Somewhat startling news came out of Singapore’s own PropertyGuru this January - and was rapidly followed up by this verenerable organ - a new report claims that Singapore private property prices are expected to drop between 6-8% in 2014.
The outlook is even worse for HDB (Housing Development Board) owners – with an expected 8-11 percent slide in HDB resale prices. The cooling measures implemented by the Singapore Government are having their desired effect – the heat is coming out of the market.
This is actually a good thing for Singaporeans – it means that housing becomes more affordable for those attempting to get on the property ladder. However, on the flip side, for investors negative capital growth is not exactly what they had in mind when they were spending upwards of S$1,500 a square foot for condos in district 10.
There is also the issue of a tax on foreign investors in Malaysia – a 2% levy has been raised on investors buying Malaysian property – with a not entirely certain view on how resale and retail prices will trend, especially since there have been a spate of mega constructions across that country. The situation in Iskandar is also fast evolving - we cover that region regularly in our magazine.
Thailand’s current problems mean that 2014 will give investors eyeing that country pause for thought – an elderly monarch and people being injured in politically motivated unrest does not instill faith in this beautiful country’s property market.
There is a silver lining for property investors in Singapore though – property markets in Europe and the US are on the up and are well worth looking at - property investment in Europe by pan Asian investors is on a massive upswing.
Property markets in countries like Spain and Portugal are rebounding and are becoming the focus of investors around the globe - in our next issue we will discuss the ‘buy a property, get a visa’ proposition. For S$800,000 you can get a jumbo HDB in or a villa with a pool in Portugal… or large townhouse in Melbourne!
I wish all readers a very prosperous Lunar New Year. Saddle up for a wild ride and Gong Xi Fa Cai.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Singapore Business Review. The author was not remunerated for this article.
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Alexander Knight is a Singapore-based property commentator and Regional Director Southeast Asia at investorist.com.