Last month, J.P Morgan released an interesting report on Singapore developers and possible movement in residential prices in the next 2 years. I personally find it insight and interesting as the report is laden with loads of data to back their claims, and I thought it would be beneficial to many with a quick summary of it.
Let me attempt to write this summary in a form of questions and answers for simple reading and understanding.
First and foremost, where are residential prices heading in the next 2 years according to the report?
Based on the report, the team at J.P.Morgan anticipated that there will be a 10% drop in residential prices over the next two years.
Woah 10%? How did they arrive to this figure?
The main metric they used in arriving to this figure is the price to median household income ratio. In the past few years, median household income has been growing at a CAGR of ~5% with property prices experiencing only modest growth in comparison.