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Old 26-02-2014, 07:04 PM
cslee cslee is offline
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Originally Posted by Unregistered View Post
You know, the strange thing is when you are looking to buy, you will feel that the prices havent drop, at best they are not moving up as fast as they were previously.

To say that prices will crash or the crash has already started is way premature.

The current situation is not like in 2008/09 where the world economy was collapsing due to the US sub-prime problem. Then all the doom sayers were predicting the mother of crash. Many people the world over (S'poreans included) lost their jobs. But you know what? Many people sold off their homes hoping to jump back in to scoop up properties at rock bottom prices. My tenant was one of them. He waited and waited. Property prices did drop, but not to the extent that he expected. The next moment he realised, the property prices were on the uptrend again. He panicked and quickly grabbed a unit at a higher price than he would have liked. Still he counted himself lucky.

Today's situation is all home made. The gahmen is engineering a soft landing through a series of CM, TSDR and MSR. Though they didnt say how much reduction in price they are looking for, it is not in their interest to cause a collapse. It does not serve anybody any good. One interesting thing to note is that developers are still bidding aggressively for land - how then can they launch the new property at lower prices? Also we are experiencing full employment, economy is chugging along happily. With the CM, TDSR, MSR speculators have long been weeded out. People who bought properties later with the CM, TSDR and MSR in place are not taking excessive loans - this only means that they are able to hold on to the property for long term.

How much drop then could one realistically expect? Gurus have been predicting around 15% drop, but we have to wait and see. The window of opportunity will be small, because the gahmen could then step to remove or relax some of the measures, TDSR and MSR. Afterall, it is all home made factors.
Actually, I have a wager with that particular owner in end 2015. So wait and see is the right word to use. But some factors are beyond SG gov, inc:
1) Interest rate is trending up. Interest rates and property prices usually move in reverse direction. Question now is how soon and how fast.
2) China's bubble economy i.e. infamous ghost towns, abandoned projects etc - no one knows when it would pop. Just a matter of time
3) Unlike HDB, significant foreign ownership in private properties. Matter of time they would shift out to pour into the recovering US/Europe property markets.

The above factors are inevitable - question now is just matter of time.

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