Over the past 3 months, the media has been reporting mostly good news about the Singapore Property Market and Local Property Brokers have been upbeat about the property market. Against a backdrop of what looks like a very promising – The Great Singapore Upgrade for the Property Market, this article attempts to provide deep insights that investors should consider as well as questions investors should be asking.
- Transaction volumes are increasing
- Property price index (PPI) is increasing
- Developers unsold units are decreasing
Fig 1. Source: moneysmart
Fig 2. Source: URA (OCR-Outside Central Region, RCR-Rest of Central Region, CCR-Core Central Region)
a. If unit is vacant for 6 months, do you have the funds to pay for the mortgage payment?
b. If rental drops by 30%, ie. From $3000 to $2100, are you able to top up the difference for the mortgage payment.
c.Will there be potential supply and demand mismatch in the future, for example will there be enough demand to take up the number of units in that area in future.
Fig 3. Source: URA, REC Research
Fig 4. Source: URA, Exclusively collated by REC Research
4. Population Growth & Demographics
Fig 5. Source: Singapore Population Trends 2017