Property market outlook remains positive amid price declines
Singapore's property market outlook remains positive in the longer term, even as residential prices are expected to decline by 10 to 15 percent over the next two years, said industry watchers at the Real Estate Developers' Association of Singapore (Redas) property market update seminar as reported in the media.
Moreover, they noted that there is no pressing need for the government to lift its property cooling measures now, given that global interest rates are set to increase only next year.
Song Seng Wun, Executive Director and Regional Economist at CIMB Research, said, "There is no shortage of liquidity now, which is an issue, because everyone is waiting for that 10-15 percent decline in property prices."
In fact, a lot of liquidity in Asia is now waiting on the sidelines, he said.
This is what keeps the government from relaxing its property cooling curbs before the US Federal Reserve increases interest rates. However, Song believes that the Fed hike may arrive sooner than expected considering the positive economic data in the US recently.
With this, property developers will have to deal with dropping residential prices as well as increasing land costs, which was the result of the reduced residential land supply in the second half of the Government Land Sales (GLS) programme.
Muneerah Bee, Senior Journalist at PropertyGuru, edited this story. To contact her about this or other stories email muneerah@propertyguru.com.sg
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