S'pore home prices still falling

[weijian]

CY09, responding to you statement.

The thing about the current situation on property is this. While the property investors may have the ability to service their loans comfortably, it is the mental anguish of recurring losses that they may not be able to tolerate. There is no foreseeable upside to speak of and plenty of potential negatives going forward. Having to service an empty/depreciating property for years is painful(Depreciation from the leasehold tenure, financing cost, property tax, maintenance, opportunity cost). If it is me, I would cut my losses(ie selling it at a lower price) and put my money to better use.  

hi Big Toe,
I don't think that is necessarily true. For irrational human beings, the mental anguish of recurring losses should not be higher than that of a one-time big loss. A one time big loss, even though lower than the sum of small losses, creates too big of a mental deficit.

Some years back, an experiment was done on noise affliction. Subjects were exposed to 2 kinds of noise - One was constant small noises for a longer period, while the other was occasional but slightly louder noise...On the decibel scale, the former had higher impact. As it turns out, the latter was reported by the subjects to have been a louder irritant.

You would have reacted like an Econ, ie. a rational being but generally, I think the masses are not.