As per the recent updates from Fitch Solutions Macro Research, the residential, as well as non-residential building sector in Singapore, is expected to rise by 3.2 percent in 2019 and 2.3 percent in the year 2020. This hike in the real estate sector is actually supported by the strong pipeline of several well-planned projects in the area.
However, the firm also revealed that there are some uncertainties related to this rise due to US-China trade issues and due to the expected recession in coming quarters.
According to the stats presented by Fitch, the residential buildings are expected to have higher growth; probably 3.2% in 2019 and 1.5% in 2020. It is important to mention that as per previous forecasts; the residential sector was expected to shrink by 0.7% and 0.8% in these years respectively.
With this expected improvement in the residential sector, the construction activity will also increase by a considerable level. Reports reveal that almost $9 billion public and private residential building projects were awarded in the year 2018; however, it was limited to $4.8 billion in case of industrial and commercial contracts.
The government at present is in the favour of new build-in-order public residential building projects. Almost 6 such projects were launched in early 2019, and five more might be announced by the end of this year. On the other side, if we talk about private residential sector, there was a considerable decline in planned and under construction residential units; however, a bounce-back was noted in the fourth quarter of 2017. It is expected to rise more by this year.
Also, the firm made a forecast showing a fall from 2.6% to 2.3% for the overall building sector in the year 2020. This drop may happen due to numbers of recently planned residential buildings and the latest cooling measures.
Fitch noted that downside risks are rising due to the fall in non-oil domestic exports observed in the month of March because the private consumption in Singapore is subdued for these resources.
As per a recent report, the Singapore economy may improve by 2.2% by the end of the year 2019, and at the same time, it warns that implementations of various tariffs on Chinese and US goods may pose some negative impact on the economy.
Note that, the recession in the US is going to affect the global market, and the impact will be seen in Singapore economy as well.
Hence, while experts are expecting slight growth in the real estate market, on the other side, they are also worried about the slight slowdown in demand. The business confidence may fall for both residential and non-residential buildings in the area.
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