Property and Property!!

Mapletree Commercial Trust has finally decided to launch its public offering at 88cents. In listing a public offering, any company will try to maximize their gain (i.e. sell the share at the best possible price) without affecting market interest (i.e. market demand). However, as there are so many REITS in the market and many of them are trading at higher yields and greater discount to their NAVs, my opinion is that there may be limited upside to the price after listing.

Let's talk about something else today. The election is finally here. And, one of the hot topics is, of course, the property prices especially for HDB flats. In a way, the new HDB flat prices depend very much on the market value of resale HDB prices. So, higher resale HDB prices will likely lead to higher new HDB prices. But, to support higher resale HDB prices, there are other important factors such as income of the population. Let's take a look at the median income of resident household and resale HDB price index for the past 10 years.



Over the period from 2000 to 2006, the median household income was relatively flat. Similarly, the HDB resale price index fluctuated within a narrow range. From 2006 onwards, the HDB resale price index started to climb higher. Income went up too. So, unless income goes up, it is unlikely that this uptrend in HDB reale price index is sustainable.

In tandem with the strong economic growth, household income should continue to rise further. And, so will HDB resale price index. How long can this last? I think it's anybody's guess.

Disclaimer: The content in this blog contains purely my personal opinion and it is in no way a substitute for professional financial advice. You should seek advice from a professional financial advisor with any question regarding your financial matters.