Finally some truths on Property

I was reading the Economist and I was sort of relieved that someone finally wrote some truths about property investments, which is kinda different from how some has painted it. If you want to know more, get the latest issue (as of this date).

Some key points (to me):

• The value of any particular home is largely determined by whatever a similar house sells for nearby. One absurd bid can push up prices for everyone.
  
• Reason for momentum (up I presume) in property markets is because you cannot short-sell a property. Those who bought during good times are usually more optimistic in their valuations, while those who bought during downturns are more realistic.
  
• The amount of space that people need increases over time as they find partners and have children.

Notice how some people in Singapore said otherwise. A small group of people are unable to push up the price of a property? Property prices will go down if you start building more flats?

My personal belief is that the reason for the oversupply of flats previously is not because of the oversupply, but due to the reason that the flats were previously built in locations with almost non-existent amenities and public transport. Now, the demand is hot because the amenities and public transport are already in place. Flats are either priced realistically or optimistically.

The last point is more on a separate matter. Space does matter when you're talking about babies. Leave it to the market and the developers will definitely build smaller flats. It's a question of profit. The question is whether you want to do something about it.