In Singapore, the real estate scene is undergoing a nuanced transformation, marked by signs of a gradual slowdown in the rental market, leading to increasingly tenant-friendly conditions.
As detailed in the Singapore Property Market Outlook 2024 by PropertyGuru, a leading property website in Singapore, the rental market is expected to experience a gentle deceleration.
This shift is primarily attributed to an influx of new properties and completed projects, ready to satisfy housing demand, which is likely to exert downward pressure on rental rates.
High but stable property prices for the next six months of 2024
The report, drawing on aggregated data from January to October 2023, reveals a decline in sales activity within the private residential property market. Cooling measures and heightened interest rates have played a role in influencing this trend.
Similarly, the HDB resale market has experienced a tempered increase in both pricing and transaction volume during the same period, with many first-time property seekers turning to the HDB Build-To-Order (BTO) programme.
Notably, interest in million-dollar flats remains robust, with 369 transactions recorded as of October 27, aligning with the figures observed throughout 2022.
Looking ahead, the next six months are predicted to maintain high but stable property prices.
Although the Singapore housing market’s performance might appear relatively uneventful, its inherent stability is likely to resonate favourably with both investors and homeowners.
Dr Tan Tee Khoon, Country Manager – Singapore at PropertyGuru, highlighted the resilience of Singapore’s real estate as a traditionally solid investment.
“Despite the deceleration in market activity amidst the evolving economic landscape, the promise of sustained economic growth supports the continuity of robust property prices,” he said.
Dr Tan added that prevailing uncertainty might motivate more individuals to participate in the property market, provided their financial positions allow for it.
“There is also a belief that even if property prices moderate in the short term, the pricing rebound could be much faster and higher when economic conditions improve. Meanwhile, potential homeowners may re-evaluate and align their preferences to properties within their budget.”
Property market poised for nuanced landscape
Amidst uncertain economic conditions and sustained high interest rates, Singapore’s property market is poised for a nuanced landscape, as outlined in the latest report.
The findings suggest a potential division in the market, with first-time buyers and those eyeing an upgrade to private properties expected to exercise caution.
These buyers may delay entries into the market until identifying projects aligning with their criteria, accumulating financial capacity for higher downpayments and acquisition costs.
Conversely, individuals who invested in new condo projects in 2018/2019 are anticipated to become more active.
Having benefited from the capital appreciation of their properties during the COVID-19 pandemic, these investors, exempt from Seller’s Stamp Duty (SSD) if they decide to sell, may re-engage in the property market with newfound funds.
Owner-occupier likely to be main drivers of the property market
Additionally, the report also predicted that owner-occupiers will emerge as the primary drivers of the property market in the coming year, stabilizing sales activity amid economic uncertainties.
Affluent investors, navigating inflation and increased property taxes, are expected to persist in acquiring second properties.
Incorporating the latest Additional Buyer’s Stamp Duty (ABSD) rates into their considerations, these investors are likely to prioritize capital returns in their upcoming property decisions.
Properties offering higher value more likely to be picked up by buyers
In the context of a sustained high-interest rate environment, the report suggests potential private property home seekers may face pricing challenges, prompting a recalibration of expectations.
Notably, a discernible trend emerges with a preference for properties in the Outside Central Region (OCR) near MRT stations.
Additionally, buyers are showing a shift towards larger HDB flats or those situated in prime locations, indicative of evolving preferences in response to market dynamics, said the report.
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