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Thread: Two signals speak volumes about condo prices

  1. #1
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    Default Two signals speak volumes about condo prices

    http://www.businesstimes.com.sg/sub/...29799,00.html?

    Published April 23, 2009

    Two signals speak volumes about condo prices

    Study by DTZ finds STI and developers' stock to be reliable guides to turning points

    By KALPANA RASHIWALA


    THE Straits Times Index and cumulative unsold inventory held by developers have been found to be reliable indicators preceding major turning points for private apartment and condo prices in Singapore, according to a study by DTZ.

    The STI has been observed to lead the Urban Redevelopment Authority's non-landed private residential price index by one to four quarters since 1993.

    For instance, the STI peaked in the third quarter of 2007 - nine months before the URA's index peaked in Q2 2008.

    Similarly, the cumulative unsold inventory of non-landed private homes - with sales licences - held by developers has peaked or bottomed between two to 12 quarters ahead of turning points in the URA's index.

    DTZ also devised an internal risk assessment model to estimate the probability of future major turning points in the Singapore residential market.

    It showed the risk of entering a correction phase has escalated considerably since Q2 2008.

    The property consulting group said: 'Our assessment indicates that the probability of a full recovery by the end of 2009 - for the office and residential property markets in Hong Kong, China and Singapore - remains low.' DTZ added: 'Our internal model also indicates that the Singapore residential market has a higher chance of bottoming by mid-2010 (than by end-2009) and staging a gradual recovery from that point onwards.'

    Both the Hong Kong and Singapore office markets have a lower probability of recovering by end-2010 than the residential markets in these two cities, as the office sector is more closely correlated with economic growth than the residential sector, DTZ reckons.

    Asked whether the recent stockmarket rally will presage a recovery in home prices in Singapore, DTZ senior research director Chua Chor Hoon said: 'It's too early to say if the stockmarket rally will be sustained. A lot will hinge on when the economy recovers.'


  2. #2
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    How come below comments on the % was censored from the paper???

    Hopes of a quick turnaround in property market fizzling out
    By Mok Fei fei, Channel NewsAsia | Posted: 22 April 2009 1421 hrs

    SINGAPORE: Hopes of a quick turnaround in the property market here are fizzling out.

    Property consultancy DTZ said the probability of a full recovery in the Singapore property market by the end of this year is low.

    In a research report issued on Wednesday, DTZ predicted there is only a 0.1 per cent chance that the Singapore office rental market will recover by year-end.

    The residential market here is not faring much better, with only a 0.9 per cent probability of recovery by the third quarter and a 5.8 per cent chance by the end of the year.


    DTZ said the Singapore residential market has a better chance of bottoming by mid 2010 and stage a gradual recovery from then onwards.

    It also expects the office market to lag the residential market in staging a recovery.

    Factors that DTZ used in its forecast include Singapore's stock market index and the cumulative unsold inventory held by developers. - CNA/yb

  3. #3
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    these kind of property news... one week bullish one week bearish....those who follow the news blur blur liao... better to do more homework than just rely on news...

    maybe govn thinks the current property mkt run could be unsustainable, so pour abit of water to dampen the sentiments and wake up the "bear"...

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