Monday, December 29, 2014

Singapore Boleh! Jawboning HDB Prices Lower

Singapore is truly one a kind.

National Development Minister Khaw Boon Wan just jawboned the prices of HDB resale flats lower, saying that single digit falls in 2015 would be a "good development". From my reading, he did not imply that we are going to have single digit falls, but rather that single digit falls would be better than double digit falls. So, a double digit fall is definitely within the realms of possibility, which would of course bring more turmoil to the market than a single digit fall.

So anyway, while Yellin (USA represent), Draghi (EU represent) and Kuroda (Japan represent) are telling everyone that everything is fine, Singapore is actually dressing up Minister Khaw as Captain Obvious to tell people that "OEI, TOO EXPENSIVE LA!".

No seriously, he is making it very obvious. Another quote from his post today on the MND blog:
2014 marks the turn of the housing market in Singapore.  Prices have been moderating and the market shifting from a seller’s to a buyer’s market.  The shift is not yet complete and 2015 should see greater stability. - Minister Khaw
Is there another government cooling measure in the works, or is it just going to be a slow drag lower over the next 2 years as JP Morgan predicts?

Whether we have a "good development" or we have a "sustained period of residential slowdown", I think the signs are pretty clear. They are pretty much one step short of heli-dropping pamphlets telling people not to buy property.

From my silent surveying of the battle grounds, I see that the older warriors are getting ready to head back to their bunkers to wait out a long winter, while I see the younger ones similar to myself are wondering if "that was it?" and if they should buy the dip now before they lose their chance.

Anyway, whether we have a steep correction, a slow drag lower, a rebound higher or whatever, I believe that the market moves in cycles (thanks Ray!). We've been a boomin', so is it so crazy to be expecting a bustin'? With a little patience, we will see what happens in the future. (duh, sorry, Captain Obvious moment!)

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