Singapore Property Investment 1st Quarter Sales Plummet
- May 10, 2016
- Posted by: admin
- Category: Property Investment
The uncertain state of Singapore’s economy has been a major concern not only in Asia but the rest of the world. With the Monetary Authority Singapore (MAS) revising its 2016 growth forecast down to 1.8% from the earlier 2.2% investors had at least hoped no more upsets would crop along the way. However, a report by DTZ Consultancy has put a damper on any hopes for recovery in the real estate market indicating sales have plunged 74% in the first quarter of 2016.
The shocking report released in April shows Real estate sales transactions in Singapore fell to S$1.75 billion in the 1st three months down from S$6.7 billion in Q4 2015. The number of investment deals in Q1 2016 is the lowest since the third quarter of 2009 which was in the middle of a global financial crisis. The DTZ reports labels investment sales as land sales, buildings and property units valued above $5 million.
Main Economic Indicator
With the property market rated as one of the modern practical indicators of a country’s growth the report by DTZ has jolted the country. The report comes against a move by MAS to ease the monetary policy setting in a bid to curb core inflation. DTZ Consultancy has attributed the decline to a volatile global economy, mixed signals in the Chinese market, capricious oil prices and the Brexit debate in the U.K.
The sluggish local economy has also been highlighted as a major cause of concern as it has weakened international investor confidence in the property market. The increase in commercial space has also greatly reduced transactional levels. With the cooling measures proposed by MAS property market analysts are not too optimistic about an about turn in the volume of sales in later quarters of 2016.
Highlights of Q1 2016 Real Estate
A closer look at the DTZ report highlights the grim situation in the Singapore real estate market. Real estate volume for instance plunged 90% in Q1 2016 down reaching $521.9 million which is a significant drop in comparison to $5.1 billion in Q4 2015.
Notable sales include the top performer a land site near East Coast Park. This site measuring about 19,000 sq m site alone went for over $620 million. An EC land property at Yio Chu Kang Road was sold for $183.8 million while another state-owned land site was bought for $419 million highlighting the fact that investors are still ready to put their money in the country’s property market.
The report still has a positive outlook highlighting the strategic location of Singapore as a major draw for international investors. The negotiation processes have also been noted to take longer hence the reduction in number of closings.