The prospects look grim for the Singaporean property market even after posting seven quarters of decline in home process. In a report from bworldonline.com, the recent June housing data showing sales declining by a further 42 percent with no end in sight.
According to Knight Frank LLP's Head of Consultancy and Research Alice Tan, "The momentum is very weak, it doesn't bode well for the residential market."
With home sales last month at just 375, which is about half of what is needed to be considered as a 'healthy market' according to Tan. It is also the lowest number of transactions for the month of June since data was cumulated from 2007.
One of the material consequences of the continued doldrums are the increase of defaults in the payments for housing purchases. In a report from Bloomberg.com, the heyday of the Singaporean market, house prices were 40 percent above market valuations. This was fueled by low interest rates as well as increased demand from foreign investors. At its height, the government had instituted a cap on borrowers' total debt repayments to 60 percent of income. This made refinancing of loans very difficult on top of the new taxes on foreigner purchases as well as new levies on property transactions. As a result, the Singaporean housing market cooled off with a 4 percent decline in 2014 which was the first of its kind in the country since 2008.
Now, there is a market glut on available housing especially in the luxury homes sector. In a report from cnbc.com, prices for homes in this sector may have already hit rock bottom.
According to CRE Managing Director Chandran VR, "We are seeing a number of our clients coming back very seriously this time around. We are currently serving buyers in the market for luxury apartments. A lot of them are very ready to make a move because they feel buying has corrected and if they wait too long, the market can take off."
CRE is a property agent focused on the luxury homes sector and prospects may be good ahead as a number of investors are already in the market nibbling away at the glut of the Singaporean market. A small victory in a landscape that is still in the doldrums for the time being.
