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Singapore property prices to stay resilient?

Tuesday, June 19, 2012

If the latest report by Maybank is correct, then, the expected 20 to 30% decline in Singapore property prices over the next couple of years might not transpire. The expectation is now for a mere 10% decline in property prices over the next 18 months. This suggests that any dip in prices could see showflats packed with buyers again.


Related post:
Affordability of housing in Singapore.

4 comments:

Musicwhiz said...

Interesting fact is - I've now only heard of people around me (peers, colleagues, friends) who made money from property. So far, no one has lost money at all. Makes me feel like a complete idiot for not investing in property, and being conservative by not taking up leverage. But oh well, I just shrug to myself - perhaps everyone will indeed get rich through property and leverage; but I'd like to choose a different path.

As to whether prices can remain resilient, even the analysts don't know. They're just trying to make intelligent guesses.

Regards,
Musicwhiz

AK71 said...

Hi MW,

Investing in real estate in Singapore is still the fastest way to making that first million dollar for many.

Conditions are somewhat more uncertain now with government ramping up land sales and demand possibly cooling. However, the persistent low interest rates and Singapore's very open economy could see more money pouring into real estate here.

There would come a day when property prices suffer a larger than expected correction. This is my gut feeling. When is that going to happen? I don't know but it does not look like it is going to happen anytime soon.

Think of yourself as in a capital accumulation mode. When that huge correction in price comes, you would have a war chest ready. :)

AK71 said...

Singapore private residential property’s marginal 3Q12 price growth indicates developers may not be able to price aggressively amid homebuyers’ increasing resistance, but they also don’t need price-to-sell moves, says Chia Siew Chuin, director of research & advisory at Colliers International, in a note.

Although the QE3 announcement may give buyer sentiment a temporary boost, a Singapore property asset bubble isn’t likely, she says, citing increasing buyer resistance to record-high prices, the sizeable supply coming on-stream in the next few years and the likelihood the government will implement more measures if the market shows an “untoward” QE3 reaction.

“These factors should maintain some degree of stability and sustainability in Singapore’s residential market over the next 12 months. The impact of QE3 on the Singapore residential market is hence expected to be short-term and will probably peter out before the end of 2012. Thus, residential prices are expected to edge up by only 2%-3% in the next 12 months.”


Dow Jones & Co, Inc.
10 Oct 2012

AK71 said...

Singapore topped Hong Kong as the most desired place in the Asia-Pacific for so-called mobile millionaires to reside, with quality of life being cited as the main attraction, according to a RBC Wealth Management survey.

Almost a third of the millionaires in Asia who live, work or spend more than half their time outside their counties of origin prefer Singapore, while 24% chose Hong Kong, the second most popular in the region, RBC and The Economist Intelligence Unit said in a joint research report today.

Real estate led the list of preferred assets for internationally mobile wealthy according to the survey, which showed 23% of those in Singapore reporting a “high propensity” for property investment, compared with 7% in North America. The island’s home prices climbed to a record in the third quarter, prompting its government to restrict home loans and cap property development.

For mobile millionaires who moved to Singapore, 89% ranked quality of life as important followed by 83% ranking the country’s political stability as important, the survey showed. Infrastructure and educational opportunity were also cited for reasons to live there.

In the three months ended Sept. 30, the island’s private residential property price index rose 0.6% to a record 208.2 points, according to government data. In prime districts, apartment prices gained 0.2%, compared with the 1% increase in the suburbs.

The Monetary Authority of Singapore told lenders on Oct. 5 to restrict home-loan maturities “to curb continued upward pressure on residential property prices,” in an attempt to avert a housing bubble. The government said in September it plans to cap the number of homes that can be developed in suburban projects as it seeks to curb the increasing trend of so-called shoebox apartments.

RBC Wealth Management, part of Toronto-based Royal Bank of Canada, and EIU, a London-based unit of The Economist Group, surveyed 558 individuals who have at least $1 million of investable assets through June to October.


Bloomberg, 10 Dec 2012.

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