Singapore Property Rebound Just Starting as Prices Seen Jumping

Credit Suisse Group AG and Morgan Stanley are calling the end of Singapore’s property downturn, after a second consecutive quarterly increase in private residential prices.

Home prices may rise as much as 10 percent this year, according to analysts at Credit Suisse, while Morgan Stanley and OCBC Investment Research expect as much as an 8 percent increase, according to reports from the brokerage firms.

Private residential prices rose for a second straight quarter in the period ended Dec. 31, reinforcing signs that the city-state’s property market is emerging from a four-year slump. For 2017, prices rose 1 percent compared with a 3.1 percent decline in 2016, data from the Urban Redevelopment Authority showed.

Developer valuations remain attractive, according to Credit Suisse, whose top stock pick is UOL Group Ltd. due to its high exposure to Singapore and its residential market. UOL is also one of two developers cited by OCBC as having the best prospects. City Developments Ltd. is Morgan Stanley’s favorite, and also one of OCBC’s best picks.

Here’s what the analysts said about their outlook for Singapore property:

> Collective sales, or "en-bloc" deals, valued at S$8.3 billion ($6.2 billion) last year should continue to enhance the property market in 2018: Credit Suisse > Homes sales may increase 40% in 2018: Morgan Stanley
> Housing recovery will extend through 2019; potential government cooling measures pose risk but such moves may be premature as market is just two quarters into a recovery: Morgan Stanley
> Surge in home completions from 2021 could begin to dampen sentiment but prices could double by 2030: Morgan Stanley
> New home sales estimated at 12,000 to 15,000 units in 2018; rental prices to climb between 5% and 10% this year: OCBC