24/07/2023
Core inflation rates are projected to go down to 3% for the whole year. This is great news for most as it relates directly to food prices & retail goods.
However, note that housing prices and electrical & gas prices are still rising, albeit at slower growths. It is little comfort to most people, be it to the lower wage workers to the investors. In the past couple of years, it has been spiking sharply as expected due to the economic situations coupled with the COVID pandemic. But percentages are just that. A 3% jump in food prices, say a $5 meal, is equivalent to $0.15. But 3% spike for a 4-room HDB at $600K or a shophouse at $5 million is $18,000 & $150,000 respectively. Does your income or savings climb at the same rate? This is not to mention the government changes in ABSD rates, TDSR rules, etc.
On the other hand, most property owners love their homes. They believe that their homes are as valuable to their buyers as it was to them. And I don't blame them. Particularly when you've a good unit with nice views, a high floor, amenities, etc. This will convince them to sell at high prices, for good reason of course. Not that I'd blame them. I would, too. But we'd be slow to move with the market. Even when indicators show a slowing down or an incoming crash, we'd stall, believing buyers will come eventually to match our asking price. The same applies to landlords asking high prices even though the demand may not be as strong as it was during the height COVID, with some doubling the rates.
So, at the end of the day, are we folks really benefitting temporarily, or will the House always win when statistics are just numbers splashed on a page?
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