HDB resales price falls for the first time in 8 years and private home price also fall in Q4

Yesterday, we saw this article “HDB resale prices fall for the first time in 8 years” and “Private home prices fall in Q4”.

 

Let me highlight some of the important data that were released.  HDB resale prices fell by 1.5% in the 4Q of last year.  For the whole of 2013, the resale price index registered a decline of 0.6%, the first time annual drop since 2005.  18,100 resale transactions last year, a 28% dip from 2012 and the lowest since 1997.  Luxury homes also shows signs of losing steam.  Data released by URA showed that private home prices fell by 0.9% from the previous quarter.  For more detail, you may refer to the website or yesterday newspaper.

 

Now, we started to see economists and analysts came out to say - watch out the property market……some analysts estimate there could be a fall by 5~10% for the private housing this year, HDB price could……….

 

Does this piece of news surprised me?  Those who follow my blog will know that in September I have already mentioned that the property price will come down.  http://achua138.blogspot.sg/2013/09/property.html  When everyone knows this piece of news, it is no longer a news.  As an investor, I don’t listen to others.  Whoever he is.  I do my own analysis.  I need to be on guard and act before others do so. 

 

Give you one example on what I mean on that.  Cash over valuation (COV) on the HDB housing. Two extreme examples, 4-room flat, Queenstown, in 4Q 2012 COV $65,900.  4Q2103 dropped to $37,900.  Non- mature estate Punggol, same 4 room unit 4Q2012 $45,000 and 4Q2013 dropped to $0.  These data I extracted out from yesterday article.  I mentioned that “some areas are selling with zero COV and some even to the extend of selling under valuation” in October.  http://achua138.blogspot.sg/2013/10/hdb-resales-price-drop-for-first-time.html

 

When I saw private developers eagerly lunching their unit with discount, gift…….respond by the developers on the new land bidding…….Singapore’s 3 main banks were been downgraded due to household debt …….government concerned about the continuous property price increase and started to implement cooling measured one after the other until they see result…... ……….I know the property peak is there.  Yes, I agree to some extend with some people saying that Singapore small island, no matter what the property price will go higher than what the price that they paid now.  When?  3 years later or 5 years later.  I will say before the crash or some people called it correction.  不要自我安慰。 If you can buy a unit whether is for investment or own stay with a 20~30% lower, why not, right?  Property prices are not thousand nor ten thousand dollars.  We are talking about few hundred thousand to millions.  20% is a lot.  

Game has begun.  HDB resale pricing is only the beginning.  Now we see private property housing got sucked in, so what next?  Industrial property, shop space prices………watch out on that.  As I said in my previous posted, investment products are inter-related with one and the others.  We see DOW dropped 500 points over the last 2 days.  Remember I said 小心， 小心再小心。 I will talk about equity market by end of January.