When we buy a home or invest in any property, there is a key question we need to ask: Where is the demand coming from?
In this episode, I am going to cover the topic of supply and demand from the point of view of a fellow home buyer. Let me share with you my thoughts on two questions:
1) Who control the fate of the property market? Is it the developers, agencies, banks, analysts, media, government, homebuyers, investors or tenants?
2) Can we create demand in the property market? Developers can create supply in the market by mass producing new projects. Can they create demand in the market as well?
Allow me to elaborate my points by drawing two handy examples in the current market: the recent new launches and the Johor properties.
You can now watch the podcast below. The video comes with full script or subtitles. If you are watching from your mobile, ensure that the “Caption” function is on. If you are on your desktop, turn on the “cc” button – the leftmost button at the bottom right hand corner.
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Mr. Ku Swee Yong, CEO of International Property Advisor Pte Ltd, is conducting a half-day workshop to share his unbiased views on good and bad buys of properties in prime districts and Sentosa. He will also share tips and traps of buying different classes of landed properties. Sign up for the Choosing Prime Properties In Singapore Workshop and see you there.
Hi Vina, thanks for the informative video. What do you think of the new very limited upcoming EC launches. The Piermont Grand EC (in Punggol) to be launched in July 2019 by CDL is expected to be at record high due to limited supply of ECs and high land price paid by CDL. Do you think it is still worth a buy? Many thanks.
Thanks for watching my video. I don’t recommend individual project as I am not a property agent. Honestly, I don’t know whether we still need to build EC given our oversupply of both private condos and BTOs. EC or not EC, whether it is worth buying still depend on the basic factors such as location, pricing, quality design and layout.
I like your honest views. Actually property developers do create demand, albeit a short term one. And that is enough to fool many gullible buyers and keep the market heated for a few years. Let me elaborate my reasoning.
The large number of enbloc deals in recent years had created many new home buyers, as they had to sell their homes thru enbloc. These enbloc home owners who got a windfall from these deals will buy another home, probably without much rational thoughts (c.f. Prospect theory). Of course, this artificially created short-term demand seems to be fading and if so the reality will set in earlier than the Developers expected, thanks to the recent cooling measures.
I am not sure what is the next song the property industry will sing. But I know they are a bunch of powerfully rich and influential people who Crush and cook me up like a chicken nugget—-if I am not careful.
Thanks for sharing your views. As Ku Swee Yong said, many en bloc owners are renting or rightsizing to HDB flats. Because owners are older and from non CCR regions compared with last round of collective sale. That’s why we don’t see increase in transactions in districts with closed en bloc deals.
Well, willing buyers willing sellers. Leave it up to individuals to decide whether there’s any value for money in new launch projects.
Well I think your views (and that of Ku Swee Yong) are fact-based and hence more accurate. Thanks for sharing.
Hi Vina, I am curious why the property price index remained low for so long from 2002 to 2006? What were the factors that kept prices that way.
That’s only 13 to 17 years ago. If you can remember, it started with recession in the US, then economic slowdown, followed by SARS. People around me all had “property phobia”. They said I must be crazy or simply naive to buy properties at such bad time.
Thank u Vina for sharing so many interesting reads. Were the interest rates high or low during that period?
Interest rate was lower than what we are paying now. In mid-2005, I was still paying an interest rate of 1.3 percent. It only started going up in 2006.
Thank you Vina for the info.
Hello Vina,
I think your blog is a treasure trove of information, especially for a first-time buyer like myself. I am quite concerned that I may be deciding to buy from developers at a time where prices are artificially driven up by the hot market in the previous few years. Do you have any thoughts on whether now is a good time to purchase a new development? or should i adopt a wait and see attitude?
Thank you again for taking the time to make these informative posts!