The property market in Singapore

Residential values have weakened in a challenging real estate market.

8 April 2014, Words by Lucy Greenwood


Like Hong Kong, cooling measures have had an impact 
on Singapore’s residential markets. New home sales volumes were down 37% in 2013, while the 
resale market was hit even harder, with volumes down 51%. With developers and vendors holding stock rather than accepting price cuts, residential capital values grew by just 0.4% in H2 2013. The Additional Buyer’s Stamp Duty has proved an effective measure in slowing the market.

Rental values fell by 0.3% in the final half of 2013. The rental market faces challenges in the coming 
year as the overseas workforce 
is tightened. Applications for Employment Passes are expected to become more difficult when a new policy requiring jobs to be advertised to locals first comes into effect in August. Consequently, Singapore’s rental market is turning in favour of tenants, a trend likely to be magnified by an anticipated stream of new supply coming to the market.

Nonetheless, the city-state’s fundamentals should see it win out over the long term. In the office market, rents are up and occupancy rates are rising. Singapore ranks highly for infrastructure, business environment and governance, as well as international reputation. The government has unveiled a city masterplan with bold proposals for three new districts and a new town.

It is this kind of proactive management that will underpin the real estate market going forward. We believe Singapore still offers potential to investors looking for a stake in Asia in the longer term.


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