Like it or not, property is Singaporeans’ favourite assets. This is because of the attractive functional, social and economic benefits that comes with getting a home. It is a 3-in-1 asset: Shelter over your head, investment for capital growth and a pre-requisite for marriage. It is almost unthinkable to get married in Singapore without your own home.
So, if you are getting a home in 2019 for one of the 3 reasons, here’s what you will need to know. P.S. Get ready your pen and notebook to copy down the key points.
Close to the end of 2018, Morgan Stanley published a report, claiming that property prices will soar in 2019. According to Morgan Stanley’s report, property prices will grow by 10% in 2019 and go on to double by 2030. This was despite the latest round of cooling measures on the Additional Buyer Stamp Duty (ABSD) and tightening of Loan-To-Value (LTV) ratio.
Morgan Stanley cited the influx of capital from en bloc beneficiaries and HDB upgraders as the key drivers for demand. Moreover, with housing supply still below historical average and falling, this will support the housing prices in 2019.
So far, home prices haven’t seen that big bump like in 2018. Resale prices of private condominium slipped 0.3% month-on-month in January compared to rates in December 2018. On a year-on-year comparison, private condo resale prices fell 6%. HDB resale transactions also look lacklustre, falling 0.5% in February 2019 compared to February 2018. According to CapitaLand CFO Andrew Lim, a 5% growth in home prices will be considered a ‘very good’ year for Singapore’s residential property market.
If you are a home buyer in 2019, you might want to know this: The property market is starting to shift towards a buyer’s market. In 2019, there are around 60 development projects that are set to launch. 40% of the developments will be located in the prime District 9, 10 and 11. Some of these developments will come with a freehold ‘lease’. This means that there is a wide range of developments for you to choose from if you are planning to buy a home in 2019.
The two biggest projects that are on home buyers’ watchlist are the Treasure at Tampines (> 2,000 units) and the Normanton Park condo re-launch (1,882 units). Both developments are situated in very ideal locations surrounded by amenities like shopping centres, tertiary institutes and central access. Other big projects include SingHaiyi’s The Gazania and The Lilium.
Apart from the big projects, here are some other interesting developments to consider:
In the HDB space, the biggest story is still the development of a new non-mature town, Tengah. This will be the newest HDB town in Singapore since Punggol. Interest in the Tengah estate has been rift, given that it is going to be launched with the latest housing technologies and amenities, from carless zones to thematic playgrounds to community quadrangles to urban water harvesting system. It is no wonder why young families are oversubscribing to Tengah BTOs.
Besides Tengah, there are also interesting developments in the central region like Kallang. So far, one development in Kallang was already launched in February 2019 and another one will be launched in May 2019. While they may be pricey, they can become good investments given their ideal location to the CBD.
Since 2018, SIBOR has been trending upwards, thanks to the rate hike environment around the world. Many home owners who have taken up floating interest rate loan packages are starting to feel the pinch. Right now, the floating rate home loan packages come with an interest rate of ~2.3%. As interest rate continues to hike, it will not be long till interest rate surpass the HDB concessionary loan rate of 2.6%.
Interestingly, DBS has introduced an interesting fixed rate loan package offer: 2.5% fixed interest rate for the first 5 years. This is 0.1% below the HDB concessionary loan rate. While DBS is the first to introduce such a package, you can expect other local banks to follow suit to snatch a piece of the residential loan pie. In other words, Singaporeans are in for a variety of options for home loans in 2019.
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