Real Estate - an alternative investment ● 潘树盛 By Roy Phua Asia's all enduring preoccupation with real estate is undergoing a reality check as a conse-quence of the economic crisis. Private residen-tial property prices in Singapore, have collapsed by over 45% from its peak in for example, 1996. The shock and dismay of die-hard real estate believers is not surprising. For many, however, the rationale that underpinned that real estate investment is showing surprising flaws. Arguments such as "land is finite" persuade in boom years, but are now denounced by some as intellectual garbage. The long-term prospects of real estate investment, while not entirely mis-placed, are subject to investment cycles, interest rates and changes in government policies, like all other forms of investments. Putting all of one's investment eggs in the property basket, as many Asians have been inclined to do in recent years, is unlikely to hatch a balanced invest-ment strategy. This article examines the possi-bilities. Real estate investments are very long term in nature and possess two important characte-ristics that are often less than understood: leverage and illiquidity. These factors accen-tuate the capital gains on real estate in boom times and magnify the loss on the downturn. If one were to invest $200,000 (borrowing $500,000) to purchase a $700,000 property for example, a simple 10% rise in property price a year would translate into about a 21% return on the original investment, net of interest expense assumed at 5.5% p.a.. With that same interest assumption, a 10% fall in property price how-ever would translate into a loss of about 48% on that same $200,000 investment, the tragic con-sequence of leverage working in reverse. The illiquidity of real estate is another important factor for consideration. Exiting a real estate in-vestment often requires time and patience, par-ticularly so in a less favourable environment. The average investor needs to consider the sheer amount of the financial investment and the uni-queness of each property asset. The illiquidity limits the flexibility investors have when they need to realign their investments in accordance with changing market conditions or changes in investment needs. The long-term nature of real estate in-vesting requires it to be matched with stable, long-term cash flows. Assumptions on income growth, interest rate trend and rental yields are important, and when they do not materialise as planned (or hoped for), the investment goes awry. In addition, the size of the upfront capital commitment in real estate investing makes di-versification within the asset class difficult to achieve. The real estate investor has the bulk of his investments locked into a few properties. Seen from this perspective, real estate investing can be a high risk venture. The risk does di-minish with a long-term time horizon, but the rate at which Singaporeans turn over their real estate investments suggests a shorter term, high-risk attitude prevails. Asia's love affair with real estate has been fuelled by easy money and accommodative government policies. These conditions are not present today. The era of supernormal returns from real estate investing is over. Bankers are licking their wounds from loans gone sour and have turned wary about lending for real estate investment (as opposed to home ownership). Having experienced the effects of an over-zealous appetite for real estate, it is probable that both of these factors are unlikely to be as potent in the future. The new Asia requires that the bold assumptions of old be tempered- stable interest rates, "guaranteed" employment, "guranteed tenants", etc. Price appreciation will be more gradual hereon and more in keeping with inflation. Other investment options need to be considered and matched with one's age, obli-gations and financial aspirations. (The author is Equity Manager of Rothschild Asset Management.) 退烧后的亚洲房地产 亚洲人对房地产投资情有独钟，不外经过一场经济危机的攻击， 人们对房地产长期性的信念正面临考验。 举例来说，新加坡的私人住宅价格，从岑岭期算起已经退跌了超 过45%。死硬的房地产“信徒”，对此感想震惊、沮丧并不奇怪。对 许多人来说，已往支持房地产投资的理性根本，也正现露出破绽。像 “地皮有限”的论点，在市场大好时很有说服力，但此刻被许多人看 成是“学理垃圾”。房地产投资具有恒久前景，这个说法也不完全错 ，但它和其他投资形式一样，逃不外周期、利率和当局政策改变的影 响。因此投资时，如果像亚洲人已往几年那样，把所有的蛋都放在房 地产篮子里，就不行能制订出平衡的投资计谋。 房地产投资是恒久的，它有两个往往被忽略掉的重要特质：高额 借贷和套现困难。因为这些特质，投资者在市场猛涨时，能捞取可观 的成本收益；但遇到衰退期，“烧伤水平”也同样会加重。 举例来说，一小我私家如果出资20万，再借贷50万元购置一个售价70 万元的房地产，只要房地产价格在一年之中上涨10%，他从20万元投 资中所取得的回报就有约21%之多，这是扣掉利息本钱（假设年利率 为5.5%）后算出的。以沟通利率计算，价格如果跌10%，20万元投资 的吃亏就约莫是48%，这是高额借贷的痛苦结局。 投资房地产，很重要的另一点考虑是套现不容易。从房地产投资 中退出是需要时间和耐性的，在倒霉情况下尤其如此。由于是大手笔 投资，每一个房地产项目也都具有奇特性，普通投资者因此不能掉以 轻心。一旦市场情况起了变革或投资需要改变，而必需重组投资来配 适时，套现如果困难，伸缩的余地就受到限制。 房地产属于长线投资，它要求投资者有不变、恒久的现金周转能 力。因此对诸如收入增长、利率走势和租金回报等，都先得做一些假 设，而一旦环境和所打算的有收支（或事与愿违），投资的棋就走错 了。 另外，由于得先垫出一大笔资金，也就很难做到分手投资。少数 几个房地产就能把投资者的大部门资金套牢，从这个角度看，房地产 投资可说是高风险的。这种风险，会跟着时间的推移而淡化。但重新 加坡人的房地产买卖频率来看，一般人的出场态度，都属于短线和具 冒险性。 已往，亚洲人是在简易贷款以及当局勉励性政策的火上浇油下， 对房地产发生沉沦的。今天环境差异了。从房地产投资中谋取暴利的 日子已经不再。银行因收不回贷款而元气大伤，对借钱给人投资房地 产（比力买楼自住）的事，此刻是心有余悸。 经历过狂热后，这些因素在未来日子里，不行能继续发挥同样效 应。在新亚洲，现代职业教育杂志社，一些旧有的斗胆假设——像不变的利率、铁饭碗、“ 包有”的租户等都必需稍作调解。从今以后价格的涨势将变得平缓些 ，也会趋向和通胀同步。其他投资渠道必需加以考虑，以共同一小我私家 的年龄、包袱和财政期望。 （作者是一家资产打点公司的股票投资经理）
