In the last few years as the Singapore property market just continued it's slow and painful grind downwards (10.8% correction over 12 quarters since the peak in 2013Q3), investors with little holding power have sold their properties with losses. Based on resale transactions of condominiums and apartments where the previous caveats can be traced, The Edge Property revealed that the proportion of unprofitable deals rose from 10% in 2015 to 17% in 2016. Defaults on residential mortgages increased from 2014 through to 2016, a trend that is likely to continue as retrenchments and vacancies increase, rentals decline and continual interest rate hikes in 2017. Furthermore, adding to the downward pressure on prices is an increase in supply in the market due to the massive ramp-up in residential developments after the last Global Financial Crisis. Based on URA data, there are approximately 44,000 units of private residential properties to be completed in the next few years.
If we are currently in the early bear stage of the property market cycle, we need to sit tight and wait for further correction. The late bear and early bull stages, will present opportunities to buy good-value properties. Patience is a virtue.
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