Tuesday, January 18, 2011

Commercial Property In, Residential -Watch Out!

I have been very busy answering all your enquiries regards the impact of the government measures. I have seen quite a few options being returned and it will be interesting how everything pans out. What do I mean?

The lowering of loan to value has impacted demand quite drastically. If demand is lowered for the lower end property, there will be a knock on effect. If you can’t sell, you will not upgrade as well. Quite a few buyers have been caught, they bought their new place with the anticipation that they will be able to sell their current place. Well guess what, they are in a catch 22 situation now.

I hope the government do monitor the situation very closely. If there is a sudden economic change, such policies need to be reversed or we will create the perfect storm. With the widely anticipated increase in interest rates due to inflation, lower financing and restrictive measures, we might be caught out.

All these factors bode well for commercial real estate. They are not subject to the new rulings and the massive liquidity being pumped into the system needs a home. Commercial real estate seems to be the last bastion, given that the government should be less concerned over this sector as the buyers are corporates.

What does this add up to? Expect the market to be slow and I will be fishing for bargains now. Once I firm up my Asian Titan Trends dates, I will share with you much more.

Your Friend,
Andy Ong