Singapore Private Property! Boom Times for Some, Unfortunate for Most.   by Suzanne

in Real Estate / Buying a Home    (submitted 2011-01-04)

With the increasingly inflated prices of private Property in Singapore and many being priced out of the market; Castlewood Group Director, Chris Comer had this to say:

“Having been involved in the real estate industry in many countries over my 20 year career I have never seen such massive hikes in property prices like I have seen in Singapore since 2005".

New Rules of Purchase

Whilst the Singapore government has sensibly brought in to play very effective cooling measures such as the non ownership of a private condo unless the sale of HDB, (Housing Development Board) is undertaken or for that matter the purchase of any deeded real estate, whether it is in Singapore or even overseas, the HDB must be sold. So basically the practice of owning a HDB and renting it out to a tenant whilst owning a private condo is over. A buyer cannot own both. This added to certain taxation and duty advantages geared towards encouraging end user ownership of private property in Singapore, has surely seen the end to off plan flip investment there for some time.

Is this a case of bolting the door after the horse is already long gone or a very clever and practical way to bring private property ownership back within the grasp of all Singaporeans as opposed to the very wealthy few? I believe the latter of the Two...

A Long Term Problem

The flipping of off plan real estate as a short term money making gamble has been the name of the game in Singapore since before 2005 fuelled by such very popular proven practices in the USA, Europe, China, HK and more recently the UAE this short term attitude to real estate investment is the cause to what may become a long term problem for average Singaporean families who are just simply trying to climb higher on the property and social ladder, basically the Singapore private property market has priced the majority of Singaporeans and PR’s ( Permanent Residents,) out of the market place, making the dream of the private condo and landed detached/ terraced home purchase, a luxury which will now only be enjoyed by wealthy foreigners and very few cash rich Singaporeans.

With thousands of new condos due to be delivered in Singapore in 2011/12 we also have to ask ourselves, “Who is actually going to rent these properties?” As we must assume the majority have been purchased as an investment and whilst the option of flipping the property on to a new buyer has now depleted this still leaves a lot of investors with bank loans to re-pay and plummeting rental levels to deal with.

When Will House Prices Return to Normal?

The cooling of the real estate market in Singapore by nature of the action itself will instigate defaults and bank repossessions as it has done in the USA and Europe however in Singapore this will be a positive in the long run as it should bring private housing prices back within reach of Singaporean end users looking for a quality family home once again.

About the Author

Whether you are an experienced real estate buyers or first time buyers Castlewood Group will provide a full advisory service to take away the inconvenience of owning and renting a property in Singapore.

Castlewood Group, Buys, Builds, Manages, Guarantees Returns & Exits for its clients. A simple and hassle free solution for any real estate purchaser.