Morgan Stanley expects home prices to increase amidst curbs

Romesh Navaratnarajah15 Oct 2018

Housing prices in Singapore are expected to increase by up to 10 percent by the end of next year.

Despite the new housing curbs, Morgan Stanley expects home prices in Singapore to increase by up to 10 percent by end-2019 and to double by 2030, reported Bloomberg.

Morgan Stanley analysts expect the housing market to be underpinned by the city-state’s status as a global hub, faster economic growth, as well as demand from buyers of en bloc projects.

More: MAS checking impact of new property curbs

In fact, home prices in Singapore have been on the uptrend during four of five previous rate hike cycles.

“Contrary to common perception, we believe housing supply/demand dynamics remain favourable, and we anticipate a wave of capital inflows into the housing market,” said Wilson Ng and his colleagues in a note to clients. “Housing supply is still below historical averages and is set to fall.”

Their views were formed following a revisit of last year’s forecast that home prices in Singapore would double by the end of the next decade.

The government has underscored that the property curbs are aimed at achieving price stability as well as sustainable growth in line with the country’s economic fundamentals. With this, the analysts expect the government to intervene during both up and down-cycles, such that in the event prices fall, the government would relax some of the property cooling measures.

The government introduced eight rounds of property cooling measures between 2009 and 2013 when home prices soared 60 percent. In 2017, it partially removed the seller stamp duties, before re-introducing new curbs this year.

And since most of the cooling measures from the previous tightening cycle are still in place, there remains a wider toolkit for the government to stimulate the housing market if the need arises, said Morgan Stanley.

The city-state will also remain relevant as a global hub – which would help in attracting capital inflows to the property market.

Home buyers looking for Singapore Properties may like to visit our ListingsProject Reviews and Guides.

 

Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg

POST COMMENT

You may also like these articles

Cooling measures in Hong Kong and Singapore: what works, what doesn't

 Governments in the two rival cities have poured icy water on their overheating housing markets, with contrasting results. By Duncan ForganIt would be fair to say that Singapore’s famously stri

Continue Reading25 Apr 2018

Govt cools property market with higher ABSD rates, tighter LTV limits

Buyers rushing to submit their cheques at Riverfront Residences before the 12am deadline to avoid the revised ABSD rates. (Photo: Jeanice Ong)The government has raised the Additional Buyer’s Stamp D

Continue Reading6 Jul 2018

Property cooling measures decimated en bloc sales market

Two en bloc redevelopment sales worth $353 million were completed in the third quarter, way lower than the $3.8 billion registered during the previous quarter, data shows. Singapore’s latest round

Continue Reading11 Oct 2018