Singapore Hit By Recession

Singapore Hit By Recession

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What was previously described as one of the world’s hottest property markets only two years ago has now officially lost its grace according to the latest reports. Singapore property owners have joined the crowd when they lost 5.7 percent value in their homes in the forth quarter last year.

The drop in value was also the biggest in a decade, painting a less than optimistic picture for the months to come. The biggest loser’s according to the latest figures were the non-landed prime properties. These properties saw a loss of 6.3 percent.

The luxury real estate market also took a fair beating with only 49 transactions taking place in the year 2008 compared to 87 in 2007 and 119 in 2006. Interestingly enough, while the transaction frequencies have fallen in this sector, price hikes saw increases of 64 percent over the last two years. A SQ. FT of Singapore’s good class bungalow market is now valued around $822.

The current situation has been related to the global recession by industry watchers, saying that the market will bounce back again when Singapore comes out of its current recession. Therefore it is hard to predict when this might be.

This leaves the market open for serious buyers with cash. A two-bedroom apartment at popular Orchard Road in a yet to be build condominium will set you back some $860,000 Singapore dollars (US$ 583,249).

While buys like these are considered a good bargain, many buyers are choosing to be cautious. It is understandable when we see economies collapsing and job losses across the board. The global crisis affects us all in one way or another and by playing the waiting game buyers can gain a more secure financial environment for themselves.

Officials predict that the economy of Singapore could shrink by 2 percent in 2009 and the city’s second-largest real estate company City Developments Ltd, announced that it will delay selling homes at new residential projects “for the time being”.

Looking at these stats it is clear that while most people are being cautious, the market will continue to stay stagnant in Singapore.

Photo credits: Flickr