By Desmond Ng

THE showroom crowds have returned, the property advertisements are trickling in and there is a flurry of activity and a sense of haste in the property market.

The mood is decidedly more buoyant.

And the numbers are telling. Sales of private homes hit 3,144 in the first quarter of this year.

This is a 78 per cent increase compared with the 1,762 private homes sold in the fourth quarter of 2008, according to property consultancy DTZ Research in its analysis of caveats.

This includes both primary and secondary sales.

Most of this demand came from HDB upgraders who had been priced out of the market during the property boom in 2007, said DTZ.

Are these signs of a housing upturn? Or is this a small property bubble unsupported by fundamentals?

To find out, The New Paper spoke to a panel of property watchers, comprising Knight Frank's director of consultancy and research, Mr Nicholas Mak, Chesterton Suntec International's head of research and consultancy, Mr Colin Tan, and HSR Property Group's executive director, Mr Eric Cheng.

They focused on five signs which typically precede a property recovery.

DIAGNOSIS

Uncertainties in the US, volatile oil prices and a glut of new housing supply here next year suggests that it's far too early to say that the property market has bottomed out and is recovering.

1. ECONOMIC GROWTH

A booming economy translates into the creation of more jobs or more people with higher incomes.

This confidence will ultimately mean an increase in demand for residential, industrial and commercial properties.

Happened yet? No.

Singapore's full-year economic growth forecast was revised dramatically downwards by the Government in April - the third such change in less than four months.

The Government now expects our GDP (gross domestic product) to shrink between 6 and 9 per cent this year, instead of the 2 to 5 per cent contraction forecast previously.

2. STOCK MARKET RALLY

The stock market is a barometer of investment sentiments where people expect that the economy will recover in the future.

Stockbrokers and analysts do projections and if they see early signs that the economy is doing well, they will buy into the stock market.

The stock market typically leads the property market by four to eight months.

Happened yet? Sort of.

The stock market has had its best monthly performance since at least 1999, with the Straits Times Index (STI) surging 21 per cent last month to its highest level in nearly eight months.

The STI has been close to 2,400 in recent days, its highest level since last October.

But analysts warned that this could be an unsustainable rally in a bear market.

3. MARKET FRENZY

Confident developers are launching their projects, the newspapers are thick with property advertisements and there's an increase in property transactions.

Happened yet? Yes.

Sales of homes are up and people are buying either in anticipation of a price increase or a fear that they'll miss the boat.

4. COE INCREASE

Better sentiments and more confidence in the economy means that people are more willing to spend on another big ticket item - cars.

Happened yet? Sort of.

COE premiums climbed to an eight-month high last week - back to levels seen when the global financial meltdown started to gain momentum in October.

For example, the COE price for cars up to 1,600cc closed at $11,690 last week, substantially higher than the $5,000 average during the first four months of this year.

But this increase could be due to a sharp 24 per cent cut in COE quota from April this year.

5. MORE FOREIGNERS

An increase in foreigners investing in properties here or more expatriates coming here to work creates more demand for homes.

This is an indication that things may be brightening up because companies usually hire expatriates only when the job market is getting hot.

Happened yet? No.

The recession blues have hit our expatriates. Though there are no official figures on the number of work passes being applied for or cancelled, recruitment firms have noted an increase in laid-off expats, according to a report in The Straits Times in March.

Some international schools polled also said that up to 20 per cent of their students have pulled out because their parents have lost their jobs in the downturn.

This article was first published in The New Paper.