The current state of the property market can best be described as challenging as buyers and sellers hold out waiting for a change in market sentiment. Up or down, either way, a change in market conditions will definitely evoke a reaction. This is because both parties are in standby mode and waiting to pounce. This is the game of the moment.
However, constant reminders by analysts and media exposure that prices are on the way down and sales volumes are dropping, have given buyers hope that holding out will give them better bargaining power and perhaps a better deal. Consequently buyers are anticipating a further drop in prices.
As unsold units pile up and fresh supply come into the market, this approach may well ring true. Meanwhile some developers are reworking their sums to induce sales of certain projects at reduced prices.
But one thing is clear. The property cooling measures, especially with regards to the total debt servicing ratio (TDSR) and additional buyer stamp duty (ABSD) have effectively slowed down the once red hot pitch of the market. This is not to say that the market is languishing away. It is not, as can be seen by the see-sawing of the volume of property transactions charted from month to month. The narrow gap of fluctuation in sales volume and overall prices suggest that the market is stabilizing and holding well. Indeed one cannot expect the property market to go up continuously as a time will come when an equilibrium point will be reached through saturation.
With this in mind, here is a report by Squarefoot Research entitled 'Tug of War'
'Tepid sales and poor market sentiments are putting a strain on developers as unsold units continue to pile up. The primary market is currently deluged with an estimated of 16,050
unsold units from projects already launched, out of which only 15% are from completed projects. Including future launches from sites sold, the estimated supply is nearly 30,000 units.'
Read the full article 'Tug of War here'