Sunday, December 28, 2008

Big surprise: Property prices fall in Singapore and Cambodia

Singapore's private home prices fall: Dec 28, 2008, Private home prices fall. By JOYCE TEO
Private home prices are falling - and they will fall even more next year.

Property developers may disagree, but there is no question about it, if you ask industry observers.

The economy has slowed considerably and there have been retrenchments and wage cuts.

Sales volume of new homes looks set to reach an 18-year low this year, while supply is far from lacking...

Manpower Ministry data already shows that average monthly real earnings - pay minus the effect of inflation - fell by 17 per cent from SGD$3,982 in the first quarter to SGD$3,307 in the third quarter.

Also, on an annualised quarter-on-quarter basis, gross domestic product growth in the third quarter declined by 6.8 per cent, continuing the 5.3 per cent contraction experienced in the second quarter...

Going forward, though, there could be more speculators desperate to get rid of their properties because they do not want to be saddled with huge loans, experts say...

Novelty Group, for one, last month cut its price for the 75-unit Luma at River Valley Grove from SGD$2,800 per sq ft (psf) to SGD$1,450 psf.
In Cambodia, speculators are the big losers as property market stalls:Dec 18 2008, Written by SOEUN SAY AND GEORGE MCLEOD:
"About 5,000 land speculators have lost their fortunes after the property market downturn brought on by the global economic crisis," said Meas Tola, managing director of Angkor Real Estate of Cambodia.

He says his company's future is in question as commissions fall to almost nothing....

"The prices in Phnom Penh have been overinflated. Everyone has jumped on the greed bandwagon. ... Now we are seeing a lot of major construction projects being put on hold or cancelled," said Naim Khan-Turk, the director of research and consultancy with CB Richard Ellis in Ho Chi Minh City.

"Cambodia is going to have a reality check. Speculators have been borrowing to buy condos that aren't built and they are not going to be able to pay the banks; then the suppliers won't get paid and everyone is going to lose," he said.

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