Everyone knows that to make money, we have to buy assets at a lower price and sell at a higher price. The problem is how do we know when is the cheapest time to buy? When is the market bottom? The truth is no one is a seer but for real estate investors, or even for home buyers, you have quite an accurate clue when the property market is at its bottom.
I remembered my “shifu” mentioned that the stock market leads the property market by about 6 months (or 2 quarters). Hence, if the stock prices of property developers decline, it is a sign that property prices will decline too.
It was reported on 23 Apr 09 edition of “The Straits Times” that indeed the stock market (STI was used) leads the URA non-landed residential price index from 3 to 12 months.
It must always be on hindsight in order to know that the stock market has bottomed. If it is proven that the stock market is on recovery, it is a good time to monitor home prices. Although it is still not possible to find the exact bottom, it is good enough for buyers or investors to buy property near the cheapest point.
In this current financial crisis, real estate consultancy DTZ is expecting a recovery in mid-2010, as reported in the same article mentioned above. At the time of writing, the market is showing some gains after a long period of consolidation. If this is a true start of recovery, the property market may be bottoming soon.
You may also like:
Discover the Secrets of Singapore Trading Gurus!
Interviews with Singapore stocks, forex, futures and options traders and trainers! This book is written for you:
- learn how professionals trade
- discover their strategies, money management and approach to the markets
- understand their stories and motivation behind trading
- know your trainers before attending their courses
{ 3 trackbacks }