Today Singapore population is 5.736.319 and counting. This is per latest United Nation estimates. The total Singapore land is 700km2 meaning the density is 8155 people per km2. A 101.8% of the population live in the urban center. With such data, one thing is evident, land scarcity. With the population expected to continue rising, the market is in an exponentially high demand for housing than supply. Did you know Singapore is the 29th most densely populated city in the world? Let’s have a closer look at Singapore real estate values and explain some of the projection every future homeowner should be aware of.
Boom and bust cycles of Singapore real estate
Singapore real estate is a subject of the global economy. When there is a surge in the marketplace, real estate values in the country goes higher as well. When there is a bust in the global economy, real estate values drop as well. The reason behind the positive correlation is because investor appetite heavily influences Singapore real estate. When the economy is doing well, they investor drive the prices up. Come global economy bust; the demand disappears as investor restrain from investing. According to statistics, landed real estate values dropped by 17.6% in 2008 due to the global financial crisis. The economy had since started to recover with prices increasing by 87.7% with the highest amounts seen in 2013 before the government enacted measures to slow down the trend.
The current Singapore market
Since the peak in 2013, real estate values in Singapore have been on the downward trend. This is despite the increase in demand. In the last 13 consecutive quarters, real estate value for landed and no—landed has to feel down by 10% and 8% respectively. This is good news for Singaporean.
For a long time, Singapore market was profoundly affected by Asian Financial crisis with the prices doubling in 2009. Most financial observers say that despite the government intervention, Singapore real estate is a bubble and not unless the government upholds favorable prices to both investors and homeowners, its stability will collapse.
The private residential property index fell by 2.77% in the first quarter of 2017. This is the 13 consecutive fall in year to year real estate price as per Urban Redevelopment Authority. When adjusted for inflation, home prices fell by 3.45% in 13 quarters.
Below is the fall in prices for various regions.
Core Central Region
Prices of non-landed residential properties fell by -2.6% inflation-adjusted and 1.9% y-o-y to Q1.
Outside central region
Properties prices fell by -2.6% (inflation adjusted) or 2% during the year to Q1 2017.
Rents of central region
Property prices were down by -3.2 %( inflation adjusted) or 2.5% over the same period.
Regarding property stock, Singapore is set for its best performance in the next five years. This comes after investment improved in the city-state as it looks to recover from the upbeat economy with the trend projected to grow by more than 2% by the end of this year. Currently, property stock index was trading at a price value of 0.89%, a drop compared to its performance six to nine months ago.