Since year 2009 property market has been constantly been pressurized by the Government with the various cooling measures to curb the property price from rising causing potential property bubbles while the general economy is on her recovery. However, despite all the curbing measures ( Singapore, China and Hong Kong ), property prices still on the rise. Does that mean the various measures by the Government is insufficient or there could be something underlying to explain for the rising of the property prices ?
Starting from the point whereby global economy gone into recession in 2008 and came out of recession in 2009. Government from various countries all injected stimulus ( in term of monetary ie printing money ) to the economy to aid the economy from coming out of recession and spur growth along the way. With the excessive of cash and uncertainty in the economic recovery, most people would want to use the money to acquire physical assets ( property, since prices were depressed to low level during the recession ) as a safeguard. With that, property prices were fast driving up. In addition, Government also proposal numerous of infrastructure spending to boost the economy like building/upgrading roads, railway and etc. With all the infrastructure works going on, this only jacks up the land prices around the area with those infrastructure works being carried out. Hence, property price will just keep on rising despite all the curbing.
Take the case of Singapore, Government has planed to enhance the MRT system within the next decade and during the recession period of 2008, the Circle line and the Downtown lines were being constructed. With those fully functional, the value of property around those areas will no doubt be increased. China is another country that is having the same scenarios as in Singapore. The much talk about Tianjin city ( where it is currently being undergoing development to become a first tier city ) is building its subway network and expecting to be completed either in 2011 or 2012. The completion of the subway will bring a lot of conveniences to people doing business in Tianjin city. Another city Hangzhou ( very rich in history as it was the capital during the South Song dynasty ), a very popular tourist spot is also planning to build its own subway network and that will bring a lot of conveniences to the tourists as the city is current being served by buses only.
Even in US, California also proposing to build a high speed railway network at the moment. Spending on infrastructure is probably one of the best method at the moment to continue the global economy from recovery and at the same time it can create a lot of jobs to help bring down unemployment.
With spending in infrastructure as the main focus to spur and sustain economic growth at the moment, it is very difficult for the property prices to drop despite all the curbing measures. Potentially, property developer ( CityDev, Capitaland, Kepland, SC Global, Allgreen, Ho Bee, Yanlord, YingLi ) could be a good upside with an at least 5 years of time frames.
