Navigating through turbulent times
The residential property market shows signs of bottoming out, with the transaction volume of private residential property rising 16% from 14,117 units in 2015 to 16,378 units in 2016. The price decline has also slowed to a modest pace of below 1% q-o-q last year. Recently, a positive note came in the form of a recalibration in the property cooling measures.
However, the market still faces mounting headwinds. The US Federal Reserve increased its benchmark rate by 0.25 percentage point on March 15, and the market expects two more Fed rate hikes this year. Meanwhile, the Ministry of Manpower highlighted in its latest labour market report that the resident unemployment rate rose to 3% in 2016, after holding steady at about 2.8% for four years.
In these turbulent times, join us at The Edge Property 360° on April 8 as our panel of experts give their views on the outlook for Singapore’s economy and property market. Dr Boaz Boon, former head of research at CapitaLand, founder and principal of THRED and director of Vestasia, will lead the panel discussion.
Suan Teck Kin, senior economist, global economics & markets research, UOB
Singapore’s economic growth rate has been trending down after the global financial crisis in 2008, leading to concerns about whether such a low-growth environment would be the “new normal”, and how the Committee on the Future Economy would lift Singapore to the next level. In this session, we will take stock of how Singapore’s economy has developed over the past five decades and consider, with the CFE, what the outlook for the country’s economy is, as well as the bright spots and risks that lie ahead.
Alan Cheong, senior director, research & consultancy, Savills Singapore
The recalibration of the cooling measures is actually not a surprise. We will discuss the reason for the measures being adjusted downwards and what to expect in the private residential property market. The recalibration exercise appears to have had an impact on developers’ sales, albeit marginally. For example, in the weekend that the revised seller’s stamp duty kicked in, of nine projects surveyed, six saw an increase in sales and three, a decline.
Is the Singapore residential property market really that in need of such recalibration stimulus to boost sales? Yes and no. No, because the market was already on its way to recovery since mid-2016. Yes, because we believe the existing slew of measures are so harsh that they may retard the ambitious programmes that the government is planning for the future. These range from the Kampong Bugis development plan to re-engineering the economy to a cerebrally driven one. For all these to happen, a greater admission of overseas nationals with the requisite skill sets is needed, and to house them, residential sales have to step up a notch.
Tan Hong Boon, regional director, capital markets, JLL Singapore
The evaluation of a potential collective sale project is more than just the location, tenure, age and density (or lack of) seen on site. It entails investigation into the planning parameters such as zoning, plot ratio and height control, as well as the financial aspects such as the expected land price, development charges, differential premiums, existing unit prices, likely prices apportioned to the respective units in a project, to see if it indeed stands a good chance to go en bloc. And that is only half the homework done. The other half is getting the lengthy process right, convincing the majority of the owners, going to the market with a reasonable expectation and finding a worthy buyer. Being procedurally and stringently regulated, the collective sale exercise may be plagued with many potential pitfalls along the way. What to look out for along the route to success becomes critical.
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