Increased sales strongly suggest that buyers are convinced property prices have bottomed, or are low enough for them to re-enter the market, writes EMILY ENG
GIVEN the recent euphoria in the residential market, it is no surprise that it has become a hot topic of discussion. Isn’t Singapore still in recession, people wonder. Unemployment is still high, with an estimated 116,600 jobless residents as at June this year.
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And while gross domestic product (GDP) forecasts have been revised upwards from an initial minus 9 per cent to the current minus 4 per cent, the ‘improvement’ is still a negative figure. But none of this has dampened the buoyant mood of buyers and the flurry of launches.
So what’s driving this burst of buying, and is speculation rampant? We take a look at the situation, with our focus on the upper-mid to high-end segment where prices average $1,500 per sq ft.
First, we compare the recent bullish market to the boom of 2007. Two years ago, the activity had started in the high-end segment, driven by foreigners eager to buy into Singapore due to the good job done promoting the city.
The buzz surrounding the two planned integrated resorts (IRs) helped boost Singapore’s appeal, leading to a record number of foreigners buying private property here.
This, coupled with pent-up demand, led the market to experience one of its most active years, with 14,811 new units sold during the year. Speculation quickly came into the picture, and the government abolished the deferred payment scheme to rein it in. But it was the global financial crisis that eventually brought the market to a standstill. Continue reading
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