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Old 28-11-2011, 02:01 PM
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Property prices are determined by transaction benchmarkers and will come down if sellers are buyers agree to transact at prices lower than the existing market price.

When people lose their jobs:

1. From a home-owner perspective, he/she that have lost his/her job may become unable to finance the housing loan. This could be a second/investment property or even their primary occupied property (as savings deplete, they may decide to downgrade). They may need to liquidate their assets to obtain cash to attend to their other cashflow needs. If enough home-owners lose their jobs, (i.e. in the case of a economic downturn), and if they are unable to find a replacement job the ST (for the same reasons as described in an economic downturn), they may find that they need to lower their asking prices in order to move units. This as a result of the need to dispose of the asset fast, or because there is simply alot of home-owners in similiar situations (i.e. lost their job) wanting to sell off their flats in the market.

2. From a home-seeker perspective, the loss of jobs can affect the purchasing power of investors / owner-occupiers. If enough of these people are affected, this can lead to a fall in demand for houses. Ceteris Paribus, things being equal, this could lead to an excess demand over supply situation which would push prices down.

Thus in summary, if enough people lose their jobs for a significant period of time, housing prices do come down.

Quote:
Originally Posted by Unregistered View Post
If people lose jobs, will property prices come down?




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