CONDITION OF THE RESIDENTIAL PROPERTY MARKET AND FACTORS AFFECTING IT (1986-1992)

Abstract

The period 1986 to 1989 witnessed the revival of the private residential market from its trough in 1986. Throughout this period, the market has undergone periods of consolidation, as oversupply is gradually taken up, uncertainty due to the stock market crash, mini-boom due to speculation and investment, and stabilisation as more supply is completed and further boom when expectation diminishes. The author attempts to give a detail account of the above events, and also covers the major contributing factors that resulted in this revival. The factors are used to project the market condition in the immediate future (1989-1992) to determine whether they will still be as dominating and as effective as before. Some new factors are also introduced. Based on the study, it was discovered that most of the factors are subsidiary ones that `thrive’ on a few underlying or fundamental factors. The latter factors help to determine market confidence while the former ones generate market expectation. The combined effect of these two, confidence and expectation, provide the impetus during the upward trend and also largely determine the fate of any future market condition. Factors are dynamic in nature. But, at any point of time, their effect can be interpreted as the two vital forces that drive the property market in the direction that is proportional to their impact.