Home prices may drop 8% in 2016

Posted on 17 Dec 2015 | Comments Off on Home prices may drop 8% in 2016

Prices of homes in Singapore could continue to slide next year and fall by up to eight percent, compared to a drop of about three percent in the first ten months of 2015, revealed JP Morgan in an AsiaOne report.

With declining residential values, consumer prices have steadily dropped in the past 12 months. This raises fears over deflation, which happens when the inflation rate decreases below zero percent.

“Overall, it makes for a fairly challenging outlook for domestic demand,” said Aditya Srinath, chief of ASEAN equity research at JP Morgan.

Nevertheless, the looming interest rate hike in the US could help some sectors of Singapore’s economy, but this could be offset by gloominess in China and weaker domestic consumption.

In addition, the city-state is experiencing a patch of slow growth as it’s not easy to transition an economy that was heavily reliant on foreign workers to one that is geared towards higher productivity, but with limited foreign manpower.

Given the situation, JP Morgan has taken a cautious view on investing in Singapore, rating the country as underweight for 2016, Srinath added.

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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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