Singapore property price has recovered steadily, current Optimism (1 Jul 2018) is 59%, comparing with last quarter results of 50% optimism on 1 Apr 2018. If the same strong rates of recovery continue, especially with speculation of property market without further cooling measures, Singapore property could exceed the critical 75% optimism (selling zone) in about 2-3 quarters, reaching 100% optimism peak in probably 1-2 years. By then, bubble will be back to Singapore property again, a potential high risk for investor who needs to hold for a few years due to property tax.
The past 7 rounds of cooling measures by Singapore government is only political economy, having limited correction on Singapore property market. When the fear has subsided, greed will come back to buy high sell higher in property market. Property developers have been rushing over the past 2 years to bid for higher land price for property development, implying the future property has to be sold even higher for developers to make profits. However, when a true crisis comes, when many people lose the jobs, lose money in stocks due to falling down in prices, the fear could be back to property market again, the next correction could be significant.
In the next global financial crisis, both Singapore stock and property markets likely will drop to low optimism again, this will be great opportunity to buy & hold for long term investing, may not need to sell high in future as property is defensive in nature.
I was busy with teaching of Ein55 class last night, did not know that last night government has started the 8th round of cooling measure for Singapore property after I wrote this article. Government tries to slow down the growth of property market, implying property investment would be more suitable for longer term investing. There will be more opportunities in property stocks which trader and investor could still benefit from both the cyclic and growth natures of property market.
Learn from Dr Tee workshop to position in current property market, as well as property related stocks, profiting from the next global financial crisis. Register here: www.ein55.com
