Property prices in Singapore are set to double by 2030 according to Morgan Stanley.
“Property market bears expect slower population growth, an ageing population, and a structural growth slowdown to weigh on the long-term property market outlook,” said the global financial services firm. “We disagree, and believe home prices will double by 2030.”
In order for the prediction to be realised, property prices in Singapore would need to rise by at least 5% per year from now on – a huge increase for a market that has suffered a long downtrend.
Prices rose more than 60% in Singapore from 2009 to 2013, resulting in the government introducing a range of cooling measures in 2011 in a bid to prevent a bubble from forming.
But, in March, the Singapore government scaled back some of those curbs, a fact that Morgan Stanley believes to be a positive signal that the property market is close to the bottom.
The financial services firm also expects supply to decline. Private residential supply added around 20,000 units a year between 2014 and 2016, twice the historical average since 1990. But, in 2017 and 2018, supply levels are set to fall 40% each year, it noted.
The bank also noted an increase in single unit households, and a shift toward higher-skilled foreign workers. It predicted that by 2030, one in five households in Singapore would be occupied by just one person, up from one in eight in 2010 – a factor that always sees an increase in demand.
Couple this with the signs that buyer sentiment has already picked up (one recent development launch saw its entire first phase sold out within a day) and the signs are indeed looking positive.
