The most recent time I experienced Singapore's property market falling into more affordable pockets was some time in 2006. Thereafter, it rose again, only to be hit by the 2008 financial melt-down and brought back done to mortal levels in Q4'08 to Q1'09.
Actually less ... arghh ... prices ... private housing (and public housing, which was pulled up by the private market) rose quickly, some time March '09. And suddenly there was a mad flurry of crowds flocking to new property launches as if there was the GREAT SINGAPORE SALE there. Just type "singapore property market" into youtube and you will see scores and lists of videos to support my claim. These scenes were constantly splashed across the media reports - TV news, newspapers alike, echoed the maniacal sprint to get, especially the much heralded catch - properties near the up and coming Changi South Business District, where banks were re-locating their operational centers to, where the logistics hub is, where there would be the next University Campus nearby. 1 example of the mad rush? Property named "Optima", where long queues of both agents (queuing for property buyers) and property buyers started 3 days before the property launch!
And the prices? Take a district 15 (you could refer to iProperty website for more information on the Singapore property market) property, priced at S$800 - S$820 psf (push you back S1.1M for a about a 1,300 sf size area, 1SGD worth today around 0.68USD) late '08 is now worth close to S$1,200 psf (close to S$1.6M)! For the high end markets in town, Orchard, District 9, just take a look in the papers and you will see smiling faces of property agents in the classifieds coaxing the well-heeled to part with S$2,000 psf and above. And such price moves come screaming so far without a halt, amidst the start of the 2nd Formula 1 night race in Singapore!
Property is important, it helps hedge against inflation. Property agents will tell you that. Evident when Singaporeans are face with stagnant or lowered salaries, near zero bank interest rates for savings or FDs, and rising prices of basic necessities - food for instance. Just take a look at today's 26-SEP-2009 Straits Times article "How much is a burger worth" - according to a recent UBS survey, Singaporeans can afford to buy less than what people in many other cities can because prices here have risen more than wages. Couple of statistics from the article to home in the stark reality here in this little island city - full of resolve and having built a global brand towards establishing itself as a very credible high tech industrial, pharmaceutical, financial and media hub:
Wage Level (benchmarked to wages in New York)
- Singapore ranked 41 globally
- behind Tokyo (11), Sydney (16), HK (36)
Price Level (benchmarked to prices in New York for a given basket of goods with 122 items)
- Singapore ranked 24
- above HK (28), Sydney (38)
Domestic Purchasing Level
- Singapore ranked 50
- behind Sydney (2), Tokyo (23), HK (41)
All these are scary. Soon to be wed couples or newly weds are being priced out of the markets. Not just for the private housing but even for public housing where prices are also skyrocketing! Asking prices, according to the newspaper reports are S$50k to $80k above valuation (you may need to fork out more than S$300k to S$500k for 3-room to 4-room public housing in choice areas), totally unheard of, in '06, '07, where prices of public housing were going anywhere between S$20k and more below valuation prices!
What will the future be looking like for our next generation?
Connect with me in Twitter @Nelson Wee
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