OCBC says too early to call for recovery in property market

Source : Channel NewsAsia – 29 Jun 2009

OCBC Investment Research has said mass-market residential projects are seeing strong demand, especially from local buyers, but it is still too early to call for a recovery in the property market.

In its latest report on the property sector, OCBC noted that the recently launched 8@Woodleigh condominium at Potong Pasir was fully sold within two weeks, while Vista Residences in Balestier has also seen a strong take-up rate for the units launched so far.

It said local buyers are still driving the demand for these properties, but there is also a rising proportion of buyers who are taking up these units for investment rather than for their own stay.

Still, OCBC said it remains unconvinced that the market is showing a real recovery. This is because the buying strength seen in recent weeks could have been driven by the spillover effect from an earlier pent-up demand that had drawn cash-rich local investors back into the property market.

OCBC said the potential catalysts for an increase in property prices will have to come from the inflow of foreign funds into the property market as well as a pick-up in employment opportunities.

Foreign funds had been the driving force of the property boom in 2007. For now, they have not come back in a strong way, said OCBC.