Singapore Property:Yet to see the bottom

Singapore’s property has always been a popular investment vehicle for locals andforeigners alike. The Asian “insatiable hunger for bricks”, metropolitan culture, stablepolitical and economic system of Singapore has drawn in investors over the years. Sincesuffering a c.25% drop in the property price index during the Global Financial Crisis (GFC),property prices and sales volume recovered remarkably in the 2 years from 2009 before aslew of cooling measures were implemented by the Government. Over a five-year horizonfrom 1Q11 (around the start of a slew of cooling measures), current residential propertyprice index has returned to near the level it was at since 1Q11 (See Figure 20).

    We highlight that the recent uptick in sales volume over the last 2 quarters was due to twofactors: various marketing schemes by developers, and the continued sales momentum inselected Outside Central Region (OCR) launches that was supported by low interest rates.

    However, sales volumes remain way below the heyday seen before the GFC or during2010-2011 after the recovery. We expect the government’s continued clampdown onforeigner influx, increasing indebtedness in household balance sheets and more favourableforeign property markets to continue to impact interest and affordability in local property.