A Window of Opportunity is Coming Near You

Stock market prices have drop. Car COE (Certificate of Entitlement) prices have drop. Oil prices have drop. Even the once gravity-defying gold bullion prices have drop. Only one thing has yet to seriously drop – Property prices.

There are more than enough reasons why one is still bullish on the current property market. Extremely low interest rates and cheap mortgages. Strong Singapore dollar and money supply. Hot money continue to flood the region. Genuine demand from house hunters.

If you are bearish on the property market I can understand why. Euro debt crisis has deteriorate further and the possibility of default by debtor nations. This may lead to a banking crisis and a contagion spreads. U.S economy goes into a full blown recession. At the same time China suffers a hard economic landing and the housing bubble finally burst.

The property market usually lags the stock market by at least 2 to 3 quarters. So are we anticipating a property market crash 6/12 months down the road for Singapore’s property market? Very unlikely even with the current economic events happening around the globe.

This is unless multinational corporations start axing their regional head count. Singapore total unemployment rate stands at 2.1% (as of June 2011). Go walk around high end restaurants and you see corporate executives continue to wine and dine away. Long queues quickly formed when H&M opens its first Singapore flagship store. Consumers with high disposable income continue to spend.

H&M opening

Remember Singapore is not a depressed market. There is no reason for property owners to sell into depressed prices. Bankruptcy rate in Singapore decline to lowest level in 2010, so there ain’t many desperate sellers out there.

source: tradingeconomics.com

Home buyers’ confidence and sentiments are always affected by the global market volatility. No one wants to make the first move when no one else is buying. And we love to rush in and chase after prices only when everybody starts buying. It is a common herd mentality.

The window of opportunity is coming sooner than you think. There is no need to rush. No need to queue.

Just do it… quietly

K Shanmugam