A long term buy?
Late last year there was a knee jerk reaction on Propnex share price due to
the Government announced a package of measures to cool the private residential and HDB resale markets.
The measures include raising Additional Buyer’s Stamp Duty (ABSD) rates, tightening the Total Debt Servicing Ratio (TDSR) threshold and lowering the Loan-to-Value (LTV) limit for loans from the Housing and Development Board (HDB). All aiming to reduce the rate of increasing housing price.
But prices continue to go high. More and more Public Housing are crossing the $1 million mark. With prime area HDB flat going as high as $1.3M.
Private housing prices have also risen by more than 9 per cent since the first quarter of 2020 and continue to rise.
HDB resale flat values also continue to rise by about 15 per cent since the same time. Recently a old but big unit in the town of Yishun also hit the $1M mark.
Overall, i see that Singapore property market can only go up. With inflation, property is one of the best to weather it and inflation proof.
And all these cooling measures to tighten financing conditions for both public and private housing "will encourage greater financial prudence".
The Government also will increase public and private housing supply to cater to demand, but not to dampen price, but to slow the growth rate.
Well, this is not the first time cooling measure is apply, and will not be last. Its a good measure for long term to prevent bubble. But each time there is a knee jerk reaction. So i still believe property price will gradually rise.
As to the impact to Propnex, think again. They rely on volume of transaction, not pricing of property. Plus the amount of commission is can be adjusted by % point.
I would say any cooling measure news are short term buying opportunity for all those who want good dividend.
And i can see another measure coming up@TigerStars
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