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Reasons why Singapore isn’t heading towards a Property Bubble anytime soon



It came as a surprise to some when Singapore’s rental rates surpassed that of Hong Kong, which is well known for their high rental prices to begin with.


For others, this is merely another confirmation that Singapore is indeed the most expensive city in the world. In the bi-annual EIU survey last year, Singapore also clinched the top spot as the most expensive country to live in too.


Some of the reasons attributed to the high score include the strong Singapore dollar, rising inflation and the trade disruption due to the Ukraine War. Since Singapore is a country that is heavily reliant on trade, any fluctuations in the global economy will also affect Singapore greatly as well.


Post Pandemic - but not out in the clear yet


With the pandemic almost behind us, we are seeing new challenges ahead of us. Inflation continues to soar, along with rising interest rates that also force mortgage rates to increase as well. This is coupled with the continued war in Ukraine that will put a challenge on the resources and prices of necessities as well. Within Singapore, companies are laying off their staff at an unprecedented rate as well. With these issues looming ahead, it seems like the year ahead will continue to be a tough battle.

Many property markets has taken a hit due the dire economic situation. Many countries are facing a dip in property prices, especially with the interest rate rises placing a downer on the highly leveraged markets.


Why Singapore isn’t yielding to the negative outlook

Chinese investors continue to pour their funds into Singapore’s property market. Take the recent Fujian buyer for example - the transaction was a whopping bulk-purchase of 20 units at the new riverside condominium Canninghill Piers. The transaction for the units in Clarke Quay was sealed at S$85 million. This works to be about an average price of approximately S$2,773 psf.

With investments from overseas buyers still going strong, demand has remained high. Based on the report by Huttons Asia, “Singapore has a reputation for being a haven… which is favoured by investors. There is keen interest among Chinese corporations to set up operations in Singapore.”

Strong demand extends to commercial properties as well. Ultra-high-net-worth (UHNW) investors, family offices and property investment funds have rose over the past few years, posing as another strong demand in the strata-title offices and commercial shophouses.


Finally, construction delays due to the pandemic has affected the release of Build-To-Order (BTO) units. Many couples have consequently turned to private properties or resale market, driving the demand up too.


Road ahead: Should you invest in properties now?

With the property market still going strong, investments remain viable and attractive. If you are looking to have a detailed analysis what properties you should look into, do not hesitate to reach out to know more.



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