After three years of falling prices, 2018 is looking like the year that the Singapore property market’s long-awaited turnaround finally gains traction. Analysts reckon that a trough has been reached though they are careful to tamp down excessive optimism.
While market watchers generally agree that prices will move up, their forecasts for the increases vary from as low as 3 per cent to a giddy 15 per cent. Most also agree that resales will drive transaction numbers higher this year than last year.
Sales of new homes, however, are expected to stay at 2017 levels as developers pace out their launches in anticipation of prices going up.
JLL’s national director of research and consultancy Ong Teck Hui noted that with cooling measures unlikely to be relaxed, they are “like an iron ball shackled to the foot of the prisoner that will prevent him from running too fast”.
“Unlike previous recoveries, the measures act as a retardant to the momentum of the current recovery,” he said. “So we are unlikely to see prices spiking… such as the 38.2 per cent surge between mid-2009 and mid-2010.”
The recovery could falter if the Government decides to intervene to prevent prices from spiking or if there are external or economic shocks. But market watchers believe this is unlikely in 2018
Savills Singapore senior director Alan Cheong noted that historically, the length of Singapore’s private property price uptrends averages 17.6 quarters.
“If this forms the base case for this new cycle, we still have a few years to go before the price upswing is exhausted,” he said.
“If we see a price increase of about 5 per cent, the upcycle will have some legs past 2020. But if prices spike 17 per cent a year, the upcycle will probably taper off by 2019.”
Analysts also note that with about 20,000 new units coming on stream in 2018 and 2019 from government land sales and en-bloc sites, prices will not rise too steeply.
Though developers’ bullish land bids have led to perceived over-exuberance in the en-bloc market, some observers see initial signs that the collective sales fever may be starting to ease. Only three of six collective sale sites whose public tenders closed last month were sold.
According to regulations, owners may enter into a private treaty contract with a buyer within 10 weeks from the close of the public tender.
Therefore, conservatively we should be looking at average psf of $1800-$18900 for The Verandah Residences Pricing.
The Verandah Residences Unit Chart