Time to flee the property market

[Cecil Lee]

Time to flee the property market
The winds of change are always blowing. This time it has come to take the foreign property speculators away. The sharp rise in property prices over the last ten years was contributed mainly by two factors. One, a stubborn and foolish decision not to build, and two, an even more stubborn decision to let more foreigners in to buy up whatever properties that were left. It was thought to be a good thing, at least for those hoarding a lot of properties, other than the developers. Some smell self interests.

After 7 measures to cool the market and with the last one raising the cost of foreign speculators, it is starting to bite. Boon Wan had disclosed in Parliament yesterday that foreign interest in local properties had cooled. From 1,400 units sold per quarter, it had fallen to 330 units per quarter. The foreigners are starting to flee the property market.

The other factor of not building has also been reversed with a projection of an over supply situation in the next few years after the ramping exercise. The factors contributing to the rise have been reversed. The fall in property prices is only a matter of time and how much will it fall. The other question is how much will the govt allow it to fall and at what level will it be sustainable or ?affordable? with a new definition?

Should the buyers of properties start to hold back or start to sell before the impending fall? The dumb explanation that it is all market forces is falling flat on its face. It is all about good governance and about bad governance, about managing for inflation and about managing for sustainability.

Where would the property market head to? What would be the new explanation of a rising or falling property market?

Chua Chin Leng aka redbean

* The writer blogs at http://mysingaporenews.blogspot.com.

[Cecil Lee]

Please check the date of posting. As it may not be the current trend, today. LOL