Some Still in Denial

The days of easy credit are over and property prices have been too inflated. Risk of buyers’ default is expected to rise.

The property market outlook in 2009 remains weak and the slowdown in global economy still remains a major concern, thus keeping potential buyers out of the market. We expect mass market property prices to remain resilient. However, mid and high end properties could still see potential pricing downside.

The market has already started to correct with the official property price index. I would say people should invest on their own terms and not try to plan based on market trends.

Those who insist, should look to business cycles on market trends. Property market tends to lag some 6-12 months behind local economic growth indicators.

House will become cheaper but will they become more affordable?
Affordability will further deteriorate if banks tighten credit on mortgages or loan, and government cutting employers' CPF contribution to stimulate the economy.

While some are happy that affordability of the private residential market has improved, the reality is that majority of properties currently on the market are still not affordable to the general population.

One does not have to look too far back to realise how irrational buying property really is, regardless of price and affordability. Looking at last two to three years, many people bought property thinking that prices would continue to rise.

However, the opposite is also true.