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Property market now
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2 Answers
Prior to the Covid -19 pandemic and MCO lockdown, the property market had already shifted to the buyers market as far as the residential market is concern. Developers were still enjoying good sales though not 100%. The commercial activities were somewhat stable amidst some economic slowdown.
Post that, we are anticipating a major slowdown should the economic activities in the country take a beating, a real recession is likely to set in whereby many people may lose their jobs or have to make to with a reduction in income.
When the people are not spending and they cannot afford to buy big ticket items like properties, naturally there will be less demand vs the constant supply by developers. Prices will be pressured to come down. However, there are property owners who may not be in financial difficulties and are able to sustain this anticipated recession period.
Most people will buy on need basis while there will be opportunistic investors who may scout for bargains in this crisis. In the long run, property do hedge against inflation and appreciates in good cycles.
In my opinion, the owners of properties who may be higher geared on loans will try to sell off their properties urgently if they do not have sufficient savings to ride through the bad cycle while others may sell only if the prices are right for them.
Most of the forced selling will be in the apartments, condominiums and serviced residences which are not rented out yet having to pay the monthly maintenance charges and sinking fund. This sub-sector is already trending on an oversupply situation. As for mid range link houses, most of them are owner occupiers hence the stability of prices will probably remain. The owners are also older and more established financially with the exception of a few perhaps. The higher end properties may see some desperate sales which are attractive if the owners could not sustain financially.
Developers will still enjoy reasonably good sales although their prices have been Read More
Post that, we are anticipating a major slowdown should the economic activities in the country take a beating, a real recession is likely to set in whereby many people may lose their jobs or have to make to with a reduction in income.
When the people are not spending and they cannot afford to buy big ticket items like properties, naturally there will be less demand vs the constant supply by developers. Prices will be pressured to come down. However, there are property owners who may not be in financial difficulties and are able to sustain this anticipated recession period.
Most people will buy on need basis while there will be opportunistic investors who may scout for bargains in this crisis. In the long run, property do hedge against inflation and appreciates in good cycles.
In my opinion, the owners of properties who may be higher geared on loans will try to sell off their properties urgently if they do not have sufficient savings to ride through the bad cycle while others may sell only if the prices are right for them.
Most of the forced selling will be in the apartments, condominiums and serviced residences which are not rented out yet having to pay the monthly maintenance charges and sinking fund. This sub-sector is already trending on an oversupply situation. As for mid range link houses, most of them are owner occupiers hence the stability of prices will probably remain. The owners are also older and more established financially with the exception of a few perhaps. The higher end properties may see some desperate sales which are attractive if the owners could not sustain financially.
Developers will still enjoy reasonably good sales although their prices have been Read More
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