As Singapore bucks global downturn, 6 in 10 say property is unaffordable
- Price jumps have been fuelled by a supply shortage coupled with demand spikes from locals looking to upgrade and an influx of well-to-do foreigners
- Surging property prices pose a challenge for the ruling People’s Action Party, whose achievements include the highest public housing rate in the world
Nearly six in 10 people who want to rent or buy said they find property becoming more unaffordable, according to a poll of 790 respondents conducted in July by 99 Group, which operates online home rental portals.
“Interest rate hikes do not seem to have a significant impact on new home sales” in Singapore, said Christine Sun, senior vice-president of research & analytics at OrangeTee & Tie Pte, a local real estate agency. Property prices, she added, are “more supply-driven rather than sentiment-driven.”
Authorities are taking notice. The government introduced curbs last year to cool home prices that surged the most in a decade. Officials also announced tax increases on high-end properties during the annual budget this year, and plan to increase the supply of private homes.
Despite a brief slowdown, residential prices have rebounded and grew at a faster pace than expected in the second quarter, climbing 3.5 per cent.
Wealthy locals and high-earners moving to the city state are pushing up prices, said Alan Cheong, executive director of research at Savills Plc. Singapore’s rent surged the most among 30 cities globally in the first half, tying with New York. The nation said last month it would try to woo highly paid expats with a new visa.
That’s part of the reason luxury properties are seeing the most froth. Condominium resale prices rose for 25 consecutive months as of August, according to estimates released Tuesday by SRX, a portal run by 99 Group.
The heat has also spilled into public housing, with some government-subsidised flats fetching price tags of more than S$1 million (US$714,000).
The surging prices pose a challenge for the ruling People’s Action Party. Its achievements include the highest public housing rate in the world, with over 80 per cent of the country’s 4 million residents living in government-built homes.
A separate survey in May showed residents are roughly split on the government’s response to housing affordability. About 52 per cent said it was performing “well”, with the rest saying it was doing “badly”, according to the poll of 758 people by Blackbox Research Pte.