Can Property Market Recover Without Lifting Cooling Measures?

Can Property Market Recover Without Lifting The Cooling Measures-

Certainly Yes! The aim of cooling measures is to stabilize the sky rocketing property prices in Singapore back in 2011/2012. In order to prevent a melt down when the market realizes that the rapid appreciation in property value is merely a hype, the government promptly kicked in the cooling measures.

In other words, cooling measures are here to stabilize the property market, not to crash it.

In other words, cooling measures are here to stabilize the property market, not to crash it.

So do you think property market can recover without lifting the cooling measures?

Here are some signs that the market is nearing the bottom:

prices drop slows with increasing volume.jpg

Source: Squarefoot research

  • In the new launch condominium market, several projects such as GEM Residence, Poiz Residence, OUE Twin Peaks sold well despite current restrictive loan environment.
    Let’s take OUE Twin Peaks as an example using the transaction data charts as follow.
    Average prices have fallen back to pre-cooling level, do you think it can break lower than that?
    With a total of 462 units and about 130 units are sold, do you think the deferred payment scheme can continue to sustain this increasing volume trend with 300+ units left to strategically launch in batches?

Transaction data OUE twin peak 22 07 2016.jpg

Source: 99.c0

  • URA property price index is starting to show a slower decline. This is a sign of entire market stabilizing and consolidating into a new equilibrium.
URA q2 PPI .jpg
Source: URA Q2 real estate statistic

In short, cooling measures are here to stabilize the property market such that it has a sustainable growth and today we are gradually seeing signs of prices hitting the bottom backed with strong volume. This could be an indicator that we are already at the bottom.

Let us continue to monitor the next few quarters. It is going to be exciting!

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