The reports are in and things are not looking up: property prices are sliding downwards in Q1 2014. This is a continued trend from Q4 2013, where prices suffered a rough patch and dropped as well. Both the private and public housing sector has been hit with the drop, thus no one is spared. As it has already been 2 quarters with a decline, talks are on the rise that perhaps this is a signal of more falls to come, especially when a new flux on new houses are intended to penetrate the market and a possible tax rise is on the horizon.
As an example of the severity of the drop, during the 3 months of Jan to March, prices for property in the private sector slid 1.3% from their previous point. In comparison, in the 3 months of Q4 2013, it had only fallen 0.9%. This is almost a 50% increase in drop rate! In the public sector, the resale market remained steady in its decline by falling at the same 1.5% rate, but demand has also dropped from 4.1% to 2.8%.
So what is the Property Price Trend? We have to put things in perspective – the prices have not yet reached rock bottom. In fact, prices are still 37% higher than it was in 2009.
Indeed, the core factor behind everything are the cooling measures introduced in September 2009, meant to combat a turbulent time where housing price arrest was extremely unstable. The combination of three factors: Additional Buyer’s Stamp Duty (ABSD), Sellers’ Stamp Duty (SSD), Loan-to-Value (LTV) Ratio that make up the cooling measures did their job to curb rampant price growth and speculation. Compared to the past, prices are certainly more stable than they used to be
However, perhaps these measures have been a little too successful. Analysts believes that as long as they remain in place, the property market will remain bound by its overly harsh rules which may ironically have the unintended effect of scaring everyone away from investing in property.
What do you think? Is it right to continue with the cooling measures, or are they a product of a different environment that should be abolished today? Only time will tell what the right answer is.
We hope this has been helpful insight into your future plans of property investment. If you’re looking to take advantage of this opportunity, at Condo New Launches we have a wide variety of information on new properties for you to pursue.
