The property cooling measures are showing a great impact on the marketfrom past few days, andSingapore banks are expected to receive huge benefits from this shift. Rating agency Moody’s recently revealed that if the property prices fall considerably by a large amount, it will reduce the speculative demand for the residential properties in the area.
Buyer & Seller Must Know
Study Reveals 7th Ranking of Singapore for Citizen Well-Being
Here is another proud moment for Singapore as it is a single non-European country that maintained its position in the top ten among countries compared for citizen well-being on a global level. Studies reveal that Singapore is at 7th position in this league table. The improvement is not only in this sector. Instead, Singapore has scored well for around 10 other areas including employment and infrastructure as well.
The great news for residents of Singapore is that it showed improved performance for almost all indicators on Asian averages; however, economic stability was the only factor for which it dropped position by 24 places as compared to the year 2009. Managing director and senior partner at Boston Consulting Group (BCG), Mr. Vincent Chin, recently revealed that this drop happened just because of the small open economy style of the country. Note that, during this annual study, the economic stability was accessed on the basis of three indicators: GDP growth volatility, inflation volatility, and inflation.
Mr. Chin said that the low score of Singapore in economic stability was derived by GDP growth volatility where it got 81 points out of 100. He mentioned that the impact of the small open economy on this factor could be explained in terms of the economic growth of the country along with the more pronounced business cycle fluctuations as compared to the countries that follow outwardly oriented and less economically open economy design.
Singapore’s property experiencing a slow market after the cooling measures
Even the biggest property markets in Singapore have been going through a rather slow market ever since the cooling measures were introduced. Experts do not predict a complete downfall of the property market.
This situation has forced the both CFOs of CapitaLand Group and GuocoLand Group to question the acts of the government. Very recently, the government made some changes in the Additional Buyer’s Stamp Duty rates (ABSD). There was a 5-percentage-point increase for citizens and permanent residents who would be buying a second home. These chief financial officers (CFOs) are not sure if these steps were the right decisions.
HDB cuts the supply of flats for this year as a result of improvements in the resale sector
Every year, the Housing Board provides a number of flats in order to meet the demands of homebuyers and give them the diversity they need. But, this year, the HDB decided to reduce the number of released BTO flats from 17,000 to 16,000. The 1,000 reduction was taken after it was noticed that the resale sector of the property market is catching up. This particular section of the market was in decline for quite a while, but, apparently, things are stabilizing, including the prices of resale homes.
Starting with the last half of 2016, this year is the first time when it was noticed an increase in the prices of resale apartments. This news came together with the HDB’s announcement to reduce their share of available BTO flats. This is not something new, as the HDB adjusts its offer according to how the market is evolving. According to the HDB board, the number of flats they release will be gradually decreased throughout the year, as the resale market will slowly start picking up the pace. Just how much things moved in the resale sector? As numbers show, there was a 0.1% increase in the prices of resale flats in the second quarter of 2018, in comparison with the first quarter of the year. But, even so, the prices are still lower than they were in the same period of 2017, more precisely 1.5% lower.
New Tengah to go through some tech upgrades
A couple of days back, the Singaporean government signed two agreements with companies that promise a technologically upgraded future. The signing of agreements took place at the World Cities Summit at Marina Bay Sands Expo and Convention Centre.
The New Tengah town is expecting a new energy management system that is a centralized cooling system. This project is being handled by The Housing Board (HDB) along with the SP Group. On the other hand, the town is being given a makeover in terms of integrated buildings alongside an open digital platform. This part of the update is the responsibility of the JTC Cooperation in cohesion with the ST Engineering department.
Homebuyers / Investors rushed into properties purchasing
In a Thursday evening on 5thJuly 2018, the implementation of the new increased Additional Buyer Stamp Duty (ABSD) was announced. This new policy would soon take its effect on the 6thJuly 2018. Within an hour after the news surfaced, several developers of upcoming new launch condo announced that they would be releasing their units for sale on first-come-first-serve basis on the very same night. And buyers started rushing and forming long queues in the showrooms of within hours.
Measures to keep down the price inflation of houses have been adopted by some Asian countries
When demand is on the rise, usually the prices are driven up as well. Considering the fact that the demand for houses is continuing to rise in some Asian countries, including Singapore, special measures and policies have been adopted to break the inflation of prices in this sector. According to a report recently released by S&P Global Ratings, the monetary policies and measures meant to cool down prices have managed, so far, to keep house prices within acceptable limits.
