{"id":75055,"date":"2017-12-21T03:00:51","date_gmt":"2017-12-20T20:00:51","guid":{"rendered":"http:\/\/www.siamlandbank.com\/propertynews\/property-news\/singapore-property-market-looking-up-for-2018\/"},"modified":"2017-12-21T16:03:13","modified_gmt":"2017-12-21T09:03:13","slug":"singapore-property-market-looking-up-for-2018","status":"publish","type":"post","link":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/singapore-property-market-looking-up-for-2018\/","title":{"rendered":"Singapore property market looking up for 2018"},"content":{"rendered":"


\n\u00a0Luxury apartments in Singapore.\u00a0\u00a0\u00a0
\nGiven the higher land prices and anticipated market recovery, new private home prices will likely be higher in 2018.
\nBy Elizabeth Choong
\nThe private residential market is widely expected to perform better in\u00a02018\u00a0due to improved consumer sentiments. According to\u00a0PropertyGuru\u2019s\u00a0latest Consumer Sentiment Survey,\u00a0many\u00a0potential buyers are looking to make their purchase in the next few months driven by the strengthening property market.\u00a0\u00a0
\nWhat are the factors\u00a0driving this improved sentiment and is\u00a0there any merit to it?\u00a0
\nAfter languishing in the doldrums for\u00a0the last\u00a0two years,\u00a0Singapore\u2019s economy\u00a0has\u00a0improved significantly. GDP grew\u00a0by 4.6 percent\u00a0year-on-year (y-o-y) in Q3 2017, up from 2.9 percent\u00a0y-o-y in Q2 and 2.0 percent\u00a0y-o-y\u00a0in\u00a02016. The stellar performance\u00a0in Q3 2017\u00a0was due to\u00a0improvement\u00a0in\u00a0the manufacturing sector,\u00a0but a more broad-based growth\u00a0is expected as other sectors continue to strengthen and gain momentum.\u00a0\u00a0
\nThe Singapore government projected\u00a0that GDP\u00a0will grow\u00a0by\u00a03.0\u00a0percent\u00a0to 3.5\u00a0percent\u00a0for the whole of\u00a02017 and 1.5 percent to 3.5 percent\u00a0in 2018. In addition,\u00a0the unemployment rate fell from 2.2 percent\u00a0in Q2 2017 to 2.1 percent\u00a0in Q3 2017. The recovering\u00a0economy gives potential home\u00a0buyers\u00a0more confidence to go ahead with their purchase.\u00a0\u00a0
\nRecognising that\u00a0prices\u00a0in the private residential market have stabilised,\u00a0the government lowered the Seller\u2019s Stamp Duty (SSD) rate\u00a0in March 2017.\u00a0At the same time, the government\u00a0reduced the time frame when\u00a0SSD will apply from\u00a0four years from the\u00a0date of purchase to\u00a0three years.\u00a0The adjustment\u00a0in SSD\u00a0has\u00a0given\u00a0potential\u00a0investors more peace of mind and\u00a0confidence\u00a0because they\u00a0know that they\u00a0can sell their investment\u00a0property\u00a0earlier without incurring any stamp duty.\u00a0\u00a0
\nWhile the adjustments in\u00a0SSD did not inspire a flood of buyers to the private residential market, it certainly gave the market a\u00a0significant\u00a0boost. The number of transactions in the primary market has seen a vast improvement in\u00a02017. For the first 11\u00a0months\u00a0of 2017, the Urban Redevelopment Authority (URA) reported that 11,127\u00a0brand new units were sold,\u00a0far\u00a0surpassing the 7,972 and 7,440\u00a0units\u00a0sold during 2016 and\u00a02015\u00a0respectively.\u00a0
\nPrimary market sales\u00a0for 2017\u00a0crossed\u00a0the 10,000 mark for the first time since 2013; a strong indication that the\u00a0demand for private\u00a0residential units\u00a0is\u00a0definitely picking up and the market is\u00a0well on its way to recovery.\u00a0In addition, the unsold inventory level\u00a0is at\u00a0a historic low of 17,000 units. Assuming that transaction volume is maintained at about 11,000 units per year, all\u00a0currently unsold\u00a0units\u00a0are likely to\u00a0find owners before\u00a0the end of\u00a02019.<\/p>\n

