Characteristics of real estate market – Singapore property for sale/ rent
Singapore property for sale/ rent – The real estate market possesses certain unique characteristics which are different from other markets. The three main characteristics of the real estate market are as follows: Singapore property for sale/ rent.
- No central market
An example of a market is a place or a location where goods and services are bought or sold. At a designated wet market, vendors (meats, fish, vegetable, fruits) gather to sell their goods. A market however does need not be a physical market where people gather. For real estate, there is no central market where real estate or property is sold or bought because real estate is immobile and cannot be moved to one central market.
The selling and buying is usually by means of advertisements through newspaper classified advertisements, internet portals, flyers, banners etc placed by property developers, estate agents or salespersons. Buying and selling is through appointments made to view the subject property or show flat and the buying/selling is usually concluded there. Hence there is no central market for the real estate market.
There are however many submarkets within the real estate market. For example, there is the residential market, the commercial market and the industrial market. Within the residential market we have submarkets such as HDB flats, condominiums, apartments and landed properties. All these markets are quite distinct from each other and serving different sectors of the real estate market.
- Lack of information
Due to the heterogeneous nature of real estate, information about property sales transactions is not easily available. Even with transacted prices available from URA, HDB, SISV Realink and REALIS, detail information about its facing, internal layout, age, extend of renovation, existing condition of the house, etc. are usually not available. It is this lack of information that makes it one of the key characteristics of the real estate market for Singapore property for sale/ rent.
- Imperfect market
An imperfect market is where information is not quickly disclosed to all participants in it and where the matching of buyers and sellers isn’t immediate. It is a market where individual buyers and sellers are able to influence prices. This might occur if sellers are few or if the information available to buyers about prices or products is deficient.
An example of a near perfect market is a stock exchange where transacted prices are made known almost immediately and matching of buyers and sellers is immediate. With its high volume of transactions, individual buyers and sellers are not likely to be able to influence prices.
Real estate market is an example of an imperfect market. It usually takes weeks for transacted prices to be made available to the public. Matching of buyers and sellers are not immediate, it may takes days to weeks to negotiate on a deal. Due to the high purchase price of property, the number of real estate transactions is usually very low resulting in buyers and sellers being able to influence the prices. Because real estate is an imperfect market, the estate agents and salespersons have an important role to play to match the needs of the buyers and sellers. Singapore property for sale/ rent.
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