|
Singapore market to plummet?
Singapore's
property market could be set for a dramatic fall, amid increasing signs that
prices in the country have peaked.
After a construction boom over the last few years, Singapore has witnessed significant
property price growth of up to 70 per cent in some parts of the country since
2005.
Singapore
was one of the hottest investments last year with Jones Lang LaSalle putting it
at the top of their list.
Property prices had surged by a whopping 31 per cent
and Colliers International reported that residential rents also jumped by up to
70 per cent last year alone.
However, now the housing market is succumbing to the global slump with
official figures showing a 0.4 per cent increase, the slowest for four years,
and prices are expected to fall further in the third quarter of this year.
Developers are reporting lower profits for the second quarter as the
property market cools. City Developments, Singapore's biggest private
property group, last week reported a 15% drop in earnings.
CapitaLand and Keppel Land,
the two big state-owned developers, have announced profit falls of 43.5% and
16% respectively. Meanwhile, Singapore's
FTSE property share index has fallen 35.2% from its peak last October.
CapitaLand's Chief Executive, Liew Mun Leong, said that the earnings fall
was largely due to the moderation in the price increase for the Singapore
property market, adding that the outlook for the high-end market would probably
be very flat.
Singapore
has suffered similar boom-bust property cycles before. In fact, the market in Singapore
was extremely weak only a few years ago, before being rejuvenated in 2005,
after the government eased lending restrictions, in an effort to boost the then
sluggish construction sector.
However, property analysts say new developments including two casinos and a
finance centre should help to underpin the long term market.
Rental yields are
also expected to weather the storm, especially in central areas where demand is
high.
A Spokesman for Jones Lang LaSalle said, "These new gaming resorts will be
employing thousands, and some of the workforce will come from abroad creating
demand for rental accommodation."
Singapore is likely to avoid
the property market collapse that occurred in 1997 with the Asian financial
crisis, according to Chua Yang Liang, Head of Research for Jones Lang LaSalle
in Singapore.
However, he does expect Singapore
to suffer a moderate downturn similar to that in 2003.
"Developers are better able to stabilise the market than previously, since the
big ones now have the financial capacity to delay new residential launches to
prevent supply excess while low interest rates are expected to support demand,"
said Mr Yang Liang.
Prices are expected to pick up again from 2010.
To browse commerical properties for sale in Singapore, visit www.themovechannel.com/property/serviced_offices/Singapore/
|
Related Articles |
 |
 |
Big Apple big bargain
Bargain commercial property rental prices are making even expensive parts of New York City more attractive and further decreases are expected in 2009...
More...
|
|
|
|