The Singapore property market is very much alive, with dozens of renovation and new building projects across the city. One of them being the Canninghill Square Mix Development project located at River Valley Road. With so many ongoing projects, one has to wonder about the price forecasts for Singapore property in 2021.
In this post, we will take a close look at where the Singapore property market is headed. Spoiler alert – Singapore Property prices are projected to go up. Let’s see what impact the property construction projects, including Canninghill Square Mix Development, have on the price forecasts.
Singapore Residents & Household Net Wealth
Many factors can affect such a dynamic concept as property prices, and the same applies to properties in Singapore. One of the significant factors is the Household Net Wealth of Singapore residents. However, if we look at the stats, it becomes clear that the median wealth per adult in Singapore is approximately $97,000. This category Singapore as one of the countries with the high-income.
With all that money on their hands, Singaporeans have a lot of options. One of the options is to invest in the property market. If this happens, it will drive the property prices.
This is just one of the factors that affect the projected prices in 2021. Let’s see what the Morgan Stanley report has to say about it.
Fast-Paced Singapore Property Price Growth
Morgan Stanley is known for its comprehensive quarterly and annual reports on various niches closely related to finances. Their latest report on the global real estate trends and opportunities clearly paints the picture of the Singapore property market. During 2020, the market was very stable, and home price growth was 2% throughout the year.
However, Singapore’s economy entered a fast-paced recovery by the end of 2020. As a result, the report indicates that we should expect to see home price growth accelerating to 5% due to the high economic recovery rate. Some experts, including the head of research at Colliers International Singapore, are confident that Singaporeans have a really strong buying power. Experts project that the developer sales will be 2.5% better in 2021 than they were in 2020, even though the average price will go up.
Expansion of Multinational Companies
So far, we have established that the rapid economic recovery rate and high household net wealth of Singaporeans are the factors to drive Singapore property prices in 2021. But there is one more development that can push prices even higher. Singapore is very attractive to some of the world’s most renowned companies.
Tencent, Bytedance, Zoom, and Google are just a few of the enterprises planning to expand their operations to Singapore. While this development most definitely has the potential to drive the prices in the commercial real estate area, it can potentially drive the prices in the residential real estate as well. The expansion of multinational companies in Singapore can boost price forecasts that are already positive.
Subtle Inflation of the Building Costs
Building costs were stable over the last couple of years. This is the main reason why they weren’t taken in as a significant factor in property price forecasts. However, the worldwide pandemic has affected building costs too. This is mainly because of the COVID-19 safety measures that construction companies have to incorporate in the workflow at the construction sites.
The safety measures have impacted the entire supply chain. The costs of materials remained the same, but the cost of doing business went slightly up. This subtle inflation of the building costs also affects the property prices in 2021. As soon as these specific safety measures become obsolete, prices will shift right back to their previous state. Nevertheless, it shouldn’t have a significant impact on optimistic price forecasts for Singapore property.
Urban Redevelopment Authority & Bank of America
Urban Redevelopment Authority is a Singapore Government Agency. It releases property price reports quarterly. On the other side, we have Bank of America that does practically the same only globally. It’s fascinating to cross-reference the reports of these two bodies. Surprisingly, both reports deliver approximately the same forecasts regarding Singapore property prices in 2021.
Urban Redevelopment Authority reports the price index on properties +0.8%. At the same time, the Bank of America report has it at 1%. However, unlike the Urban Redevelopment Authority, the Bank of America report does a price forecast for 2022. The positive trend continues, but the projected prices will rise strongly the following year by 5%.
As you can see, the same information comes from entirely different sources. The bottom line – Singapore property prices will go up in 2021. The favorable price forecast extends to the following year, and the economy continues to recuperate, and the buying power of Singaporeans becomes even more potent.
