Private property prices will see slower growth in the first quarter of this year, amid the current upheaval in global financial markets and a possible US recession.
That is according to property consultants who said prices will be supported by rentals which will continue to climb higher this year. Related Video Link - http://tinyurl.com/2ew98s
There has been frenzied buying and selling in the financial markets, but according to consultants, that is not likely to be replicated in the property sector.
"What the uncertainty is doing is that it's keeping speculative investors at bay and injecting realism into the minds of potential genuine purchasers. So, we're unlikely to see the frenzied level of buying as we've seen in the first half of last year. So the net result is likely to keep price growth in check moving forward," said Tay Huey Ying, Research & Consultancy Director of Colliers International.
According to the latest numbers from the URA, the number of private residential properties transacted fell to 328 in December, after hitting a high of 1,800 units in August last year.
"We suspect there will be more choices available for new projects from second half of February right up to the March and April period. That's when I think we'll see continued demand spillover into the market, particularly onto the mass as well as mid-end projects," said Donald Han, MD of Cushman & Wakefield.
While that demand is expected to support prices in the mass market segment, property consultants said the current market turmoil may impact on the high-end segment.
Still, they believe that prices will hold up because of strong rentals.
"If you look at last year, rentals are expected to rise by as much as 40%. This year, we expect rents to go up by at least about 15-20 percent, so that would potentially provide a higher yield in terms of investing in Singapore residential property market," said Han.
Private property prices were up by about 30% last year. - CNA /ls
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