2019 is most likely to be a year for unexpected turns in the residential property market of Singapore. Property prices which had escalated by almost 7 percent in the first six months this year have only risen by 3 percent since then. This may stay the same or dip lower in the coming year spelling good news for homeowners looking to make an investment in the new year.
2018 saw a whopping 10% rise in home prices and the Government had to add in restrictive measures by July to bring stability to the soaring numbers. Several aggressive land bids from developers for new and old areas in the early half of the year had caused the sudden inflation in market rates.
To protect Singapore from diving headlong into a property bubble, the Government had put in guidelines regarding size and number of apartments for the builders. Several taxes and anti-money laundering measures were introduced and a consensus on a median price for residential units in keeping with area prices was reached. All measures introduced by the Government have put several restrictions on developers and real estate businessmen since.
In its annual financial stability review released last month, the Monetary Authority of Singapore lauds the measures taken by the Government as an unchecked rise in property prices could have led Singapore into an economic crisis later.
Though this is good news for buyers, sellers do not look to the new year with much enthusiasm. They hope for the sake of their businesses, for a flat and unchanged market in 2019 but are preparing for a possible decline of up to 3 percent in property rates. Brokers believe the government is unlikely to add further restrictions in property laws in the coming year as the market seems to be already coming to a standstill.
However, that may not be the case. Earlier this month the government made public its plans for a slow release of land sales for residential use in the first half of 2019. It also announced it will intervene as and when it sees necessary to check the property market from facing undesired spiraling in either way. Builders are however worried that the government’s interventions may only increase developers’ costs and push away international investors in the process.
Private and public property prices have both come down in the last quarter of this year. This may be a cue to developers to rethink their strategies and timing for market launches. The stabilizing of property rates may lower aggressive land bidding in 2019. According to CBRE Group, the collective sales from 37 transactions that have happened so far this year estimates to a total of $10.8 billion. This may fall to one-tenth of the current value in the coming year if prices fall.
There is already a good number of public and private land tenders in the supply pipeline for the coming year. Developers are most likely to be cautious about making new bids in fear of the price dips in 2019.
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