Thursday, November 27, 2008

About this Blog

Developers want sales, Drop the Price

"There, official slap in the face for REDAS. Good riddance to their hubris. See what $2 COE has done for cars? You want sales, drop prices. "; was Ann's straight-forward response to the following news report (extracted from the Singapore Property Forum) :

Property market to soften
PROPERTY prices are set to soften and demand will weaken as the Singapore economy slows down, Minister for National Development Mah Bow Tan said on Wednesday evening. Private housing prices have declined by 2.4 per cent in the third quarter of this year, and further price movements will 'depend on the severity of the economic slowdown', he added. Speaking at the 49th anniversary dinner of the Real Estate Developers' Association of Singapore (REDAS) at the Shangri-La Hotel, Mr Mah said: 'Going forward, price movements will depend on the...ability of the industry to make adjustments in response to the changes in economic conditions.' The good news is that home-ownership rate is high in Singapore - at more than 90 per cent - and the government has an important role in ensuring the long-term stability and smooth functioning of the property market, he said. Among the measures it should take, he said, is to guard against 'irrational market behaviour such as excessive speculation that is not in sync with economic fundamentals.' But there are limits to what the government can do. The government cannot, for example, dictate to banks that they should extend loans to companies or individuals with weak financial standing. It also cannot work against market forces and try to prop up property prices artificially. Mr Mah explained: 'Such efforts are not sustainable and will not be beneficial to the health of the property market in the long-run. Any measure seen to be knee-jerk or excessive might even weigh market sentiment down further. 'It is in our interest to ensure that the property prices move in line with economic fundamentals, as it affects home ownership, asset values, retirement savings and other sectors of the economy.'

The situation is so obvious that the govt has never felt the need to say it. The speech is probably in response to the recent calls to prop up prices, and of course, it's a big NO because the fundamentals reveal a big property bubble. And bubbles have to burst before the economy can move ahead. The high housing cost makes Singapore business uncompetitive and the govt worries that FT are leaving. (Posted by Anonymous in the Singapore Property Forum)

May also want to read:
Fire Sale: Owners Dump Condos
The days of Cheap, Easy Credits chasing after property is OVER!
When the bubble of greed and fear burst, guess who suffer?
Property Investment Tip: Don't put all your eggs in one basket
HDB Resales: West Sees Highest Price Increase


danny said...

On 16 Nov Real Estate Experts (Agents who try to sell you property) states that HDB flats will retain their prices, due to demand sustained by so called downgraders.
“Mr Han also did not rule out that demand for HDB flats could be sustained by downgraders from the private residential market.”
On 21st Nov 2008, BT article reports Mr. Mah’s comments that 2-3 BR HDB are in demand due to downgrader (financial crisis) which seems to support the theory that times are bad and people are downgrading.
22nd Nov, Savills (a real estate agency) expect HDB upgraders to support to cushion fall in mass private home prices.

“Savills expects mass- market home prices to fall 5 to 8 per cent in the next five quarters - arguing that a price drop in this segment will be cushioned by continued support from HDB upgraders and other buyers picking up private homes for their own occupation.”

So in the 16 Nov article, the expert Mr. Han thinks that HDB are in demand due to downgraders from the private residential market. And then barely a week later, Savills expects HDB upgraders to cushion fall in mass private home prices.

-_- The obvious conclusion (at least according to the ‘experts’): Now is a great time to buy.

Anonymous said...

Agreed: This is no joking matter : one of the worst global economic crisis in history(no political/social crisis yet) Reading between the lines, the "experts" underlying agenda is obvious. Most Singaporeans have not seen the impact of overseas crisis yet. Either the buyer is smart or a fool.BEWARE!

Anonymous said...

It is a Payback time for the speculators and developers. They have it too good in the sharp run over these past 3 to 4 years in the property boom. They should learn to live with their position and not artificially prod and lobbying behind to protect their selfish interests. So far, they have been successful as we see there is no sign of a meaningful correction in the property sector in Singapore and no signs of a major correction unlike advance cities which have drop to a very competitive level compare to Singapore. No failures. This shows how strong holding power because they are sitting on large pile of speculative capital gains or cash. It is very unhealthy state of affair in Singapore. Even now with the crisis, Singapore is ranked one of the top most expensive cities in the world. Do we want to continue to compare ourselves to New York, Tokyo, London, Hong Kong? A fair comparison to stay competitive?

Post a Comment

Dear visitors:
Your comments are most welcome!

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 :)