Property Market after GE 2015?
Looking at previous Post-Election Property Price Points
By looking at what has happened post-GE 2006 and 2011 (Fig. 1), it can be seen that property prices increased. This could be attributed to positive investor sentiments in both the stock and property market.
Although the property prices corrected about 7% from the peak of 2013-2014, Mr Khaw Boon Wah mentioned that the cooling measures are unlikely to be removed near term. However, with government starting their policy revision as seen from the recent HDB and EC Income Ceiling increase, it is likely that further policy easing will happen over the next 2 quarters.
Reviewing Singapore’s Economic Data
Looking at the Household Assets/Debt Graph (Fig. 2) and Household Income/Debt Graph (Fig. 3), one conclusion that can be drawn from it is that – Singapore’s Household Debt has been on the rise. That is why the government put in policies like the TDSR and recently cap on un-pledged loans. Both policies have only one main objective – to ensure that Singaporeans do not over leverage. Only if household debt is controlled, will the government continue to let the property market continue its upward trend.
Over the past year, there were market talks about the Government easing housing policies for Singaporeans. This could be in the form of reducing ABSD for Singaporeans. Should this happen, there will be an increase in demand for properties as there are still many Singaporeans who plan to buy their 3rd or more property but are reluctant to pay 10% additional tax.
With these factors considered, it is very likely that the Singapore Property Market will start to recover and resume its upward trend sometime over the next 2-3 quarters.