Property market haunted by Hungry Ghost? Maybe not

Source : Sunday Times - 10 Aug 2008

Practicality overriding superstition when buyers see attractive options in 7th Month

It has been a week since the Hungry Ghost Festival started.

For potential home buyers, this means that they can forget about new launches until the festival wraps up at the end of the month.

The good news: There are plenty of homes to choose from in the resale market during this period if you are not superstitious.

Sellers have finally become more flexible, even if it is just a tad more, market watchers say.

The Hungry Ghost Festival, which falls on the seventh month of the lunar calendar, started on Aug1 this year and will end on Aug30.

The property market traditionally goes into a lull during this period, as some consider it inauspicious to make housing commitments, move house or start renovation work at this time.

However, the past few years have shown that practicality largely overrides superstition when buyers are presented with attractive options.

The property market was active last year during the Hungry Ghost Festival, for instance.

This year, the festival appears to be having a more significant impact on the market, since it comes on top of bad news generally. It is largely weak sentiment causing the current quiet, market watchers say.

Those who are keen to buy will continue to look around, they say.

But developers are sitting out the lull.

‘Generally, people are not keen to commit, so developers are not launching,’ says Savills Singapore’s director of marketing and business development, Mr Ku Swee Yong.

Nevertheless, there are still many individual sellers.

‘Buyers are the ones who want to wait, not the sellers,’ says Colliers International’s deputy managing director for agency and business services, Ms Grace Ng.

Indeed, market watchers say they sense that sellers have in the past month or two become a bit more willing to negotiate their prices.

Buyers might be kept away by the bad news, but some sellers have become more realistic after waiting in vain for half a year for the market to pick up, says Ms Ng.

‘When the sentiment is poor, buyers will ask for discounts regardless of the period,’ she says.

‘They will use the sub-prime crisis, slower economic growth, and so on, to ask for discounts to insulate them from further falls.’

A reasonable discount would be around 5 to 10 per cent, she says.

What to look for

Owner-occupiers can look for older developments, which are typically realistically priced, or check out developments that have obtained temporary occupation permits recently, say market watchers.

The latter developments are likely to have more sellers as some investors may want to cash out.

For instance, there are quite a number of units for sale at newly built developments such as Park Infinia at Wee Nam and The Sea View.

Mr Ku says buyers can check out the new mid-tier developments located on the fringe of Orchard such as the River Valley and Balestier areas.

Investors have bought quite a number of units in these new developments in the past year or two, and if they are holding a few properties, they are likely to want to offload some, he suggests.

Keen to bargain

‘When the sentiment is poor, buyers will ask for discounts regardless of the period. They will use the sub-prime crisis, slower economic growth, and so on, to ask for discounts.” - MS GRACE NG, Colliers International’s deputy managing director for agency and business services