The most bullish of all bull runs?

The most bullish of all bull runs?

Judging from the recent spate of positive market news, it appears that there is no better time to be involved in property than the present.
A report on Wednesday highlighted the sharp rebound in resale transactions of completed private homes last month, confirming that the secondary market had indeed recovered to levels before the additional buyer’s stamp duty (ABSD) was imposed in December.

Only a day earlier, it was reported that rentals for homes in the private market had risen yet again for February. Overall, the message was that, with the exception of small pockets of weak rents in some locations, the leasing market has been pretty resilient – even amid news of expatriates returning home in numbers.

But if you look at the data, there had never been so many renter households in Singapore before. For the whole of last year, there were 45,062 private leasing contracts lodged with the Inland Revenue Authority of Singapore.

Meanwhile, according to the Housing and Development Board’s website, the number of subletting approvals for last year totaled 26,130. Ostensibly, these numbers are keeping rents for both private and public apartments fairly high, if not higher.

Thus, who are the renters? Mainly locals who are beneficiaries of en bloc sales.

Their impact on the market cannot be denied, especially their roles in the robust sales of new properties and in the high rents for both private homes and public flats.

Many analysts expect another round of cooling measures to be introduced. We have already seen off five rounds of cooling measures but we do not seem to have got much further from square one. If the measures do not address the issue of low borrowing costs directly, I would not rule out just another round but a few more.

Finally, the widespread optimism has even begun to permeate the moribund high-end market segment.

Projects located in the prime central areas as well as those on the fringe are being re-launched with discounts, rental guarantees, luxury fittings and designer interior decor.

The thing with market launches is that they help provide more recent sale benchmarks against which buyers and sellers in the secondary or resale market can rely on to conclude their transactions.

As it is, some agents are already spreading the word that the suburban market is over-bought and over-supplied and that it may be time to re-enter the prime segment. The prices on a per square foot basis has certainly narrowed between prime and fringe versus suburban.

Yes, it does seem a lot more convincing this time around. Is this finally the year of the high-end market?

Source : Today – 27 Apr 2012