Below is what I shared with some friends in a property investment program. It is purely personal opinion and recorded here as my reference in next 12 months.
If you look at current global economy. After the Euro crisis (just beginning), the Europe government start to take more conservative money policy to reduce its government debt, and German has been emphasizing it the second time. From my point of view, we are moving to an period where money will not be easier available, and the interests rate will hike after Australia etc. India increased its interest rates as well.
With a more conservative money policy, the available cash to push the property market will shrink fast, and current bull run will not sustain. In addition, whose who are holding multiple units will have to reconsider their strategy.
Let’s take a look at Singapore market.
It is true that there are a number of immigrates in last a few years and they are part of the supporting strength for the property market now. However, most of my colleagues, which are considered as foreign immigrates, was holding the cash now and complaint that private house are far too expensive. Such voice is not only from middle-tier managers, but also from company directors, managing directors as well.
From government perspective, the new BTO units for HBD has been released at record high speed, and government is definitely looking at the market to prevent the bubble, and will take actions to cool down the market. I do believe there will be policy ready to release if the HDB price continue to rock. Usually, a government policy will take 12 months to see the real effect (not recall where I heard this, but I will again as observing China’s market), so we can estimate when to see Singapore to cool down.
As for the timing, it is impossible to perfectly time the market, and I would like very much to team with you and a few other guys in this area to keep close eye on this area. I would still believe Singapore property market will start to decline from Q4 or Q1 next year, and 2011 will have much better opportunities to enter the market than 2010.
The appropriate time to open eyes wide is when US/SG start to increase interest rates.