Wednesday, October 24, 2012

Brace yourselves for another record-breaking home sales by end-2012

Singapore is still 'safe haven' for properties.

According to to Knight Frank, new home sales volumes in Singapore hit all an all-time record year to date in 2012, with prices continuing to edge up on a quarterly basis.

Here's more from Knight Frank:

With inflation significant and therefore real interest rates negative however, there is a real incentive to put money in property. The low mortgage rates and the status of Singapore as a “safe haven” have helped facilitate this.

Total sales volume is expected to hit a new record by end 2012 with about 20,000-22,000 private homes sold. The ongoing uncertainty in the world’s economy continues to have an impact on markets.

Weaker economic growth has impacted sentiment and in some cases the wealth of buyers, whereas property as a hard asset continues to be regarded as a safe investment choice, reinforced by inflation and often negative real interest rates.

This situation continues to be further complicated by government intervention into various property markets, which has continued through 2012, with Hong Kong, Indonesia and Malaysia notably recently introducing further cooling measures.

Fear that activity from central banks in the Eurozone, Japan and especially the US could lead to excess liquidity finding itself into property markets this side of the world, means that it is unlikely that any of the cooling measures will be lifted in the short term.

The conflicting policy objectives of boosting economic growth while avoiding excessive asset price appreciation means that government intervention in various forms is likely to continue.

The ongoing difficulties in the world economy, including a slowdown across Asia-Pacific markets, will continue to have an impact on residential markets in the region. With much uncertainty in the world; the ongoing Eurozone crisis, the sluggish recovery in the US and a slowdown in China, sentiment has been impacted.

That said, underlying drivers will continue to support demand for residential property in developing Asia and the volatile performance of other asset classes will continue to attract investors who trust hard assets in the form of property.

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)

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