Buying volumes are returning and prices are stabilising. So is Singapore property market finding a bottom?
There are some signs of buying interest returning from pent-up demand. Many who have waited for prices to drop are now having the feeling that after waiting for 2 years it is time to dip into the market. Developers are giving more discounts and freebies to move dead stock. New projects are seeing some healthy demand as well albeit in the lower end market segment.
All these are good news for the property market which has been stucked in a slow grind to the downside for much of 2013 and 2014.
The last few months have been more encouraging as I noticed that buyers are more serious in closing deals rather than waiting for fire sales to come along. However I do not see a surge in prices anytime soon. TDSR and other cooling measures are still effective in curbing excessive exuberance. What I see in the market are genuine buyers who want a roof over their heads.
There are still many “known unknowns” like how high and how fast will interest rates rise and whether China and Euro region is going to have a hard landing; and some “unknown unknowns” that no one can predict. The good news is that there is a temporary respite in rising SIBOR rates and it has in fact dipped slightly. See SIBOR chart below:
Although the market looks like bottoming, it is in no way, shape or form out of the woods. Road blocks and shocks can come from external factors. However it is comforting to know that governments, including Singapore’s, do not want to see major upheavals in their economies and will act positively to generate growth. This will provide a solid platform for stabilisation in prices and hopefully continue to trend up.