Thursday, December 1, 2011

The volatile real estate markets and how to make money out of it.

Its Christmas soon, I always feel good over this season as we commemorate the anniversary of the Lord’s Jesus birth. The new decorations at Orchard looks amazing even though they used blue all over again. Let’s hope we don’t have a blue Christmas.

At the recent Success Forum, many of you were asking me how I manage to call the trends correctly despite all the economic gloom that is going on. Yup, I called for residential prices to hold and commercial to still have upside. Its been 3 months and my reading of the markets seems to be quite right as many owners are able to weather any negativity due the low holding costs as interest rates are still at a record low. Remember, its all about supply and demand. With not that many enthusiastic sellers, well prices will hold.

Right now, it does seem scary with China’s growth slowing and the Europeans cannot seem to get their act together. This brings me to recollect what happened in the mid 1990’s when the Asian financial crisis occurred. How fortunes have reversed! The US and European economies are now in doldrums. The people are now refusing to swallow the bitter pills that were prescribed by the IMF and this is simply déjà vu.

The irony is the hypocrisy but that is another story all by itself. To be very honest, I am feeling a little uneasy about the property markets. There will have be some room for softening as the markets have come up substantially. So if you are shopping for an investment residential home, you might want to hold off for the time being. Some properties will emerge stronger than other asset classes as the demand and supply balance corrects itself. If I were you now, I will want to learn about what to be looking out for in case bargains do appear and thus you will be in the right place to take full advantage.

The commercial scene is still quite active, as players are now jostling for deals. I will weigh the pros and cons of the market and get back to you once I manage to get enough rest and have a clearer perspective.

Till then, take care and don’t make any wild moves!

Your Friend,
Andy Ong