It’s already 2018, this year expect the unexpected, things are going to be crazy! Everybody is anticipating an improvement of the real estate property market, but the big question is how and when? On top of which are the latest fads that surface in random over the entire areas of Singapore. The following are few of which that you need to consider:
En bloc fever will likely escalate except if the government intervenes
Developers were purchasing land at very attractive prices. About $3.3 billion amount of land property was completed by end of the year, 2017 and the land areas were selling approximately 29 percent greater in contrast to past five years. On that of which, we noticed record-breaking property bids, like the multi-million dollar plot, the Stirling Road.
This is in spite of the Development Charges(DCs) increasing for real estate developers. In private non-landed developments, the average goes as high as 13.8 percent but not even one of it able to discourage buyers, which mostly are the Chinese developers.
The fire which ignited these said developers to encroach on Singapore’s property market are copious and outright: Chinese developers crucially has to run abroad to evade a collapsing property market of their country. It is a must for them to diversify to keep themselves against possible yuan devaluation and planning to build their trademark by creating credible market such as ours.
Excluding the rules and regulation intervention, the residents of the old estate property can hold their hopes up on huge en bloc sales.
Being in hurry to refinance might turn mortgage bankers busy
Now that tax reform bill being passed by America, their major bank will probably focused on rate hike’s interest. Due to the slashing of taxes stipulated in the reform bill, this is considered an economic strategy and motivation: it is expected to raise spending With Uncle Sam and a factor to inflation.
The counteract of this is for the Fed to increase interest rates, evident in the hikes for three times since 2016. Whenever the increase happened, the SIBOR or Singapore Interbank Offered Rate goes up also, thus yielding to a more costly home loans.
Over the next decade, we would be witnessing more Singaporean lenders opted for Fixed Deposit Home Loan Rates (FHR loans), wherein the interest is fastened over bank’s fixed amount deposit instead of SIBOR.
It is also expected to experience bigger interest in home loans under a fixed rate, in spite of the greater interest rate. ( we don’t expect that many can save by shifting to this scheme but many will try it anyway, for the sake of psychological reassurance).
Property sales volumes are likely to be lively
Property housing sales reached as much as 29 percent year-on-year, as 2017 of September. The bulk of real estate property transactions have maintained an increase since the previous month of March and there is a vivid reason why it keeps going:
Due to the huge number of en -bloc sales we’re witnessing, this leads to a big number of people being displaced and would be looking for housing units in 2018. These said home seekers are more or less flush with money, based on the proceeds of generous sales they received from the developers. Anticipate long queues in the showrooms this 2018, in spite having still a weak rental market.
Expect a higher fee for the acquired private property
After a decline for 15 straight quarters, real estate property market bounced back! This simply means property prices went down and buyers are ready to jump in! We’re achieving a positive analysis from various places like the Morgan Stanley reckoning that property prices hikes to 10 percent in this year, 2018.
If ever there is some truth on it then it is like bringing us back to the 2013 property heyday ( as to the present, property rates goes down by 11 percent since the 2013 last peak.)
Not only that buyers are active again, remember that we mentioned about displaced individuals: all the residents who transferred from the en-bloc sales this 2018 are expected to be active the following year and the sales proceeds signify that they can manage heftier price logo or tag.
The rental market seemed to remain weak
The tensions with North Korea, unpredictable America, and Europe yield to global uncertainty. No one is so sure on how Brexit turns out and its effects and while America’s market got a brief “adrenaline shot” through tax cuts, its anti-free trade rules are creating long-term disturbance and issues.
Landlords dreamed of the return of the wealthy expatriates might be disappointing. Even at the recent year-end, 2017 there is no change in rental cases, despite the changes and improvements in oil and gas industries, the root of the problem which begun in 2014.
But of course, this favors the tenants. Expect for a stronger haggling power, as landlords are a bit disturbed about vacancies.
In that case, we need to hypothesize that vacancies increases. Why? Due to some landlords who are annoyed in those low rental income property ( try to imagine the rental of your condo falling down an HDB Flat) and just recently close relative, son/daughter-in-law / move in.