Despite mounting macroeconomic challenges, the Singapore real estate market expects to shine in 2023, holding its resilience. The city-state is prepared to remain resilient even though concerns about the recession and increasing inflation have overshadowed the world’s real estate markets.
According to the managing director of Savills Singapore Research and Consultancy, the Singapore real estate market should be in a decent position to fight off the adverse effects of global economic crises and worldwide political tensions.
Singapore’s residential rental market going up
According to data from MSCI Real Assets, Singapore saw real estate investment deals of $9.1 billion during the first three quarters of 2022, an increase of 47% from the same time in 2021.
Further, the robust performance of the residential rental market, with private residential property rents rising 8.6% q-o-q in 3Q2022, is the biggest quarterly gain in 15 years.
According to the International Monetary Fund, Singapore’s GDP is expected to expand by 2.3% in 2023, exceeding the 1% and 0.5% GDP growth rates predicted for the US and EU.
Savills also points out that China, Vietnam, Indonesia, and India’s economies are expected to lead global growth.
Comepetitors of Singapore real estate to take note
Moreover, the expanding foreign direct investment and governmental reforms in Vietnam are increasing interest from abroad in the real estate industry.
For instance, earlier this year, Singapore’s CapitaLand said it would probably buy a site in Ho Chi Minh City for a $1 billion mixed-use development.
The weak Japanese currency and low-interest rates are anticipated to be favourable for Japan. The favourable margin between debt prices and yields is why Japan continues to draw foreign investors. According to Tetsuya Kaneko, head of research and consultation at Savills Japan, the multifamily and logistics sectors continue to be favourites. Still, there is increased interest in offices and the reviving hospitality sector.
I am Tyson Yuk, the founder of the blog Commercial Realty Singapore. With over 15 years of experience, my forte is in the commercial and luxury property line. With my blog, I aim to educate, advise and share tips and tricks with potential property buyers and investors to help them make successful property ventures.
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