Property prices in Singapore expected to remain flat this year
The privately owned property market in Singapore saw prices remain largely flat in July compared with the previous month, according to the latest NUS Singapore Residential Price Index (SRPI).
The index gained just 0.2% overall from June and analysts said it is mainly due to global uncertainty over the slowing of the United States economy and the eurozone debt crisis.
Colin Tan, head of Research and Consultancy for Chesterton Suntec International, said that as long as this uncertainty persists, private home resale prices would likely remain flat over the next month or so.
Excluding small units with a floor area of 506 square feet or below, the index for properties in the central area was down 1.3%, while non central properties showed a 1.2% increase. The index for small units was up 1.4% from June.
The SRPI, compiled by the NUS Institute of Real Estate Studies covers completed non landed properties in the central and non central regions on a month on month basis.
‘The Asia-Pacific region, including Singapore, remains on track for continued growth and can weather a global slowdown,’ said Ong Kah Seng, senior manager at Cushman & Wakefield for Asia-Pacific.
He added that Singapore, like Hong Kong, is in the ‘high risk range’ when it comes to its vulnerability to the economic crisis in the West but home buyers can expect to see a 10 to 15% capital appreciation on their properties over the next five years.
‘If you are looking at the nearer term, property prices here will generally remain fairly flat in the next year, with the potential for some downward adjustment,’ he explained.
‘But there is always underlying demand stemming from individuals looking at upgrading or for investment, and opportunistic buyers may be quick to react to the lower housing prices, thereby pushing the market up again,’ he added.
Mark Teo, senior group division director at ERA Realty Network, said that while external factors affecting Singapore’s economy are important, what affects the property market most are the government’s policies and measures.
He pointed out that government investment in the development of the Marina South area, for example, has led to prices of several properties in the area skyrocketing. ‘The development became a global product that commands international pricing. Government policy in Singapore is very, very powerful, so make sure to track this especially if you are looking at properties for investment purposes,’ he added.
Catherine Tan, senior executive estates officer with the HDB, said that buyers need to ‘refer to transacted resale prices of comparable flats and not on cash over valuation in your negotiation so that they will not overpay’.