Property Sector : Back With A Bang with these 4 reasons

There got 4 explaination on the hot property market in Singapore:

Back with a bang. The private residential segment is on a recovery track, with the developer sales volume of 4,714 units in 2Q09 alone exceeding the 4,370 units sold for the whole of 2008. Price levels rebounded by 5-8% qoq in 2Q09 after a 30-40% fall from end-07 peak levels. With the resurgence of homebuyer sentiment, we expect price levels to firm up by another 8-10% during 2H09. Thereafter, prices are likely to rise in tandem with economic growth.

Structural transformation lends high degree of sustainability to the current recovery. Interest rates are drastically low in comparison to that during the Asian financial crisis. Net household wealth is double that in 1997 and household debt-to-asset ratios are at a 10-year low. Corporate balance sheets are also a lot stronger. Furthermore, favourable migratory patterns to Asia and Singapore's appeal as a top global city, as evidenced by the higher level of foreign participation, help support a sustainable recovery.

Supply glut has been overstated. The tight supply in the public housing segment, which accounts for 78% of the total housing stock, and the segment's narrow price differential with the private mass market segment support the overall private residential market. Moreover, the demand and supply dynamics are favourable to the private mass market and mid-tier segments that constitute nearly 80% of the private housing market. Also, the strong holding power of developers this time round lends them greater flexibility in releasing their high-end inventories.

Integrated resorts to spearhead re-rating. The two integrated resorts (IR) are expected to create 50,000 to 60,000 jobs and directly contribute S$5.4b to the Singapore economy, or 2.6% of GDP, by 2015. The IRs were the major catalysts of the last property boom by creating buzz for Singapore's transformation into a top global city in which to live, work and play. With their launches coming up in 1Q10, the IR theme should make a strong comeback towards the end of this year in the run-up to the IR openings.


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