bepgof 20 Report post Posted March 30, 2010 (edited) Demand and supply curve theory suggest that if demand exceeds supply, then the price point moves up the supply curve. Offer a higher price, then got more ppl willing to sell. Deals will be matched. Problem now is, ppl do not have the ability to offer higher price, the limiting factor being the CASH component required to meet the COV demands. The supply is there, just that the price does not match. In conclusion, it's not a question of insufficient supply, it's just that the buyers do not have the ability to pay the higher price demanded by the sellers, thus no deal. This is the same argument to say that the world will never run out of oil, becuase nobody will be able to afford that LAST DROP. The govt will never sell flats at a LOWER price just to make the buyers happy. The existing owners will be a even bigger group of unhappy ppl. The govt needs to study closely regarding this COV thing. I wld love to buy an apt at Orchard Road for $500psf when the going rate is $3K psf. Shd the govt BTO me a $500psf apt for me there? Shd the govt loan me $2.5K psf to make up the shortfall between what I have and what is the going rate? Shd I give up my dream and settle for Changi Beach? Many thanks for broaden the horizon. I think Phantom may be thinking of giving up the dream & pitch a tent at Changi beach. Gov likes "invisible" hand theory very much, ie biddings, cov, coe, land tendering, etc and claims these are "demand & supply" theory, but behind "invisible" hand is actually an visible one, and a very big and powerful one. Edited March 30, 2010 by bepgof Share this post Link to post Share on other sites
Phantom 1 Report post Posted March 30, 2010 Demand and supply curve theory suggest that if demand exceeds supply, then the price point moves up the supply curve. Offer a higher price, then got more ppl willing to sell. Deals will be matched. Problem now is, ppl do not have the ability to offer higher price, the limiting factor being the CASH component required to meet the COV demands. The supply is there, just that the price does not match. In conclusion, it's not a question of insufficient supply, it's just that the buyers do not have the ability to pay the higher price demanded by the sellers, thus no deal. This is the same argument to say that the world will never run out of oil, becuase nobody will be able to afford that LAST DROP. The govt will never sell flats at a LOWER price just to make the buyers happy. The existing owners will be a even bigger group of unhappy ppl. The govt needs to study closely regarding this COV thing. I wld love to buy an apt at Orchard Road for $500psf when the going rate is $3K psf. Shd the govt BTO me a $500psf apt for me there? Shd the govt loan me $2.5K psf to make up the shortfall between what I have and what is the going rate? Shd I give up my dream and settle for Changi Beach? I just want to correct that I don't believe that aloe of people can't afford the cov, rather alot aren't willing to pay the asking cov. But then again just as many are willing hence there's a market supporting the high covs. If one hears everyone telling him that 50k cov is a norm, one might actually start believing. It's like a game of Texas Hold'em. I almost bought one on the fringe of d9 asking 1200psf was offering 1100psf, no deal. The government said it's capital markets at work willing buyer and willing seller, maybe our papers shouldn't be reporting every news as bullish to support the property craze. Anyway we are in a stampede now, alot of people would be blindsided Share this post Link to post Share on other sites
Phantom 1 Report post Posted March 30, 2010 Quite agreed with 2nd para. Sorry lah, don't quite understand what is "behind the curve" & which curve, the one mentioned by yoongf? If that's the case, may be gov is considering allowing cov to be paid by cpf, to "compensate" for earning power's under elasticity? behind the curve in anticipAting demand and supply. I.e. Too slow.. Cov via cpf is a definate no, that will fuel prices even higher. Share this post Link to post Share on other sites
Phantom 1 Report post Posted March 30, 2010 (edited) Many thanks for broaden the horizon. I think Phantom may be thinking of giving up the dream & pitch a tent at Changi beach. Gov likes "invisible" hand theory very much, ie biddings, cov, coe, land tendering, etc and claims these are "demand & supply" theory, but behind "invisible" hand is actually an visible one, and a very big and powerful one. My dream would be a nice 2.8m freehold 2207sqft apartment at Meier Suites. I'm not giving up anything. And I definately do no liken renting a hdb or apartment to pitching a tent. The latter would be much cheaper. P.s. In today's Market, 700k DBSS looks bang for the buck. Go figure Edited March 30, 2010 by Phantom Share this post Link to post Share on other sites
