The little red dot has limited land and a growing population, so “land prices will continue to go up because of these unavoidable factors”, says Dennis Wee, founder and chairman of the Dennis Wee Group. “This will in turn affect property prices here and that is one reason why real estate is considered to be one of the safer investments one can make in Singapore.” But with more buyers put off by rising prices and increasing density here and turning to other markets, staying competitive will need to be a priority.
What would you say are the greatest challenges ahead for the Singapore property market?
Wee The greatest challenges lie with an oversupply of properties hitting the market despite a limited pool of buyers due to the cooling measures. Many local buyers are put off by the high prices and difficulty in obtaining loans. For foreign buyers, too many policies are in place that hinder potential investors from investing in Singapore. If the pool of buyers is unable to expand, property prices will stagnate due to a lack of demand.
How would you propose policymakers meet these challenges?
Wee For the local market, allowing a higher percentage of CPF savings to be used in the purchase of property, especially for people looking to buy for their own stay, should help to generate more interest from local buyers and would be a healthy method of achieving organic growth.
What will continue to make Singapore property attractive for foreign investors?
Wee Singapore is known to be a very safe country. We also have some of the best infrastructure and business policies in place to encourage businesses to set up in Singapore, and this draws many investors to our market. Our currency is also one that remains strong and secure, and foreign investors are confident that when they invest in a Singapore property, it is very likely that foreign exchange rates will work in their favour rather than against them, providing another form of security.
However, maintaining policies that encourage investment from foreign investors will be essential in ensuring that they do not lose interest in investing in Singapore property, especially as competition from other Asean countries heats up to win over property investors. If Singapore wants to continue to be seen as an ideal place for property investment, it needs to ensure that it can stay ahead of the competition and continue drawing businesses and expats to the country while maintaining its standards of transparency and legal rights.
With increasing density and smaller homes becoming the norm at all levels of the property market, how does this affect the way local buyers view their purchases?
Wee In terms of local buyers, the trend has already shifted overseas. Even before the implementation of the cooling measures, some Singaporeans had already started investing overseas rather than locally, as prices became more unaffordable over time. Most people buying local property are now doing so either for their own stay, or for long-term wealth preservation rather than short-term profitability. The trend of local buyers choosing to invest overseas instead of locally will likely continue until local properties either become affordable to more Singaporeans, or until there is a rise in demand from overseas investors.
How do you think the next generation of Singaporeans will view home ownership?
Wee They will still view home ownership as very important. However, younger buyers tend to look for newer properties, with an emphasis on clean aesthetics and modern design, while older buyers tend to prefer the spaciousness and character of older properties.
What are your views on the emerging trend for sustainable and smart homes and buildings?
Wee It is still too early for us to tell if sustainable and smart homes have had any impact on the value of a property, especially since such features are not primary concerns for most home buyers. However, due to savings from potentially reduced expenditures, buyers may gravitate over time towards such properties, especially as more of them become available. Even so, unless there are greater benefits for buyers to select sustainable and smart homes, it is unlikely that such features will have any effect on the value of the property.
Illustration: Yohei Yamaguchi; Images: 123rf.