Property market upturn on the horizon

23 Aug 2017

Singapore skyline


There’s mounting confidence that Singapore’s real estate market is about to recover from its four-year slump, reported Bloomberg.

According to the latest data from the Urban Redevelopment Authority (URA), developers sold 3,077 private homes (excluding executive condominiums) in Q2 2017 compared to 2,962 units in the previous quarter and 2,256 units in the same period last year.

SEE ALSO: Surging developer sales point to further property market recovery

Share prices of major local developers have also risen significantly this year. For instance, that of CapitaLand increased by 24 percent to S$3.76, while City Developments Ltd (CDL) shares rose 40 percent to S$11.48 as of 9.41 PM EDT on Tuesday (22 August).

But Bloomberg Gadfly columnist Andy Mukherjee thinks that the start of a property upswing in Singapore needs someone influential to commit to an iconic long-term development.

For instance, CDL Chairman and billionaire Kwek Leng Beng teamed up with AIG Global Real Estate 13 years ago to launch Sail@MarinaBay, an ambitious, 245m-tall waterfront tower.

It was a surprising move that time as property prices were down 45 percent from its peak in 1996. Kwek also had forecasted that prices would increase from five percent to 10 percent annually over the next seven years, even though Singapore’s residential market was impacted by the Asian financial crisis and then by the SARS epidemic. Ultimately, home values grew at a compounded annual rate of 7.5 percent over nine years.

However, Mukherjee noted that local developers appear to be making bigger investments elsewhere. CapitaLand has recently set-up a US$300 million fund to invest in Grade A commercial properties in Vietnam, while CDL joined forces with KPG Capital and Abacus Property Group to seek opportunities in Australia.

Nonetheless, a Chinese group is bullish that Singapore’s market upturn is close at hand, as a consortium consisting of Nanshan Group and Shenzhen-based Logan Property has successfully acquired a residential site at Stirling Road in Queenstown in May after it submitted a record bid of S$1 billion.


This article was edited by Denise Djong.


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