The active\u00a0en\u00a0bloc\u00a0sales market has given\u00a0a\u00a0significant\u00a0boost to consumer sentiment and\u00a0demand.\u00a0In 2017, some 20 developments comprising over 3,000 units were sold via collective sales; far surpassing the total in the previous few years.\u00a0Many\u00a0of the 3,000\u00a0displaced\u00a0households\u00a0from the on-going\u00a0en\u00a0bloc sales\u00a0will have to buy a replacement property.\u00a0These displaced households are likely to look to the resale private residential market to fulfil\u00a0their immediate housing needs. Their small windfall from the\u00a0en\u00a0bloc sale\u00a0also\u00a0means that they\u00a0have\u00a0more than\u00a0adequate\u00a0funds to finance\u00a0their new\u00a0home.\u00a0
\nThere are two main factors driving the\u00a0current\u00a0vibrant\u00a0en\u00a0bloc market. Firstly, the government tapered the\u00a0number of land parcels\u00a0launched for tender under the Government Land Sales (GLS) programme during the past few years.\u00a0Secondly, many developers\u00a0are slowly running out of land\u00a0to develop and available inventory to sell. With less land\u00a0available\u00a0from GLS,\u00a0developers have to turn\u00a0to the\u00a0en\u00a0bloc market to obtain land despite it being a more\u00a0long drawn and complex process. However, developers have little\u00a0choice because they need to\u00a0replenish their depleting land bank.\u00a0\u00a0
\nThe aggressive bids by developers for residential land also mean that\u00a0the\u00a0breakeven cost\u00a0for these projects will be higher. As such, residential prices can only go up in the near future. This fear that prices will increase\u00a0even\u00a0further has encouraged many buyers,\u00a0who were\u00a0sitting on the fence,\u00a0to finally take the plunge.\u00a0\u00a0
\nIn fact, prices have already started moving upwards because\u00a0some\u00a0sellers and developers have started to\u00a0price\u00a0the anticipated increase into their\u00a0asking prices.\u00a0This is clearly seen in the\u00a0PropertyGuru\u00a0Property Index (Singapore, Price), which showed a 1.6 percent\u00a0y-o-y increase in Q3\u00a02017\u00a0(refer to\u00a0Figure 1).\u00a0At the same time, the URA price index finally showed an increase in Q3 2017 after 16 consecutive quarters of decline.\u00a0This upturn cycle for private residential property prices\u00a0is expected to be more sustainable and less speculative\u00a0because it is supported by\u00a0a\u00a0stronger economy\u00a0and\u00a0genuine\u00a0demand.
\nHowever, it is not all rosy.\u00a0In December 2017, the Monetary Authority of Singapore (MAS) warned of \u201cexcessive exuberance\u201d in the\u00a0property market arising from\u00a0increasing land prices and the upcoming supply of some 20,000 units from recently sold land parcels from GLS\u00a0and collective sales.\u00a0In addition, the government\u00a0has kept the\u00a0supply of land via GLS for\u00a0H1 2018\u00a0at the same level as H2 2017.\u00a0Taking into account\u00a0the still cautious stance of the government, it is\u00a0unlikely\u00a0for the government to\u00a0ease any\u00a0cooling measures in the near future.\u00a0
\nAdditionally, interest rates for mortgage\u00a0loans are on a gradual upward climb.\u00a0The three-month SIBOR had been\u00a0under 1.0 percent\u00a0since July\u00a02016,\u00a0but\u00a0has been\u00a0above 1.0 percent\u00a0since August\u00a02017. As at December 2017, the rate has hovered around\u00a01.2 percent. The\u00a0rise in interest rates\u00a0will push up the\u00a0amount of mortgage payable each month and thus\u00a0negatively\u00a0impact\u00a0home\u00a0buyers\u2019\u00a0ability to afford a\u00a0home.\u00a0
\nFor some home\u00a0buyers,\u00a0the higher mortgage payments may\u00a0bar them from making their purchase\u00a0because they are unable to fulfil the\u00a0Total Debt Servicing Ratio (TDSR)\u00a0requirements. Investors, especially those with multiple investment\u00a0properties,\u00a0may become overleveraged especially since\u00a0rentals for private residential properties remains weak.\u00a0\u00a0
\n\u00a0
\nThe URA rental index for non-landed private residential properties indicates that rents are\u00a0still declining albeit at a\u00a0slower pace.\u00a0The vacancy rate is about\u00a08.4 percent\u00a0for condominiums\u00a0(refer to\u00a0Figure 3). It is clearly\u00a0still\u00a0a tenant\u2019s market\u00a0with numerous available units.\u00a0Bearing in mind the tight control over the number of foreign workers allowed into Singapore, rental demand for private residential\u00a0units\u00a0is likely to remain weak.\u00a0As such, investors must have\u00a0enough funds\u00a0to keep paying\u00a0their\u00a0monthly\u00a0mortgage\u00a0even if there is no rental income\u00a0for several months.\u00a0In addition, the keen\u00a0competition for tenants\u00a0is expected to continue putting\u00a0downward pressure on rents.\u00a0
\nSo,\u00a0is 2018\u00a0an appropriate time\u00a0to buy\u00a0private residential properties\u00a0in Singapore? The answer is yes, especially for owner-occupiers. Prices have moved up but the increase is slight. In general, prices are still low\u00a0compared to the peak years.\u00a0Additionally, prices are expected to increase further in the next\u00a0few\u00a0years, fuelled by the strengthening\u00a0economy and improving demand. Interest rates are still low despite recent\u00a0upward movements.\u00a0However, owner-occupiers\u00a0still\u00a0have to do their sums carefully and take into account the increasing interest rates.\u00a0Investors\u00a0have\u00a0to ensure that they have sufficient funds to ride out\u00a0the still weak rental market.\u00a0\u00a0<\/p>\n

