THE property market has made a dramatic recovery over the past year. In the residential sector, prices of mass-market homes have even surpassed their 2007 peak. Expectations are running high that some time this year too the luxury segment will touch 2007 record highs.
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Things are also picking up in the office market, which has seen a flurry of leasing activity since Q4 last year. Demand has already turned positive and there are even predictions in some quarters of a 30 per cent increase in Grade A office rentals this year.
However, one should not get carried away. The authorities in many parts of Asia are already keeping a watchful eye on asset bubbles building from hot money flowing into real estate. Liquidity and low interest rates remain the key fuel of the property upturn.
The question on everyone’s mind is whether this recovery can be sustained. A lot depends on how well Singapore and the rest of the world perform. Sovereign debt default concerns in several European countries continue to stoke worries about a double-dip recession. Closer to home, the drive towards higher labour productivity could give rise to job insecurity and dampen demand from house hunters.
2010 sees the completion of several major landmark projects here – including the Marina Bay Financial Centre and the Marina Bay Sands and Resorts World Sentosa integrated resorts.
The two IRs are expected to boost Singapore’s tourism numbers, which should generate multipliers for the broader economy. That will be positive for the Singapore property market.
Many property industry players have long been pinning their hopes on the IRs drawing high-rollers into town who will be impressed with Singapore and want to invest in property here. Singapore will also be on the radar screens of overseas investors if the IRs are successful.
Domestically, though, affordability remains a key concern, especially in the mass-market housing segment. A substantial interest rate increase could also hit price-sensitive buyers.
The Singapore government for its part has come up with a few measures to weed out speculators from the housing market. It also has the option of increasing land supply.
The following posts will hopefully guide you through the Singapore property market. I leave you with the timeless advice of property market doyen Kwek Leng Beng: Always buy within your means and remember that property is a mid to long-term investment.
Source : Business Times – 25 Mar 2010
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