52 | MARKET WORDS | Francine Carrel


Will Singapore slow? T


he news we’ve seen from Singapore over the last 14 months has largely been a


succession of ever-higher fi gures. Transaction numbers smashed the previous record – despite government attempts at cooling the market. Prices have been steadily rising, as have sales. Could this be about to change? A mere month ago I’d have said no, but recent developments have given spectators pause for thought.


As our tour team at OPP prepares to board a fl ight to South East Asia, I’ve taken a look at what’s been happening in one of the most important (and potentially profi table) markets in the region. Interestingly (if a little frustratingly!), more news from the country has been coming into the OPP inbox almost every day this month. But let’s start from the beginning. Singapore (offi cially the Republic of Singapore) is made of 63 islands, lying off the southern tip of the Malay Peninsula. The country is very built up, with very little rainforest remaining – although projects reclaiming land will create more space for development. The British claimed sovereignty over


the islands in 1824 – Singapore became one of the British Straits settlements in 1826. After being occupied by the Japanese in World War Two, Singapore united with other former British territories to form Malaysia in 1963, although it was separated two years later.


The country has seen an astounding rise in wealth since that point and is currently the fourth leading fi nancial centre in the world – its port is one of the fi ve busiest globally. Singapore has the third highest per capita income in the world.


Currently there are around 5 million people living in Singapore, with 2.9 million born locally. The Chinese, Malays and Indians have signifi cant presence. This is refl ected in the fact that the country has four offi cial languages: English, Chinese, Malay and Tamil.


The People’s Action Party has won every election since self-government was introduced in 1959 – the party “governs on the basis of a strong state and prioritizing collective welfare”. Singapore has been popular with foreign investors, although numbers


have been waning – as of Q3 2012, transactions from foreigners in Singapore accounted for just 7% of total transactions. The cosmopolitan society is desirable to some, as is the lucrative property market.


The country is ranked at a reassuring number one out of the 183 countries in the World Bank Group’s Ease of Doing Business index and 26th out of 187 countries in the UN’s Human Development Index. In Transparency


“Currently there are around 5 million people living in Singapore, with 2.9 million born locally”


International’s Corruptions Perceptions Index, Singapore holds a score of 87/100.


Singaporean agents know what they’re doing, and will fi ght for a good commission, but they’re pleasant to work with. Put simply, it’s a good place to do business. It’s hard, however, to ignore the fact that Singapore’s real estate market is overheated. Property prices surged 50% between 2007 and 2011 and, while the rises slowed in 2012, they did not stop. Foreign investors have been given a large portion of the blame; but their relatively small numbers don’t appear to be shrinking dramatically. Over 2012, one headline seemed to keep popping up again and again – “Singapore prices rising despite the government curbs/ cooling measures/ general panicking.”


Going up | Despite government intervention, the market wouldn’t cool


Singapore started 2012 under the newly introduced Additional Buyers’ Stamp Duty (ABSD), which came into effect in December 2011. The 10% extra charge for foreign buyers and 3% extra for residents was met with mixed reviews (the negative ones, unsurprisingly, largely coming from overseas), but the government made good arguments for its necessity – the relatively small market was under clear threat of overheating. Almost immediately, though, it became apparent that the fi rst cooling measure was not going to be adequate in damping down Singapore’s


FEATURE


www.opp-connect.com | FEBRUARY 2013


Keeping an eye on property news from Singapore has certainly been interesting this year. Repeated cooling attempts by the government seemed, until very recently, to have little effect – while other regulations made life easier for those working in the sector. But what’s next for this buzzing business hub?


market. January 2012 saw a record 2,077 transactions for private homes (although most of these, as we shall see, came from resident buyers), tripling the previous month’s number. This was largely put down to a hike in property completions and launches in the Outside Central Region (OCR). Prices also continued to climb, albeit slowly – though experts noted that investors were staying away from top- tier properties. In April 2012, Urban Redevelopment Authority (URA) fi gures showed house prices falling quarter-on-quarter for the fi rst time in three years. The private residential property index fell 0.1% at the end of Q1 2012. A small decrease, to be sure, but it had a psychological effect on the market.


Overseas buyers started to pull out of the Singapore market in a spectacular fashion – at the same time that developers began to panic about a series of new regulations.


Homes sold to buyers from abroad fell by 78% in the fi rst quarter of the year in light of ABSD. Although overall transaction numbers remained healthy, a startlingly low number of 293 came from abroad in the fi rst three months of 2012, compared with 1,358 in Q4 2011. In addition to this, developers were starting to worry about a new change in the law, effective from May, which stated that they would have to provide accurate information, show proof of their track record and seek consent for changes in a unit from home buyers – rules intended to protect consumers. The URA drove this approach forward in the aim to increase transparency in the market. At the time, the Real Estate Developers Association of Singapore (REDAS) told OPP that: “REDAS supports these changes which will help potential buyers make more informed choices when purchasing their ideal homes. As a body representative of a large community of property developers, REDAS is committed to continually promote good practices and professionalism among developers to deliver better and higher quality homes for all.”


Among the mandatory information developers now have to disclose to potential buyers are a drawn-to- scale location plan and site plan of


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68