What does the future hold for Singapore’s property market?
According to a recent Savills report, the outlook remains challenging for the rest of 2014, and this is expected to continue over the next six years.
The report looked at how 12 world cities would perform in 2020 and gave a tough assessment of Singapore.
Although the office sector is still robust with rents increasing by 7.3 percent in the first six months of 2014, the residential market has slowed with values and rents dropping by 4.2 percent and 3.5 percent respectively during the period.
This is due to the government’s cooling measures which are continuing to put pressure on the city-state’s prime residential market.
Savills added: “Market controls are set to be a feature of Singapore over the coming years as it battles market affordability in a bid to remain competitive on the global stage.”
One factor that puts Singapore at a disadvantage is its restricted land supply, which is at odds with the increasing wealth and growing workforce.
Lower value industries may have to relocate across the causeway, where land, property and wages are cheaper.
At the same time, Singapore risks becoming more rarefied or distant from the lives and concerns of ordinary people, with Singaporeans protected by government access to housing.
Meanwhile, employers will face more difficulty in attracting and retaining young talent from overseas due to the high real estate costs.
On a positive note, Singapore’s high-tech infrastructure and proximity to some of Asia’s key growth markets will see it progressing as a world leader in business.
In fact, the World Bank has ranked Singapore as number one for ease of doing business.
The city-state also has a strong reputation in the biotech and energy sector.