Singapore property prices have reversed its declining trend in 3rd Quarter 2017. Official flash estimates shows that the private residential prices have risen 0.5 percent for a quarter-on-quarter. This is the 1st time in four years of decline that the prices have increased.
Many property analysts are expecting the prices to increase between 0-1 percent in 2017 and a further of 4 to 8 percent increase in 2018. But some caution that it may be too early to call this a market rebound as more data are required.
Healthy demand in the recent en bloc markets by property developers and strong land biddings on government land sales by developers have pointed towards a recovering market. The increase in transaction volumes in developer sales and resale transactions when compared to the same period last year was 57.5 percent and 42.8 percent higher.
OCBC and Morgan Stanley expected the first price upturn since 2013 in the third quarter of this year. OCBC Investment Research commented that “the bottom is actually behind us” while a 0.8 percent quarter-on-quarter rise was expected by the analysts at Morgan Stanley.
The overall unsold inventory of developer units has also reduced in 2017. Several new developments have also increased their selling prices to take advantage of this improved market sentiment.
The Government of Singapore has reiterated in early 2017 that property cooling measures are unlikely to be lifted in the near term despite numerous calls from property developers. In March 2017, the seller stamp duty was slightly adjusted to reduce the selling taxes which helped buyer optimism and purchasing activities. Monetary of Singapore (MAS) have also adjusted regulations on loans to allow easier refinancing.
Despite the strong positive outlook, double-digit growth in prices is not expected to happen as the Total Debt Servicing Ratio (TDSR) framework continues to limit excessive borrowing. Moreover, a gradual increase in prices, coupled with positive economic growth will reduce the risk on the formation of a property price bubble in Singapore.
Official statistics will be released on 27 October 2017.