The Urban Redevelopment Authority (URA)'s latest news release (1 Oct 09) doesn't surprise many, 3rd Quarter 2009 property prices gone up by about 15.9% from 2nd Quarter (decline 4.7% in 2nd Quarter).
The increase breakdown as follows:
- 16.2% Core Central Region
- 19.1% Rest of Central Region
- 15.4% Outside Central Region
Property prices have started to rise since May 2009 since the market hit a bull run. What is the supporting factor of the property price escalation? Apart from the stock market, the economy has not recovered as significantly and fundamental is not strong.
IMF may have released news saying global economy is expected to recover in year 2010 and have adjusted global growth forecast to 3.5% (China being 9% growth next year). The expected grow does not justify a 15.9% increase in local property prices, at least for now.
If surge is not supported, it is hanging in thin air. There is a danger of a property bubble that may just break without much warning. This happened in year 2008, but of course situation were different back then. Back in 2008, the global economy were ruin by the US Financial Crisis.
Where will the property market lead to in the coming one to two years?
Friday, October 2, 2009
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