Why is Singapore bucking the trend?
Dec 13, 2022
By   Internet
  • City News
  • House Prices
  • Property Market
  • Property
Abstract: According to the Global House Price Index report published by Knight Frank, low interest rates and overflowing demand from the collective sale market have driven private property prices in Singapore up 10.6 % over the past year, the largest increase in Asia.

Preliminary estimates of the private residential property price index for the third quarter of 2022, released by the Urban Redevelopment Authority of Singapore (URA).


Overall, the Private Residential Property Index rose by 6.2 points from 180.9 points in the second quarter of 2022 to 187.1 points in the third quarter of 2022. This compares to a 3.5% increase in the previous quarter and a 3.4% increase in the second quarter.


This is a total increase of 41 basis points over a 5-year period. In the past five years, the Singapore government has increased stamp duty three times, for example, from 12% to 17% for second homes for Singapore citizens, and from 20% to 30% for foreigners.


These figures all point to the same question. Despite the global epidemic, Singapore is receiving a lot of investment and property transactions and investment migration are all up.


Supply and demand affects prices


The 2 years of the global epidemic has to some extent hindered the overseas travel and property purchase plans of the Chinese.


However, there has always been domestic demand for overseas property purchases and investment properties, some for children studying abroad and others for asset allocation.


Overseas property purchases had been growing year on year before the epidemic, and even though the arrival of the epidemic was slightly affected, the enthusiasm for overseas property purchases has continued after the epidemic has improved.


As a result of the recurring epidemic, countries in Europe and the US, which used to be popular, are no longer the first choice for overseas home ownership.


Instead, Chinese-friendly Asian countries have become the new favourites for overseas home ownership.


Singapore is politically stable, number one in the world in terms of law and order, and has good epidemic prevention and control.


With all these favourable factors, overseas demand for buying property in Singapore has been growing.


On the supply side, the epidemic has led to tightened immigration restrictions in most countries, disruptions in the supply of construction materials and a shortage of construction workers.


This has, to a certain extent, resulted in a reduction in the supply of housing, with many developments not being delivered as scheduled, and the number of private homes naturally falling from year to year.


With demand outstripping supply, prices have naturally risen.


Investment to preserve value


Singapore was ranked as the world's freest economy in the 2021 annual report released by the Wall Street Journal and the Heritage Foundation.


The tax advantages have attracted leading companies from around the world to relocate here, giving a major boost to the local economy, providing ample employment opportunities for young international students and making study for housing popular for a while.


Singapore's low interest rate environment and safe asset protection have greatly attracted global investors. Wealthy entrepreneurs, especially from Southeast Asia, have flocked to Singapore to invest and live.


In addition, Singapore's property prices have shown resilience and the property market is steadily moving upwards and is a prime global asset Singapore has a property bubble index of only 0.45% among 24 major countries/cities worldwide.


Compared to Singapore property prices, Hong Kong, London and New York prime locations are 115%, 65% and 43% higher respectively, making home ownership less secure than in Singapore.


As the financial centre of Asia, Singapore has a very well-developed financial system. Even in 2008, the worst year of the financial crisis, the Singapore dollar was one of the most stable currencies in the world.


Land values are indirectly guaranteed by Singapore's scarce land resources and growing population. While Singapore is a small country, it has the highest population density in Asia, even higher than Hong Kong.


The city does not have a rural area from which to escape or save money. In other words, as long as there is no major financial shock, Singapore property prices are unlikely to plummet.


The high population density means that there is solid demand for Singapore real estate and a high potential for appreciation.


Garden Cities


For most other people, the choice to buy a home and settle in Singapore is more because of the charm of Singapore itself.


Singapore's government is known worldwide and beyond for its integrity, its people are optimistic and open to foreign tolerance and racial harmony.


In addition, those who choose to migrate or live abroad are particularly concerned about the security issues related to their personal and property.


When living in Singapore, the police are the first to be contacted for anything, and they will patiently resolve even the smallest of matters.


In the Global Law and Order 2020 report by US consultancy Gallup, Singapore scored 97 on the Rule of Law Index, making it the number one country in the world.


Singapore's educational resources are outstanding and its healthcare standards are among the highest in Asia.


Bilingual education, a well-developed education system and health care are also available.


UK healthcare company Veolar and research firm Magmatic have analysed data from thousands of cities around the world to assess the quality of healthcare services, accessibility and liveability, and have named the world's best cities for retirement.


Singapore ranked third, behind Tokyo, Japan and Wellington, New Zealand, and ahead of romantic Paris, France, and Vienna, Austria.


Singapore is a small, beautiful, green and tidy garden city with shady roads, small gardens and lawns, and fresh air.