In case you were tempted to invest in property after reading my post on property profits, here’s some sobering news.
I looked at the URA data on the property transactions for condos in districts 9, 10 & 11 that have taken place from end of 2006 to October this year.
The graph below shows the number of transactions from December 2006 to October 2007. You can see that the numbers have started falling since July.
Close to 1,200 condos and apartments in the central districts were sold in April this year, but the numbers dropped drastically over the next few months to a low of just 200+ in October.
Either sellers are asking for too high a price that no one is willing to pay, or potential buyers are spooked by the subprime crisis, falling US dollar and high oil prices.
Even COE prices have fallen.
2 Comments
Your analysis is interesting. However given the strong economic growth in Singapore over the last few years, investors have holding power and will refuse to sell unless asking prices are met; the ‘flippers’ with no holding power will all have been weeded out before completion assuming they bought in August. If you need the property you will still need to buy anyway since prices are moving up. Also, the commodities boom is pushing up materials costs, so replacement cost for anything is still going up. Maybe not so good as investment since there are alternatives, but at least to stay buying is a good idea
Yes , sellers with holding power will hold on , but when stock market is down(potentially lacklustre for 2008) , and inflation is high , holding power will be diminished, and only investors with sound investment strategy, without over exposure to volatile investments will hold out. Thus , do not wait till the market crash and you are forced to cut loss. Plan ahead take some profit while you can. Not everyone can buy at the low and sell and the very peak. In betw, there are also profit to be made.
Then again , it all depends on individual opinion on the market this year and of coz your risk appetite.