Even though the rates of expansion for credits with a mortgage are lower than half a year ago, these type of credits is still taking place at a wide rate across the region. At the same time, the monetary policies remain mainly the same, which keeps mortgage rates low, even lower than before, easing the load for the people that get these credits out of the desire to have their own homes. Also, the specialists at S&P said that these measures suffered changes in time, so they are capable to do their job better. And they managed to do so, as the house prices in various regions around the Asian-Pacific area manage to remain within acceptable boundaries.
Singapore Grabbed the Rank of Asia’s Most Innovative Country
According to the index released recently, Singapore is now ranked as the top most innovative country throughout the world outside Europe. As per the Global Innovation Index, the country grabbed the fifth position, i.e., two places higher as compared to last year’s ranking, and it maintained top rank in Asia. If we look at the overall league table, with the first position of Switzerland, further ranks in the table are given to Netherlands, Sweden, and Britain in sequence. However, other names in the top ten’s list are United States, Finland, Denmark, Germany, and Ireland.
In the near future Sembawang will be transformed into a real community hub
It is not a secret that those living in Sembawang prefer traveling to Yishun to get more affordable food or enjoy leisure activities like swimming. Well, in approximately two years, everything will change for the residents of Sembawang. In other words, the area is planned to be transformed into a modern community hub by the summer of 2020, which means that a wide range of facilities will become available. Thus, not in a very long while, Sembawang’s inhabitants will enjoy sports facilities, such as swimming pools, and a hawker center, just to name a few. The developments will occupy a 12ha area that will be conveniently located next to the Sembawang MRT station.
Positive outlook for Commercial, industrial space
Even though there are some cooling measures in place right now for residential properties, these may very well be a sign that the investments go to other sectors. It seems that right now the retail investors which have a good capital outlay can very well go to the conserved shophouses and some offices. But there are other investors are going to the industrial market.
A Tumble in Banks & Property Stocks
On the evening of 5th July, the government of Singapore announced special measures for the property market. As a result, there was a further decrease in the property and bank stocks.
Soon after this announcement, companies started reducing their trade prices. Few of the companies are mentioned below:
– City Developments experienced a decrease in stock value by 17% and it was traded at S$9.30
– Trades of UOL Group collapsed down by 12.65 percent. Thenew value was S$6.77. This allowed them to recover their previous losses
– Oxley Holdings reduced by 14.63 percent after which the prices shed to 35 Singaporean cents. It was among the heaviest trade as the turnover was of 22.39 million
– CapitaLand was trading at S$3.01 after the reduction of 5.35 percent
– The Real State Agency PropNex took a spill of 13 Singaporean cents and was traded at 56 Singapore cents
– APAC Realty dropped down by 21.15 percent and the price reduced to 61.5 Singapore cents
On Monday, PropNex stepped into the Singapore Exchange holding a per-share IPO price of 65 Singaporean cents.
The prices of private homes almost doubled in just one month
Before the new cooling measures came in, it seemed to be an unspoken fact that the prices of private homes were about to increase, no one ever thought that the difference from one month to the other would be so significant.
From April of 2018 and until May of 2018, the prices of private homes increased with 53%. Besides this, the number of homes released in May was also higher than the ones made available in April. In April homebuyers bought a total of 664 new units, May came with 1,060 more, which means that the increased in the number of new units from one month to the other was of 59.6%. Also, in comparison with the last year, the number of units increased almost three times, considering that in April 2017, only 370 units were launched.
Singapore to Stabilize Its Property Market
On the 5th of July, the government of Singapore announced that they will be increasing the rates of Additional Buyer’s Stamp Duty. Moreover, they have also decided to constrict the limits of loan that are applied on property purchases. They are doing all this in order to stabilize their property market by keeping economic fundamentals in mind. The announcement was made after they noticed a massive raise in the prices of private homes.
The bidding competition for the collective sale of Kemaman Point is over
The most recent collective sale, for the Kemaman Point development, is now over, as Soilbuild, a successful real estate and construction group, grabbed the development for the price of $143.88 million. There are a total of 89 units in this residential building and each owner of the development expects to receive between $1.4 million and $2.32 million on their units, depending on their type and size, according to Knight Frank, the marketing agent that took care of this collective sale. Also, the same Mr. Frank said that the sum of $1,173 representing a square foot per plot ration of this development reflects the permissions for redeveloping the area, which can have up to 122,711 square feet at most.
Tearing down of Rochor Centre
The rainbow coloured public housing estate in Singapore popularly known Rochor Centre will soon disappear from the cityscape. Demolition of this centre began in the morning hours of June 26 and is expected to take around ten months to be torn down floor by floor. The day witnessed heavy rainstorm bit it was not enough to stop the former residents turning up to the location to see their home of memories bowing down in the name of infrastructure development.