Monday, September 15, 2008

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Reality returns to Singapore Property Market 2008

This happened in 1998...will it happen again?

Reality returns to Singapore Property Market...

In a market severely distorted by speculation, people buy with over-optimism that their property 'll make money, and less thought is put into whether the property is really worthed that much.

Take for example the enbloc fever. Old HUDC price soared by as much as 80% in a year because people were buying the "enbloc potential". Now that most enbloc potential has vanished, people look at the old and run down HUDC and ask how could it be worthed more than a million.

Now that reality has returned to the market, home buyers will think whether they want to sacrifice so much of their lifestyle just for a roof over their heads. Investors will make their calculations in terms of rental return and the risks of property investment as compared to their other investments.

Displaced enbloc sellers looking for replacement homes may keep the market going for a little longer, but the market will be mostly dominated by rational thinking rather than promises of a rosy dream.

The cooling market has exposed the weaknesses of the many arguments for the continuous climb in property price, like the simplistic view that IRs will bring so many people and therefore so many more housing uints will be needed. People begin to see the reality that it's not just the number of people who will be coming to Singapore but the sort of spending power these people have will eventually determine the sustainable property price.

Posted by Anonymous in 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 :)