Singapore Property Market to Benefit From Brexit
A turning point in the United Kingdom’s history, the Brexit referendum held in 2016 brought about far-reaching effects – they could even be felt here in Singapore, according to a blog post by OrangeTee.
This comes as the prospect of Brexit has cast a negative impact on the London property market’s status as a safe haven investment for overseas buyers, while boosting that of Singapore.
The British Property Federation publication Who Buys New Homes In London And Why? showed that 49 percent of prime central London properties are purchased by foreign buyers.
“But the prospect of Brexit has dampened demand from this segment.”
UK real estate prices saw house prices increase by just 0.1% year-on-year in January, the slowest in six years, and only rose only by 0.4% in February.
OrangeTee noted that falling prices and a drop in the number of sales transactions “is a clear indication that foreign buyers are moving away. Or, at best, they are adopting a “wait and watch attitude”.
And with Singapore’s property market being a favourite of foreign buyers for many years, London’s loss could turn into Singapore’s gain.
OrangeTee said there are various factors that make a real estate investment in Singapore an attractive proposition for overseas buyers. These include the city-state’s stable economy, strong governance and rule of law, world-class infrastructure and strong demand for real estate.
Moreover, Singapore’s Property Price Index showed that prices of private homes have remained relatively flat over the last three quarters of 2018, before dropping by 0.9 percent in the first quarter of 2019.
Luxury home prices declined by an even bigger percentage, with the Urban Redevelopment Authority reporting that prices of non-landed private homes within the Core Central Region fell by 2.9% in Q1 2019.
“Conditions in the real estate market in Singapore are just right for overseas buyers. Prices are down, and a purchase made at current valuations offers the likelihood of gains.”