Singapore property investment appeal wanes

The property market here may be losing its shine, as Singapore falls out of the top five Asia-Pacific real estate investment destinations for next year in a joint survey of industry professionals by PricewaterhouseCoopers (PwC) and the Urban Land Institute (ULI).

The PwC-ULI report, Emerging Trends In Real Estate Asia Pacific, found that Singapore fell to seventh place for 2014 from third place this year, dropping out of the top five for the first time since 2007, when the inaugural survey was published. The top five investment markets for next year are Tokyo, Shanghai, Jakarta, Manila and Sydney, with Guangzhou rounding up the six places ahead of Singapore.

While Singapore holds considerable investment and development appeal due to its vibrant growth and emphasis on community liveability, a supply glut is expected to hit the market in the coming year. Narrowing in on the residential market, fewer respondents thought that 2014 would be a good time to purchase private housing because of concerns about oversupply and government policies to cool the market.

“Investing in real estate in Singapore is becoming more expensive due to the expected higher interest rates, compressed cap rates and tighter regulations,” said PwC Singapore’s Partner and Real Estate Leader Choo Eng Beng.

“The property measures have taken effect, especially the Total Debt Servicing Ratio. In terms of supply, we’ll see an influx this year, next year and in 2015,” he added, noting that the respondents expect residential property prices to fall by 10 to 20 per cent in the coming year.

Source : Today – 6 Dec 2013

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