There is still activity in the market as
Chinese money is still hunting for investments. I suspect the recent crackdown
on corruption in China has something to do with this. Chinese officials and
their cronies are preparing for ‘what if’ situations. The structures they have
set up looks a little dodgy and they are targeting mainly commercial property
and there is no ABSD that increases the price of their transactions for them.
Do not underestimate the amount of money flowing in from this source as I estimate
the amount to be staggering.
What is the bottom line then? Residential
will be very muted especially if that asset class’ demand is domestically
driven. Why? The drying up of financing will impact local Singaporeans’ ability
to buy. This is because they are very dependent on bank loans. Think of landed
properties where only Singaporeans and selected PRs are allowed to participate.
I am also grim for HDBs as many workers are
being sent back as the government is serious about winning the popular vote and
cutting the quotas of workers. Those with employment passes are also being
targeted as the minimum salary level has increased and the newly implemented
job bank will require certain regulations to be passed before companies are
able to hire them. The strong rental for HDBs has been propping up the
upgraders market for mass market homes. I have been reiterating this for quite
some time and I hope you do keep tab.
Commercial properties will still be
selectively strong as foreigners are able to pay full cash! Yup, you did not
hear me wrong, no financing. I certainly hope that the international economy do
not collapse as any shrinkage of the economy will have everyone heading for the
exit with no one to pick up the slack.
Till the next entry, take care and God
Bless!
Your Friend,
Andy Ong
01/10/13
