Property outlook? You are all alone

When there were first signs that the United States economy would slip back into recession, the US dollar fell against most currencies. However, when the euro zone debt crisis deepened, the greenback appreciated sharply. This caused a small but sudden spike in the Singapore Interbank Offered Rate to which most housing loans are pegged to.

So, this is how our local rates can ostensibly rise even when the US Federal Reserve promises to keep US rates low till mid-2013.

Talking about safe havens, gold's latest bull market began in late 2008 because investors longed for something tangible. This was because the value of stocks, bonds and even currencies was shaken by the financial crisis. People wondered whether any corporation or government was strong enough to stand behind a certificate.

As a physical possession, gold was one of the few investments that needed no such guarantee. Sounds familiar? Property is also something that most people would consider as tangible.

However, since its August peak, gold has fallen more than 15 per cent to around US$1,600 an ounce today. The recent collapse suggests that the 2011 gold rush was a speculative bubble that may have popped. What about property?
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Source : MediaCorp Press Ltd  by Colin Tan, is Chesterton Suntec Internationl's head of research & consultancy.


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