Let's look at the sales and rental transactions over the last 4 years. Here are some observations from the past transactions.
- The sales to rental ratio of the 60/40 has shifted to 80/20 over the years. While the sales transaction has dropped, the rental transaction has gone up.
- The sales transaction has fell from 32,000 to 12,000. Despite the drop in sales volume, the property prices remain elevated. The answer lies in Singapore sound economic fundamentals and sellers’ power to hold the price in spite of the drop in sales volume.
- If the rental transaction is up, why is the rental market facing price pressure and also takes a longer time to rent out? One of the reasons is because the market is receiving a lot of newly completed units in 2014.
- The ratio of 80/20 is artificially suppressed due to the countermeasures. It shall return to the healthy ratio of 60/40 in time to come.
The resale market shall return!