Luxury home prices in the city-state rose by over nine percent in 2018 – which marked the peak of its current market cycle.
Singapore has emerged seventh in Knight Frank’s Prime International Residential Index (PIRI 100), even after going through over 15 property cooling measures since 2010.
This comes as luxury home prices in the city-state rose by over nine percent in 2018 – which marked the peak of its current market cycle, said Dr Lee Nai Jia, research head at Knight Frank Singapore.
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Now in its 12th year, PIRI 100 tracks the price movements of luxury homes across the world’s top residential markets.
Knight Frank revealed that the value of the 100 luxury residential markets tracked increased by 1.3 percent on average last year, which is the lowest rate of annual growth registered by the index since 2012.
“This drop comes as little surprise,” it said.
“As we learn to live without the ultra-low interest rates that have supercharged real estate markets globally since 2008, lower price growth was an inevitable consequence of the shift in monetary policy.”
Lee noted that Singapore’s path had been an erratic one as prime prices were stifled by stringent taxes as well as cooling measures.
“A reduction in Seller’s Stamp Duty in 2017 was interpreted by some as a change in policy sentiment, prompting a surge in demand, but a further tightening of stamp duties for nonresidents and developers in 2018 has halted the market,” he said.
With this, he expects a slowdown in 2019, “although solid economic fundamentals should prevent prime price growth from entering negative territory”.
The Philippine capital Manila topped the index with luxury home price growth of 11.1 percent – a growth that was driven by “lack of supply and a thriving economy”.
The report, however, noted that Manila’s performance remains low compared to previous top performers.
“In the 12 years we have been compiling PIRI, the top-performing market has yet to record annual growth below 21 percent,” it said.
“So 11 percent is quite a departure, but it confirms our view that prime markets are converging and the outliers are disappearing.”
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Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
