Saturday, August 30, 2008

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Integrated Resorts Completion in 2009-2010 to lift Private Property Market? DO or DIE bet

The private property market is in a stalemate right now! Buyers are not biting and sellers are not willing to lower their prices.

The question is therefore who's more likely to blink first ?

The answer is obvious given the current unsustainable high property price and faltering economy.

Developers and sellers are all betting on the opening of the IRs to turn the market around by end 2009 -2010. There's a chance that they are right but slim because economic fundamentals simply cannot support the current, or as sellers hope, even higher property price.

Now here's the other scenario: World economy sinks to the bottom in 2009 - 2010, so Singapore economy feels even worse impact than now. IRs see low visitors and few profitable businesses. Properties on hold from 2006 - 2010 suddenly flood the market with very, very desperate cash-strapped developers and sellers but demand has already shrunk ..

Even developers are aware of the risk of that scenario, that's why we can expect more launches ahead to test the market. (Read: "Developers weigh odds of launches after Ghosts Month" by Business Times)

Waiting for the IRs magic in 2009 -2010 is a DO or DIE bet !

Proficient investors do not make DO or DIE bets. Why subject yourself to DO or DIE bets if you can preserve part of your capital and fight another day?

My feel is that even if the world economy is ok, there is a huge number of properties going TOP in 2010 which individuals, if cannot hold, will do sub sales at a much lower prices. This is what the developers fear most and that is precisely why Wing Tai's boss said that he cannot guarantee prices to be stable after 2010. Prices do not come down that much yet because developers are holding the launches now and TOP is about 1.5 years away. However, as the time gets near, like what you said - Sellers will have more fear and will start to dump. We see this boom / bust cycle happens again and again, time after time.

Posted by Anonymous at the Singapore Property Forum
May also want to read:
Property Fire Sales: 2010 sees TOPs of properties bought at peak prices in 2007-2008
History of Singapore Property 1960 to 2008
Buy or Not Buy: How to decide amid mixed market signals
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 :)