Hi Raymond,
In 2015 when we first discussed BGC condo market, you convinced me that Singapore condo price levels “are already too high to be safe”.
In 2021, I feel SG condo price levels have not risen faster than BGC, but have been fairly stable. I wonder why.
https://data.gov.sg/dataset/private-residential-property-price-index-by-type-of-property is a price history chart for Singapore private properties.
Now I feel a lot of Singapore condo demand comes from rich foreigners including Chinese, Indians, Australians, Europeans, and wealthy families of SouthEastAsia. In their mind, Singapore represents clean, orderly, safe, efficient, highly developed market economy, decent legal system, so the attractiveness and value of Singapore properties keep rising relative to other international real-estate magnet cities. (Singapore probably pale against Nylongkong, Tokyo, Sydney … in some metrics and is not world #1, but is rising steadily.)
So unless Singapore experiences a serious (economic or social) down turn relative to other cities, it would continue to attract regional hot money.
How about a global real estate down turn? I don’t see it coming in my lifetime. There are very few asset classes to displace real estate on global scale. Along with gold, real estate is the oldest, most established, most proven asset class in human history. Housing bubble can occur in one location relative to other locations, but not globally, not in my imagination.
— For retail residential properties, I always use 3 acid tests for overpriced valuation
- rental yield
- home price / typical, median household income
- home price / monthly expenditure of an average household
However, these acid tests don’t apply to cash-rich foreign investors, who are neither typical, median or average.