COE vs COV

COE is Certificate of Entitlement of renting a car for 10yrs.
After 10 yrs, COE is worth nothing!!
Dec'2010, COE price is at 10yrs high: $47k for Cat A and $62k for Cat B.
I bought my Honda Airwave in Apr'2008 at $65k (inc COE at $14k), I don't think I make a lost if I sell when COE moves to $60k as 'experts' predicted. 3 yrs of free ride!

COV is Cash Over Valuation when buying a property.
Due to Govt cooling measures, COV have dropped across Singapore.
Buying sentiment is bad after the measure is announced in 30-Aug.
I quickly sold at 38k COV (My neighbour sold at 50k before the announcement) and bought a 5-rm flat at just 5k COV. Act quickly to ride the down trend as 5k COV is unheard of in town area for a 7yrs old fully renovated flat!!

Car Prices = COE + Machine Price
House Prices = COV + Valuation
Both COE and COV have something in common. They are perceived value.... speculative.

Car is depreciating asset.... in fact is a liability if it is not for work purposes.
It set me $12k back per year to maintain my car installment, parking, maintenace, Rd tax and insurance.
Petrol is $300 to $400 per month. Total cost may add up to $16k+
If not for the nature of my work which require me to have a car....where car allowance is provided, I rather take taxi everyday. Total taxi cost only $600 per month.

Housing is an appreciating asset.... get the right house at the right price can easily double your investment in 5 to 10yrs.
Location is the key. Buying a worst house in the best location is always better than buying the best house in the worst location.
To be double sure of making $$$, buy near valuation. Avoid paying 100k COV!!!
During bull market, high COV is very common. There are many rich people to push up the market.
Personal opinion is 10% of valuation price as COV is reasonable.

People always like to chase market!!! Why!!
When COE is low, people just wait..... When COE is getting higher, they panicked to buy and push up the price higher..... now experts think that it will go another 20k higher.
When COV is high, everyone is buying.. housing transaction is very active and high volume. Up bidding each other offer.... counter offer counter offer till crazy COV!!
Now that sentiment is low, everyone wait & see again.... instead of snapping up great deals.
What a joke!

Haven't the COE teach us a great lesson?
A deprecating asset yet everyone is chasing after. This tell me that there is excessive $$ in the market. Everyone is expecting job security and good economy.

Based on this expectation, what makes people think that housing prices will go lower?
To me the current low COV is the best opportunity to do house upgrading or move to a better location.

Many Property Experts keep on talking that prices may go down in the next 6 months.....
Will it really go down??? COV may have come down to more realistic level but valuation is still moving upwards.

Govt certainly does not welcome property bubble but will also not do anything stupid to crash the market as these will create thousand of bankruptcy overnight.
Just Imagine you bought at 1 mil and the property become 700k overnight due to govt new policy. How much you will lost? The banks will chase after you to top up the difference.
If you are bankrupt, can you support S'pore through income tax?
Will S'pore receive more property taxes if property prices is higher or lower?
Will there be more social problems? Will S'porean have confidence in S'pore property?

Other than flipping private properties, most HDB investment is for mid term 5 or more years.
I think this is a good vehicle to fight inflation. Can your salary raise faster than housing prices?
Bare in mind that HDB already cross 1Mil.
There will be many more HDB millionaires when Duxton is selling.

Land is limited in Singapore and population is growing, properties price can only go up.
Population increase is supported by the PRs and most of them have the money to push up the prices.
Further more, developers have increasing cost from land price and constuction cost due to high material and labour cost. All these will factored into their selling price to you.

Is Singapore current housing prices expensive?
Singapore GDP is higher or comparable to places like Japan, Hong Kong, Shanghai, Taipei and so on.
Gen X in these countries can barely afford their own 'shoe size' houses and many are staying with parents or renting a house.
Gen X in Singapore still can afford a house.... consider ourselves lucky.
But the same cannot be say on our next generation. I wonder if my children can afford to buy their own houses in future?

Personally, I think bigger flr size unit will be seeing huge value in future.
Why?
Singapore new flats is getting smaller in size so bigger flr area will be rare in future.
If next generation cannot afford to buy their own house, they will live in with parents whom may need to pool up their resources and upgrade to bigger hse.
Current HDB ruling is using MOP to discourage buyers from changing HDB flats and many buyers may buy bigger flats straight away (Instead of upgrading later)

So is Car or Housing more important to you?
Would you invest in COE or COV?
Are you still waiting? Waiting to enter when everyone is chasing up the market??
Take your pick.