Demand remains buoyant in Singapore’s property market
Market watchers mentioned that with the pricier transactions, an increasing number of city fringe projects are now selling at prices that are similar to those in the Core Central Region (CCR)
The demand for properties in Singapore is picking up as the effect of cooling measures has seemingly worn off.
Analysts noted that it’s mostly home buyers who are driving that demand in the market rather than property investors.
In addition, real estate developers have remained bullish by launching new projects to capitalize on the pent-up demand.
Tighter loan limits and higher taxes have cool the property market in the first quarter of this year.
As a result, overall transaction volumes fell by about a third on quarter, the lowest level since the circuit breaker period.
Analysts said that the effect of the new round of cutting measures implemented in December 2021 was felt at the start of 2022 as home buyers begin taking a “wait and see” approach.
However, it is important to look into various segments within the property market.
For mass market projects, the impact has been minimal. The millennium buyers remain a driving force and there is an inter-generational transfer of wealth.
Industry observers say cooling measures only affected property investors, but not genuine home buyers looking for a place to live.
By and large, especially for Singapore citizens or even permanent residents who are going to buy their first home, they will be well protected as they are guarded in the sense that prices are not going to be runaway anymore.
It is why the long-term impact on developers is still likely to be muted.
No rush for property developers
The truth is that property developers don’t have many units to sell in their inventory in the pipeline.
This is a key difference compared to the past cooling measures where developers are holding quite a bit of unsold condo units in Singapore.
In addition, developers’ balance sheets are also in a much better position at this point in time. Hence, there’s no rush for developers to cut their prices and clear their current inventory.
Even with property prices holding steady, demand seems to be coming back stronger.
It’s reflected in the sales for some recent launches like Piccadilly Grand.
More than 75 percent of units there were snapped up on its launch weekend.
Market watchers have also mentioned that sales volume for the year is likely to reach around 11,000 to 12,000 units amid slower overall launch activity, rising interest rates, and tighter financing rules.