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Morgan Stanley: Home prices to rise by 8% in 2018

Morgan Stanley recently released the most bullish forecast for the Singapore housing market, expecting private home prices to increase by two percent this year, before rising again by another eight percent next year, reported the Business Times.

This compares with DBS’s forecast of a two percent fall in 2017 and three percent increase in 2018 and another three percent in 2019. OCBC Investment Research, on the other hand, only expects a bottoming out of prices in 2018, with prices falling five percent this year.

In April, Morgan Stanley analyst Wilson Ng even predicted property prices to double by 2030. Maintaining his earlier forecast, Ng has provided a timeline of the inflexion point, stating that property prices will rise in Q3 2017 instead of early-2018 as he had previously expected.

His optimistic outlook for the market is partly precipitated by a slew of en bloc deals that began entering the market in May 2017. With seven en bloc sale projects already awarded, about 1,500 homeowners are expected to be displaced, each of whom is about $1.8 million wealthier.

“With leverage, this adds up to $13 billion of potential capital inflows that could find their way back into the property market, more than the entire value of developer sales in 2016. More en bloc deals could follow, with 50-60 more currently under discussion,” he said.

Wong urges real estate industry to embrace digital innovation

National Development Minister Lawrence Wong recently urged valuers in Asean countries, including stakeholders in the real estate industry, to embrace digital innovations, reported the Straits Times.

Unlike the media distribution and travel industries, digital innovation has not had much impact on the retail sector. Nonetheless, things are beginning to change, noted Wong.

He pointed to the Canada Mortgage and Housing Corporation, which leveraged on its property information database to develop an automated risk assessment system.

“The real estate industry, including the valuation sector, must adapt to change, and transform in the face of digital innovation,” said Wong at the launch of this year’s Asean Valuers Association Congress.

“There are also new opportunities for valuers in other melds such as business and intellectual property valuation.”

With the theme Valuation – Real Estate and Beyond, the two-day event saw speakers presenting papers on key topics including valuation of green and smart buildings and new accounting standards on valuation.

“Increasingly, valuation of non-tangible assets such as intellectual property, service contracts, and proprietary data, are also becoming more important when valuing businesses.”

This is partly driven by digital innovation as well as the continued growth of the services sector, which makes up over 50 percent of many Asean countries’ gross domestic product, explained Wong.

Established in 1981, the Asean Valuers Association has five founding members – Singapore, Thailand, Indonesia, Malaysia and the Philippines. Over 250 delegates from Asean countries and counties such as Fiji, China and South Korea attended the 20th edition of the Congress.


  The PropertyGuru News & Views   This article was first published in the print version PropertyGuru News & Views. Download PDFs of full print issues or read more stories now!