Is it a good time to invest in real estate in Singapore? Or will the prices continue to go downhill?
Well, if the experts are right, you will be making a huge mistake if you can invest but choose to stay out. According to Morgan Stanley, the downward trend will end, if it has not done so already, in a few months from now.
The bank has made the following predictions:
- Home prices will start to increase in 2018 (However, many believe this may start earlier, somewhere in the second-half of 2017 or late 2017)
- Home prices are expected to double by 2030
- Single-person households will primarily drive home sales in coming years
While Morgan Stanley is optimistic, not everyone shares this view. Property market bears have their own reasons for predicting a less rosy picture. They believe that slow rate of population growth, a slowdown in structural growth, and an ageing population will make it hard for Singapore real estate market to stage a reversal.
However, Morgan Stanley holds a contrarian view and predicts a 5-6% increase per year. The fact that the first quarter was relatively better than the previous ones might suggest that the downtrend is finally ending. If so, one can expect a bullish trend to start. The coming quarters are the key because they will tell where the market is heading.
So, should you start investing right now?
If you are a long-term player and do not mind taking a risk, this might be a good time to invest. If you are a cautious investor, you should perhaps wait a little more, until the beginning of the reversal. Once the graph shows a move towards the north, you can start investing in good projects.
However, keep in mind that you might not get as great a return as you would get if you invest right now. But of course, the later you invest, the less risk there is. So it all depends on how much risk you can take. If you want to invest right now, one project you might want to consider is Martin Modern. It is being built by a famous developer Guocoland and is slated to be one of the most interesting projects in the near future. The project is expected to be completed in late 2020 or early 2021 and believed to offer consumers the best in luxurious, high-class living.
What has been happening till now?
The first quarter saw 0.5 percent decrease in prices of private homes, making it the 14th consecutive quarter to register a drop. However, the good thing was that this time much of the decline was registered in small landed property segment. There was no significant decline in non-landed prices.
The housing prices had soared impressively from 2009 till 2013 on count of extremely low global interest rates. Quantitative easing seen in developed countries also played a major role in this trend. To counter the trend and to prevent a real estate bubble, the government implemented several cooling measures.
However, in early March, some of these curbs have been lifted off, which experts believe is a signal of the end of the downtrend.