Investment properties in Singapore start selling again

To listen to some of the headlines produced around the latest CB Richard Ellis report on Singapore’s property investment market, you could be forgiven for thinking the second coming had arrived.

“Property sales soar in Singapore,” says property wire. They go on to state that property sales have risen 51.6% from June to July and that this is a “record high since the URA began recording figures – in 2007 when the downturn began.
It is encouraging to see some activity, but a 51.6% increase over almost zero sales is not exactly something to get too excited about. A closer look at the CBRE figures reveals that this is still a 77.6% fall from Q2 2008. I am not really sure why it is necessary to dress up statistical data in this way, but I imagine property wire has a vested interest in talking up the market.

The CBRE report is quite informative and detailed, and does indeed point out that this rise is off of an extremely poor Q1. Rents in all categories are still falling, although median sales prices have risen, which is perhaps an encouraging sign, but still not the second coming.

Most of the increase in sales of investment properties seems to stem from private Asian investors with cash to spend, and the institutional investors are still sitting on the sidelines awaiting the real bargains in 12-18 months time. I tend to agree with the larger firms’ approach – the fundamentals are still weak, the Singapore government has just revised it’s projected GDP figures to - 6-9% from -2-5%, and the Singapore dollar continues to slide against the US dollar.

The full report is available for download here – CBRE Q2 Singapore