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Outlook for 2012

Singapore’s property market has been on a bull run since the collapse of Lehman Brothers in 2008. Just as figures shows that Singaporeans are still rushing in to invest in properties, “To join them or to stay out and miss the boat. What can we expect moving forward?” are the questions in most of our minds right now.

As we move into 2012, we glance into the past to predict what to expect in the year ahead. Looking at the key trends in Singapore’s property market for 2011, we noted the following:

Trends in 2011

1) HDB prices rose faster than private property prices

2) URA’s private residential property price index peaked at 206.2 points, with especially buyers in the luxury segment holding back on their purchases

3) Investors are going into industrial and commercial properties.

I was talking to one of my buyers at Eon showflat the other day and he was asking me about my opinion on the property market in Singapore. “Do you think the property prices will go down this time? If so, how much will the prices fall?”

True. With worrying global economic situations especially with the troubles in Europe, combined with the dampening effect of the government measures and the large upcoming supply of completed private and public housing, it does seem like the RESALE market will be going in for a dip. However, with that said, if you’re expecting prices to fall significantly, don’t hold your breath as it may not happen. The supportive forces includes:

1) low interest rates,

2) high occupancy rates for mass-market properties at 97.5% (Citi’s property analyst – Wendy Koh)

3) future population growth, and

4) expected continued economic growth in Singapore and our near full employment (2%).

How much will the prices fall?


New launches are the next opportunities that investors (who are cash rich) looking into right now. With normal progressive payments, or even Interest Absorption Schemes (for certain projects with tie-ups with certain banks, e.g. Eon with OCBC), the investors are able to wait-and-see approach with just 20% downpayment and allow their property price appreciate with the upcoming developments within the locality.

In addition, prices for the new launches are expected to increase or at least not fall, as the developers had bought the land at a high price. With construction costs on the rise and increasing workers’ levies, we’re expecting the new launches to hit the sky and break new heights.

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