Monday, June 2, 2014
How time flies! It’s been almost 7 months since our last post. And if indeed there are still a few of you out there, the wife and I hope that you are keeping well and enjoying the ride on this somewhat bumpy property train.
The wife and I have not been following the property market as religiously as before - we attribute this to a combination of our busier schedules and laziness, probably more the later.
During our hiatus, it looks like the TDSR (Total Debt Service Ratio) has put quite a dent in the property market. Price of new private residential properties has fallen in the last 2 quarters, albeit by only about 1% and not the 15 - 20% (yet) that some of us are hoping for. Private resale prices have also supposedly fallen for the past 9 consecutive months, as sellers cut prices to keep pace with discounts for new homes. And developers are becoming more cautious when bidding for new land sites.
Do all these mean that the long-overdue price correction is finally happening? Someone had posted on our message board about his friend buying a resale unit at 35% off the current market price, while another had said that buyers are offering 20% less than market price. So it does sound like doom and gloom for sellers these days. However, the wife and I feel that despite the lower demand and softening prices, a substantial price drop (by this, we mean price dropping by more than 20%) over the course of the next 6 months is unlikely. While there will always be cases of “fire sale” in a bearish market, we believe that many sellers and buyers still possess the means to hold out for the time being. And as long as the current disparity between buying and selling prices persist, prices are unlikely to see a major correction. Having said that, the wife and I reckon that 2015 will be interesting, when another 50 or so new residential projects will supposedly come on-stream.
The above is our humble opinion as always. So how has your property watching/buying experience been these past months?
Posted by The Folks @PropTalk at 3:17 PM