This comes amid the expected slowdown in Singapore’s economic growth, led by the debt crisis in western countries.

As home buyers are likely to be more cautious, prices will not increase or decline by over five percent by end-2012, said property experts. They added that rental yields are also expected to rise by between two and three percent in 2012, in line with historical averages.

“The Asia-Pacific region, including Singapore, remains on track for continued growth and can weather a global slowdown,” said Ong Kah Seng, Senior Manager at Cushman & Wakefield for Asia-Pacific.

He noted that Singapore, like Hong Kong, is in the “high-risk range” when it comes to its vulnerability to the economic crisis in the West.

Ong pointed out that home buyers will likely see a 10 to 15 percent capital appreciation on their properties over the next five years.

“If you are looking at the nearer term, property prices here will generally remain fairly flat in the next year, with the potential for some downward adjustment,” he said.

“But there is always underlying demand stemming from individuals looking at upgrading or for investment, and opportunistic buyers may be quick to react to the lower housing prices, thereby pushing the market up again.”

Meanwhile, Mark Teo, Senior Group-Division Director at ERA Realty Network, said that while external factors affecting Singapore’s economy are important, what affects the property market most are the government’s policies and measures.

He cited how government investment in the development of the Marina South area has led to prices of several properties in the area skyrocketing.

“The development became a global product that commands international pricing,” he said. “Government policy in Singapore is very, very powerful, so make sure to track this especially if you are looking at properties for investment purposes.”

For young couples seeking to acquire properties for the first time, Teo recommended Build-To-Order (BTO) flats, as they are usually cheaper and have “higher capital appreciation value”.

Catherine Tan, Senior Executive Estates Officer with the HDB, also said that buyers need to “refer to transacted resale prices of comparable flats and not on cash-over- valuation in your negotiation so that they will not overpay.”

“The transacted flat prices can be found on the HDB info-web,” she added.

Source : PropertyGuru -  5 Sep 2011