StockTalk(7.4): Singapore's private-home price index contract for the first time in 3 years
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Singapore's private-home price index has contracted by 0.4% quarter-on-quarter, marking the first decline in three years, according to the latest Urban Redevelopment Authority (URA) data. The figure was primarily driven by a slide in non-landed private home prices in the city fringe or the Rest of Central Region.
However, property consultants are not expecting a sharp correction in the second half of 2023 as most believe that low unsold inventory and healthy household balance sheets will prevent significant price declines barring a widespread recession.
Meanwhile, the number of non-landed private homes bought by foreigners (excluding Singapore permanent residents) has fallen significantly following the government's cooling measures. Foreigners' share of non-landed private home purchases has also slipped.
Will the decline in Singapore's private-home prices affect your investment strategy for the region? What factors do you consider when determining whether or not to invest in Singapore's property market?
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kk1629 : The decline in Singapore's housing price index is related to the government's policy of increasing ABSD (Additional Buyer's Stamp Duty). The purpose of the policy is to control speculations by investors and encourage them to maintain long-term investment goals, which is crucial for stabilizing the real estate market and protecting consumer interests. The restrictions on foreign buyers and significant decrease in housing prices demonstrate that the ABSD policy is working effectively for now. However, its long-term impact remains uncertain, and policymakers will need to continue evaluating its effects on the real estate market and the broader economy.
Kopikarp : With the slight dip in Singapore's private-home prices, I'd tread cautiously but keep an open mind towards opportunities. Affordability remains a priority, ensuring any investment aligns with my financial capabilities. I'd also closely study market trends and regulations, including those tied to property cooling measures, for their potential impact on my investments.
Tracking economic indicators like GDP growth and unemployment rates would be vital as they may hint at the property market's future direction. I'd also explore opportunities in REITs, which could offer me a stake in real estate while providing liquidity and potentially mitigating risks associated with direct property ownership.
Aligning all these with my personal goals and managing risks through careful diversification are critical steps. As a conservative investor, I'd ensure that any venture into real estate, whether direct or through REITs, complements my broader financial plan and does not overly expose me to potential risks.
ZnWC : The recent private home price index contraction is caused by several factors. First is the cooling measure ABSD (Additional Buyer's Stamp Duty) increased which aimed to deter speculative activity. Second is the increase in supply of public housing rolling out. Third is the decrease in buying power of Chinese foreigners has significantly reduced demand in local private property. Fourth Singapore may be facing recession based on weaker export and manufacturing contraction has reduced locals to make long term commitment to invest in private property.
Have said the above, the factors are only temporarily. When Singapore's and China's economy improve, the private property buying will return. ABSD control of property speculation has its limitation because if the price is uptrending, the return can cover the extra stamp duty. The question is which type of private property is still in strong demand.
stevenlsf1 : As interest rates remain high, the cost of buying a house will increase dramatically, and many mortgages will only feel it after two or three years of fixed interest rates
No_Horse_Run_4896 : Government policy is greatly affecting all the big buyer. Let's hope the price will remain stable