Prices of private residential properties rose 1.5% quarter-on-quarter in Q2 2019, hitting a five-year high.
Some interesting observations:
- Foreign buying increased in Q2, with the number of non-landed homes bought by foreigners rising 46.2% from the previous quarter. The most high profile purchaser would be James Dyson, who dropped almost $120 million for the most expensive penthouse in Singapore and a Good Class Bungalow (GCB). Amid global economic uncertainty with Brexit and the ongoing US-China trade war, this can be seen as a sign of confidence that foreign investors have in Singapore’s continued growth and stability.
- However, 82% of the transactions were made by Singaporean buyers, with Permanent Residents (PRs) and foreigners a distant 12% and 6% respectively. This underscores the strong demand from Singaporeans buying homes for their own stay, buoyed in no small part by the billions that thousands of homeowners have received from the en bloc sales in 2016-2018.
- Prices are forecast to remain stable or even post moderate growth of up to 5% for the entire year of 2019. Sure, that’s all very modest compared to the 7.9% gain in 2018, but this comes after the latest round of cooling measures in July 2018 and headwinds in the global and local economy.
- Effects of cooling measures are only felt for a short term – approximately 6 months, going by the trend we have seen in the last 3 rounds of cooling measures.
The property market is going strong, defying the expectations of many. Perhaps Morgan Stanley will prove to be right after all.