Monday, March 04, 2019

Are we prepared to cope with declining property values?

Singapore has benefited from high property prices over the past few decades.

The high prices made all property owners, including HDB owners, feel wealthier.

Even if they income is low or the business lose money, most people think about the appreciation in their assets, and consider that they are still better off.

This situation is likely to change. The appreciation in property prices has now come to a stop. It will start to decline.

Worse, HDB flats which have passed the 40 year mark have seen a sharp decline, or a lack of market.

Private property will also follow. The market forces of supply and demand will always mark its mark.

Properties can be inflated when there is euphoria. But when the euphoria disappears, it must come back to earth.

How will Singapore cope with declining value? The wealth that was created in property will disappear. The high prices will now translate into high cost of living, and not appreciation in assets.

What are your views?

Tan Kin Lian


Anonymous said...

As more & more enbloc become unsuccessful, you start seeing private property prices also drop & re-enbloc at much lower prices.

The newer condos will be worse 20-30 years down the road. They have all the attributes of being difficult to successfully enbloc --- large numbers of owners, gross plot ratio that is already maxed out, very little room for developers to earn profits.

Anonymous said...

How do you cope with declining value? You went in with your eyes open and signed a contract for 99 years so you'll just have to cope. Think of the 99 years, if you live that long, you have stayed in that unit at fabulously low price and be grateful. If you have sold it within the first 25 years, do pocket the gains and be grateful. If you think your 99 years leasehold is going to retain it's value at the highest point for the rest of its lease...You are hallucinating. Nope, I am not pro or anti government but a realist.

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