Property portfolio VS ETF

[BBCWatcher]

Nikkei is in recent high.

The Nikkei 225 index hit its all-time high of 38,957.44 (intra-day) on December 29, 1989. On the most recent trading day (as I write this) it closed at 20,132.67. That's over 48.3% below its all-time high.

I think Tokyo property price is very high.

If you reduce the geographic zone tightly to Ginza (one of Tokyo's neighborhoods), then nominal real estate valuations there have risen all the way...to about where they were in 1989.

 

[Majestic12]

This.

I can't stress this enough - A large multitude of "rich" Singaporeans generated their wealth not by being smart, but by simply buying a house to live in decades ago and saw its value quintupling or more. These same folks are probably also the ones being burnt by stupid investments in gold scams and O&G bonds. Makes you wonder why they get to be "accredited investors".

That real estate bull market from the 70s till today will not repeat, at least not in the same, rip-roaring fashion.

In short, past performance isn't indicative of future results.

I suppose it could happen if somebody drops a cruise missile or two into Singapore's CBD.

 

[Majestic12]

The Nikkei 225 index hit its all-time high of 38,957.44 (intra-day) on December 29, 1989. On the most recent trading day (as I write this) it closed at 20,132.67. That's over 48.3% below its all-time high.


If you reduce the geographic zone tightly to Ginza (one of Tokyo's neighborhoods), then nominal real estate valuations there have risen all the way...to about where they were in 1989.

Taking into account inflation, Japan looks really, really cheap. You've pipped my interest to look at it again.

 

[SpeedingBullet]

I suppose it could happen if somebody drops a cruise missile or two into Singapore's CBD.

Oh yeah, there's that possibility

 

[Wood41]

An article was laughing at the foreign funds which left Japan just as it took off recently.

Taking into account inflation, Japan looks really, really cheap. You've pipped my interest to look at it again.

 

[Majestic12]

An article was laughing at the foreign funds which left Japan just as it took off recently.

I hardly read articles and analyst reports since the vested interest is significant, intentionally and otherwise. Due diligence is key.

 

[Wood41]

It was a Business Times news article (reprinted)
the foreign fund flow at the wrong time.
Nothing bias & intents to fool .

I hardly read articles and analyst reports since the vested interest is significant, intentionally and otherwise. Due diligence is key.

 

[RedShoe]

Most posts compare the returns between property and ETF but not many posts address the fact that unlike buying ETF, buying property allows leverage, a leverage that is less risky than those given by other instruments like CFD, warrants, options etc.

It is because of this leverage that make real estate owners rich. Right?

 

[Wood41]

Double edged sword.

Margin trading if you dare.
Without all the levies & restrictions , many Sinkies would be bankrupt by now.

 

[Earnasyougrow]

Most posts compare the returns between property and ETF but not many posts address the fact that unlike buying ETF, buying property allows leverage, a leverage that is less risky than those given by other instruments like CFD, warrants, options etc.

It is because of this leverage that make real estate owners rich. Right?

Property owners also risk margin call when property valuation goes down as well. Those highly overleveraged individuals are going to get burn when that happened as stock and property market are often linked. When 1 crashed, the other follow suit.

 

[OngHuatHuat]

You are very right. I always worry about margin call.

Property owners also risk margin call when property valuation goes down as well. Those highly overleverage individuals are going to get burn when that happened and stock and property market are often linked. When 1 crashed, the other follow suit.

 

[subprimelive]

You are very right. I always worry about margin call.

There is TDSR framework when we take residential property loan, i guess there is some buffer even when interest rate goes up.

 

[Wood41]

Most posts compare the returns between property and ETF but not many posts address the fact that unlike buying ETF, buying property allows leverage, a leverage that is less risky than those given by other instruments like CFD, warrants, options etc.

It is because of this leverage that make real estate owners rich. Right?

 

[alocacoc]

Most posts compare the returns between property and ETF but not many posts address the fact that unlike buying ETF, buying property allows leverage, a leverage that is less risky than those given by other instruments like CFD, warrants, options etc.

It is because of this leverage that make real estate owners rich. Right?

Stocks,ETF,UT,Bonds etc also allow you to leverage. You can pledge them and get cash for more securities or to buy property.

 

[Shiny Things]

Property owners also risk margin call when property valuation goes down as well. Those highly overleveraged individuals are going to get burn when that happened as stock and property market are often linked. When 1 crashed, the other follow suit.

Um. Possibly a naive question here, but what kind of mortgages have a margin call built into them? I wasn't aware this was a thing unless you're talking about cross-currency mortgages.

 

[BBCWatcher]

....what kind of mortgages have a margin call built into them?

Most of the bank mortgages in Singapore do. Banks typically have the option, but not the obligation, to issue a margin call if the Loan to Value (LTV) exceeds 80%. Even if they don't issue a margin call you'd still have to cough up some more cash if you want to refinance.

I would remind everyone that direct real estate holdings cannot come anywhere close to the futures/options markets if you'd like to make highly leveraged bets. A few decades ago real estate was the only reasonably accessible way to make leveraged bets, but that's no longer true. Modern financial markets have evolved. I don't necessarily recommend making leveraged bets using any vehicle, but you can.

 

[windwaver]

Man, this screenshot is a good post

 

[windwaver]

Most of the bank mortgages in Singapore do. Banks typically have the option, but not the obligation, to issue a margin call if the Loan to Value (LTV) exceeds 80%. Even if they don't issue a margin call you'd still have to cough up some more cash if you want to refinance.

I would remind everyone that direct real estate holdings cannot come anywhere close to the futures/options markets if you'd like to make highly leveraged bets. A few decades ago real estate was the only reasonably accessible way to make leveraged bets, but that's no longer true. Modern financial markets have evolved. I don't necessarily recommend making leveraged bets using any vehicle, but you can.

The discussion can go on till the cow comes home but it very much depends on the risk appetite of the investor. Good old deposits vs highly leveraged products, each has it's returns and risks.

Personally, I am a conservative person so I'm leaning towards not leveraging anything.

 

[alocacoc]

Personally, I am a conservative person so I'm leaning towards not leveraging anything.

Mm, say u own 1 Lot of DBS bond yield of 3.9% and you can leverage for another 1 Lot at 1.5% cost. Deal or no deal ?
Is this consider risky ?

 

[Wood41]

What are you all waiting for ?
Netlink ipo to tikam.
Forget about property & etf.
Thank me later.