Sections

ideals
Business Essentials for Professionals



Singapore Property Could Have Muted Demand In 2019, Says Researcher


12/30/2018


Singapore Property Could Have Muted Demand In 2019, Says Researcher
In 2019, Singapore's residential property market could be under pressure because of the rising interest rate environment in the U.S. according to the opinion of an executive from a real estate services and investment firm as told in a television interview.
 
According to a report from real estate agency Knight Frank, there has been a steady increase in the prices of Singapore's private residential properties even into the third quarter of 2018. "The prices were supported by first-time home buyers and investors seeking Singapore properties for diversification purposes," the report said.
 
But according to Desmond Sim, head of research for Singapore and Southeast Asia at CBRE, that trend could undergo a change soon enough. He said that it is being expected that there would be muted demand for residential property in the region going forward in 2019 because of poor business sentiments resulting from by global slowdowns and the series of rate hikes by the U.S. Federal Reserve this year.
 
"Demand will be a little bit slower on the back of poorer sentiments and also on the back of fear of rising interest rates. So, we have projected that demand will likely, you know, come down in the region 7,000 to 8,000 units where we have seen historically it's gone up to 20,000 units before. So definitely more muted demand going forward in 2019," added Sim.
 
"The biggest thing globally that will affect Singapore would predominantly be the rising interest rates environment ... After quantitative easing, cheap liquidity has been a boost to most residential markets. So, I think that was the main concern of the Singapore government that is why they interjected," he said.
 
During the first half of 2018, the price growth in the property market in Singapore rose to about 7 per cent which forced he government to put cooling measures in place to curb that increase in July. Following the measures, there has been a partial slow down in the rate at which residential property price were increases in the previous quarters, according to recent local reports.
 
Despite this downward trend, Sim believes that all this may not be all bad news for the Asian city state's property market because going ahead in 2019, one can expect that the office real estate market and its prices would continue to perform comparatively well.
 
"So far, the office market has been doing spectacularly. That's on the back of very tight vacancy, on the back of limited demand going forward for the next two years, tech and co-working space(s) has been very strong in terms of taking up space," he said.
 
(Source:www.cnbc.com)