A View on Singapore Residential Property Market
Attended a talk by Jones Lang Lasalle last night. One of their Singapore Sales Directors gave an interesting view of the Singapore property market even though he was there to talk about Iskandar.
In short, he is not bullish on the residential property prices over the next 6 months. I have previously mentioned to, many of you that I am not bullish on property prices too.
The speaker mentioned that after every of the previous 6 rounds of cooling, agents can "spin it" by telling buyers that they have to “buy now else the next round of cooling might prevent people from buying”. This has brought buying decisions forward and caused the data pattern that we have observed. Unfortunately, after the latest round of cooling measures, such a story cannot be spun for property investors and speculators. Forward buying decisions means that future demand may now be uncertain.
Interesting…
On the other hand, my view comes from a heuristic (rule of thumb) that the physical property market price pattern lags property develop stock price pattern by 6 – 9 months. We have seen how property developer stocks have performed year-to-date (see Capitaland C31, Kepland K17 and CityDev C09).
Also, bank and developer tie-ups have facilitated affordability by the mass market and recent active prohibition of such tie-ups may reduce affordability and may therefore cause sales volumes and prices to decline.
CityDev and KepLand have a higher exposure to residential property than their peers.
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