Caveat emptor: investing in the property market carries high risks, but also equally high rewards.
WITH the recent release of third-quarter real estate data, it may be timely to ask: Is there a real estate bubble, and if so, how bad is it? When the figures were unveiled in the last week of October, private-housing prices were out-of-sync with the rest of the market. Prices and rents were down for the other major sectors – office, retail and industrial. These trends were in line with current economic conditions.
Private-housing prices rebounded sharply by 15.8 per cent, easily the highest quarterly rise in more than 25 years. This is aggravated by the decline of housing rentals. Prices dropped by 2.2 per cent despite the third quarter traditionally being the best in terms of number of leases closed, as this is when many expatriates return from their holidays and sign new rental contracts.
Although the overall housing rental trend is down, rentals in some areas have improved and recorded increases in August and September. These increases could partly be due to the large number of expatriates signing new leases in the third quarter. Overseas managerial staff from the integrated resorts would also have signed on during this period.
Rents will go up for some developments due to competition. There are also signs that some tenants are moving to smaller units. This may also lead to rises in some unit types but declines for others.
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