Cracking the property market code can sometimes feel like trying to master the art of surfing in choppy seas. But if you’ve been eyeing the Singapore property scene, the signs are flashing green – it’s an excellent time to grab your board and ride the wave. In recent years, we’ve seen property prices in our Little Red Dot ascend steadily, with no signs of hitting the brakes.
The global pandemic has done little to dampen the spirits of the Singapore property market. Despite hopes that an economic slowdown courtesy of COVID-19 might bring property prices down a notch, the opposite has happened. The past couple of years have turned out to be a silver lining for the property market.
So, what’s driving this surprising leap in property prices? The answer harks back to the classic economics playbook: supply and demand.
The Balancing Act of Supply and Demand
A tight squeeze in the property supply chain has seen prices climbing to keep pace with strong demand. Despite the hefty price tags, Singaporeans are still keen to get their hands on homes, seen as both a basic need and a symbol of social standing.
This cocktail of strong demand and limited supply has created a unique dynamic where property prices are on an upward escalator. With not enough new properties to satisfy the appetite, prices are struggling to find a flat spot. Even with soaring prices, buyers seem ready to meet the challenge, adding more fuel to the price hike.
Peering into the 2023 Property Market Crystal Ball
Property pundits are looking at 2023 through a rosy lens. They foresee property prices continuing their upward rise, despite possibly at a gentler gradient due to a forecasted increase in the supply of new homes. Depending on who you ask, the price hike for new private homes could range from a healthy 5 percent to a heady 12 percent. The climb for resale HDB flats also looks promising, with estimates pegging it between 5 and 11 percent.
The expected increase in supply isn’t a small matter. In fact, we might see between 10,000 to 12,000 new private homes hitting the market in 2023, spread across 40 launches. This significant bump in supply could help control rising prices and cool down the expected price increase.
A Tale of Rising Rents and Home Ownership
On top of rising property prices, rental costs are also on the rise. Experts predict that rents for private housing could increase by more than 12 percent in 2023. If you’ve been considering renting instead of buying, this increase in rental costs might make owning your own place more appealing.
Some personal notes
Although these positive signs may make it seem like the perfect time to dive into the property market, it’s important to remember that everyone’s property investment decisions should be unique to their own situation. Factors such as your financial health, investment goals, and risk tolerance should all be taken into account. Navigating the property market can be a complex task, and seeking the guidance of a financial advisor or real estate professional is always a wise move.
In summary, the combination of high demand and limited supply has propelled the Singapore property market forward. The projected increase in property prices and rents in 2023 creates an excellent opportunity for potential buyers to explore the market. However, it’s crucial to conduct thorough research and make a decision that aligns with your personal circumstances and long-term financial aspirations.
