Businesses in real estate render highly lucrative returns given the incessant demands in housing sector on account of the ever increasing population numbers today. However, Singapore is presenting a different kind of scenario to view. Despite an upsurge in private property prices in the second quarter of this financial year, the take-up rates for houses remain low. This is a cause for worry which needs to be addressed according to Chia Ngiang Hong, president of the Real Estate Developers Association Singapore.
What does the statistics say?
Statistics reveal that towards the end of the second quarter of this year, among 54,000 private condominiums or apartments that were under construction, there were approximately 35,000 units that were still on the shelves. With more units possibly coming from Government Land Sales and successful EnBloc Sales. According to the president’s estimation if we go by the current rates of sale, likely it will take up to 5 years for the real estate market to clear this batch of upcoming new launch, which is clearly a worrisome picture. The heightened US-China trade tensions and the geo-political and economic environment of the Singapore could make it even more challenging for the real estate market. The Government however has been apprised of the challenges ahead and is alleged to have assured the real estate developers that it shall observe and manage the market cautiously in line with the economic fundamentals of the country.
Further, real estate investment deals are maintaining their steady pace. Both demand and rental for office space has shown to be stable.
Things might appear a bit gloomy for the retail scene as there is stiff competition from the E-commerce industry due to intense competition posed by e-commerce. Tighter restriction on foreign manpower employment has also led to a shortage of manpower and this makes it even more challenging for several industries especially both the retail and F&B industry. Retail malls are making more efforts to attract more shoppers by improving on their digital marketing strategy.
On the brighter side, both the real estate developers as well as the government has acknowledged that a lot has to be done to regain the citizens’ confidence in the infrastructure of the country and towards that end quality upliftment initiatives are being carried out.