15.9% q-o-q jump in Q3 could mark the end of one of the shortest downcycles ever
Property cycles seem to be getting shorter and with sharper price swings, mirroring the trend in general economic cycles. In one of the quickest upturns in recent years, the official private home price index jumped 15.9 per cent quarter-on-quarter (q-o-q) in Q3 this year. The four quarters of price drops that preceded this mark the shortest downcycle in the past 18 years – assuming, of course, that prices do not decline in coming quarters.
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The increase in Urban Redevelopment Authority’s (URA) flash estimate of its Q3 2009 private home price index was the biggest change since a 27.2 per cent increase in the index in Q1 1981.
Jones Lang LaSalle also pointed out that the turn in the index – from a 4.7 per cent q-o-q contraction registered in second quarter this year to the 15.9 per cent jump in Q3 – was the sharpest since the series began in 1975.
The unprecedented loss of confidence last year from the global financial crash and the collapse of Lehman Brothers led to the unwinding of risky investments. By Q1, investors were awash with liquidity and looking for a trusty place to park their funds. ‘Singapore real estate certainly fits the bill as a safe depository of wealth,’ observes Real Estate Developers Association of Singapore CEO Steven Choo. Continue reading
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