|
|
 |
|
Viewing report
|
|
|
|
Singapore Real Estate Report Q1 2012
Business Monitor International, Nov 2011, Pages: 57
Business Monitor International's Singapore Real Estate Report provides industry professionals and strategists, corporate analysts, real estate associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Singapore's Real Estate industry.
Singapore is historically one of the most stable real estate markets in the world, especially in the wake of the global financial crisis. But even this market is not immune to the recent downturn in investment, resulting from debt fears in the major markets of the US and eurozone. Solid economic fundamentals, political stability and a transparent business environment drive the property market; however, activity has been subdued in recent months.
The economy's record GDP growth of 14.5% in 2010 was one of the highest in the world, although a relatively steep correction in growth is expected over the next few years. BMI forecasts GDP growth rates of 5.9% in 2011 and 4.4% in 2012. However, economic fundamentals are sound, unemployment is low and consumer confidence is high. Strong performance in tourism is further benefiting the hotel and retail real estate markets. While office markets are experiencing a slowdown in demand in Q311, it is hoped that this is a temporary correction and growth will continue in the sector going into 2012.
Key Opportunities In The Real Estate Market:
- Singapore's real estate sector has historically led the Asia Pacific region. Even though growth is slowing due to the subdued US and eurozone markets, the country still presents an attractive investment environment.
- Singapore's real estate market is one of the most transparent in the world. According to Jones Lang LaSalle's 2010 Global Real Estate Transparency Index, Singapore ranks third globally. Transparency International's 2010 Corruption Perceptions Index ranks Singapore equal highest (least corrupt) on the list of 178 countries, while the World Bank's 2011 ‘Doing Business' report ranked the country first for the fourth consecutive year. In August, Singapore was rated by Savills' World Class Index of residential property markets as the fourth best city in the world.
- Developers are targeting investment from mainland China. Singapore's transparent market, lack of capital gains tax and status as a gateway into a number of emerging South East Asian economies have helped China become the biggest foreign buyer of Singaporean property at present.
Key Risks To The Real Estate Market:
- The current global economy is beset by uncertainty, especially from the eurozone's sovereign debt crisis and the effects of the US fiscal deficit. Asia is heavily exposed to this potential downturn. In Europe, the risk of a freeze on bank lending to Asia (as seen in 2009) is acute, while strong trade links (particularly with Singapore, which exports around 15% of its products to Europe and the US) suggest a eurozone recession would hurt the region's export powerhouses.
- Residential real estate prices are still climbing, despite cooling measures (although growth is beginning to slow). If this results in pricing some buyers out of the market, commercial subsectors (particularly retail) could be negatively affected as affordability in Singapore decreases.
- One of the key risks to the growth of Singapore's real estate market will always be its size. As space for new developments runs out, companies will become increasingly reliant on reclamations and renovation projects, as well as seeking new developments overseas.
|
|
|
|
