Singapore Speculators Sling Out Home Price Warnings

Singapore property prices are expected to keep on rising despite government moves to try and cool the market as investors move in.

Property analysts had feared property prices would fall because the government had released large tracts of land for building new homes.

They also had concerns that a tighter monetary policy from the US Federal Reserve would also hit Singapore’s property values.

But a report by global bank Credit Suisse dismisses the worries and predicts property prices will soar another 8% by 2017.

Credit Suisse analyst Michael Wan, said: “If the government pushes out the supply of property as aggressively as it has done under the Government Land Sales (GLS) programme over the past three years then our analysis shows that prices will only correct marginally by 2017.

Curbs on prices have not worked

“That view is contrary to many other analysts.”

He explained only a big change in interest rates or for GDP to fall dramatically would drag property prices down.

The report also noted: “That while cooling measures have temporarily softened sales transactions, not all of the curbs have been effective in reducing prices.”

The bank also says that if the government release land for around 16,000 homes  a year, then prices will drop by around 1% in 2017 – indicating that Singapore will not see a property supply glut.

The report warns: “However, if there was a meaningful GDP or interest rate shock then property prices would fall by much more.”

For property prices to drop by 16%, property loans would have to increase substantially and the stock market would have to show a significant rise as well.

Property market stabilising

Another property firm is also saying that Singapore’s property market is looking up.

Jones Lang LaSalle says that after a six month decline in prices, the cost of an upmarket home in Singapore and China has now stabilised.

Buyers are now returning to the property market and that property prices in nine Asian markets they monitor have risen by 1.9% in the last quarter.

Hong Kong saw the biggest increase of 1.7% in that period but the firm says prices will correct slightly after the government introduced stamp duty on foreign and corporate buyers in October.

However, they say that there will be a ‘modest’ increase in prices for luxury property in Singapore with demand being led by domestic buyers.

Though a survey by RBC Wealth Management says Singapore tops Hong Kong as the most desirable place for ‘mobile millionaires’ to live  and points out  that they increasingly look at investing in the city.