According to a report by the global financial services firm Morgan Stanley, property prices in Singapore (particularly that of homes) will double by 2030, with the prolonged downtrend in the country’s property market expected to end in 2018.
The company’s forecast implies that prices will increase by 5% to 6% each year, marking a strong reversal from a long downtrend in the market. It stated:
“Property market bears expect slower population growth, an ageing population, and a structural growth slowdown to weigh on the long-term property market outlook. We disagree and believe home prices will double by 2030.”
From 2009 to 2013, prices of homes in the country soared more than 60%, mostly driven by quantitative easing and very low global interest rates in developed economies. This trend still occurred even with the government placing some measures to suppress a market bubble. However, the government recently managed to scale back the uptrend by shortening the minimum holding period and lowering seller’s stamp duty.
Morgan Stanley sees this action as an indication that the property market was closer to the bottom, where buyer sentiment should start to improve. Because of this, the bank expects sales volume to rise this year, spurring property prices to be higher in 2018.
Now, Singapore’s property market is being closely watched for investment and other economic implications, with Morgan Stanley noting an increasing household formation rate driven by individuals and higher-skilled foreign workers looking for their own living spaces.
As estimates show, “one in five” households in the country would be occupied by just one person by 2030, which is up from “one in eight” in 2010.