Singapore Property Investor and Buyer update June 2009

Singapore Property Investor and Buyer update June 2009
Courtesy of www.PropertyBUYER.com.sg

The property market has woken up remarkably from late Feb to now. Credit

has also eased considerably. In April and May we have started to see

property sellers becoming greedy by withdrawing their properties from the

market.


Contacts: -
Tel: 6100 - 0608 sms: 9782 - 8606
Email: loans@propertyBUYER.com.sg
http://www.propertybuyer.com.sg/contactus.php

Remember we wrote in an earlier article about herd mentality, that when the market rises, everyone wants to go in. And sellers

withdraw. And when the market drops, suddenly every seller wants to come into the market and sell to add on to selling

pressure. This is the typical BUY HIGH, SELL LOW syndrome driven by 2 factors. Excessive greed and excessive fear, both are

bad for your financial health.


Obama's plan to stimulate the market to the tune of more than US$1 trillion dollars have finally sunk in, and the market

believes it will alleviate credit and share market has rallied in expectation that the recovery is coming. We emphasize the word,

"expectation". House prices have however continue to fall although it has fallen at a smaller rate which the market considers a

win!

Jobs are still being lost, although at a smaller rate which the market again consider a positive sign.

So these days, it seems that the market will take whatever slightly positive news and hope for the best.

The worst of the credit crisis looks over, however is consumption returning?


That is the doubtful part as US unemployment rate has broken through 9% as we write and will continue to worsen. (Although it

is worsening at a slower rate) We are hopeful that a recovery is coming. Americans consumers are losing wealth in the billions

as we speak, so it is expected that they will not be able to resume fully to their spending patterns of previous years.


Singapore Market Liquidity


There is enough liquidity (i.e. Money) in the Singapore financial system. In Jan 2009, Singapore's M1 money supply increased

by around 6 billion. There is also sufficient liquidity in the hands of the population (though it is not evenly distributed),

reduction in property prices tend to be able to draw out latent pent-up demand.


But is the recovery sustainable?

We seriously doubt that.

The Singapore GDP is still falling at a projected 6 to 9% annualised rate for 2009. Q1, 2009 GDP annualised fall is around -14%

and in order to reach our goal of a -9%, this means Q2 should come in around -10 to -12% and Q3 should be better than -9%

and Q4 should at least come in at -4 to -5%. And that will enable us to achieve a -9% GDP.


The large chip off our GDP is caused by our over-dependence on exports.

Demand overseas have fallen, factories have shut their gates, therefore, this

segment of the economy will continue to suffer.


Our exports depended a large part on the USA.

So while our Singapore GDP languish and unemployment continue to rise, it

is very hard to see how this recent property rally can be sustained after the

pent-up latent demand has been exhausted. A more stable market yes, but a

rising market? We doubt.


After August when the quieter property volume months resume, together

with reality of job losses, more property launches. So by August and

September we should get a clearer picture of the market.


Developers are clearing stock

The market is getting hot now, developers are launching 99 years properties

again to "CLEAR stock", so unless you really like these properties, there is a

reason why they clear the 99 years and not the 999 or FH properties in their

portfolio.


EN-BLOC developers Leasing out their properties on 2 year leases

Some developers who had bought en-bloc developments and who have

been lucky enough NOT TO TEAR down the development yet, have begun

leasing their properties out on 1 year and 2 years leases. This also indicate

that these developers who have been caught out cold are expecting that the

economy will NOT RECOVER ENOUGH for them to tear down and launch their

properties for sale at the prices they want. So rather than tear it the property

down, they are leasing it out on 2 year leases and tying themselves in.


Exercise Caution

There are always good deals and bad deals in any property cycle. People

buy property for various reasons. We are not advocating whether to buy or

not to buy, but rather that you should exercise caution when buying (if you

buy).


Dishonest Property agents are on the loose again when market hots up

Property agents are again out on the loose and here is one on Singapore

Management University (SMU). Do not buy on impulse or greed and do NOT

bring your cheque books when going for a viewing. It's okay we lose a Home

loan deal, but it's not okay if you over-pay by too much.

we strongly encourage you to do your home work.

http://www.propertybuyer.com.sg/viewnews.php?article=107

But if you still decide to buy after reading our articles, please consider to use

our services for Getitng your HOME LOAN or to refinance your home loan. The service is free to you as we receive a fee from

the banks.

Contact them at: -
Tel: 6100 - 0608 sms: 9782 - 8606

Email: loans@propertyBUYER.com.sg

http://www.propertybuyer.com.sg/contactus.php


Property Checklist / Guide (Kiasu one)

http://www.propertybuyer.com.sg/viewnews.php?article=39

Read More of their articles

http://www.propertyBUYER.com.sg/articlesnews.php