In a survey I carried out to Propwise.sg customers, 66% of the 269 respondents accept that the existing fourth round of property control measures by the government are adequately harsh to stop the formation (or worsening) of a property bubble in Singapore.
71% of the respondents accept that property prices will stay flat or go down in 2011 as a consequence of the measures, a pointed contrast to the bulk of analysts who had predicted continued property price appreciation of this year before the measures were recounted. Many think the measures would seriously limit the buying pool to just new home buyers, making it tough for investors, stockholders and even some upgraders from buying.
Of the 29% of respondents who thought that prices would still continue to understand in 2011, the low rate environment, powerful economy and low unemployment levels were cited as reasons for the ongoing strength of the market regardless of the measures.
31% of respondents were delaying any farther property investments for the moment thanks to the measures, commending that the near term pool of buyers and therefore strength of demand would be weaker going forward. On the selling side, only 7% of respondents were trying to sell their property shortly before the market got worse, probably a result of the strong balance sheet of the sellers. With buyers holding back and sellers not desperate to sell, transaction volumes are probably going to plummet, making the life of a property agent difficult indeed.
The measures were also criticized by some respondents for forestalling genuine purchasers and upgraders from making their purchases. The high amount of cash needed to buy the second property would present a serious stumbling block for the average Singaporean.
Speculators would also be compelled to think hard about keeping their property for the long term as they cannot expect to flip it for a profit upon TOP as they did in the past "their focus must move from capital increase to rental yield. Also, with the higher downpayment requirement for a second and bigger mortgage, the return on capital will have fallen, making property a less tasty investment for some.
There had been also some feedback about the way the measures have not differentiated between locals and foreigners. Actually some assume the measures basically tilt the field in favour of cash-rich foreigners who could then exploit any weakness in the market to pick up more properties at good prices.
Apparently long-term financiers have not been discouraged by the measures "55% of the respondents were keen on making a property investment if prices softened. The main issue was on how dreadful the fall in prices would be. Unless there had been an external crisis of some kind, the situation was not likely to be as bad as in the Asian Crisis post-1998 because of the adequate liquidity in the system. Some respondents thought a fall in costs of 10% to 15% would be satisfactory to lure them back into the market.
Some fascinating comments from respondents
"As long as Singapore economy is still doing well and the low rate environment is still there, property will continue to do well too. Unemployment is awfully low and incremental wages are all charge good factors. Don't forget, market may continue to do well this year as East Asia is still booming."
"Buyers of shoe-box units (cubicles) of 350 to 500 sq ft (Mickey Mouse units) are another significant culprit contributing to rising property costs. Though the quantum payment is tiny and hence reasonable, in terms of $psf, it's a quantum leap. This gives the developers the confidence to keep raising their prices to way beyond $1,000 psf even in far-flung places as Choa Chu Kang and Yishun on 99-year leasehold land. The governing body should so forbid the building of homes below a certain in-built area. Having declared all this, I am more than convinced that current prices are highly inflated and not sustainable."
"I think it isn't so much of preventing a property bubble as we are already in a bubble. It should be more of the simplest way to downsize/deflate the bubble steadily without bursting it."
"Now that I can no longer make money investing on properties in Singapore, I'm going to be looking more actively on overseas properties (ie. UK)."
"Speculators ' sensibilities will be dampened but maybe new buyers and cash-rich. Upgraders will find advantages in this move. "
"Unlike 96 and 07, today's market is flooded with money. There's enough liquidity now to see prices going up for a while, at least for this year. After that, anyway, it's 2012. We need not fret about property prices when the world is coming to an end, do we?"
Hope that you enjoyed reading this Singapore property market article!
71% of the respondents accept that property prices will stay flat or go down in 2011 as a consequence of the measures, a pointed contrast to the bulk of analysts who had predicted continued property price appreciation of this year before the measures were recounted. Many think the measures would seriously limit the buying pool to just new home buyers, making it tough for investors, stockholders and even some upgraders from buying.
Of the 29% of respondents who thought that prices would still continue to understand in 2011, the low rate environment, powerful economy and low unemployment levels were cited as reasons for the ongoing strength of the market regardless of the measures.
31% of respondents were delaying any farther property investments for the moment thanks to the measures, commending that the near term pool of buyers and therefore strength of demand would be weaker going forward. On the selling side, only 7% of respondents were trying to sell their property shortly before the market got worse, probably a result of the strong balance sheet of the sellers. With buyers holding back and sellers not desperate to sell, transaction volumes are probably going to plummet, making the life of a property agent difficult indeed.
The measures were also criticized by some respondents for forestalling genuine purchasers and upgraders from making their purchases. The high amount of cash needed to buy the second property would present a serious stumbling block for the average Singaporean.
Speculators would also be compelled to think hard about keeping their property for the long term as they cannot expect to flip it for a profit upon TOP as they did in the past "their focus must move from capital increase to rental yield. Also, with the higher downpayment requirement for a second and bigger mortgage, the return on capital will have fallen, making property a less tasty investment for some.
There had been also some feedback about the way the measures have not differentiated between locals and foreigners. Actually some assume the measures basically tilt the field in favour of cash-rich foreigners who could then exploit any weakness in the market to pick up more properties at good prices.
Apparently long-term financiers have not been discouraged by the measures "55% of the respondents were keen on making a property investment if prices softened. The main issue was on how dreadful the fall in prices would be. Unless there had been an external crisis of some kind, the situation was not likely to be as bad as in the Asian Crisis post-1998 because of the adequate liquidity in the system. Some respondents thought a fall in costs of 10% to 15% would be satisfactory to lure them back into the market.
Some fascinating comments from respondents
"As long as Singapore economy is still doing well and the low rate environment is still there, property will continue to do well too. Unemployment is awfully low and incremental wages are all charge good factors. Don't forget, market may continue to do well this year as East Asia is still booming."
"Buyers of shoe-box units (cubicles) of 350 to 500 sq ft (Mickey Mouse units) are another significant culprit contributing to rising property costs. Though the quantum payment is tiny and hence reasonable, in terms of $psf, it's a quantum leap. This gives the developers the confidence to keep raising their prices to way beyond $1,000 psf even in far-flung places as Choa Chu Kang and Yishun on 99-year leasehold land. The governing body should so forbid the building of homes below a certain in-built area. Having declared all this, I am more than convinced that current prices are highly inflated and not sustainable."
"I think it isn't so much of preventing a property bubble as we are already in a bubble. It should be more of the simplest way to downsize/deflate the bubble steadily without bursting it."
"Now that I can no longer make money investing on properties in Singapore, I'm going to be looking more actively on overseas properties (ie. UK)."
"Speculators ' sensibilities will be dampened but maybe new buyers and cash-rich. Upgraders will find advantages in this move. "
"Unlike 96 and 07, today's market is flooded with money. There's enough liquidity now to see prices going up for a while, at least for this year. After that, anyway, it's 2012. We need not fret about property prices when the world is coming to an end, do we?"
Hope that you enjoyed reading this Singapore property market article!
About the Author:
Propwise.sg, a top Singapore property blog, is devoted to helping you understand the property market and make better calls. Visit us to read more Singapore property marketarticles.
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