Remember the LORD for it is he who gives you the ability to produce wealth and so confirms his covenant... Deut. 8:18

Tuesday, December 22, 2009

2010 Property Market Grim ???

Looking at the share prices of the major property developer, it looks like the March 2209 rally of the builders stock prices has stalled. I'm seeing sign of reversal in the next few months if there're no catalyst to support prices. Momentum (volume) has dwindled with prices traded markedly lower than their recent high, despite analyst rating of "buy" on the sector.

The housing market has seen asking prices peaking in Dec 2009 but I see dampening prices in next few months into 2010 when the recently announced real property gain tax kicks in. The growth rate of new buyers enquiry will slow, prompting developers to step up their efforts in showcasing their offerings.

Other factors pointing to a slowdown in property market will be rising mortgage rates by banks and cancellation of the interest absorption scheme by developers. Rates increase will means higher repayment on mortgages on both existing lenders and dampened speculative/investment sentiment of new lenders. Some will be able to handle the rising rate. The ones that won't be able, may rush to dump their existing property on the secondary market, adding to the already high inventories level.

What will happen to the property prices then....? And the property counter share prices then...?

1 comment:

MarkOnMarkets said...

Too bad SRS hasn't proven that it can actually go up in a sustained manner...