Tuesday, January 31, 2012

And speaking of "pent-up demand"...

Reference: "Why property prices will remain high"- The Straits Times Forum, 31st Jan 2012

The wife and I have a slightly different take on the matter:  According to the data provided, some 128,896 private homes were available for sale duirng the period of 1995 to 2010. And since population of citizens and permanent residents during the same period had supposedly expanded by some 216,628 households, the resulting "pent-up demand" for private home ownership should easily have absorbed all private homes available during the period. But reality of the matter is that 39,184 homes remained unsold as at end of last year.

Some may attribute the unsold units to "apartment type mismatch" or "pickiness of home buyers", but perhaps a fairly significant percentage of the increased households between 1995 - 2010 are not really in the market for a new home or prefer to go on rental instead?

So the question really becomes: Is the high property prices seen over the past 2 or so years really due to genuine pent-up demand (i.e. new households that need to buy a home to live in) or is it more a function of greed (i.e. despite the already high prices and cooling measures, there's still money to be made in the property market)?

We could jolly well be wrong of course...



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