Property Boom in Recession Times? (Aug 09)

SINGAPORE (AFP) - Despite Singapore's worst economic slump since independence, the residential property sector is in the midst of a new boom reminiscent of 2007, when the city-state was known as the world's hottest real estate market.

Greed and its twin brother Fear are back in play as punters stake out condo launches days before sales open, with some offering blank cheques to pre-book flats, prompting the government to hint it may have to cool things down.

"Some of the practices and habits that you saw in the last property boom are beginning to come back, so I think we'll have to be careful," said Minister for National Development Mah Bow Tan, whose portfolio includes housing."

"A little bit of speculation is inevitable in every market, but when it becomes excessive, then it is something that we should try to avoid," he said.

Prices of luxury condos -- the segment worst hit by the recession -- are now inching toward peak levels achieved around mid-2007, according to an analysis by business weekly The Edge.

Foreign investors, including Asians looking for a secure place to park their money, are also back in the Singapore market.

Singaporeans enjoy one of the world's highest savings and home ownership rates, but most live in relatively spartan government-built flats, making owning condos an obsessive goal for families.
- extracted from Yahoo! Singapore

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For those who are rushing on the bandwagon of getting a property, cool down first. Singapore is the only country in the world (I think) where the property market is growing like wild fire despite us entering the worse recession that most of us experience for the first time in our lifetime.

Buying a home, or even a 2nd property, is a big commitment. Do not have those mentality that 'U jump, I jump'. Sometimes the consequences are beyond your imagination if things do not go your way.

Do your mathematics and understand your limits on how far you can stretch your dollar, e.g. your monthly CPF contribution, % of bank loans you can take, rental yield, etc. Many Singaporeans end up asset rich but cash poor when they reached their retirement years. Is that desirable?

If you need any advice on what kind of debts (good debts vs. bad debts) you can expect to face, do give me a call. I can also help you source for your ideal property as well as an extra service.