Friday, July 11, 2008

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Property Price Trends 2008-2010 in Prime District & Mass Market

I guess each one of us are still waiting for prices to drop more by the end of this year. But smart buyers be prepared that prices drop by 40% will seem to happen only in super prime districts. Condos in The Sail, Sentosa Cove, Ardmore areas will all be affected. This will be the worst case scenario.

It seems that property owners have stronger holding powers to hold their properties and not willing to part with their property unless buyers offer a good price. They know that by 2010, the IR will complete and price will pick up. Thats the main reason why property owners are still holding on to the future. On top of that, rental returns are slow but still above market rate compared to 2006/2007. Property owners have a reason to hold on to their units as long as they are optimistic of IR potential. From now to IR completion, its only 2 years so renting their units for 2 years is not a big problem nowadays. As such, property owners now have a bigger cushion to depend on compared to bad times in 1998 and 2004.

Unfortunately, from the pattern I observe, it is highly unlikely that prices of suburban condos will drop by 40%. I am expecting about 10-15% correction only in this mass market segment. This is the worst it can go.

As for the outside central areas like Kallang, Lavender and Tanjong Rhu areas, I am also just expecting a price correction of not more than 15%. However, guys be prepared that some of the prices of new condos in this area which havent TOP will shoot up once they are completed. It is common knowledge that when new projects TOP, their prices will increase by 10-20%.

My advise if you intend to buy prime condos in D9, D10 and Sentosa areas, you should wait till end of this year or early next year to make the plunge cause I believe prices will be at its lowest point by then. But dont wait too long till mid 2009 to make the plunge cause IR is set to complete in 2010. By then too many positive economic and IR news will come back again.

However, if your plans are just to buy a home, you should consider buying now or few months later in suburban mass market condos.

If you are an investor and plan to make some more money from selling your condo, you should consider buying in OCR (Outside Central Areas) especially those condos which have excellent seaviews/IR/river/city views etc which presently are undervalued. My advise you can consider new just/not TOP condos like Southbank, One Amber and RiverEdge which presently are offering very good value for money due to their excellent views and close proximity to Marina Bay, IR and MRT. I am calling for at least 20-30% increase in these condo prices by 2010 - 2012. These condos especially Southbank and Riveredge are also walking distance to the upcoming Sports Hub. As such they will experience a double shoot up in prices in 2010 and in 2012 respectively.

Smartbuyer (Not the Blog Owner here.)
Extracted from the Singapore Property Forum

May also want to read:
History of Singapore Property 1960 to 2008
Buy or Not Buy: How to decide amid mixed market signals
When to Buy, When Not to by
Property Price Index Graph Plotter & Online Property Valuation
Your Property Investment Determines Your Financial Success in Your Life
HDB Resales: West Sees Highest Price Increase


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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 :)