At the same time as high end luxury homes start to be introduced into the market, analysts are projecting that the second half of 2008 will be good for the Singapore market overall.
So far this year, investors have been disappointed by Singapore's sluggish property market. Due to much financial turbulence caused by the sub prime credit crunch in the United States, many buyers are starting to feel uncertain about investment in Singapore. That uncertainty, though, is expected to vanish by midyear. Domestic interest rates are incredibly low, just under 2%. Interest rates this low will gradually increase the demand for property.
This year's lethargic growth is in stark contrast to last year when developers sold more then 14,000 homes in the first half of 2007. Once the government put a stop to deferred payment schemes in October, new homes sales fell drastically to finish out the year. In January of 2008, property developers only managed to sell 396 homes. Fortunately, several factors are in the developer's favour for a return to demand as 2008 progresses. Singapore has an unemployment rate of only 1.6%. Because businesses are always looking to bring workers in from foreign countries, it won't be long before these expatriates help to drive demand up later this year.
In defiance of the current market numbers, some developers feel that Singapore's is ready to cater to exclusive clientele. One developer is set to offer two units that will sell for around $30 million. Others feel that this slow period is simply the market catching its breath. Office units and even hotels set record numbers last year, so there is no doubt that the market will return. Analysts are concerned that the sub prime lending crisis in the United States will continue to affect the U.S market well into 2009, but with Singapore doing everything in its power to inspire confidence, the property market should not be affected for long.
