Singapore Economy Ahead of Growth Expectations with 7.2% Rise in 2021


The recent stats from Singapore’s economy wrap-up show the fastest growth in the entire decade, even after the worse recession posed by the Covid-19 pandemic. As compared to the reports from the year 2010, the economy grew by almost 7.2% in the previous year; which is much higher than the estimates provided by the field experts, said Ministry of Trade and Industry (MTI), Singapore.

As per the predictions made by MTI in the month of November, it was expected that gross domestic product (GDP) in 2021 may grow by 7%, considering the top end of the prior estimates limited to 6%. The economy contracted by almost 5.4% in the year 2020 due to pandemic related crisis.

While addressing the public on New Year’s Eve recently, Lee Hsien Loong, Prime Minister, stated that the economy may grow by 3 to 5% in the year 2022 while reiterating the maiden forecasts made by MTI in the month of November 2021.

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Private Home Prices in Singapore Jumped by 10.6% in 2021, Underscoring Recently Implemented Cooling Measures

The private home prices in Singapore accelerated during the final quarter of the year 2021, with a considerable jump of 5% in comparison to the past three months, even after the recently implemented property cooling measures.

For the entire year, the prices of property surged to 10.6% and it is the highest annual growth reported after the year 2010 when prices climbed by 17.6%. Note that in the year 2020, prices improved only by 2.2%.

The estimates from Urban Redevelopment Authority (URA) reveal that the fourth quarter presented robust performance while extending gains for the 7th straight quarter. It happened after prices increased by 1.1% during the third quarter of the year 2021, 0.8% during the second quarter, and almost 3.3% during the first quarter.

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Shun Tak Holdings Calls off $557m Out of Collective Sale Deal

As per the recent reports, Shun Tak Holdings which is a listed company in Hongkong has withdrawn its enbloc deal with a leasehold private property named High Point just within one month after announcing its acquisition. The news updates show that Shun Tak has fortified the $1million tender deposit by now and it is probably the first company to suffer such a loss due to collective sales in the real estate market after the implication of the latest cooling measures from the government.

It is important to mention that Shun Tak, on December 9, announced about becoming a fully owned subsidiary with the new name – Shun Tak High Point, after successfully winning their bid on the High Point condominium with the estimated price range of $556.7 million.

This was the fifth successful property acquisition of the group within the past five years in Singapore. High Point is situated at the Prime District 9 and is situated along 30 Mount Elizabeth. The overall site area for this Singapore condominium is approximately 4,422.7 square metres with a maximum gross floor area of 21, 071.8 square metres.
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Property Cooling Measures Likely to Reduce the Risk of Self-Reinforcing Price Cycle

Although the Covid-19 pandemic has kept us in a state of uncertainty for the past several months, the Government has finally decided to implement modified cooling measures in the Singapore real estate market. The main goal of the agencies is to reduce the rising threat of the self-reinforcing price cycle that increases more often for housing board and private resale markets. As this price cycle leaves a considerable impact on the affordability of houses, Desmond Lee, Minister for National Development, has finally taken this decision.

If we look at the recent reports, the market shows clear upward momentum in the transaction volumes and prices, irrespective of the rising cases of the new Omnicron variant. Prices are running high, even beyond the economic fundamentals. This situation is likely to increase the chances of destabilizing correction and it may hurt several households.

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