Should You Buy Singapore Property in 2017?
According to experts of the industry, prices of residential properties are expected to start bottoming up in the quarters coming up. This points to a moderate recovery from the year 2018. However, the easing of the cooling measures that have been imposed by the government should not be expected until next year.
The recovery range is greatly dependent on macroeconomic factors as well as economic growth; however, the recovery is expected to correspond with the growth of the gross domestic product. Additionally, it would also be largely driven by the pickup in the market of prime residency.
Since 2009, the government has introduced a number of property cooling measures, the most important ones being the ABSD – Additional Buyer’s Stamp Duty and the TDSR – Total Debt Servicing Ratio. The government has also imposed loan curbs in the hopes of taming the overall market related to properties. In spite of numerous calls from real estate agents as well as developers to lift the measures, the government is still reluctant to take such an action.
When talking about the large market space, the growth in the demand for properties will remain slow while the price will experience gradual adjustments. One reason for this is the population control policy imposed by the government as well as the supply overhang of properties. The market for residential rent is also expected to remain soft.
Prices of the private houses in Singapore rose more than 60% as an aftermath of the global financial crises that took place in 2009 and these prices peaked until the third quarter of the year 2014. Since then, after the introduction of cooling measures, the prices of the properties have declined by 9.4%.
Regardless, experts of the industry do not expect the government to ease the cooling measures soon which means that the price of the properties is expected to bottom up further making it a good time for buyers to invest in Singapore.
While announcing the budget earlier this year the government stated that it had no plans of removing any of the cooling measures that it had imposed because it seemed like a prudent decision.
The government believes that removing the cooling measures would lead to the second round of price appreciation, more so than the one which took place in the first round. The news might not be good for property developers, investors, or agents. However in the long run, it is healthier and helpful for the country considering it seen by many as the perfect form of investment.
So is 2017 a good time to start looking?
When we asked property investors “Do you think it is a good time to buy properties now?” Most of the times they will say “No, the property prices will dropped further” or “The government will ease the property cooling measures soon, I will wait till that happens”. But when we asked do they have any evident or facts that support their decision. Unfortunately, we usually don’t get any, because most of the time we were lead by speculations or advice from the so-call experts or gurus. And alot of times is based on our “Guts Feelings”.
If now the number of transactions have increased along the years since 2014? Total number of transaction of new sale, sub sale and resale property were 12,998 units in 2014 but in 2015 the total units sold were 16,007 and it doesn’t stop there. In 2016 the total number of transaction were 18,829. It shown that the property market have stabilized, and property buyers are starting to enter the market. Especially when developers have lowered their price for most project.
Such as Forest Woods which launched recently in Oct 2016. Being the last residential plot within 5 mins walking distance to Serangoon MRT Station, it was launched at an average PSF of $1,400.00 and attracted a healthy sales of 337 units out of its 519 units during the first weekend of their launch.
In the following chart from URA shows that the property price has slide steadily along the years.
Take a look at all these News Articles that drop hints to you!
Sometimes we chose to hear and believe things that we were told where many a times is base on others’ judgement’ and ‘guts feeling’ without facts. And because of that we lost the most precious opportunity. Nobody can predict the bottom of the market. But after sliding downwards for so many years, the bottom shouldn’t be far. If you understand Singapore Real Estate, you will know no matter at which period you buy your property. The property cycle will always rebound higher than the previous peak. But you must remember that you should not over leverage yourself. That is why TDSR should and will stay.
The news have been reminding us “Decline in prices” or ” Signs of Bottoming Out” and “Stable returns of buyers”. What does these means? Maybe i should summaries as an equation below.
‘Lower in price’ + ‘High Demand’ = ?
If you are interested to start feeling the market and see what is available in 2017. You can see the following article.