The year started amidst an array of uncertainties - with recession lurking along with the slew of property and bank policy changes, many would think that it is a tricky time for investment.
Now adding fuel to fire would be the ongoing banking crisis that caught many by surprise.
It is safe to say that the banking crisis has reignited the risks of recession, as global growth will now weaken with more stringent lending policies. As quoted from the World Economic Forum, “Central bankers are closely monitoring the potential for a credit crunch, with one European Central Bank official flagging a possible tightening in lending.”
Companies and consumers continue to face increased pain from the rise in interest rates, sighting a heightened increase from September 2022.
How does this affect us in Singapore?
With the series of bank failures overseas and the fears of a wider implication on local financial markets, local bank stocks also took a hit when the market opened on Thursday morning.
With refinancing risks rampant, banks are increasingly more cautious towards lending for real estate. Higher rates and lower loan-to-value (LTV) ratios have been issued since last year, signalling a more reserved stance by the banks to avoid major risks.
Henry Chin, CBRE’s global head of investor thought leadership and head of research for Asia Pacific, has stated that “The real estate capital market will be weaker this year due to the current credit-related issues and decline in mortgage approvals,”
That being said, experts do not consider crossing property investment in Singapore out of game just yet. Singapore remains to be a vibrant market with many buyers still waiting to secure a unit. Any buyers waiting for a huge dip in property prices will be disappointed, as the market is slated to still grow overtime due to high-net-worth individuals, family offices and private investors.
After all, Singapore still remains as the top second (2nd) city for cross-border investment. Singapore also remains very attractive to investors from China, and there is still strong interest from the Chinese.
Where do we stand in this?
If you are looking to secure a unit in Singapore, there is truly no better time than now to do so - the key to securing a unit effectively and at an attractive price is to do ample research. Only with proper research and analysis of the trends within your district, area and unit will you be able to secure what you need at the best possible price.
While big trends and the property market remains important for a general framework and guideline, it is crucial that you zoom in what are your needs and your investment trajectory to know how to move forward.
To know how to effectively utilise your resources to secure the unit you desire, do not hesitate to reach out.