(Click on the Technical Chart Above to Expand)
Point 1 and Point 2 in chart coincides with the entire Long Term 10-Year Cycle of an interest rate move. Alas, at the end of the one major down and one major up in the 10-year interest rate cycle, even elite property companies like CapitaLand have made one confirmation now: that the property markets' best days are over. We are at the sunset.
The next TP for CapitaLand is another -71% down to $0.86 in price. This follows standard price structure theory of first impulsive wave down, followed by symmetrical triangular consolidation lasting from 2009 to 2020, and a breakdown now. The breakdown of long term consolidation has been achieved now. The price actions of the property sector, and property stocks, could no longer perform overpar under both low interest rate and recovering higher rates which rose merely slowly from 2009 to 2020 -- an environment extremely conducive for property markets.
For property markets, if there is good high price, there is likely not much liquidity. The fact is that income and employment of the largest middle-class do not match up to the property inflation anymore. We call that a gap. There are just not enough good jobs or high paying jobs to match up to the properties. This is a phenomenon happening worldwide. This is why property stocks could no longer break up previous highs of 2008 no matter how conducive interest rate environments were.
The financial money game of phony artificially inflated assets is coming to an end worldwide, especially real estate, and especially in Asia, because there is not much greater fools within the greater fools' theory anymore; most greater fools had already been in, and even if fools wanted to play the game, the income and employment conditions (that gap) does not catch up to the game anymore. And despite banks being enabled worldwide to lend out unlimited cheap monies to the masses, the gap between income (and employment) and property prices of the largest middle class can no longer provide the volume to support the asset bloated eco-system.
Nobody, in their wildest dream, will ever believe property markets can keep going down against them. Classical conditioning has been deeply entrenched, and sheeps could be slaughtered. This then is where risk and danger is.