Singapore properties are expensive. But compared to other major global cities such as London, New York, Paris, Tokyo and Hong Kong, perhaps they are simply reasonably priced, particularly in the category of prime district properties. The government-implemented property cooling measures might have helped keep prices down.
According to the Monetary Authority of Singapore’s (MAS) Financial Stability Review from November 2015, Singapore’s home prices very well could have been 17 per cent higher than they are now if not for the property curbs implemented since 2010. The ratio of home prices to income for Singapore is now 5.6 per cent, lower than the 8 to 9 per cent for most major cities. Mortgage rates (at between 1.6 to 2 per cent) are approximately the same as average rental yields for prime properties, which are currently at 1.8 per cent.
Average luxury prime district home prices are hovering around $1,991 psf at the moment, about 20 per cent lower than the segment’s peak in 2011. Though sales volume has been low in the past year, as the year moves ahead, property analysts are expecting rental rates to increase after this year as the supply of prime properties dwindle. For savvy investors, the time to purchase may be soon, before property curbs are lifted and demand rises once more.