[Singapore] Real Estate Market Getting too Hot to Handle? Cooling Measures Might be Triggered
On 22 Jan 2021, Channel News Asia released 2 articles featuring the latest reports from HDB and URA. Despite the impacts of COVID-19 to the economy, HDB resale prices rose by 5% and the number of transactions by 4.4% in 2020, the steepest climb for both metrics since 2012. Even though private property prices did not perform as well as HDB resale prices, it still grew by an impressive 2.2%, amidst the raging effects of the pandemic.
Ms Christine Sun, Director, Senior Vice President of Research & Analytics at OrangeTee believes that the trend in HDB is a direct result of government aids. She said, "Large-scale Government support on multiple fronts has limited income loss and prevented massive unemployment among Singaporeans ... Some buyers were confident that they have the ability to service their housing loans and proceeded with their new home purchases."
Ms Wong Siew Ying, Head of Research and Content at PropNex, predicted that this trend would continue in 2021 and she believes that this is due to a rising supply of newer resale flats entering the market, which will help to stimulate demand and support prices.
On the contrary, the rental market did not enjoy the same fortune. It is reported that in 2020, rentals of private residential properties fell 0.6% versus 1.4% increase in 2019. While it is showing some signs of recovery in last quarter of 2020 (with a 0.1% increase after two consecutive quarters of decreases - a 1.2% decline in the second quarter and a 0.5 per cent drop in the third quarter), market conditions are more likely to create a negative trend.
All in all, 2021 looks like a promising year for the real estate market in Singapore and around the world. Ms Sun is quoted as saying, "Property markets around the world saw an unlikely boom during the worst economic fallout and health crisis in living memory... Property prices have been rising and the uptrend is widespread across many countries including the US, Canada, Europe, China, Australia, and Asia. In some advanced cities, prices have even exceeded pre-crisis levels".
According to PropNex CEO, Mr Ismail Gafoor, all stars are aligned for a bull year for Singapore's real estate market. "Many of the sales drivers – such as low interest rates, effective management of COVID-19, and economic recovery hopes - that fuelled the property market in 2020 will continue to spur buying interest this year," said Mr Gafoor.
However, it seems that the steam accumulated in Singapore's real estate market might be too hot to handle for the Singapore government. Officials from the Singapore government have been publicly saying that the government would keep a close watch on the property prices. This has sparked talks about the possibility of another round of cooling measures. The last round of cooling measures, ninth since 2009, was announced in 2018.
To read the full articles and watch the accompanying video, please follow the LINK 1 (HDB article) to LINK 2 (privater property article) on Channel News Asia's website. In view of this, if you are living ins Singapore, now is the best time to start growing your Real Estate Network and get yourself ready to ride this upcoming real estate wave before cooling measures kick in!