7 Questions Singapore Property Buyers Want Answered For 2017

7 Questions Singapore Property Buyers Want Answered For 2017

Recent news that Singapore is cutting seller stamp duties has got the industry talking. Some say that there is an increasing likelihood that the government may be moving towards the relaxation of property curbs, while analysts say these tweaks are unlikely to have a significant impact on the market.

It is no doubt that these property cooling measures implemented in 2013 have worked to some extent, with prices falling from their 2013-peak. But amidst the backdrop of falling prices, there are still many potential buyers staying on the sidelines, waiting for the right time to get into the market. If you are one of them, read on to find DREA’s answer to some of the most asked questions property buyers in 2017 might have in mind:

Have property prices bottomed out?

The URA private non-landed residential price index is still 30% points above crisis level(as of 2H2016) but is fast approaching the 2008 pre-crisis peak. While all indicators suggest that regulator’s policy intent for a soft moderation of property prices is playing out, a key uncertainty is whether cooling measures will begin to be lifted once prices begin to reach the 2008 levels.

Although the recent announcement of the relaxation of cooling measures may look to be the start of more relief of property curbs to come, there might be more downside ahead since 2017 will be the year of peak supply. 

Will cooling measures be lifted this year?

This is anyone’s guess but looking at figures from DREA’s 2017 Singapore Residential Property Market Report, we see that declining property prices is still driving demand. Taking this into consideration and that property developers are still pushing out innovative payment schemes and discounts, there is still room for the measures to be in place for awhile.

Where are the most popular districts for buyers?

Looking at data for volume of sale transactions in 2016, the most popular districts were:

  • D9 – Orchard, River Valley
  • D18 – Tampines, Pasir Ris
  • D22 – Jurong
  • D3 – Queenstown, Tiong Bahru
  • D19 – Serangoon Garden, Hougang, Punggol

And the most unpopular? They were District 28 – Seletar and District 7 – Middle Road, Golden Mile.

Which areas provided the most capital gains within a year?

Price increase for private non-landed residential properties between 500-1000 SQFT was the highest in the following districts:

  • D9 – Orchard, River Valley, + 18.6%
  • D26 – Mandai/ Upper Thomson, +13.2%
  • D19 – Hougang/ Punggol, + 11.2%
  • D1 – Boat Quay/ Raffles Place, + 10.8%
  • D16 – Bedok/ Upper East Coast, + 8.4%

Which districts had the highest volume of loss-making *resale transaction?

  • D10 – Bukit Timah, Holland
  • D9 – Orchard, River Valley
  • D15 – Katong, Joo Chiat
  • D18 – Tampines, Pasir Ris
  • D16 – Bedok, Upper East Coast

While D10 had the most number of loss-making transaction, D9 saw the highest number of loss-making transaction with more than 50% losses.

For those transactions sold at a loss in 2016, the highest numbers came from units bought between 2011 and 2012. 

*based on 2H 2016 sales transaction

How’s the outlook for the rental market?

The rental market is generally seeing declining rates, with 1 bedroom units falling 8.9% over the year, and 3-bedroom units falling 8%. Vacancy rates have also touched a 15-year high in the 2H 2016.

Which area should I look out for if I am keen to buy?

Buyers should zoom in on untenanted resale units originally bought in 2013 for investment purposes and negotiate hard for a good deal. In 2017, we estimate that ~20K units will be approaching the end of their 4-year SSD lock-up period. More importantly, 2013 was the year where prices peaked.

With vacancy rates at an all-time high, some property investors are finding themselves stuck with vacant, untenanted units. For those who bought into the market in 2013, 2017 is the year to cut losses without attracting SSD. This presents an attractive opportunity for buyers today to negotiate hard. DREA has shortlisted a number of condominiums with units that fulfil these criteria. You can download the report for free here to find out which ones they are.

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