Market Sentiments – Will Singapore Property Market Turn?

Gloomy outlook? Hmm. Photo credit: hsalnat, Flickr
Gloomy outlook? Hmm. Photo credit: hsalnat, Flickr

Everyone is asking the same question with regards to the current financial market as Singapore Exchange (SGX) seem to be volatile with no directions.

Greece/ Europe Situation

With over 54 billion euros in debt, Greece as alongside with Spain and Portugal sent a shock wave to the global economy to end Singapore Exchange’s bullish streak from over 3,000 index point back to the 2,700 point in a matter of 1 week.

This highlights the fragility of the Euro dollar and its economy with 16 countries of the EU zone tied to one currency. As there’s no solution to Greece’s pressing issues at this stage, the world economy’s eyes will be watching and following tightly.

Here’s how the Greece problem happened.

Government injecting Land Sales

The government has been introducing numerous land to allow local developers to top up their land banks as we understand developers are running short of supply. This effectively brings down the possible en bloc fever that has happened in 2007 in which was the former peak of the real estate prices in Singapore (At current, 9 en blocs has been successful this year).

With more land supply coming into the market and with Government stepping in with measures such as the Seller’s Stamp Duty to cool prices down. It’s quite clear that the Government introduce more measures to cool the market down if the price continues to climb.

Additional Home Supplies Coming Along for TOP Projects

Numerous projects are about to TOP soon and with some already having obtaining their Occupancy Permit, you will have more supply in the market. Owner-occupied units are unlikely to be affected unless the job economy is not doing well. What we are afraid of would be only investment units which are looking for tenants. If there’s a good number of tenants coming into the market, the prices will maintain;

On the contrary should the units be empty, investors will be tested on their pockets on the ability to hold out for either a good or bad rental.

Is it a Good Time still to Buy?

All these seems to be market dampener no matter what angle you look at it. Personally, my take is its always a good time to buy should you be able to identify and justify your property purchase.

For example, If a condo development has 176 units and only has 7 units of 2-bedroom units and the rest are bigger. No matter how you look at it, you know you’ll never go wrong in the long haul with the supply and demand math.

Its also never wrong to start buying early if its for your own stay. No matter how the market declines, it will come back as our estate cycles are getting shorter. And in a good or a bad market, there’s always transactions that looks reasonably fair and attractive in prices. How would you explain that?

With a land scarce situation that Singapore is facing with the growing population on a limited amount of land, and even for the Government to start devising an Underground Master Plan. land value could only head north overtime.

My two cents. What’s yours?

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