The ongoing European debt crisis has had greater success in cooling Singapore’s red-hot private housing market than a cluster of anti-speculation measures or even the recent announcement of a sharply-accelerated Government land supply programme.
Show flats, which at times have resembled crowded scenes at a sale, have grown eerily quiet. This is partly because many developers have delayed their project launches; but there is no denying the huge dent in market confidence.
Compared to a very vibrant April, feedback from housing agents described May as a total washout.
One agent who closed six deals for completed properties in the secondary market in April, drew a blank for the whole month of May. Agents relate that some of their peers who normally guard their turf fiercely, are now more than willing to co-broke.
Apartment owners are also starting to get more unsolicited calls asking them if they are willing to sell their properties. Opening their letter boxes, they find them filled with brochures and flyers. Their mobile phones are receiving frequent SMSes from unfamiliar agents.
Especially prone are those who have bought properties over the past six months. For them, the scare tactics begin. Owners, especially those known to be active sellers, are urged to sell their properties before the market begins to correct.
These efforts, coming consistently from almost every other agent they meet, are beginning to take effect and are really giving some owners the jitters.
It is a nervous market out there, especially for those who are highly geared.
However, amid all these desperate moves by agents, developers continue to bid higher prices for housing sites.
In the most recent tender, a 99-year condo site at Upper Serangoon Road, close to the Potong Pasir MRT station, received the second highest bid price ever in Singapore’s Rest of Central region.
This result can mean two things – either developers have a different perspective on the market, or, they are confident that they can transfer ownership of the individual apartments to investors before any price correction can take place.
Either way, this is not good news for genuine homebuyers.
So, what can we expect in terms of housing prices going forward?
If the market remains downcast for May and June, prices cannot come down in the second quarter for the very simple reason that there would be very little sales. At most, they will remain at April’s price levels.
Can we expect a price correction soon? It depends. Will the debt crisis in Europe go away soon? I suspect it will but because the problems there are so deep-seated, it is not the end of the story and the problems will resurface.
Source: Today, 4 Jun 2010