Singapore to receive a boost in property markets

Recent developments within the Singapore economy and industry sectors could herald the return (and possibly rise) of the property markets.

As is often the case with any economy, sectors can either gain through the losses of other sectors, or they can gain on the back of a larger gain by other sectors. In the case of the Singapore property markets, both of these things have happened.

The former is expected to occur because of what has been going on with bond yields from the Singapore government. Bonds from the government are usually some of the strongest investments around because of their guaranteed interest nature, but the bonds in Singapore have been in a prolonged slump that is only expected to get worse in 2008. The average yield from a Singapore bond in 2008 is expected to be approximately two to three per cent. Compared to the expected minimum inflation rate of five per cent, that is not a very impressive yield amount.

In response to this announcement, many investors have already taken a look at alternative methods of investment and one of the sectors that is receiving the benefit of money being pulled out of bonds is the property sector.

Property and bonds have long had this relationship for the money of investors in Singapore and with bond yields expected to get worse over the coming time, analysts expect more domestic money to pour into property, giving the markets higher liquidity and more demand.

In addition to this, banks in Singapore have been very successful in expanding their credit services by large margins. This has increased their customer base and in turn given them very impressive earnings in the 2007 fiscal year.

Such behaviour is expected to continue into 2008 and if banks are able to continue expanding their credit services, the property market will benefit greatly as investors will have that money available to them.