right in their first message.
You can close one eye, buy any property and still make a handsome profit in a growing market. But prices in many foreign property markets are currently at their all-time highs. There are also countries with structural economic problems but no turnaround in sight.
Frankly, I haven’t seen real property investors who won’t keep mum about which projects they are buying. Instead of buying jointly with complete strangers without any background check, they only invest with people they know very well for obvious reasons.
Besides, what make you think that you can too become a property millionaire, but minus the hassles of the punishing discipline to save, and the enormous efforts to do all the legwork?
The problem of these get-rich-quick property seminars is that they tend to over-simplify the strategies. There is no short-cut and no magic pill in property investment. And you really don’t have to pay so much for a course and go around in circles to learn that.
Lastly, don’t be distracted by all the noises around you. Make sure that all the fundamentals are sound before you make any decision.
P.S. I am afraid that the upcoming Buying My First Private Property 1-Day Workshop on January 24 won’t sell you any get-rich-quick strategy or undervalued overseas property. The workshop will only tell you all the tips and traps of buying private property the first time so that you know how to make the right decisions.
This article was first published at propertysoul.com
Current Affairs
Reforming Singapore’s defamation laws: Preventing legal weapons against free speech
Opinion: The tragic suicide of Geno Ong, linked to the financial stress from a defamation lawsuit, raises a critical issue: Singapore’s defamation laws need reform. These laws must not be weaponized to silence individuals.
by Alexandar Chia
This week, we hear the tragic story of the suicide of Geno Ong, with Ong citing the financial stress from the defamation lawsuit against her by Raymond Ng and Iris Koh.
Regardless of who’s right and who’s wrong, this Koh/Ng vs Ong affair raises a wider question at play – the issue of Singapore’s defamation laws and how it needs to be tightened.
Why is this needed? This is because defamation suits cannot be weaponised the way they have been in Singapore law. It cannot be used to threaten people into “shutting up”.
Article 14(2)(a) of the Constitution may permit laws to be passed to restrict free speech in the area of defamation, but it does not remove the fact that Article 14(1)(a) is still law, and it permits freedom of speech.
As such, although Article 14(2)(a) allows restrictions to be placed on freedom of speech with regard to the issue of defamation, it must not be to the extent where Article 14(1)(a)’s rights and liberties are not curtailed completely or heavily infringed on.
Sadly, that is the case with regard to precedence in defamation suits.
Let’s have a look at the defamation suit then-PM Goh Chok Tong filed against Dr Chee Soon Juan after GE 2001 for questions Dr Chee asked publicly about a $17 billion loan made to Suharto.
If we look at point 12 of the above link, in the “lawyer’s letter” sent to Dr Chee, Goh’s case of himself being defamed centred on lines Dr Chee used in his question, such as “you can run but you can’t hide”, and “did he not tell you about the $17 billion loan”?
In the West, such lines of questioning are easily understood at worse as hyperbolically figurative expressions with the gist of the meaning behind such questioning on why the loan to Suharto was made.
Unfortunately, Singapore’s defamation laws saw Dr Chee’s actions of imputing ill motives on Goh, when in the West, it is expected of incumbents to take the kind of questions Dr Chee asked, and such questions asked of incumbent office holders are not uncommon.
And the law permits pretty flimsy reasons such as “withdrawal of allegations” to be used as a deciding factor if a statement is defamatory or not – this is as per points 66-69 of the judgement.
This is not to imply or impute ill intent on Singapore courts. Rather, it shows how defamation laws in Singapore needs to be tightened, to ensure that a possible future scenario where it is weaponised as a “shut-up tool”, occurs.
These are how I suggest it is to be done –
- The law has to make mandatory, that for a case to go into a full lawsuit, there has to be a 3-round exchange of talking points and two attempts at legal mediation.
- Summary judgment should be banned from defamation suits, unless if one party fails to adduce evidence or a defence.
