Uncertainty

While out shopping (I use this term casually) for landed properties these days, I noticed a similarity that makes me think twice on my bet on landed.

Most owner occupiers of the landed property are selling their home because they are now old. Their children have moved out and they all say the same thing, "We don't need such a big house". Of course, I can understand..the maintenance of the house, garden and the climbing of stairs, not to mention landed properties tend to be situated further from amenities as compared to HDBs flats and condos.

And so a quick check with Singapore Statistics website confirmed my fears. Indeed, we face a rapidly ageing population (everyone knows that already) that will see 1 in 5 in the elderly group by 2020. That's barely ten years from now! Only ONE property cycle.

Previously, we had optimism for offsetting factors - immigration and economic growth as two key drivers. But now, the Government sees a 5 to 5.5mil population as optimal, and we are already there as of last year's census of 4.99mil. Not much upside in terms of population in this case.

A rapidly ageing population also means economic growth will be hurt, especially badly for Singapore knowing precisely well human capital is our pivotal driver for growth, if not the only factor. This is further aggravated by breaks recently applied on incoming migrants. Now BOTH drivers for optimism have been badly dented.

If so, this property wave we are riding now could very well be the last time we see a new high. Following a serious property bubble, we could even fall into a deflationary spiral the one Japan had (is still) seen (seeing). And landed homes, once heralded as "something you can always trust to appreciate due to our land scarcity" might have seen its most glamorous days.

Okay, maybe I'm just frustrated of being priced out of the market now and being all bearish (for my own benefit). But unless our two new IRs, diversification and productivity drive succeed with flying colours in the near future, Singapore might have already seen her golden age.