This question has been brought up many times over and it is not unusual for potential buyers to ask this question. There will never be a good time or bad time to buy into real estate. This is always very subjective in terms of needs versus wants.
With recent uncertainties in Hong Kong, it is firm that real estate needs stability. Stability ensures that this asset class is well protected. Stability ensures that people will be assured of their properties are protected. We have read news of funds flowing in from Hong Kong but all these are yet to be verified. Let’s take it that this is really the case, then should we not be buying into our own real estate? When more funds are flowing into Singapore, liquidity will rise in Singapore. Cash will be used to acquire assets and this will eventually raise the prices in view of the increased demand. There are talks of recession and the trade war between America and China is causing a major concern with regards to the world economy. The data actually tells otherwise because if this escalates and the situation does not improve further, it will at most affect 0.2% of the US GDP and 0.4% of the Chinese GDP. The interest rate has been cut by 25 basis points by the federal reserve recently and this signals a further reduction in the coming months in view of the US economy weakening in view of the trade war. The Chinese have an economy that is self-sustaining, even without exports, their GDP remains stable. There is this joke, God created man but China built the rest. What does this mean? Everything that we use is almost as good as made in China. So do we need to elaborate further?
The Chinese will not just sit down and wait for miracles to happen or just sit and wait. Plans are already in place to work around the situation and this in fact turns out to be quite an advantage for the Chinese. Setting up factories and offices in other parts of Asia and re-exporting the items to the US?
The situation in Hong Kong has in a way spurred buying interest in Singapore. We have seen more purchases from foreign buyers in recent months. Even with the ABSD in place, foreign buyers are still identifying Singapore as the primary place to park their wealth. Some local Singaporeans whom I have spoken to mentioned that the foreigners are different because they have so much money. Before we make that sort of statements, we need to think about how the wealth was accumulated and it sure does need some risk-taking spirit and brains. It is not about just money dropping from the sky. The Chinese were once seen as a 3rd world poor country but today, they are way more advanced than we are. So let’s give them the due credit that is needed.
With the current situation in Hong Kong, falling interest rates, increased liquidity and government control measures in place, there is never a better time than this.
