As per recent updates from Singapore real estate market, the home buyers need to prepare themselves for facing a considerable hike in the price of private homes for the new properties in the area because almost 71% of the developers expect the unit price to go up in the coming six months. The poll conducted almost three months ago on this price expectation analysis reported that 60% of homeowners are in favor of price hikes.
A detailed real estate sentiment index survey was published recently by the National University of Singapore Real Estate, and it shows that as per the first-quarter survey of the year 2022, almost 24% of developers are looking forward to maintaining the prices for new launch at the same level; however, only 5% expect prices to stay at a lower level. The fourth-quarter poll from the year 2021 revealed that 35% of developers expected property prices to stay the same.
If we talk in terms of future sales and new launches, almost 65% of developers took part in the poll during the first quarter of the year 2022, and this survey indicates that a higher number of units will be brought to the market in the coming six months; however, only 15% predicted lower number of units. Furthermore, the considerable rise in the construction costs led to increased inflation with higher interest rates; they have now become two potential risk factors for the 95% of the senior executives working actively in the Singapore real estate hub.
The respondents during surveys indicated the global slowdown in the economy as a major risk factor. At the same time, 64% of the survey participants also pointed their fingers toward the tightening of liquidity and financing opportunities in the debt market. Although there was a slight decline in the 4th quarter of the year 2021, it was reported to be 32.6% during the 3rd quarter.
The government in Singapore is continuously making efforts to cool down the market conditions; the results may take time to reflect. As per the composite sentiment index presented by Resi Study, the derived indicator for real estate market sentiment improved considerably after the reopening of Singapore borders and adequate Covid-19 management measures. The reported hike was 6.1% during the first quarter of the year 2022, which is higher than the 5.4% rise observed during the fourth quarter of 2022.
It is important to mention that the rise in inflation can be disruptive for the market, the same as the cost of oil and some other raw materials. If banks keep on rising interest rates, people will find it more difficult to manage their debts and get new mortgage loans for buying property. Real estate is usually known to maintain a good hedge over inflation rates. The increased demands in the Singapore real estate market may further suppress the negativities caused by the pandemic and cooling measures posed by the government. In this way, interested local as well as foreign homebuyers may find better opportunities to get a new launch property in Singapore.
Learn more from the link below,
https://www.straitstimes.com/business/property/more-singapore-property-developers-expect-prices-of-new-launches-to-go-up-survey
