So what does Mr Kwek Leng Beng thinks?

Kwek Leng Beng, executive chairman of major property player City Development, has a thing or two to say about price trends in the Singapore market.

Over the next six months, he said, developers may adjust downwards launch prices of private housing projects that are not located near MRT stations by about 5% if they wish to move units, amid greater buyer caution.

However, developers of projects that are well located, close to MRT stations, should be able to hold prices or even marginally increase them by 1 – 3 %, he said.

“I believe the market will not crash unless of course the worldwide scenario is so bad…”

Besides how acutely the economic situation in the US and Europe pans out and its impact on Singapore, price movements for private homes will also depend on local competition. “If in the vicinity, there are three or four developers selling at the same price, you will definitely have to consider reducing the price if you want to get out earlier.”

Asked about the impact of a potential recession here triggered by events in the US and Europe on Singapore condo prices, Mr Kwek said: “I do not believe that it will impact a lot unless interest rates go through the roof… At the moment, the market is full of liquidity, interest rates are so low, and there is a lack of alternative investments.”

He also said he does not envisage an oversupply in 2013-2014 as predicted by some analysts, as “I don’t think (the government) will come up with new measures to destabilise the market” given the uncertain environment, following Standard & Poor’s downgrade of US credit rating and the worsening of Europe’s sovereign debt crisis.

“I think the government is more concerned about public housing and the new (National Development) Minister has taken positive action,” Mr Kwek added.

He said global cooperation among governments as seen during the Lehman debacle can once again help to stabilise markets – although “this time I believe it will take a little bit longer … it is a little bit harder”.

“Everything is overblown. That is human nature. Just like property, the higher property prices go up, the more you want to buy, I guarantee you. The lower it goes, the more scared you are,” he quipped.

Source: The Business Times

The wife and I was watching an episode of the latest season of “Covert Affairs” last night and after hearing what Mr Kwek has to say about the state of our private home market going forward, a quote from the episode came instantly to mind: “when you listen to people speak, you learn to interpret what they mean, not what they say”.

So is it just us or beneath all the guarded optimisms, there lies a genuine concern that Singapore home prices will come under increased pressure as governments around the world find it more difficult to tackle the current problems arising from the US economy and Eurozone and thus will take a longer time to stabilize the markets? If our memories served us right, the US sub-prime crisis (which eventually led to the Lehman collapse) took more than a year to turn itself around, while the Singapore residential property market tumbled during that period.

And contrary to Mr Kwek’s take on the psychology of home buyers, we always subscribe to the notion of “when everyone is falling over themselves trying to get into the market, it’s time to get out”. And that notion has worked out rather well for us so far. *fingers crossed*

Then again, he is executive chairman of CDL while we still have an outstanding mortgage on the ONE property we currently hold…
   

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