There will be a substantial number of new properties which will flood the market. Government data suggests that 82,575 fresh, private residential units are expected to be constructed between 2014 and 2018.
However, are buyers listening? Prospective homeowners are hesitant to shell out premium costs for apparently inflated housing assets.
Furthermore, it’s anticipated that the market will see a further onslaught of properties available with more resale units available due to the expiration of this four-year seller stamp duty.
The supply glut is expected to place the Singapore property market – particularly in luxury developments – in a precarious situation.
Ultra-luxury condo Singapore are confronting the most depressing sales forecast in six years as a flurry of government measures look to cool among the most expensive real estate markets in the world.
Land prices in certain parts of Singapore are rising at three times the rate of flat expenses, with plot values increasing by an average of 30 percent per annum since early 2011.
The gain in the expense of property ownership is creating margin pressures on developers. Along with lack of demand and increasing risk of penalties on unsold units within two decades of completion is putting additional pressure on developers.
Low rates of interest in the range of 1.5% to 3% over the last few years resulted in ample liquidity that led to banks meting out exceptionally favorable lending conditions to Singaporeans.
If people were swayed by this and more extended themselves by investing in many properties or obtaining debt far beyond their means, it’s just expected that they will have a tough time at the current real estate situation.
The marketplace would see these properties back available in an attempt to reduce its owners’ financial strain. This backed with how the pool of prospective property buyers has shrunk tremendously will further apply brakes to the slowing property market.