- A statement is to be proven false, hence, defamatory, if there is strictly material along with circumstantial evidence showing that the statement is false. Apologies and related should not be used as main determinants, given how many of these statements are made in the heat of the moment, from the natural feelings of threat and intimidation from a defamation suit.
- A question should only be considered defamatory if it has been repeated, after material facts of evidence are produced showing, beyond reasonable doubt, that the message behind the question, is “not so”, and if there is a directly mentioned subject in the question. For example, if an Opposition MP, Mr A, was found to be poisoned with a banned substance, and I ask openly on how Mr A got access to that substance, given that its banned, I can’t be found to have “defamed the government” with the question as 1) the government was not mentioned directly and 2) if the government has not produced material evidence that they indeed had no role in the poisoning affair, if they were directly mentioned.
- Damages should be tiered, with these tiers coded into the Defamation Act – the highest quantum of damages (i.e. those of a six-figured nature) is only to be reserved if the subject of defamation lost any form of office, revenue or position, or directly quantifiable public standing, or was subjected to criminal action, because of the act of defamation. If none of such occur, the maximum amount of damages a plaintiff in a defamation can claim is a 4-figure amount capped at $2000. This will prevent rich and powerful figures from using defamation suits and 6-figure damages to intimidate their questioners and detractors.
- All defendants of defamation suit should be allowed full access to legal aid schemes.
Again, this piece does not suggest bad-faith malpractice by the courts in Singapore. Rather, it is to suggest how to tighten up defamation laws to avoid it being used as the silencing hatchet.
Current Affairs
Man arrested for alleged housebreaking and theft of mobile phones in Yishun
A 23-year-old man was arrested for allegedly breaking into a Yishun Ring Road rental flat and stealing eight mobile phones worth S$3,400 from five tenants. The Singapore Police responded swiftly on 1 September, identifying and apprehending the suspect on the same day. The man has been charged with housebreaking, which carries a potential 10-year jail term.
SINGAPORE: A 23-year-old man has been arrested for allegedly breaking into a rental flat along Yishun Ring Road and stealing eight mobile phones from five tenants.
The incident occurred in the early hours on Sunday (1 September), according to a statement from the Singapore Police Force.
The authorities reported that they received a call for assistance at around 5 a.m. on that day.
Officers from the Woodlands Police Division quickly responded and, through ground enquiries and police camera footage, were able to identify and apprehend the suspect on the same day.
The stolen mobile phones, with an estimated total value of approximately S$3,400, were recovered hidden under a nearby bin.
The suspect was charged in court on Monday with housebreaking with the intent to commit theft.
If convicted, he could face a jail term of up to 10 years and a fine.
In light of this incident, the police have advised property owners to take precautions to prevent similar crimes.
They recommend securing all doors, windows, and other openings with good quality grilles and padlocks when leaving premises unattended, even for short periods.
The installation of burglar alarms, motion sensor lights, and CCTV cameras to cover access points is also advised. Additionally, residents are urged to avoid keeping large sums of cash and valuables in their homes.
The investigation is ongoing.
Last month, police disclosed that a recent uptick in housebreaking incidents in private residential estates across Singapore has been traced to foreign syndicates, primarily involving Chinese nationals.
Preliminary investigations indicate that these syndicates operate in small groups, targeting homes by scaling perimeter walls or fences.
The suspects are believed to be transient travelers who enter Singapore on Social Visit Passes, typically just a day or two before committing the crimes.
Before this recent surge in break-ins, housebreaking cases were on the decline, with 59 reported in the first half of this year compared to 70 during the same period last year.
However, between 1 June and 4 August 2024, there were 10 reported housebreaking incidents, predominantly in private estates around the Rail Corridor and Bukit Timah Road.
The SPF has intensified efforts to engage residents near high-risk areas by distributing crime prevention advisories, erecting alert signs, and training them to patrol their neighborhoods, leading to an increase in reports of suspicious activity.
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