Before I became a blogger in 2012, I contributed to the Straits Times (ST) Forum Page once in a blue moon. My first letter was written in Dec 2004 and discussed the issue of whether downgrading homes was a viable means of providing for retirement. I was 29 that year. Certainly, I was not thinking of retirement then, but what aroused my interest a few years earlier was whether properties could be a viable investment for me. That led me to study how the demographics of Singapore would change in the 35 years from the time I thought of the question to the time I would retire. My conclusion was the demographics was favourable for the 1st half of the 35 years and unfavourable for the 2nd half of the 35 years. The main issues were the low birth rate and greying population in Singapore. Since I had to live in one house for the entire 35 years (and more), I probably would not profit from any property investment over the entire period. Thus, I dropped the idea of buying a private property. 

In Dec 2004, ST ran a special report on retirement and one of the methods mentioned was to downgrade their homes. Since I had thought about the issue and I believed not many people had considered demographics changes in their planning then, I decided to drop a letter to ST Forum Page. In that letter, I mentioned that due to demographic changes, property sellers would progressively increase relative to buyers and eventually outnumber them in 2017. The analysis behind the letter is discussed in greater details in Properties.

Every 5 years, I would update my analysis based on the latest demographics figures to check if there are any changes to the above conclusion. The last update was in 2013, after the release of the Population White Paper and Land Use Plan (see Properties, the Population White Paper and the Land Use Plan). While the year sellers would begin to outnumber buyers has been pushed further from 2017 till 2020, the broad conclusion from 13 years ago remains unchanged: that sellers will eventually outnumber buyers and property investors are facing a significant headwind from demographics in the long run.

Just a personal note, I believed too much in my own analysis and did not recognise that even if there are no profits to be made over the entire 35-year investment period, it is possible to profit from the 1st half of the period by buying properties or property shares. In fact, I even sold Ho Bee at $0.215 in 2003 and did not pick up Chip Eng Seng in 2003/2004 when it was languishing at $0.10! That is my desserts for being a smart alec! 

The one very expensive lesson that I learnt from this episode is that even though the long-term analysis might point in a certain direction, the short- or medium-term analysis might point in an entirely different direction. I should analyse the short-, medium- and long-term situations instead of being fixated by the long-term conclusion.

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