Analysts have predicted an increase in prices of up to 10% in 2018 in the property market.
Even with property cooling measures, UOB Kay Hian predicts that prices will rise by 5-10% in 2018. Concurring with the idea is Morgan Stanley, who predicts a 10% rise by the end of 2018.
Vikrant Pandey, Asean & Hong Kong Property Director, is of the opinion that high-end and mid-range segments are likely to fuel the rise in prices of property.
"This may be caused by a rise in the interest to buy homes from foreigners and by replacement demand from the old housing projects being redeveloped,” added Pandey.
Why are foreigners likely to influence considerably to the property market in 2018?
Because of the conservative Additional Buyer’s Stamp Duty in Singapore (15%) in comparison to stamp duty in Hong Kong for foreigners buying property (doubled recently to 30%) and the punitive divestment-gains tax in Taiwan (up to 45%).
Urban Redevelopment Authority (URA) statistics indicate that there was an increase in foreigners’ purchases by 48% in H12017 in comparison to 2016. The same period had a 32% rise in purchases by permanent residents.
Chinese, Americans, Indians, Indonesians, and Malaysians are the foreigners who drive property purchase.
According to URA statistics, Chinese buyers prefer properties costing $0.5m – $1m followed closely by those costing $1m – $1.5m. They also prefer properties in district 23, 19, and 5. Liiv Residences is another upcoming launch in District 5.
Malaysians prefer properties costing $0.5m – $1m in district 27, 19, and 18. Morris Residences is a brand new strata-landed in District 19.
(Artist's Impression of Morris Residences)
While majority of Indonesians prefer properties costing $0.5m – $1m, 11% are buying properties costing $3m and above whereas 10% are going for properties costing $5m and above. They prefer district 19, 10, and 9. New Futura and Gramercy Park are 2 luxurious developments in District 10 by CDL.
Indians prefer developments in the city fringe that are not priced at a premium but near the CBD. They prefer districts 18, 16, and 15. Alps Residences is a new development located in District 18.
Americans who qualify for ABSD remission have been among the top foreign buyers. Most of them buy properties costing $1m – $1.5m and prefer properties in districts 15, 10 and 9. Carpmael 38 as well as FiveNine @ Telok Kurau are 2 new launches in District 15.