Monday, October 20, 2008

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Real Estate Investment Outlook: The days of easy, cheap credits chasing after properties is OVER!

We are facing the worst global financial crisis of the century, it doesn't take a lot of intelligence to gauge that its impact on the Singapore property price is going to be worse than the last 97-Asian financial crisis .. when property price plunged as much as 50% in the mass market ..

97-Asian crisis did not see the sort of credit crunch here that simply choked legitimate businesses into bankruptcies ..

97-Asian crisis was not accompanied the huge risk-aversion in the money market that we see today ..

I hereby pronounce, based on the above logics, that the days of easy, cheap credits chasing after properties is OVER!

Property price will now has to be fundamentally supported by the real wealth that a country can generate for its people.

Singapore property price will therefore has to correct downward by about 40-50% esp in the mass market to match the current affordability level of the masses, and if that affordability level declines with declining economic growth, property price may have to fall still further until a sustainable level is arrived at ..

from that sustainable price level, property price will then rise in line with economic growth in the absence of cheap, easy credits ..

WE ARE BACK TO BASICS.

Posted by Anonymoust in the Singapore Property Forum

May also want to read:
History of Singapore Property 1960 to 2008
HDB Resale flats Price Index 1990-2008: Graph & Chart
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 :)