Category Archives: Property Market / Real Estate

S’pore ranked outside top 5 for real estate prospects

Posted on 17 Dec 2015 | Comments Off on S’pore ranked outside top 5 for real estate prospects

Japan and Australia remain the favourite countries for real estate development and investment, according to the Emerging Trends in Real Estate Asia Pacific 2016 forecast jointly published by the Urban Land Institute (ULI) and PwC.

Tokyo, Sydney, Melbourne and Osaka took four of the top five spots for promising markets in the Asia Pacific. Ho Chi Minh City was rated fifth.

The study, which surveyed 343 real estate professionals, ranked Singapore eleventh for investment prospects and ninth for development out of 22 regional markets.

Specifically, it pointed to a slow residential market here, mainly due to government actions in 2013 to stem soaring home prices.

“Given the current sentiments of Singapore’s property market, we’re seeing local players becoming more involved at a regional and global level as they explore, increase and diversify investments into other major markets such as Japan and Australia,” said Yeow Chee Keong, Real Estate & Hospitality Leader, PwC Singapore.

He added: “The residential market will continue to hope for an increase in the level of transactions, and that will be dependent on whether there will be modifications made to the cooling measures.”

Despite the tepid enthusiasm, the Emerging Trends report noted that “Singapore is always a market where institutions are looking to buy,” adding that a number of major property purchases are expected to be completed before the end of 2015.

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Home prices would have risen by a third without cooling measures

Posted on 17 Dec 2015 | Comments Off on Home prices would have risen by a third without cooling measures

If the Singapore government had not introduced a series of cooling measures to control the growth of private home prices following the 2008 Global Financial Crisis, such properties would have been more expensive than the current norm by up to a third, revealed a study conducted by the Monetary Authority of Singapore (MAS), and reported by TODAYonline.

Similarly, the number of private housing deals and the volume of mortgages in the city-state would have risen by a similar level, added the MAS.

The central bank also discovered that tax measures, like the Seller’s Stamp Duty (SSD) and the Additional Buyer’s Stamp Duty (ABSD), had a more significant effect on prices and transaction levels as compared to land supply policies and lending curbs like the loan-to-value (LTV) ceiling and Total Debt Servicing Ratio (TDSR) framework.

“The SSD reduced sub-sales significantly, whereas the ABSD raised the hurdle rate of return for property investors.”

This has led to an exodus of foreign property buyers. In Q4 2011, the share of private residential purchases by this group peaked at nearly 20 percent, but it plummeted after the ABSD was implemented.

As a result, weaker buying activity has dragged down property prices and mortgage lending, noted the MAS.

Meanwhile, the soft drop in home prices signals that Singapore’s housing market is moving to a more sustainable state over time, said the central bank, signifying that the authorities will likely keep the cooling measures in place.

In Q3 2015, private residential prices declined by eight percent from its peak in the third quarter of 2013.

However, MAS is still on the lookout for signs of renewed activity in the market in light of the continuing high prices in particular areas, such as those in the Outside Central Region, where it is still 30 percent above levels seen before the 2008 global economic downturn.

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