I dont think we've seen a bubble yet in Singapore - at least not until we've seen every uncle, aunty and taxi driver buying into properties...then we know it's a bubble.
In fact - and I've mentioned it in another thread - that it will not be the popping of a Singapore-bubble that will bring prices down here but a decline in global housing prices, due to a global slowdown. Singapore's local supply-demand dynamic suggest prices are going higher esp in the central region. I have no doubt about that.
But if you ask me what's going to happen to the global economy, then my bet is that we're heading for a very uncertain future. Imagine a global scenario
(1) where the US slows. This is where a crazy bunch of consumers have over the past half a dozen years spent well over their income and gobbled up imports from China as though there is no tomorrow.
(2) where China slows. With the US slowing, China will find its exports slowing in tandem with growth there suffering as a result.
(3) where the liquidity boosting yen-carry trade unwinds. Everything has been rosy over the past few years because of the yen-carry trade. Borrow yen at ultra low rates, swap it into any other currency (selling yen in the process whch explains the JPY's weakness) with interest rates above 4% and make a minimum fat spread of 400 bps - wa la! a no brainer. And of course, better still, use the 0.1% yen borrowing cost to invest in not only currencies but other assets like the stock market and properties. But what happens when this yen carry unwinds? Of course the total opposite - sharp decline in asset prices. People have spoken about higher yen interest rates or lower non-japanses rates as the trigger for such an unwinding of yen-carries. With everybody super long on this yen-carry, I believe it will only take a rush to the exit when (1) & (2) spooks the market as the risk of a global slowdown increases.
(4) Bird flu - in the market this is called a "low probability, high impact" event. I think its now a "moderate probability, high impact" event.
I give event (1), (2) & (3) a 70% chance of happening over the next 24 months. I believe that "what goes up, must come down" albeit not necessarily to its starting point (which is still an uptrend overall). My take is that we'll see a 1/3 to 1/2 retracement in asset prices depending on how much such assets have risen over the past few years. Singapore properties might not be hit as bad as other countries given the relatively less price increases seen here.
I give (4) a 40% possibility of happening within the next 5 years.
So Singapore's property market is safe if we look within the confines of Singapore itself. But when you look at the broader picture, I am not too sure...
My 2 cents worth