Mass Market Private Property prices have peaked? W or U?

2767!

As shown by the latest statistics from URA, the volume of transactions for private property in July has reached the boom 2007 levels at 2767 units sold.

A quick look and comparison on some prices between June and July:

Property : June ($psf) : July ($psf)

Martin Place Residences : 1530+ : 1740+
Vista Residences : 1040+ : 1150+
Concourse Skyline : 1320+ : 1430+
Dakota Residences : 870+ : 890+
Clover By The Park : 720+ : 740+
Double Bay Residences : 670+ : 680+
Caspian : 640+ : 620+

Recent launches have seen prices which are about 20% to 80% more than nearby projects which have already TOP. Speculation activities have also appeared to be rising fast with units out for sales within days of purchase from developers.

In addition, bullish moments of price increases appeared recently amidst the overall bearish or recovery mode economy. Do we have a W shaped recovery? or these small bullish movements are volatily seen at the bottom of a U shaped prolonged recovery.

Not a bubble and the buying continues, more furiously.

For the past five (5) days, we have seen many news headlines surrounding the local property market.

Questions were rised whether the current surge in buying interests will result in a bubble when it's time to start paying the mortgage loans and whether any intervention should come in to reduce or stop any speculative market movements?

Further evidences may show the end of the recession and the signs of early recovery in Singapore's property market.

The buying just seems to go on. For example, Centro at Ang Mo Kio Hub attracted tons of interested buyers in its VVIP preview which saw most of the to-be-released units sold within the second day. Not to mention Optima at Tanah Merah MRT where by developers were forced to open the showflat late last night when the queue formed outside was way beyond their expectations.

The common explanations for the buying surrounds the reasons of the increased investors sentiment in the stock market, accumulated buying interests from people who have cashed out since the start of the financial crisis, upgraders and specu-investors who do not want to miss out the attractive deals of new projects.

So, don't be surprised when you find the shopping centres, town centres, coffeeshops, car showrooms, and sports facilities a little empty this weekend, and wonder where the crowd when?

You know the answer?

Catch them at locations found under my entry on "GSL"

The news just keep getting better?

Yes, indeed.

URA has just released its official second quarter real estate statistics yesterday. It says private home prices have fallen 4.7% this quarter compared to the first quarter 2009. This shows an improvement from its previous flash estimate of- 5.9% earlier in July 2. And this is much improved from last quarter's -14.1%.



Not to loose out to the race and joining in the bandwagon, HDB released their "Release of 2nd Quarter 2009 Public Housing Data" yesterday. The resale price index has risen 1.4%, which is a 0.2% rise from the initial flash estimate of 1.2%. The median cash over valuation or COV fell to S$3,000, a huge decrease from the $22,000 average during the 2007 boom.

Low COVs might explain why HDB flats are still in demand even in this uncertain economic climate, especially in matured estates where demand is much higher than supply. Some analysts say the strength of the HDB resale market is translating into the private home market, as the gap between mass market condos and resale HDBs gets closer (refer to my entry on "Are we where we think we are now"), prompting more of these 'HDB upgraders' to make the crossover into the private property market.

With all these said, do we have clear signs of where this property market is heading? One thing for sure, with the numerous project launches (see my entry on "GSL"), the showrooms will still be packed this weekend, with hungry cash loaded buyers who cashed out their gains in the stock market rally.

Bring your cheque book along!

Are we where we think we are now?

Dow Jones breaking above the 9000 mark?

Bullish movements on the STI for the past 3 days?

Higher growth estimate for Singapore of -6 to -9%?

Cannot find parking spaces outside condominium showflats?

Cannot get tickets for Transformers the movie II or Harry Potter?

These and more observations triggered many of us to ask a couple of questions which have been echoing from all corners of the island;

Are we out of the bottom and is the economy really moving up already?
Is it TIME to enter the property market so as not to miss the boat?



Take a look at the article found in Business Times, Property Special 2009, "Is housing market recovery in sight" by Tan Huey Ying may offer some insights to what's happening.

In that article, there is a chart showing the indices for both private residential and HDB price index. One thing is for sure, the private prices are decreasing and the gap between both private and HDB has almost meet if not already. A signal for a perfect entry for HDB upgraders? Even with that in mind, do not rush in yet. Have you done your sums (financial calculations) yet? Not sure of the financial packages available? Check out my weblinks on home loans shown on the right column.

How about investors? For capital appreciation or rental passive income? You may find your answer by looking at the current rental markets and what the projections can be. Another article from BT "Residential leasing - the laws of demand and supply" by Jacqueline Wong and Desmond Sim may help you to clear some muddy waters.

With that many projects launching at such attractives prices, many will be tempted to take the plunge so as not to miss the boat. With the recent figures released for Q2 housing data, it seems to be so. The property market may already be moving into its upside.

But my question is; Is our economy ready for a true recovery? or are we just simply thinking that we are where we think we are.