Ministry of National Development (MND) in Singapore reported fewer expensive private home properties, costing over $1.5mln, sold in the year of 2014. This fresh data was collected by the Urban Redevelopment Authority (URA) together with the Jurong Town Corporation (JTC) and revealed in the report for the parliament member Mr. Gerald Giam on 11 of May 2015.
According to the data 4153 such price level home purpose properties were sold in year of 2014 which is 42.4% less when it was in 2013. The average sold unit price stayed almost the same level reaching $2.838mln.
This type of slow down tendency in expensive private homes industry is occurring for the second year in a row in Singapore and the problem could get even worse because lots of still uncompleted real estate units are in construction right now. So the estates prices are expected to fall down at least until the of 2015 and the could drop by 10% or even 20%. The tenants are also becoming more and pickier about the price which stops the buyers from investing into new properties.
So, if you are in the list of those people who bought new real estates in Singapore during the last two years when prices were in the up tendency with positive profit expectations then you can find yourself in the negative profit territory now.
We can notice at least four reasons why the prices are falling in Singapore now:
- Growth of the population is getting slower – it is still growing but more than 3 times slower than in the "good days“. It might have happened because of the stricter government rules for the foreigners relocating to the country.
- Government intervention by "cooling" economy with the restriction to taking loans.
- Rising supply – from 2014 to 2016 many properties are being not fully sold in the market.
- Less foreign investments, especially from China are coming.