URA has released the Q3 2008 flash estimate of the price index for private residential property. It showed a decline of 1.8% - the first decline in 4 years.

[Update 24 Oct: URA has released the full Q3 statistics - private residential property prices registered a decline of 2.4%, a bigger decline than what the flash estimate showed.]

Chances are property prices are going to decline for many more quarters.

After a spectacular 2007, Singapore (and probably the rest of the world) has swiftly entered into recession. A minister has warned of job losses. Banks have stopped hiring and a couple have even started retrenching staff. Retail has slowed and the media is now talking about how people can tighten their belts in these bad times.

Notably, property developers are scrambling to launch as many projects as possible before prices plunge further. (BT, Oct 18, 2008)

My prediction 7 months ago failed to come true. I stand corrected. But as experts say, past performance (i.e. my past performance) is not indicative of future results.

So let me try again.

The following image shows the URA price index graph (blue) superimposed over the Straits Times Index graph (pink). The scales of both graphs have been adjusted such that their time axes match.

Interestingly, by adjusting the vertical scales and without breaking either graph, the peaks and bottoms of both graphs are able to meet at the same levels, with property exhibiting a lag of about 1 to 2 quarters.



Evidently, property has a long way down to catch up with the stock market crash.

I say, condos will be much more affordable in 6 to 12 months' time. Maybe about 20% to 40% cheaper?

http://www.salary.sg/2008/property-m...ash-see-graph/