The latest round of cooling measures has put a brake on property market with prices of non-landed private residential prices dipping by 0.2 percent and resale volume decreases by 35.3% in August 2018.
Prices in Outside Central Region (OCR) increase by 0.8%, while Core Central Region (CCR) and Rest of Central Region (RCR) prices decreased by 0.3% and 1.6% respectively.
On the other hand, the HDB resale market, which has remained stagnant for the past one year, recorded a 0.1% increase from the previous quarter.
According to real estate company Savills, Singapore’s current property market is not in bubble territory and neither is is expected to crash in response to the latest cooling measures.
In fact, revised pricing outlook for the primary residential market is still positive and prices are expected to increase by 10-12% in 2018 and 5-10% for 2019, says the global real estate services provider.
Given there is still a great deal of pent-up household liquidity in the market, Savills says property demand and prices will remain sustainable.
Amidst the controversy surrounding the ownership and “lease decay” of HDB flats, we expect prices of resale prices to dip slightly in the next quarter. HDB flat sellers who are in no urgent need to sell their flats may like to consider waiting for another six months when there will be more clarity in the market to put their flats on sale.
The strong public response at JadeScape’s launch last weekend may be indicative of the strong underlying demand for mass market homes from first time home buyers and HDB upgraders.
We expect prices of properties in the OCR to continue to grow in the next quarter by between 1 to 2% while prices in the CCR and RCR are likely to remain stagnant.
With interest rates at an all time low and household incomes continue to grow, especially among the top thirty percent of earners in Singapore, prices of private properties are likely to increase in the long term.
For first time home buyers and HDB upgraders, this is a good time to get into the market. For property investors, the present transaction costs are too high and you may like to consider investing in non-residential properties which are exempted from ABSD or overseas properties.