Property Stories

Loss Aversion: Why Do People Fail To Act During Downturns

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Reuben

Reuben is a digital nomad gone rogue. An avid traveler, photographer and public speaker, he now resides in Singapore where he has since found a new passion in generating creative and enriching content for Stacked. Outside of work, you’ll find him either relaxing in nature or retreated to his cozy man-cave in quiet contemplation.

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Peter
Peter
4 years ago

Excellent piece Reuben. I was looking to buy during the 2008 crisis being several years into my career and looking to start a family soon. I was lucky enough to be able to consider buying a condo then, but the crisis hit my workplace quite badly. While I managed to retain my job there, there was just too much uncertainty to make a purchase. While the crisis unfolded, it was hard to see the bottom – like it is now with Covid-19. Back then before Lehman Brothers collapsed, news after news just kept coming out like never before. My wife and I decided against buying then. Once the crisis ended however, property prices kept going up. We got caught in this wave (thankfully early in 2010) where prices still weren’t as high as they went in 2013. But in terms of investment opportunities, it’s hard to see prices apprecaite that much as it then – namely with the regulations in place. Now with the LTV of 75% and ABSD, it’s hard to imagine this happening again – housing affordability would be out of the question, and that’s political suicide. Would the government start to ease the regulations? I highly doubt so. Many Singaporeans who can hold onto a job would use the deregulation as an opportunity to purchase a condo with the idea that prices here can never go down long-term, and with cheap loans flooding the market now, it’d be crazy for the government to even hint of any cooling measure lift.

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