Top 10 reasons why Singapore property market is heading to a Super Prime Mortgage Crisis induced price crash in 2013 to 2018.
No.10: Negative REAL interest rates: bank deposit rate at negative 4% real rate FORCE Singaporeans into buying properties to hedge for housing inflation.
No.9: No long term fixed mortgage rates: Just like those adjustable interest only loans during Subprime crisis, current low SG local interest rates are trapping the buyers of today into false sense of mortgage affordability. If interest rates go up by just 1%, it represents 100% increase over current first year rate of 1%!!!!
No.8: The genuine demand side for SG properties has no further potential to the upside: Casinos, Resorts, Influx of FTs, QE 1 -3, Tax haven for the top 1%, all those elements have ALREADY been fully priced into the current market. If just only one element falls away, the domino effect will start.
No.7: Strong oversupply of new properties: particularly new mid range condo units at fringe areas, will be coming online with the next 5 years. All sold at record high prices, record low interests and record speculative demand. When all those TOP periods coming due, there will be not enough tenants to be found.
No.6: Falling nominal rents: In today’s rental market in SG, rents for brand new condo units are highly negotiable. Under the pressure of looming mortgage repayments, all the freshly minted landlord will have very little negotiation power to fill their new investment properties.
This is from a blog I picked up from hardwarezone. .. sounds pretty convincing don't you think? :)
But of course, always read with a pinch of salt and whether vested interest or conflict of interest is present. Form your own conclusion. But i do agree everything in singapore (the stock market , coe and property ) all feel quite toppish.. I have been in the Australia stock market, now looking at Shanghai Stock Index ETF and other H-shares and also the Australian property market in Syndey and Brisbane.