Singapore Property Prices (up up up!)

Sunday Times featured Ms Wendy Kwek and her property investments. Real estate investing has really captured the hearts and minds of everyone, from the well-to-do to the ones dreaming of big time riches.

Naturally. Which other instrument offers the following characteristics?
1. Purchase with only an upfront deposit and intial payment + stamp fees (of course, this is subject to the fact it's a secured loan with the property as underlying collateral and the debtor with good credit/cashflow for loan instalments).

2. Leverage on rental income to offset interest on principal (after all, subject to location, rental is almost only a question of pricing); thereby reducing cost of investment.

3. Sell off with potential attractive capital gains against invested capital and taxes (some rebuild/repackage the current property to raise its valuation for even better gains).

However, a word of caution. Especially on private residential properties.
We always hear of people lamenting today's high prices but how high is high? Here's a chart on S'pore local house prices in real dollar terms.

URA data. Chart from Economist.

More recent data from URA (property index up to 2010Q3) and NUS Institute of Real Estate Studies indicate we have surpassed the highs of 1996 (though not adjusted for inflation).

At the rate prices of private residential property are rising, surely a bubble is forming? Those already over-stretched, beware.