The group stage of the World Cup is almost over. I've been telling my teams that transaction volume is always lowest during the group stages, when all 32 teams are still in contention and the number of games per night is daunting. I've witnessed my colleagues coming to work bleary eyed and sleeping during my sessions!!! Haha...
But as the knock-out stages commences, 16 teams will be left, by first week June, 8 teams left, by 15 June, only 2 teams. Stock markets in the country that loses will generally fall for a week or less, and markets in the country that wins will rise for the same period. But trading volume returns to normal about one week after the World Cup.
Although it sounds like a simple strategy, buying at the start of the tournament, I must caution that studies on this phenomena collected data only over 4 World Cups, hardly a big enough sample.
The article below addresses the "plunge" in caveats lodged. It is normal to expect this. Perhaps it's best to look for homes during the World Cup / European Cup?
Property caveats lodged down 41 percent in MayJun 22, 2010 -
http://www.propertyguru.com.sg/property-management-news/2010/6/27905/Property%20caveats%20lodged%20down%2041%20percent%20in%20May
The private residential property market in Singapore cooled significantly last month, with the total caveats lodged dropping 41 percent on-month to 1,979, according to the latest figures released by the Singapore Institute of Surveyors and Valuers.
Still, several property analysts are not expecting foreign investor's appetite for home units to be dampened.
Industry data indicated that district 4, which includes Telok Blangah, Keppel Bay and Sentosa areas, saw a 76 percent decline, the biggest drop in caveat numbers, while districts 1 and 2 (Marina Bay and Shenton Way) also fell by as much as 75 percent.
Caveat numbers in all districts across the country dropped on-month, ranging from 57 percent for the Orchard area to a 24-percent drop for District 5 at Pasir Panjang and West Coast.
Several analysts attributed last month’s steep drop in sales to fewer new launches by developers. They said that homebuyers were also holding back their purchases, while waiting for prices to fall.
"A lot of buyers today feel that prices are too high so there's no need to buy. So when the buyer takes a wait-and-see attitude, that's when the number of transactions come down," said Chris Koh, director of Dennis Wee Group. "Those who wanted to buy would have bought during the last one year when they saw prices escalating and they want to jump in and buy."
Coupled with the World Cup event in South Africa, market observers expect caveats for July and August to stay at up to 2,400 units a month. That is about 21 percent down from the 3,053 caveats lodged three months ago.
Despite the caution in the real estate market, Sentosa Cove made the headlines recently after a bungalow was purchased at a record of S$36 million ($2,400 psf) by a Chinese national.
Industry players are not expecting the cooling sales volumes to affect the demand for high-end properties such as Sentosa Cove.
Mohamed Ismail, PropNex CEO, said: "In fact, a neighbouring property at Sentosa went above 2,300 per square foot. In other words, there are real investors willing to put their money to invest in Singapore. Because they do believe in the long-term appreciation of the property."
According to PropNex, the current cost of landed properties in Sentosa is nearly S$2,000 psf on average. However, the company expects prices to drop to S$1,800 to S$2,000 psf due to the World Cup fever.
