Is the property market going up or down? Here are some ways of spotting the trends yourself
ARE property prices still on the way up, or are they heading to a slippery slope already?
If you are confused with so much talk on the property market these days, you are not alone.
One property consultant in a news report may say property prices will go up, but another consultant in the same report will probably say that the high prices cannot be sustained in the current climate.So, who do you believe?
With the help from well-known market commentators - Chesterton International's research head Colin Tan and Knight Frank's research director Nicholas Mak - The New Paper compiled a checklist of 10 factors for bewildered sellers and buyers to consider before they sign on the dotted line.
Bear in mind that no one factor alone affects property prices because a cocktail of different elements are at play.
But if you do notice more of the following, you'll know that something is brewing.
# More homes in the market
Plain Economics 101 - more supply vs same demand, or higher demand vs even higher supply, will eventually lead to lower prices.
For example, if the Housing and Development Board decides to bump up construction of flats in a big way, be prepared for a ripple-down effect on the property market.
# Rentals start dropping
Rentals may dip due to a slowdown in demand or more supply in the market.
When rentals start dropping in a weak market, more landlords may have problems meeting their monthly instalments and up to a point, the gap will be so big that they will have to sell the property.
# Agents get aggressive
You leave your name at a condo showroom and agents keep calling you, even for other projects that you didn't view.
It means that agents are getting desperate and buyers are not biting.
# More units put up for sale
The Straits Times Classifieds on Saturdays come packed with numerous property advertisements, even more than during the 1996 property heydays.
And developers start to launch their projects in double-quick time to beat the rest.
# No one's home?
You drive along the expressway at night and you see flanked on both sides newly completed swanky condos, but few lights are switched on, suggesting that the projects are not fully tenanted.
# Asking prices have dropped. Again.
If you've been house-hunting, you'll see the signals.
A unit you've been looking at has dropped its selling price three times in the last six months, but no one is buying.
# Property not moving
A unit has been advertised for more than six months, but has seen no takers. This means that buying activity has slowed down.
# More units put up for rent
This means that the owners could be leveraging.
If the seller can't sell their units in a bad market, they'll try to offset their monthly mortgages by renting out their units instead. This means that buying activity has slowed down.
# Economic weakness and uncertainty
If there's economic uncertainty, investors, both locals and foreigners, will be spooked and unwilling to invest in the real estate market for fear of falling prices.
# Falling wages & rising unemployment
If companies are freezing recruitment and employment numbers and wages fall, affordability is also affected.
This leads to a drop in demand and similarly, prices.
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