Rising HDB Property Prices in Singapore has many implications for buyers. Not only does the economy impact the real estate sector, but also directly the local economy. So what are the implications of a rising HDB property price?
The impact is both on the local economy and on the housing market. While a rise in property prices will increase the income of those who can buy, it will also drive out the middle class, thereby reducing the demand for homes. The reduction in the supply of properties on the other hand will decrease the price of a home, resulting in lower prices for existing homes. This, in turn, will benefit those who can afford to buy, but not everyone. This has an indirect but significant impact on the rest of the economy.
Rising HDB Property Prices means that there are many people who can now afford to buy a home of their own. Before the global economic crisis, it was the middle class that had the most disposable income. With this kind of disposable income, they were able to buy real estate like never before. They could choose from a wide range of properties. And as long as the real estate market was good, then they would stay. However, with the global credit crunch, it is likely that the buying frenzy will now slow down.
Rising HDB property prices mean that the supply exceeds the demand. A lot of the latest properties have been bought by people who cannot afford to pay high prices. Thus, when prices rise, the gap between supply and demand will widen, causing more problems than solutions.
Rising HDB prices also mean that there are more people competing for the same money. It used to be said that there are plenty of buyers, and that there are no sellers. But the number of sellers has greatly reduced due to rising prices, and this has resulted in fewer deals going through. If there are fewer buyers, the supply will remain fixed, and the price hike will not affect the prices. But if the prices increase, then sellers stand to lose. Either way, it will mean competition, and competition mean a better deal for everyone.
Rising HDB property costs have also affected the rental market. When the demand exceeds the supply, it results in an oversupply of properties on the market. This results in a drop in the rental fees and a rise in vacancy rates. The result is that renters have higher monthly rent costs. While this may not seem to be a big problem, it may indicate that the economy is struggling with too many consumers out of work, not to mention too few properties for sale on the market.
Rising HDB property prices have also resulted in the closure of many businesses and the loss of jobs. This is bad news for the economy. With too few consumers, businesses may not be able to survive and expand. And without expansion, unemployment may increase. All these factors combine to show that a falling market is detrimental to the economy.
Rising HDB property prices have been caused by many things over the past year. Some of the reasons include the global recession, increasing population and the tightening of the credit market. While these factors may still change the outlook of the economy, there is no doubt that the falling prices will continue as the global recession deepens.
Rising HDB property prices have been offset by rising employment rates and population growth. While some of the job cuts have occurred due to the rising unemployment rate, others have been announced due to the slowest economic growth in more than two years. Population growth has also picked up, causing the demand for more space to continue growing as well. These factors have combined to show that rising HDB property prices are here to stay.
Rising HDB property prices affect everyone who is an owner of a house or apartment. The only way to escape the cycle is to sell off the property quickly at the current asking price. However, selling a HDB flat could take much longer than expected especially if you want to pocket all of the premium price that you have earned. As a result of this, it may be better to hold onto your property until the market reaches a recovery stage. Then you can sell off your property at the soonest time possible.
Rising HDB property prices have affected the economy in a negative way especially with the effect they have on the construction industry. Many builders are having to downsize and reduce their employees to bare necessities as they cannot cope with the high demand of properties created by this sudden rise in the market. Other service industries are also facing problems with workers who lose their jobs due to the rising HDB property prices. Thus, although the economy may be recovering slowly, the effects of these factors may take a long time before the effects are felt by the general population.