Investment Why Knowing The Singapore Property Cycle Can Make You A Better Investor

  • February 23, 2020
  • 10 min read
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Sean

Sean has a writing experience of 3 years and is currently with Stacked Homes focused on general property research, helping to pen articles focused on condos. In his free time, he enjoys photography and coffee tasting.

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Desmond
Desmond

Hi Sean, This is a refreshing perspective. It would be interesting to see the connection you can draw from property cycles with the stock market, especially REITS and property counters. As you would have known, most REITS are not spared in the recent sell down and so are the developers as well. Which market should we focus on first ? The stock market or the property market as an indicator ? Your enlightenment is much appreciated. Thanks

AffiliateLabz
AffiliateLabz

Great content! Super high-quality! Keep it up! 🙂

Blood
Blood

Great content! Just sharing my own opinion, when the recession phase comes, would Singapore’s property ignores it and goes from explosive straight into recovery (i.e. skipping recession phase) due to Government’s earlier multiple cooling measures that suppressed the property prices. What are your thoughts?

Stacked Homes
Stacked Homes

Thank you for the kind words! We think that the property market is generally quite resilient, and while it probably won’t skip the recession phase entirely, the effects might not be so bad because of the measures put in place previously. And these can be tweaked by the Government depending on how the outlook looks at that point in time.

Marcus
Marcus

Cycles are very hard to predict. within each cycle, there’re also ‘mini-cycles’, and it’s hard to say where we are today. given the strong cooling measures by the government, really doubt that we’re in the explosive phase now.

Stacked Homes
Stacked Homes

Hi Marcus, yes cycles are hard to predict, and patterns tend to be obvious only after the fact. As of now, we’re in the beginning of the Covid-19 crisis, and it’s hard to say how long it’ll last. That being said, Singapore property has witnessed strong growth over the decades and would continue so long as the population goes up and our land remains scarce. It’s just a question of when and that’s anyone’s guess, but we’ve been in a lull for quite a while (13-17), but prices quickly returned to 2013 levels in 2018-19 in such a short time,… Read more »

Leon
Leon

Hi Sean. If I may share for your consideration and the other readers, the artificial demand is created through the credit market. While there is fixed supply and demand is limited by the spending power, the volatility that results in cycle are largely due to the credit market. Borrowing power allows the cycle to move up when people make use of their borrowing power and moves down when power are unable to sustain their credit worthiness.

If there is no borrowing involved, we would see the drastic cycle as we have witnessed across the year.

Celine
Celine

Thanks alot Sean, I find it very helpful to understand the property cycle as a 1st time investor. Especially with the amount of news in the media regarding the record bigging land prices and recent Pasir Ris 8 launch prices – it helps me to understand that we are in the midst of the explosive stage. I look forward to the right phase to enter the market (this might take a few more years, based on this cycle prediction). Hence, it would mean cultivating alot of patience and keeping FOMO in check. Would there be an impact from other factors… Read more »

Stacked Homes
Stacked Homes

Hi Celine, glad you find this useful! Yes there is an impact from things like available land to bid, foreign money coming in and so on. However, these are pretty macro-based. Usually to simplify the process, we should be looking towards opportunities in the market on a micro level, and it also depends on your objectives. So comparing the prices of condos around, the layouts, and understanding the target audience for the place helps. Factors that like whether the Singapore population will hit 10m, how many more foreigners are coming in, will the government release more land for sale and… Read more »

Shobhit
Shobhit

Interesting blog . Thank you for the insights .
In the current environment do we foresee entering into a recession phase for property ? What is keeping the market so resilient despite the macro economic conditions and raising mortgage rates ? What are your thoughts on this?

Stacked Homes
Stacked Homes

Hi Shobhit, thanks for your kind words. We’ll need to gather our thoughts on this and perhaps we’ll share it in a more detailed article 🙂

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