2018 seems like a good year with the ‘8’ perhaps bringing good fortune. Home prices and buying sentiments has shown steady improvements over the past quarters. And some project analysts are hoping the uptick will continue well into the next year.
Rise in home prices expected to last through 2020
Aside from an estimated 8% increase in home prices next year, the property cycle may very well continue to move upwards through to 2020.The Monetary Authority of Singapore’s (MAS) has however cautioned against a possible supply and demand imbalance in 2 to 3 year’s time. Rising vacancies and slowing population growth are reasons for their premonitory warnings.
The warnings are but that. Warnings. There remains 2 to 3 years from now for the market to react and change. Developers who have purchased land this year will also need the lead time to complete their new projects. 2020 will be the year these developments reach completion and perhaps also the year to watch.
Vacancy rates and rental demand crucial determining factors
Other market experts are less bullish about their predictions, citing vacancy rates and rental demand as crucial factors that will determine the sector’s trajectory. Stringent home purchase restrictions such as foreign ownership and stamp duties will also limit the speed and range of increase of property prices.
Another issue which will affect the growth of the real estate market is global interest rates which threaten to rise sooner rather than later.