11/30/2017 5:09:01 PM
|written By : Team India Se|
Property developers and those wanting to buy property in Singapore should "proceed cautiously," the Monetary Authority of Singapore (MAS) has warned.
The rental market remains relatively weak, said MAS, Singapore's central bank, in its Financial Stability Review 2017 released on November 30.
Even though vacancy rates have declined from the peak of 8.9 per cent in the second quarter of 2016, they remain relatively high at 8.4 per cent in the third quarter of 2017 compared with 5.2 per cent in the third quarter of 2013 and the historical average of around 6.5 per cent over the past decade.
More than 30,000 private housing units were vacant at the end of the third quarter of 2017 and the number of unsold units could more than double in the next one to two years as more houses are built, the report said.
Twenty residential projects totalling about 2,900 units have been sold through en-bloc transactions as of mid-November in 2017, up from six deals in the whole of 2016 and one deal in 2015. The redevelopment of these en-bloc sites, coupled with supply from government land sales sites, could potentially add another 20,000 new private housing units, the report said.
Meanwhile, the compound annual growth rate of the population has moderated, from 3 per cent in 2007–2012 to 1.1 per cent in 2012–2017, the report noted. With slower population growth, there is considerable uncertainty as to whether existing vacancies and the new supply coming on stream can be fully absorbed by the market, it said.
The private residential property market in Singapore has picked up in recent quarters, with increases in both prices and transactions.
Overall private residential property prices have fallen by a cumulative 11 per cent since the third quarter of 2013. But after declining for 15 consecutive quarters, prices registered a 0.7 per cent increase in the third quarter of 2017.
Property transactions in the first 10 months of 2017 were 54 per cent higher than that recorded over the same period in 2016.