Mixed prospects for Singapore property market

/ EdgeProp
January 19, 2019 8:00 PM SGT
The property cooling measures in July last year had a greater impact than five years earlier when the total debt servicing ratio (TDSR) loan framework came into effect in June 2013, says Alan Cheong, senior director and head of research for Savills Singapore. “By end 4Q2018, private home prices were down 4%, compared to 2% in 4Q2013.”
Cheong was speaking on the residential market at the annual Built Environment and Property Prospects Seminar, jointly organised by the Building and Construction Authority (BCA) and the Real Estate Developers Association of Singapore (REDAS) on Jan 14.
From left: Lee Nai Jia, head of research Knight Frank Singapore; Alan Cheong, head of research and consultancy Savills Singapore; Regina Lim, head of capital markets research Southeast Asia JLL; Mark Lampard, head of regional
tenant representation Cushman & Wakefield; Boaz Boon, director of real estate advisory VestAsia Group (Picture: BCA/REDAS)
“The luxury market was relatively less affected by the cooling measures, as foreign buyers now see the higher ABSD [additional buyer’s stamp duty] as part of the entry price for a good valued investment in a stable market,” says Regina Lim, JLL’s head of capital markets research for Southeast Asia. More foreign buyers are picking up bigger ticket properties in the $7 million to $10 million range — a sign that they are buying for their own use, she adds, unlike in the past, when they purchased smaller units as investment properties.
About 60 new projects yielding 20,000 new units are in the pipeline for launch this year. However, 47% of the units are from six developments with over 1,000 units each, notes Savills’ Cheong.
Developers have to be “very tactical and strategic”, especially those who had purchased a lot of land over the last two years, says JLL’s Lim. “We are expecting annual demand to be about 8,000 units,” she adds. “But based on the sites that developers have bought, they would need to sell more than 8,000 units a year over the next five years.”
The government’s change in minimum average unit size from 70 sq m to 85 sq m for non-Central Areas...