The property market in Singapore
How fast the market recover from lower demand to higher demand depend on how fast the price fall to a desirable or acceptable level.
The government feels that whatever has gone up, it must come down, but at a suitable or sustainable level. Developers have to cooperate with this level in order for volume to pick up again.
When this happen, will the government tweak the housing policy
If the developers are holding (hoarding) the price and the owners too, and refuse to allow the price to fall to a desirable or acceptable level, the lower will everyone suffer, especially the real estate agent.
Is the Resale volume low? Is the resale prices coming down fast enough due to the low volume?
Is the Primary (Developer sale) volume low? Is the developer sale coming down fast enough due to low volume?
The real estate market is very slow, it is at its doldrums
What caused the market the slow down?
The current problem is though the volume is low, but the prices are falling too slow or too steadily. This will result in a long, long wait before the government will tweak the policy to increase demand again.
The government objective is for the price to be adjusted to a certain acceptable level.
Developers and the property investors refuse to allow the price to come down because of holding power.
The fact is
1) The primary market (developer sales) is driving the market, not the secondary sale market (resale market)
For Residential, the slow down was due to policies and TDSR
The impact of ABSD
drive down the demand or desire to invest in 2nd or 3rd properties or more
drive down the demand to switch properties to a more convenient or better location through sales and purchase
drive down the demand by driving away foreigners and SPV (Companies or Special Purpose Vehicle) to purchase
The impact of SSD
drive down the demand by driving away speculators and short term investors
The impact of LTV
drive down the demand by driving away speculators and investors who depend highly on leveraging to make quick profit
To the speculators or investors, higher interest is ok because they are holding it for short term, not long term. The higher quick profit is always worth the interest they pay for leveraging.
The impact of higher cash upfront
drive down the demand for those who do not have a 25% cash upfront to purchase the 2nd or more properties
The impact of TDSR
This is the only measure that affect both residential and commercial properties
This prevent the property holding company from investing or speculating the property market.
With the 60% Total Debt Servicing Ratio reference to their total income, it disqualify many to own 2nd or more properties.
With the stress test of 3.5% interest rate, the monthly repayment is calculated higher to prevent force selling during bad time.
TDSR is implemented to ensure responsible purchases, but this is really a drive down on demand on both residential and commercial properties.
HDB Resale Transaction is also reduced because of lower demand
1) Government is building a lot of BTO at prices that is much lower than Resale Price
2) Government intend to build extra so as to minimize waiting period for BTO flat or sales of existing flat
3) People who owned a HDB flat, after MOP of 5 years, bought a condo, this group will stuck with their HDB flat because if they sell, they can't buy back another HDB flat. Staying in a HDB flat will enjoy a lot of government subsidy and benefit in many ways.
4) For those HDB owners after MOP period of 5 years, who have extra money and have intention to purchase, they cannot relocate themselves by selling their existing and buy a resale to a location they like due to convenient reason, by doing so, for the next 5 years, they can't touch private properties.
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Commentary
How fast the market recover from lower demand to higher demand depend on how fast the price fall to a desirable or acceptable level.
HDB Flexi scheme
How fast the market recover from lower demand to higher demand depend on how fast the price fall to a desirable or acceptable level.
HDB Flexi scheme
2-Rm Flexi scheme: 40% of flats set aside for seniors; studio apartment lease can be extended
Seniors buying Flexi flats can choose fittings too
More flexible HDB flat options for elderly buyers
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More flexible HDB flat options for elderly buyers
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