The Real Estate Developers’ Association of Singapore (REDAS) said the latest property cooling measures introduced last month have stabilised the property market.
Market watchers share the same view, but pointed out that it is the volume of transactions in the suburban market that has tapered off.
They added that for the high-end property market, the number of transactions may have been lower from last year, but interest and liquidity are still flowing strongly.
Singapore was ranked the best real estate investment destination in Asia in a recent survey by the Urban Land Institute and PricewaterhouseCoopers.
However, some analysts said that with the recent cooling measures, the number of property transactions has fallen by some 30 per cent.
Lim Ee Seng, first vice president, REDAS, said: “There’s a drop in volume, but I think that’s expected because of hesitation, uncertainty. So until things are clearer, then they will move in.
“Not withstanding the measures, those properties that were launched after the measures were imposed – they still have a very decent take-up. That clearly demonstrates that there’s a pool of people who are genuinely in need of properties.”
Speaking at a Lunar New Year reception, the new REDAS president said its members have to produce better quality homes to attract global investors.
Wong Heang Fine, president of REDAS, said: “So as we eagerly await good news from the upcoming Budget, and with the property market stabilising from the latest round of cooling measures by the government, I hope any further measures by the Singapore government would only be made after considering all options.”
At the sidelines of the event, market players said foreign liquidity flowing into the Singapore market will remain strong, but is likely to be lower than a year ago.
Eric Tan, chief executive of GSK Global, said: “I can foresee that with the introduction of higher interest rates in China, the liquidity in Singapore is going to be affected and I believe not as many funds will flow into Singapore as compared with the past, as China becomes a safer place to put money.”
However, REDAS remains optimistic and expects S$12 to S$14 billion in property investments this year.
Mr Wong said: “In China, they have restrictions on remitting funds overseas. I guess what they are doing is to make sure the China market doesn’t overheat, so I don’t really think that there is going to be much impact on us.
“Of course, we will like to grow our overseas market for Singapore and that’s what all the members will like to see.”
Property analysts pointed that with the opportunities shrinking in China due to policy risks, investors will look elsewhere – for example, to Hong Kong and Singapore.
Colin Tan, head of research and consultancy at Chesterton Suntec International, said: “If they are looking to park their monies, then Singapore looks increasingly attractive.”
“I don’t expect an immediate impact (from the rate hike) but what it means is that with so much liquidity support, property prices in Singapore – even if they don’t go up – they are unlikely to come down anytime soon.”
Source : Channel NewsAsia – 10 Feb 2011