Friday, 14 January 2022

Big Daddy's (Not Invisible) Hand Over Property Versus Stocks


When we invest or trade Singapore stocks, we don't have to worry about big daddy coming out with equities "cooling measures" to curb the perceived rapid speculative price appreciations right?

No free lunch.

That also meant there's no one to ring the bell at a stock market top...

Which is why in a bear market, the percentage losses is always far greater for stocks over properties. I guess this is not news to old fogeys out there. Wink.

Contrast this to Singapore's properties.

The moment when things get exciting, big daddy not shy to remove the punch bowl to the dismay of all vested interests....

Singapore property investors can't be blamed if they're envious of their counterparts in Hong Kong; US; Australian; and Canadian cities. Their property prices can shoot to the sky and stay there at their lofty levels for years.

That's until they crashed.

That's when Singapore property investors take comfort although we also have our property "crashes" and bear markets, we have less to fall from giddy heights...

Less alcohol from punch bowl, less hangover the next day.

That's something Singapore stock investors/traders found out the hard way - crash got sound!


There's another interesting difference. 

When stock market crashes, other countries may manipulate intervene by propping their local stock markets.

Japan is doing directly with their central bank buying ETFs of Japanese stocks. While US and Europe support their stock markets indirectly through "money printing".


But when it comes to Singapore properties, its not always about property cooling measures... People often forget we do have property boosting measures! 

Let's take the more obvious one like in 2005:

  • The relaxation of foreign ownership rules on apartments

  • An increase of the maximum loan-to-value ratio from 80% to 90%

  • A reduction of cash down payments from 10% to 5% for home purchase

  • Allowing non-related singles to use their CPF to jointly purchase residential properties.


Then there's the Upgrading and Asset Enhancement for HDB flats. Remember those?

How about big daddy's policy on foreign talents and immigration? 

Population 10 million?

And my favourite of all, HDB subsidies for BTO flats and all those housing grants and what not! 

(Imagine if I buy Singtel or DBS stocks, I can get a grant for staying near my parents!)

So there you go!

You want to drive without speed limits, without annoying big daddy reminding you to wear seat belts, you choose that path.

You like big daddy's warm and reassuring hand holding your bxlls palm, you go that way.

Just know that BOTH paths can equally make, or lose a lot of money.


You don't want to lose money ever?

Well, there's always CPF... (just don't call it investing OK?)


  1. Smol,

    S'pore govt learnt its lesson from AFC ... -40% plunge in private property prices & consolidation of 4 banks is no fun lol.

    I'm not sure whether the bubbliest Bishan 4- and 5-rm HDB flats sold in 1996 ever recovered their prices. Most hadn't during the last peak in 2013. And now their leasehold age is working against them.

    As for S'pore stocks, I think govt don't bother so much coz they don't underpin a lot of the sensitive stuff here: CPF funds, pension funds, GIC (Temasek also increasingly less SG listed equities), MAS reserves, insurance par funds, and generally don't form much of citizens' net worth.

    It's a reflection of the health of Singapore Inc, like skin colour & tone, but not its vital organs.

    1. Spur,

      Lucky prior to 1997 AFC, big daddy already introduced some property cooling measures in 1995 to take away some of the froth...

      If not, the plunge would not be "just" -40%...

      Imagine if one of our local banks got into trouble?

      Even non-speculative and conservative Save More bank depositors would have been sweating bullets - like those AIA life insurance policy holders during 2008!

      If we overpaid, we overpaid. Not even big daddy can bail you out...

      The consolation is if big daddy did not come with property cooling measures, more would have overpaid!!!

      Things must have gotten quite out of hand for big daddy to come out and remind everyone about the HDB 99 year leasehold zero value thingy.

      This is big daddy's equivalent to: What Were You Thinking?

      Got to give props to big daddy for having the political courage to do so, instead of sweeping it under the carpet for future governments to handle...

      Not that big daddy never tried encouraging more Singaporeans to own equities. The Singtel "giveaways" were their attempt to "encourage" the average Singaporean to open a CDP account and go forth and multiply!

      Boy, that sure backfired...

      After the admission of "not fit for purpose", big daddy now have pivoted to encouraging Singaporeans to Save More in CPF.

      Plus with the introduction of CPF Life, we start to "socialise" our collective CPF savings. That's a "softer" kind of bailouts ;)

  2. CW,

    Sorry, I deleted your original comment by mistake.

    Lucky I got copy paste your comment:

    "Well, there's always CPF... (just don't call it investing OK?)

    You can invest your CPF to reach 4M65! You no watch video?"


    1. CW,

      I've used the used car bait and switch selling tactic in my previous post.

      1M65 I poked its SAVE MORE masquerading to be EARN MORE.

      4M65 is the same same EARN MORE path, just in new bottle, that those who lost money using CPFIS have traversed. Just don't pretend and call it SAVE MORE!

      Oh! The irony!!!

      For those who are voluntarily contributing to CPF, 4% is as good as it gets! That's the price for no downside risks - in nominal terms at least.

      But if you realised you have not discounted the drag of inflation on your supposed 4% compounding,,,

      Or you now found out 1M65 is really budget airlines or minimum PC requirement...

      What do you do?

      You now voluntarily contribute to CPF to EARN MORE to arrive at 4M65!?

      I hope someone can pause and see the logic in that...

      Wouldn't cash OUTSIDE of CPF be even more flexible for that purpose?

  3. It's like playing games in "easy" mode, beat the game also no bragging rights.

    But it is OK. Some of us aren't meant to play in "normal" or "hardcore" mode. At least the game can still be played by everyone .. ? :D

    1. Kevin,

      Of course its Different Strokes For Different Folks!

      In mobile gacha gaming, those who want a casual gaming experience, should stick with PVE (play against AI) content.

      The moment anyone steps into PVP (player against another real human opponent) content, that's when we experience first hand the Grand Canyon gap between competitive gaming versus filthy casuals!



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