
Why analysts are confident that there's no asset bubble in Singapore
Good bye boom and bust situation.
According to DBS, investors are likely to remain risk averse until the uncertainties surrounding cyclical outflows of Fed tapering have been ascertained and clearer structural inflows into Asian economies are seen.
In Singapore, the near-term catalyst for the sector would be a valuation call, where analysts see the trading band for property stocks to range between average and -1 SD discount to the mean.
Here's more from DBS:
We see RNAVs remaining relatively stable where any depreciation in residential value could be offset by a more stable commercial and retail segment.
For private residential properties, despite higher household and mortgage debt, we believe there is no irrational exuberance depicting an asset bubble with the financing caps and transaction penalties put in place.
There's no asset bubble leading to a boom and bust situation in the Singapore private residential market owing to forward thinking brakes put in place.