Could the delaying of the 2 billion dollar public sector construction projects meant that we have reached the bottle-neck of housing supply? And to know that this has been postponed to 2010...
Months back, in my previous entry, I mentioned that even orders for cranes has to be put on hold all the way till 2009. Construction schedule has had been very intense. This should cause a strain in the following: Availability of Contractors, Manpower and Construction Materials.
And true enough, today's report confirmed the decision to delay public projects till 2010. Could this have an impact on the already announced new housing figure earlier? Around last month, it was declared that around 2000 homes would be launched soon with half of them in Orchard, Bukit Timah and Holland. We have no idea of what the affected public projects are.. but one thing we can be certain of, is that the ever increasing demand has and will overshot the supply for the time being at least till end of 2008. So, my gut feel is that this ever increasing property sales price will increase for at least till end 2008. Some might say 2009. After all, CDL 's Mr Kwek Leng Beng, ( I consider him a guru in the property arena) has teamed up with Wachovia, a US Finance Company to buy 44 units of Condo's at Grange Road worth around $432.4 Million. Is that a wise move? Many days later, Wachovia announced loss of US$ 1.7 Billion due to the Sub-prime problem. Could this signal more bad news to come? Even in the wake of all this, it is useful to remember that OCBC has a $221 Million write-off. What is the true extent of damage say to DBS, which is said to have the largest exposure? And similarly other banks?
And like our MM Lee said.. " We are doing fine, we are likely to do well but there are dangerous market signals." But of course, we have the Integrated Resort plans, the Formula One plans, Billion Dollars worth of investments enough to keep our jobs...
Next year promises to be a fun and exciting year.. exactly how fun?
A 4 to 5 percent inflation rate coupled with increasing oil and food price?? That will be fun... Plus of course our fate (growth rate) which is not really ours to decide, depends on the extent of the US slump and the Oil price.....
Shiok right?
Anyhow, my suggestion is: if you have "extra" properties, keep it for a while then sell it: say half a year later. At least for the time being, housing price should still appreciate. How much? This really depends.. Trust your gut feel though...And of course, try to keep your job.. in case rainy day strikes.
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