Why property market ‘up’ will be good for banks

As long as it happens in one market, it would also be the same for another market. Reported in was a piece of news about the revival for Singapore’s property market. This will help the Singapore bank stocks. The reason is clearly stated, together with some calculations. It shared that the property market is also pretty healthy. According to analyst Ng Li Hiang the transactions comprise of units with lower property prices, smaller number of speculators and property investors who tend to prefer larger units, and real buyers opting for small housing units. This is based on some assumptions, okay. Anyway, do read the full article to understand more: TheEdgeMarkets: Singapore property market revival augurs well for banking stocks

Do note that this is happening despite the cooling measures still in place and without any signs from the authorities that it will be lifted soon. Here’s an earlier article: Cooling measures in SG? One more year at least says Capitaland Ltd Besides that, do note that Singapore has just averted a technical recession when it achieved 2.5 percent in GDP growth in Q2. (Technical recession happens when an economy has two quarters of consecutive negative growths.). Remember the fact that as long as unemployment rate remains low and everyone has jobs and could pay their bills, the demand for property would continue. The unemployment rate in Singapore is ONLY 2.3 percent (March 2017). This is LESS than half of that largest economy which is still on tract increase rates because it says its growth is as expected; good. Unemployment rate in the U.S is 4.6 percent (end 2016) Perhaps this is because America has Mr. Trump as their president. 🙂

Home loans are considered ‘safe’ loans. If we are tight where money is concerned, we would somehow still try our best to pay for the home. If we did not, we would not even have a place to stay! This is why when the overall loans for homes are up, the banks would definitely report better profits too. Recently, all the banks whom I read about were reporting profits. When banks show better results, it’s a good sign I think the next sign we should be looking for would be the total transaction numbers for residential homes in Malaysia. Average price should be on the way down because the number of affordable homes are on the way up. So, there are now two clear actions to take. View more units and decide on the best out of those and buy one. 🙂  Else, start buying bank stocks if we do believe that Singapore may provide an advance notice, just like what happened with cooling measures a few years ago. Happy following.

written on 17 July 2017

Next suggested article:  OCBC: Singapore home prices drop 3-7 percent in 2017


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