atans1

Property developers should petition PM

In Economy, Property on 08/08/2011 at 6:46 am

Given the downgrade of US debt with the fear of higher global interest rates and weaker equity markets, property developers must be more worried today than they were this time last week. Maybe they should petition the PM to bring back Mah Bow Tan as housing minister? It is a well known fact that he can e3nsure that residential property prices rise in a recession.

That they were already very worried last Monday is evidenced by the meeting that day that Redas (the property developers trade union) held for 17 analysts from 14 stockbrokers and five consultants. Developers don’t call for such meetings when they are bullish. They are then too busy counting their potential profits.

They discussed issues such as “possible ways to facilitate sharing of information among industry stakeholders, the need to better understand and analyse new market dynamics and the changing nature of the demand for Singapore residential properties”, Redas said in response to queries from BT.

According to BT, Redas had suggested sharing in-house data to help analysts better study the property market. The supply of private homes in the pipeline was also discussed. The meeting took place days after Redas shared results from the latest Redas-NUS Real Estate Sentiment Index survey, which polled developers, consultants and other Redas members.

The findings reflected a softening in sentiments about the property market in the second quarter.

In recent months, several equity research houses also released reports about a potential glut in private homes. One of the most recent is a July 28 report from Bank of America Merrill Lynch, predicting ‘an inflection point in 2012, driven by excess supply, demand moderation and slowing economic growth’.

Its analysts expect around 12,500 new units to enter the market every year between 2011 and 2015 – 60 per cent higher than the 15-year historic average annual supply delivered to the market. At the same time, they expect demand for private homes to weaken due to factors such as tighter immigration policies and an influx of HDB flats.

Citi’s property analysts are among some who do not see an over-supply of private homes coming, as their June report shows.

Adding to reports from property analysts are views from National Development Minister Khaw Boon Wan, who blogs often. In a June entry, he had advised investors and upgraders to consider various factors, such as volatile global conditions, before buying a property.

According to Redas, its president Wong Heang Fine said that he would like to have such sessions on a regular basis, say, every six months.

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  1. [...] Housing – Thoughts of a Cynical Investor : Property developers should petition PM [...]

  2. Har?!? Now then the dumbos realise got “inflection point” in 2012 ah? No need to bring back Malboro Man. Just open floodgates wider for 1,000,000 foreigners a year. Plus stopping all BTOs for 2 years. Private developers are also welcome to stop all developments for 2 years. This was the major 2 policies made by PAP in 2003/04 and in 2006/07. Just combine them and I guarantee rising property prices in Great Depression.

    I’m still waiting for 60+% drop in markets leh. Burn baby burn!

  3. No reason for prices to drop even during a recession after all, prices will go up again. Just hold on to your property and with “graces” from the authority even those who have fallen through hard times can wait for recovery before selling.
    All in all, we can expect housing prices to be always on the …firm side.

  4. I think it is rather insensitive of you to joke about Mah Bow Tan at a time of potentially serious economic crisis ahead.

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