Friday, May 16, 2008

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Property Price Up or Down? 4 Variables to consider

Posted by: Anonymous
Posted: 13-05-2008

Whether or not the property uptrend continues in the next one year really depends on the recovery that can take place in the US. Personally I feel that the US Federal Reserve and government is ready to go all out to buffer the financial sector against massive losses due to the risk of bank runs and subsequent systematic economic collapses. This being the case, the likelihood of further falls in the stock markets worldwide is very much reduced.

The property prices in Singapore hinge on whether property developers are able to hold out in the next few months. The larger ones should not have any problem maintaining their prices (and composure) while the smaller ones may have to let go off their positions soon because of cashflow and weaker financials.

Therefore we are looking at a few variables:

I. how long the subprime crisis effects will last
II. how long before small property developers cave in
III. how long before large property developers cave in
IV. how long before prices start falling
V. how long before the majority of property buyers start buying in

If II and III exceed I, then there should not be any major price corrections from last year's peaks. However, if item I turns out to be a prolonged duration and exceeds II and III, then the prices from last year will start to fall for as long as V does not come in soon.

Item I is beyond anyone's control.

Items II and III are manageable.

IV is a direct consequence of II and III.

V can be manipulated through shrewd marketing and also what the mass media paints of the potential of property in Singapore.


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The blogger here has been affectionately named by close allies as "Smart Buyer" but really, he's not smart. Smart Buyer just believes that being prudent is smart. That's the essence of the message of this blog and Smart Buyer hopes it'll benefit other property buyers.

Smart Buyer :)