Property investment is known as one of the safest investment options. One reason is that property values tend to appreciate after a few years. In addition, having the property rented out can also bring in regular passive income for the property owner. For those reasons, many choose to save up money to afford Singapore house prices.
However, the property prices in Singapore value don’t always rise. There are factors that affect the price of properties that can bring the value down. It is recommended that you study the property prices trend if you are planning to buy a house or planning to invest in properties. In this article, we’ll uncover the truth about real estate prices in Singapore.
Singapore house prices during a recession
One of the factors that can bring down the property prices in Singapore cost is a recession. A recession occurs when the economy of a country has slowed down or stopped. There are several elements that can cause a recession. One of them is a situation we are facing right now, the pandemic.
The COVID-19 pandemic has caused a recession in the world’s economy. That is because most countries imposed quarantines and lockdowns to prevent the spread of the virus. This resulted in lower industrial output and consumer spending. It caused a chain reaction that led to higher unemployment, stagnant household incomes, lower consumer spending, and increases in loan defaults and bankruptcies. The industry that was severely affected by the pandemic is the real estate industry.
Normally, a recession will cause a drastically high supply of properties in the market. That is because many can no longer pay for the mortgages which will lead to a foreclosure of their homes. Some even sell their properties in order to liquidate them. As a result of the recession, Singapore’s house prices have dropped. However, the prices never stayed low for long. With the immediate response of the government, many were prevented from selling their homes and were able to continue to pay for their mortgages. Thus, Singapore has proven once again that it can withstand any recession and maintain property prices Singapore appreciation.
Property prices Singapore regions
The location has been a driving factor in Singapore’s house prices. The more convenient and accessible the location is, the higher their property prices are. Therefore, the property value is different in every region of Singapore. Real estate continues to cost more in the Core Central Region and Outside Central Region of the country. Properties here tend to appreciate faster. They are usually the first to recover after a recession.
On the other hand, regions that are far from the central districts tend to cost less. However, that may no longer be the case in the coming years. That is because Singapore continues to develop its lands to make it easier to travel within the country. They predicted that come 2030, 80% of the Singaporean household will have an MRT station within 10 minutes of walking. As a result, Singapore house prices will also increase in the other regions by then. Many investors have taken advantage of this information by buying properties near these transportation developments. If you are searching for a profitable real estate investment, you should consider this as well.
Mortgage rates affecting property prices Singapore value
Buying properties in Singapore is a huge investment. One reason for this is that Singapore’s house prices are one of the most high-priced in the world. That is why most Singaporeans avail of mortgage payments to cover the cost of buying a property. These mortgage payments have interests that can affect property prices.
Interest rates can affect the cost of house financing and mortgage rates. The lower the rates are, the more people will be encouraged to avail themselves by buying properties. Thus, the demand for houses will also increase. Property supplies in Singapore are fairly limited. That is why an increase in the demand for houses can increase the property prices Singapore value. The effect of the mortgage rate on property prices may not be as distinctive as the effect of a recession or a transportation upgrade. However, they still play a role in the demand and supply of real estate thus indirectly affecting the real estate prices.
Overall, real estate prices in Singapore don’t consistently appreciate, unlike popular beliefs. However, Singapore’s fast resilience is what makes its real estate industry very attractive to many investors. Investors have higher profit probabilities and lower risks if they invest in properties in Singapore.