\u00a0<\/p>\n

\u00a0<\/p>\n

\u00a0<\/p>\n

\u00a0
\nThis article was first published in the print version PropertyGuru News & Views. Download PDFs of full print issues or read more stories now!<\/p>\n


\n
\nSource : proppertyguru.com.sg\/Property Market
\nRead more…Singapore property market looking up for 2018<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

\u00a0Luxury apartments in Singapore.\u00a0\u00a0\u00a0 Given the higher land prices and anticipated market recovery, new private...<\/p>\n","protected":false},"author":1,"featured_media":75056,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[1],"tags":[],"class_list":["post-75055","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-property-news"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/www.siamlandbank.com\/propertynews\/wp-content\/uploads\/2017\/12\/Guru-View-1024x281.jpg?fit=1024%2C281&ssl=1","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p75ss1-jwz","jetpack-related-posts":[{"id":76090,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/singapores-unsold-units-at-seven-year-low-in-q3-2017\/","url_meta":{"origin":75055,"position":0},"title":"Singapore\u2019s unsold units at seven-year low in Q3 2017","date":"January 9, 2018","format":false,"excerpt":"\r With the improved buyer sentiment over the recent months, unsold home inventory in Singapore fell to a seven-year low at 16,031 units during the third quarter of 2017, reported Singapore Business Review citing Jefferies Singapore Limited. Total transactions volumes, on the other hand, rose 54 percent year-on-year in the\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":32797,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/luxury-home-prices-see-marginal-rise-in-q3\/","url_meta":{"origin":75055,"position":1},"title":"Luxury home prices see marginal rise in Q3","date":"November 3, 2016","format":false,"excerpt":"\r Luxury homes here have seen only minimal price growth in the last quarter. Singapore\u2019s luxury home prices grew by only 0.5 percent quarter-on-quarter in Q3 2016, according to a JLL report. The city-state joins 17 other cities tracked by JLL, which saw their rate of price growth decline from\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":72743,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/home-sellers-raising-their-prices-by-4-in-some-areas-propertyguru-index\/","url_meta":{"origin":75055,"position":2},"title":"Home sellers raising their prices by 4% in some areas: PropertyGuru Index","date":"November 24, 2017","format":false,"excerpt":"\r The CBD and its surrounding areas saw the highest increase in asking prices. Home sellers are already starting to price their units higher following recent signs of a property market recovery in Singapore. This according to the PropertyGuru Property Index launched on Thursday (23 November), which shows a 3.2\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":111882,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/private-home-prices-hdb-resale-prices-up-in-q3-2019\/","url_meta":{"origin":75055,"position":3},"title":"Private home prices, HDB resale prices up in Q3 2019","date":"October 25, 2019","format":false,"excerpt":"\r Meanwhile, buyer demand for\u00a0HDB resale flats has remained surprisingly resilient, with 6,264 resale flats changing hands, which is almost on par with the 6,276 units transacted in Q2 2019. Despite rising global uncertainties, the impact of additional cooling measures and lukewarm consumer sentiment, Singapore\u2019s real estate market continued to\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"https:\/\/i2.wp.com\/www.siamlandbank.com\/propertynews\/wp-content\/uploads\/2019\/10\/ura-property-price-index-q3-2019-singapore.png?fit=550%2C283&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":70842,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/landed-home-sales-surge-as-prices-drop-to-attractive-levels\/","url_meta":{"origin":75055,"position":4},"title":"Landed home sales surge as prices drop to attractive levels","date":"November 3, 2017","format":false,"excerpt":"\r The ongoing recovery in the housing market saw landed home sales surge in the first 10 months of 2017 as landed property prices fell to attractive levels from their Q3 2013 peak, reported Business Times. Between January and October, the number of landed homes sold stood at 1,513 units,\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":100646,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/private-home-prices-rise-at-a-much-slower-pace-in-q3\/","url_meta":{"origin":75055,"position":5},"title":"Private home prices rise at a much slower pace in Q3","date":"October 29, 2018","format":false,"excerpt":"\r The URA\u2019s price index rose 0.5% in Q3, compared with the 3.4% increase in the quarter before. Private residential property prices grew at a much slower pace in the third quarter of 2018 as the government\u2019s latest round of property cooling measures in July took their toll. The Urban\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/75055"}],"collection":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/comments?post=75055"}],"version-history":[{"count":0,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/75055\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/media\/75056"}],"wp:attachment":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/media?parent=75055"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/categories?post=75055"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/tags?post=75055"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}