The predictions concerning the private home market for the following 20 years is not that great, as prices are seen to considerably increase in the near future. If currently the price for a square foot, of a private property, is on average around $1,500, then by 2030 the prices are expected to range anywhere between $2,300 and $2,900.
What can trigger this massive difference?
Well, according to the forecasts released by DBS, the population of Singapore would be around 6.5 million in two decades from now. This means a demand for private homes that will be on a continuous rise. Besides this, the increasing incomes of homebuyers are also fueling this increase, as they are more than capable of meeting the demands of the rising prices. In other words, a homebuyer will be more than willing to pay the asking price of a property that is considered suitable and desirable. Thus, under these circumstances, a unit on the private property market will end up costing between $1.9 and $2.5 million.
Derek and Rachel Tan participated at making this report, which is based on the way the trends on the market are evolving. Also, besides the rising prices, the two predicted that the size of the private properties will shrink as well. Thus, if the average size last year was around 1,083 square feet, in 2030 this surface will shrink at just 840 square feet. This means that future homes will be 20% smaller than they are in present times. So, prices go up while the available space goes down, most certainly out of the desire to make room to more units in order to meet the demand. Of course, not everybody agrees with these projections, saying that there are much more optimistic than they should be. But, according to DBS, the number of transactions in the private homes sector will increase and will set a new average in the coming decade. So, it is expected for 13,000 to 16,000 units to be sold in the coming years, the average being somewhere around 12,000 to 13,500 homes.
But, as the Tans stated, the demand can be higher than this, as no one took into account the impact produced by the demand coming from foreigners. Concerning the average number of private units sold per year, its value hovered around 12,000 starting with 2001 and until 2017. So, the increases will be triggered by the group of HDB upgraders, new families that will form in the coming years, and foreigners that are looking to move to Singapore. But, is the country ready to face this demand? According to the local authorities, it is, since the Ministry of National Development adopted a new plan for land use that will provide all the space needed for the development of new units on a long term. Called the Master Plan 2030, an additional 3,000 hectares of land are prepared to cater to the creation of new residential units until 2030. But, there is a leap from the existing concept and what will actually happen in real life, as the achievement of all the predicted potential relies on how the social and economic factors will evolve.
So, if you are looking to get a home of your own, to upgrade your current lifestyle by moving to a bigger home, or invest in this property market niche, now is the time to do it. No matter how much you’d like it, prices for private homes will not drop at all in the coming years. On the contrary, they will rise significantly, so it is recommended to grab the current prices while they are still available, as the return on investment will be much more consistent in the following two decades if you do so.
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