Property Cycle

[coutuser]

In 1997, why did people jump instead of waiting for property prices to go up in the next cycle?

 

[Some-one]

In 1997, why did people jump instead of waiting for property prices to go up in the next cycle?

Properties are highly leverage investments. Banks would take back the house if you are not able to repay the monthly mortgage and what causes these people to be not able to repay the monthly mortgage? Loss of jobs is one of them. During any crisis, when retrenchments increases, those who are not able to hold would have to sell so get a property that is within your means.

 

[focus1974]

I guess they were overleveraged and faced the prospect of being bankrupt.

 

[klavier]

In 1997, why did people jump instead of waiting for property prices to go up in the next cycle?

margin call could be a reason..

On-Margin Call for Home Loans: What is It, and How Do We Avoid It? | MoneySmart.sg

i had a good friend who faced this in 2008...

 

[dork32]

in 96,97, my condo cost 900k (i have not bought)
In 98, it dropped to 500+k. i damn happy and go in and buy
in 02, 03 it dropped further to 400k. i cursed and swear.
today, it is worth 1.2mil. i should have bought 3 more units in 2002 and sell now.
same thing i should have place 5000 big and 5000 small on the 4D number that came out first prize last sunday.