The long downtrend period for Singapore’s housing market may be coming to an end, say market watchers, noting that there are now signs of a potential rebound.
In an interview with CNBC, Cushman & Wakefield’s managing director of Asia Pacific research Sigrid Zialcita told the news network that she expects a turning point in prices “very soon”.
According to Zialcita, the Singapore Government’s recent move to ease some of its curbs on the sector is a key the reason behind the market’s changing fortunes.
“That actually boosted sentiment in the market. We’ve seen an increase in foot traffic and it’s incentivising a lot of buyers,” she said in CNBC’s show “The Rundown”.
Other analysts familiar with the local market concur, noting that the government’s decision to loosen the reins could spur more property activity.
Among them, PropertyGuru chief executive officer Hari Krishnan pointed to an increase in property listings. There was an uptick of 2% on-year in the first quarter, and that bumped up to 2.4% by March.
He noted that the increases could be indicative of an uplift in seller sentiment, but qualified that it hasn’t reflected in prices yet.
In the first quarter, overall private home prices fell 5% on-quarter, making it the 14th straight quarter of declines for house prices in the Lion City.
However, a marked change can be seen in the fact that the bulk of the decline was in the relatively small landed property segment. Non-landed prices were steady.
Previously, housing prices in Singapore surged more than 60 per cent from 2009 to 2013, propelled by rock-bottom global interest rates and quantitative easing in developed economies. The government unleashed a series of cooling measures in 2011 to prevent an unwanted bubble.
The stringent measures ultimately helped bring the property price index down by 11% in 2016. However, the government seems to now be adopting a more optimistic stance, by scaling back some of the curbs in March this year.
Thus far, it has lowered the seller’s stamp duty and shortened the minimum holding period to avoid paying it.
However, there are those who warn that while the sentiment uplift is welcomed, the “exuberance” should not be overdone.
The Citi group in Singapore indicated that while it would be more “economically rational” for potential buyers to wait for more substantial policy easing, or further discounts from developers running up against government-mandated sales deadlines, the market sentiment in Singapore tends to work differently.
Side-lined buyers are likely to rush back to the market at the first hint of easing, for fear of losing out, it said.
Citi warned that buyers counting on the government to further relax property-sector curbs should be wary. If the recent easing pushes up volumes and prices faster than economic fundamentals, that would dampen the chances of further policy easing.