Mixed prospects for Singapore property market.
The property cooling measures in July last year had a greater impact than five years earlier when the total debt servicing ratio (TDSR) loan framework came into effect in June 2013, says Alan Cheong, senior director and head of research for Savills Singapore. “By end 4Q2018, private home prices were down 4%, compared to 2% in 4Q2013.”
Cheong was speaking on the residential market at the annual Built Environment and Property Prospects Seminar, jointly organised by the Building and Construction Authority (BCA) and the Real Estate Developers Association of Singapore (REDAS) on Jan 14.
“The luxury market was relatively less affected by the cooling measures, as foreign buyers now see the higher ABSD [additional buyer’s stamp duty] as part of the entry price for a good valued investment in a stable market,” says Regina Lim, JLL’s head of capital markets research for Southeast Asia. More foreign buyers are picking up bigger ticket properties in the $7 million to $10 million range — a sign that they are buying for their own use, she adds, unlike in the past, when they purchased smaller units as investment properties.
The government’s change in minimum average unit size from 70 sq m to 85 sq m for non-Central Areas announced last October, will mean that developers will have to “suffer some price psf decline if they do not want to push up the ticket price of the units,” she adds.
However, demand for private homes may not fall off as steeply, observes Savills’ Cheong. “Those who started work in the 1970s to 1990s have acquired enough wealth over the past decade,” he says. “They are now using their savings to help their children buy property.”