THOMAS TAN spends most of his time imparting his wealth of real estate knowledge to learners taking the government licensing Real Estate Salesperson examination, and provides upgrading courses to existing agents as well. To date, he has trained over 10,000 participants. He also runs his own estate agency that provides consultancy for real estate solutions. Beyond training and running his company, Thomas volunteers pro-bono as the President of Singapore Estate Agents Association (SEAA), an industry association that focuses on raising the professionalism and image of property agents. For more information, go to www.linkedin.com/in/tanthomas
Singapore properties are the asset class that most investors will possess in their portfolio. This is because they are able to gain capital from these in good times while they act as a hedge for their funds in bad times. So what can we expect in 2020 for the property market in Singapore? The following points will help us paint a clearer picture.
The US-China trade tensions, Brexit-related uncertainties and Hong Kong’s on-going social and political instability are important markers as to how Singapore’s economy performs and will have an impact on our property prices directly.
The Singapore economy
“The Ministry of Trade and Industry (MTI) announced today that the Singapore economy is expected to grow by ‘0.5 to 1.0 per cent’ in 2019 and by ‘0.5 to 2.5 per cent’ in 2020.”
This is very important as it is a reflection of how businesses in Singapore are performing, which in turn affects employment and income levels. In short, good economy translates into better income and demand for properties will increase.
With 2020’s projected growth forecast at 0.5 to 2.5 per cent, the one word that comes to mind is, “steady”, which means 2020 will likely perform similarly to 2019, unless the government decides to tweak the Additional Buyer Stamp Duty (ABSD). This is unlikely as the Monetary Authority of Singapore (MAS) has indicated that, with the last measure implemented in July 2018, it is content with current state of things.
Opportunities in 2020
Despite tepid economic growth and cooling measures tapering demand, property prices in 2019 have demonstrated resilience due to liquidity and low borrowing costs, and this buying trend will probably continue in 2020 barring external factors.
With over 50 new projects launched in 2019, competition among developers for buyers has been keen. As developers have five years to clear their stock without incurring ABSD, there will be pockets of opportunities as the days go by.
For those with a budget of $3 million and up, consider D9 and D10, the traditional property “hotspots” for foreign buyers, especially those from China, Indonesia and Malaysia. As long as demand remains strong with an increase among foreign buyers due to the push-factors mentioned above, our prime property prices will remain robust. One launch to look out for in 2020 will be Leedon Green (formerly Tulip Garden), which is a freehold project in the prestigious D10.
For investors on a tighter budget investing in non-prime areas, consider buying integrated mixed-used developments such as SengKang Grand Residences and The Woodleigh Residences, as these “all-in-one” projects provide many conveniences and connectivity, making it a must-have for many tenants.
Alternatively, choose a project that has growth potential, like the Avenue South Residence and Sky Everton, which is riding on the growth story of the Greater Southern Waterfront.
Singapore properties remain an essential part of an investor’s portfolio due to its proven track record of upward trajectory over the years. However, as with all investments, due diligence, timing and homework must be done to make informed decisions. If you have no time to do this homework, you can always engage a property agent to assist you.
Lastly, here is a quick tip on investment: Always “think next buyer”. Whichever property you pick out, think about the next buyer and ask yourself this: “Would he/she purchase from me?” Once you are absolutely convinced, proceed.
Have a great 2020 filled with joy, peace and prosperity!
DISCLAIMER: All views expressed are personal opinions and do not represent any entity I am affiliated with.