Why is the property price in Singapore rising day by day?


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    Why is the property price in Singapore rising day by day?


  • admin

    The demand for accommodation is rising day by day, and the new launch properties, where various luxurious condos and others are increasing to measure the scale pan. This will amount to approximately 20,000 private residential units, which in return may result in a sensitive price hike in 2019. As per the price study of the last 10 years, the price of private properties has increased by about 80% to 90%. For example, the average price of a two-bedroom condo was about $6.5 lakh a decade ago, which is now available at $1.25 million.
    These are several factors those considered by the developer before pricing a new launch property in Singapore, such as;
    The government’s cooling measure is the primary reason for the price hike.
    The cooling measures caught the market by surprise. They compounded the negative returns for real estate developers with significant exposure to the Singapore residential market will be followed by the price growth. As the Government of Singapore announced on 5th July 2018, a hike in Additional Buyer's Stamp Duty (ABSD) rates and also tightening loan-to-value (LTV) limits on residential property purchases. This process is useful to keep the price hike in line with the primary economic fundamentals, as an initiative to cool the property market. These will continue to suppress the market going into 2019 as the price for purchasing a property in Singapore will be increasing for the same, except for Singapore citizens and first time home buyers.
    The hike in interest rates in recent years affected the property prices.
    The quantity of new and unsold properties of Singapore is going up day by day, which caused some concern with developers of unsold inventories with planning approvals increasing by a measurable unit. As per the result in private residential price growth came in near the low-end as per their forecast of 8%-10% in 2018. Also, the abundant supply of units is coming on stream that effecting the interest rates to rise accordingly.
    The rising demand for properties is also another critical factor for the price hike.
    The price always rises with demand, and this resulted as a significant price hike for the new launch properties in Singapore, but the demand is there at growing to compensate for this. Nevertheless, the previously concluded deals could still present sizeable opportunities as several relocating households may have the intention to purchase replacement or resale properties, as well as the owners of more than one property, may intend to sell one of them, to take the profit opportunities from the tentative property price growth in Singapore.
    Also, the urge to increase the incentives of property agents can be measured as another factor.
    The professional property agents in Singapore are highly organized and have the best knowledge of real estate market, which includes the listing of existing properties as well as the new launch properties in Singapore, which effects as a great help for the tentative buyers also the real estate developers from their selling perspective, thus the developers may persuade to increase commission fees to incentivize property agents to boost their selling efforts amidst the intense competition in the real estate market of Singapore.
    But in spite of price hike, the new launch properties are still an excellent prospect for investment and make a profit out of that, by selling that once the minimum occupation period is over, you can earn a good return from that.

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    There may be several reasons, but the ultimate goal is “DEMAND.” The outgrowing population creates a demand for properties.