Singapore home prices have hit rock-bottom: BNP Paribas

Posted by at 9 October, at 11 : 44 AM Print

Rochor Centre

Business Community: Multinational bank BNP Paribas SA has been certain of residential development prices in Singapore are turned to restore as it has now hit rock-bottom, stated Bloomberg in their report.

The initial stage in the price recovery is probable to be driven by “very important” income progress, stated Mr. Wee Liat Lee, the company’s very own research head for financial institutions and property in Asia Pacific.

Assumed that property ownership as a proportion of household assets here is close a record low, he expects prices to rise by 10% up to 15% in the following 12 to 15 months. In line, this uptrend would appeal foreign purchasers, mostly those from China.

Instead, Wee contemplates that the home prices in Hong Kong will remain to increase after it shot record highs previously this year.

“Hong Kong has been a senseless market; the prices will never descend,” he mentioned.

Prices there would stay high because of a large growth of money that cannot be financed in foreign markets because of Beijing’s capital control measures.

“If you are in a country wherein the tangible total of investable properties is certainly small, then the liquidity will crush the property price very fast,” said Wee.

However, he contemplates a property fizz is not likely as most payments for assets are in cash. Nevertheless, price growth could decline if the government enforces more severe cooling measures to maintain prices in check.

For the meantime, data from BNP Paribas displays that Singapore homes have turn out to be more reasonably priced in year 2017, contrary to those in Hong Kong.

As a matter of fact, the house price-to-income ratio of city-state fell from 12 times in the previous period to 10 times, or the lowest as of year 2009. On the other hand, that in Hong Kong increased to 15 times from about 11 times.

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