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PR Newswire
17-07-2022, 03:05 PM
The desirable long-term trend of SG real estate is gradual appreciation. And the events of the past two years have burnished SG's reputation as the Switzerland of the East in terms of wealth management. I don't see this trend going away in the next 10 years.
Obviously the probability of a correction in the real estate market is now higher. A lot will probably depend on where interest rates will be. All that loose money over the past decade has been financing a lot of innovation (both bona fide and otherwise) and asset price inflation. I think it will be interesting if local fixed deposit rates goes up to 5% and mortgage rates up to 7%. What will REITs yield? Will more of the cash-rich stocks like TTJ go private? And will real estate investors face difficulty in servicing their mortgage?
Anyway, markets are always going in boom-bust cycles, unless you're in an industry that is in terminal decline (like traditional print and broadcast media). Maybe SG real estate will have a mild correction, maybe it will be severe with a quick recovery, or maybe it will continue to move higher. Whichever it is, one must also keep in mind that companies (like Propnex/APAC) and the business landscape they operate in are not static, and they may do better or worse than the market.
SG government will want to avoid a severe correction so they will probably pull whatever lever they have to ensure that this does not happen. Since they currently do not expect a recession, they probably do not expect any severe correction in the real estate market.
Obviously the probability of a correction in the real estate market is now higher. A lot will probably depend on where interest rates will be. All that loose money over the past decade has been financing a lot of innovation (both bona fide and otherwise) and asset price inflation. I think it will be interesting if local fixed deposit rates goes up to 5% and mortgage rates up to 7%. What will REITs yield? Will more of the cash-rich stocks like TTJ go private? And will real estate investors face difficulty in servicing their mortgage?
Anyway, markets are always going in boom-bust cycles, unless you're in an industry that is in terminal decline (like traditional print and broadcast media). Maybe SG real estate will have a mild correction, maybe it will be severe with a quick recovery, or maybe it will continue to move higher. Whichever it is, one must also keep in mind that companies (like Propnex/APAC) and the business landscape they operate in are not static, and they may do better or worse than the market.
SG government will want to avoid a severe correction so they will probably pull whatever lever they have to ensure that this does not happen. Since they currently do not expect a recession, they probably do not expect any severe correction in the real estate market.