I was a panelist last Saturday's InvestFair - Is the worse over ?    In my panel were David Cohen of Action Economics, Mohamed Ismail of PropNex, Andrew Robinson of Saxo Capital and Gabriel Yap of DMG.   I wont go into the details of the panel discussion but want to share Mohamed's views on the property sector in Singapore which I found enlightening.  Prior to the session, I was in the group that felt that the discussions were irrantional exuberance.

Mohamed started his comments with the words "BUY", "BUY" - "BUY !"  He felt the demand would continue until the end of 2009 before it would plateau.  He however cautioned about "mickey mouse units", ie where developers had priced the units high on a psf basis but made the units smaller so that the abosolute price per unit was still affordable.

The mass market didnt move much in the 2007 cycle and it was this segment that was now 8-10% below its peak.  This segment remained the most buoyant mainly because of demand for HDB resale and better cash over value from the 70,000 new PRs and about 20-30,000 new citizens.  He said that these buyers were prepared to pay monthly mortgage amounts of S$800 compared to rentals of S$2000.00.  He was a little more cautious about the high end because he felt that the prices at the previous peak were driven by "fund" buyer of physical property.  The high end is about 20% below the peak.

This view would mean the property sector is underpined by "real" demand and given the bias toward the mass market - it would favour my property stock pick - Allgreen.