Is Singapore Housing the Next to Fall?
October 4th, 2006 by Stephen RomanBloomberg speculates that the “frenzy” in Singapore’s housing market could have painful consequences, “…if the excesses continue unabated, a collapse may occur, perhaps as early as next year.”
As you can see from this chart Singapore’s market doesn’t have anywhere near the froth of other markets world wide, so why the worry? There are reasons has to do with the nature of the market. The housing market is almost entirely supported by the state of the world economy:
Nine out of 10 local households live in their own homes, typically a Housing Development Board flat. Fewer than 22,000 Singaporean families rent private condominiums and mansions.
Rents and prices of 231,000 private dwelling units and apartments are thus almost entirely supported by expatriate families living in Singapore.
If there is a global slowdown firms will be quick to trim back and the situation will be exacerbated by the fact that demand was not driven by locals in the first place. If a slowdown occurs when the article predicts many new units will be coming to the market just as demand is declining.
Posted: October 4th, 2006 under Asia, Real Estate, housing bubble.
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