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Impact Of Media On Property

>> Monday, August 1, 2011

Property prices seem to be the talk of the town with heavy media attention on high Cash Over Valuation (COV) of resale flats, DBSS prices hitting a new high and even the Minister commenting on the issues through facebook being broadcast in the press.

However, what percentage of the population is really affected by property prices? No doubt, home ownership is very high in Singapore but it is only paper profit to most as although owning the property, it is the only residence. Only a minority are directly affected, those considering to purchase and those investing.

Reporters are also drawn to headline grabbing articles. Hence, record COVs are publicized widely, like the $100k plus COV for a Tampines flat and the possible $300k plus COV for a Pasir Ris flat. This has created an impression that the sky is the limited for asking COVs, however, is this a norm that can be applied to all other flats? In my opinion, this are outliers and are the exception rather than a true reflection of the general market.

Similarly DBSS hitting a new high launch price has seen wide spread coverage of its initial $880k price tag which even cause all future DBSS to be halted. This has resulted in neighboring flat owners expecting higher prices. The $880k price tag is for the most expensive unit and not to be applied for all units, anyway, the price has been revised down but that did not get as much attention from the media.

To make things worse, reporters often interview industry "experts". So who are these experts? They are usually the corporate public relations of big real estate agencies. What is the main business of real estate agencies? Their main source of income is from property transactions, no transaction means no business. Hence, analyzing for market situation would be more secondary and would be more beneficial to create more hype to "buy now before it is too late".

Although stories about the cheapest unit sold and realistic transactions do not create as much of a frenzy, it would be responsible to give a more holistic and balanced view rather than a subjective one that focuses solely on pushing property prices higher.

Well, we should take media reporting with a pinch of salt and form our own opinions based on facts of the whole picture.


financialray August 2, 2011 at 2:33 PM  

Yes, the media will report what sells. So do check the URA website on recent transactions done. The media is useful to highlight the trends and gives a clue to the peak of the property market.
TO be fair, some of the industry experts do highlight that market is probably at its peak and to expect more condo to be available in next 2-3 years. Perhaps in the midst of euphoria, people tend to follow the herd mentality and ignore "noise". Can't blame this herd mentality because ironically it is a survival instinct.

Lau August 5, 2011 at 11:50 PM  

Hence, it is good that at least someone tries to provide a reminder for alternative views. ;)



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