Let’s explore deeper into the supply and demand side of things to understand what’s happening.
Some condo owners are no longer able to shift back to hdb because of the new policy in place. They have to set a higher budget for moving into another condo.
Just to share a recent case of mine. A family of 3 recently expecting another new family member coming. They are currently staying in a 2 bedroom condo.
They have plans initially to sell off their condo and shift to a bigger hdb flat. However because of the recent measure, they have no choice but to look for a 3bedroom condo.
Because of this, they want to set their exit price higher so that to cover the costs of moving to 3 bedroom condo.
Another case study, a retiree wanted to cash out his investment condo so that he can start exploring to buy a 1 bedroom for his son. After exploring around the market, he couldn’t find anything that suits his requirements and budget.
At the same time, the current tenant wishes to renew the rental lease. After checking around, the rental has jumped from $2800 to $3700, he happily accepted to renew and chose to delay his plan for his son condo purchase.
If the supply of private continues to be low, then the real genuine buyers who have to buy will have no choice but to accept the asking that the sellers are calling at. But of course until a certain extent which they can afford to do so at.
The overall volume has decreased further, showing that the buying power of buyers has slowly losing its steam. Either because of the high interest rates or concerns of potential recession. Or simply being priced out of the market.
If all things remain the same, 2023 will most likely be a price stagnant market, with a much slower price growth. Prices are unlikely to drop because of the still strong underlying demand in the market
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