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Singapore economy is coming from a low base since the recession but still showed high GDP growth. The real strength of the economy is still uncertain. The GDP of Singapore would be pretty much the same. However, the increasing expatriates and immigrants needing housing, schools, food, services, etc, their massive immigration, has been affecting the growth of the overall nominal GDP values.

The condition implies that we would be expecting a slow rate ascent of the real property prices towards the end of 2010. However, the risks of the property buyers will continue to increase. A property buyer planning to purchase a property still needs to make a good decision based on research and other information.

A property investor looking for real estate property to invest should wait a few more years to experience a market flooded with properties developed by the government of Singapore. The government has been trying to develop properties in relation to their present massive land sales program. There is no speculation of a market crash since the Singapore government could always resort to bring in more foreigners to boost demand for housing, which will support high land prices.

There is no effective way to measure the source of funds as well as the amount of funds each bank and lending institutions have. This would mean facing difficulty in making estimates as to the credit facilities and funds that they have available for lending to business enterprises and individuals. This could have help set the overnight benchmark interest rates. As the Federal Reserve gradually lower interest rates, it also slowly depletes its funds. The only thing that has been holding the interest rates is the Federal Reserve intervention. The interest could have skyrocketed without the timely intervention of the Federal Reserve.

CHINA

China is demonstrated good export trading and economic development. The economy is definitely showing increase signs of growth and consumption. China has a massive surplus and foreign currency reserves estimated to be worth more than US$2 trillion dollars. China’s surplus is one of the biggest worldwide! Their FDI is also impressive.

China supports the consumption of the United States as well as Europe. China has been exporting fish and other products to many neighboring countries as well as US and Europe. As long as China continue to export and support the US and Europe required commodities, they will have a good possibility to improve economic situation as well as build international relations effectively.

China has been supporting the consumption of the two big economic giants US and Europe, which makes it possible for these governments to issue more bonds. The action carries the hope that China and other rich sovereign countries would buy their bonds so they could efficiently support and finance national deficits. Issuing bonds while at the same time creating extra money supply might not be the best approach but it is still better than issuing more money supply without the support of a corresponding debt or higher tangible asset value.

The hot property market of China has become highly speculative. Although the rental yield of China’s properties are very low, these properties carry sky-high prices without any rental value. Many properties for rent are still unoccupied. This is surely a good example of bubble or what they would call, a musical chair, where one hopes to pass the problem to the next person for a profit. Assets that do not generate a yield turn into liabilities. If this situation will finally explode, the whole of Asia is set to suffer.

The idea that banks are willing to lend their credit facilities more freely, it would be wise to examine the terms and conditions of the credit facility you are planning to take as property market comes in phases. (Source: wikipedia, 2009)

Europe

Europe’s practice of collective austerity may affect the world economy. Europe can no longer spend more than they earn. This could have an impact on the world economy. The balance and tightening of an individual’s budget may sound noble but it is not the way to go about housing and other investments. Spending cuts may add to the creation of jobs. For example, if the countries UK and Germany cut public spending that the private sector relies, this may hurt the private enterprise sector and could lead to job loses or retrenchments. This could also lead to diminishing trade with the rest of the world. The self-imposed austerity drive might do more harm to the economy than improve the situation of the people. Hopefully, the wealthy people might have more liquidity that would be enough to create more investments and jobs. Austerity is remarkable but capitalization through credit is the only way to move forward.

USA

The economy of the US seems to approach stability now after a trillion dollar efforts to recover. This situation sends good news and kind of stabilizing signal to the rest of the world. During the economic recession in US, many countries were also affected. However, the world is now reaching the tail end of the problem. The strategy of President Obama launched on Dec 2008 was quite effective. Economic recovery has been remarkably doing great. Many states depended to issuing municipal bonds to fund their deficits and balance their budget. (Source:tradingeconomics.com/Economics/Interest-Rate.aspx?Symbol=USD)

The US was able to maintain the Federal Reserve interest rate at 0.25% level for over a year now. Most homeowners had equally benefited from the low interest rates and cheap credit loans. Businesses also benefited from the cheap borrowing rate offered by the banks. For sure, a bit part of it will certainly flow overseas as a Carry Trade activity where borrowers borrow at cheap rates and convert it to a higher yielding investment in another country. The fast flow of international borrowings makes it difficult to track and know the amount of funds operating overseas. International borrowings could move certain dollars out of the country fast and move back certain dollars into the country as fast as it goes out.