|
By Uma Shankari
THE Year of the Golden Tiger is expected to bring plenty of opportunities in the property market - albeit risky ones - if history (and geomancy) hold true.
'Most Tiger Years were either periods coinciding with market troughs - that is, a bottom - or were periods that immediately preceded a trough,' says Donald Han, managing director of Cushman & Wakefield.
Tiger Years are typically good years to invest, he reckons. '2010 is a year full of hope and anticipation as the market recovers from one of Singapore's steepest recessions.'
Others agree that with the Singapore economy expected to expand between 3-5 per cent this year and beyond, 2010 presents opportunities for investors to buy in anticipation of a price recovery. But the element of risk remains.
'Like the tiger, the market is likely to remain active for the first half, but the second half of 2010 remains unpredictable,' says Jones Lang LaSalle's South-east Asia research head Chua Yang Liang.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak puts things this way: 'Some believe the Year of the Tiger and the Year of the Dragon can be turbulent years. There can either be a big boom, a bust or a year with risky opportunities.
'Although property prices have already reached a high level in the past 12 months, the prospect of further increases would be tempting to some investors. However, further price growth would also bring higher risks of a correction.'
The last Tiger Year came around in 1998, smack in the middle of the Asian financial crisis. Then, the property price index for private homes shrank 34 per cent over 12 months.
'There was a very pessimistic mood at the start of 1998 in the property market,' recalls Mr Mak. 'There appeared to be no end to the Asian financial crisis.'
But by the Chinese New Year of 1999, people were optimistic again. The market rebounded from Q1 1999 and, over the next two years, prices rose more than 40 per cent on the back of strong pent-up demand, increased investor confidence and a global IT boom.
Twelve years before that, in 1986, Singapore was in the midst of another crisis.
'That Year of the Tiger (1986) came after the 1984-85 economic recession, which was exacerbated by the collapse of Pan-Electric,' says Cushman & Wakefield's Mr Han. 'The property market dived to the lowest point in Q2 1986. But it then made a remarkable, long recovery over the next 10 years until May 1996 (when anti-speculation measures were introduced by the government), with prices rising more than five times.'
The same story applies to 1974. The global oil crisis hit Singapore that year - the first major economic crisis the island had to weather post-independence. But property prices then went on to rise steadily from 1974. Over the next seven years until 1981, prices of residential properties rose more than four times.
But things were certainly less exciting in the Tiger Year before that. Way back then, in 1962, a soon-to-be independent Singapore did not have much in the way of a property market. But the fledging Housing and Development Board (HDB) - which was set up in February 1960 to manage the housing crisis - had already begun its work of transforming Singapore's landscape.
This article was first published in The Business Times.
| 
