After being through over 3 years of price declines, the recovery in Singapore private property market is imminent and looks set to carry on in 2018 – after a massive surge in the number of en bloc deals in Singapore last year in 2017, and a couple of record-breaking land sales under the Government Land Sales (GLS) programme.
While the recovery in Singapore private property prices looks promising, the surge isn’t rising at a rapid rate just yet.
Analysts have given their conservative thoughts and are expecting property prices to increase from 3% to as much as 15% in 2018 – with the resale market being the key driver to boost the total number of property transactions higher than what was recorded in 2017.
However, for the new launch sales, analysts mentioned that it is likely to maintain similar level as seen in 2017 as property developers look to manage their sales momentum in order to capitalize fully on the future price gains.
Some market watchers have cautioned that the property cooling measures are still mostly intact and have been adjusted significantly since 2013. Thus, it is unlikely that prices will spike at a massive rate similar to the past recoveries – for instance, a 38.2% increase in prices between the time period of mid-2009 to mid-2010.
The last noticeable tweak to the cooling measures was done in March 2017, when the government eased the existing Seller’s Stamp Duty (SSD) – reducing the holding period to 3 years and also the rates by 4% for each tier.
Savills Singapore has pointed that based on historical trends in the Singapore private property market, the rise in property prices has gone infer a period of 17.6 quarters on average. Therefore, there are still a couple more years before the upswing in property prices comes to an end – that’s if the current price is indeed at it’s lowest point.
Analysts have also noted that the projected supply of 20,000 new homes for sale in 2018 – 2019, built up from GLS and en bloc sites should help prevent a massive spike in property prices.
It was added that the collective sale or en bloc fever may ease off eventually as property developers will eventually be satisfied with what they have acquired for their land banks and will be more conservative with their offers. Thus, it won’t come as a surprise if there are more collective sales sites available for sale than the number of developers who have not fill up their land banks.