BROKERS in Singapore’s real estate have forecasted the prices of residential properties in city-state to remain stagnant or even dip next year.
While the prices of homes were predicted to increase as much as 10 percent this year, estimates compiled by Bloomberg show a decline of up to three percent next year and home sales below 2017 levels this year may not appreciate any further next year.
Lee Nai Jia, Knight Frank’s head of research in Singapore, said the market has “come to a standstill.”
“The Government is unlikely to introduce additional curbs or rollbacks as the market is stabilising.”
In July, the government introduced measures to cool the market which led to the slow down in the increase of residential property price.
Singapore’s regulators saw the need to introduce the measures in wake of a seven percent hike in prices during the first half of the year owing to aggressive land bids from developers and collector or redevelopment transactions, according to Bloomberg.
Other constrictions include the government limiting the number of “shoe-box sized” apartments that developers can build, along with additional anti-money laundering safeguards.
The supply of residential units spiked and the demand for them lowered after the government announced plans to slow the release of land sales in the first six months of next year.
Smartkarma analyst Tan Kok Keong told Bloomberg that home builders were increasingly worried about the government’s constant tweaking of rules as costs for development could rise while interest in Singaporean properties among foreign buyers could dip.
However, the government insists that its intervention was crucial in avoiding a property bubble as home prices could jump as much as 15 percent this year.
“Let me be very clear that the Government cannot and will not take a hands-off attitude to the property cycle,” National Development Minister Lawrence Wong said in a speech last month.
“So there should not be any surprise when we intervene in the market, because that is our approach and attitude.”
Executive director at real estate asset manager ZACD Group, Nicholas Mak, said property prices would remain flat next year at best, but said declines of up to three percent could happen.
“Had the Government not introduced the additional curbs, this bull run in the residential market would have continued for three years.”