Confidence In Singapore Real Estate Misplaced, Says Analysts
Experts have been one in saying that optimism in the 'Lion City's' housing market is misplaced. According to SCMP, foreclosures and home loans that have been "stagnating" isn't a good sign, especially with a "worsening" global economic outlook that's also affecting the city.
The perfect picture of market observers' confidence in the project is in how people have become interested in the "One Pearl Bank" project. It is a new development that will rise on the site of the once iconic, horseshoe-shaped Pearl Bank Apartments. Schedules to be completed by 2023, it has already seen 160 units already sold or 80% of the planned 200 units to be sold.
CapitaLand, its developer, has priced each unit at $1,741 per sq ft of space. It has also been advertising its development as "the bestselling new launch in Singapore's Central Area." A close look at the numbers shows a different case to be investigated.
These transactions are just 20.7% of the 774 units the development will have by completion.
It is also the result of a round of real estate cooling policies introduced by the Singaporean government, from lower loan limits to higher taxes for those investing in these projects and developments. The policies were implemented in the hopes of keeping home prices down, which started surging in 2010.
The effects have been felt in different ways and introduced in varying degrees.
It might be the reason behind PropertyGuru's price hike on its listings. It last raised its listing prices in 2017, which ended in a backlash against it. Property agents are once again protesting this policy as it makes a return in 2019, according to Today Online.
There are four packages being offered by PropertyGuru, each priced to last for 12 months. The highest increase is in the "Advance" package it offers, which has a 26.6% noticeable increase. Agents availing this package will pay $1,716.45 for 12 months starting Sept 1, which is $360.60 more than the current price.
It's not like the agents do have other choices. They may enlist their properties with other sites, but PropertyGuru enjoys the dominance in the market. It accounts for 70% of the market share with about 5.5 million property hunters or more using their site per month.
Their site may enjoy more popularity, given budget hunters' desperation in finding affordable properties amidst the rising prices the cooing measures have been creating. Given these problems, some analysts still think the Singapore real estate market is the best place for foreigners.