Singapore Housing Market Predicted to Cool in 2013

Singapore Curbs to Slash Home Sales in 2013

Singapore home sales may fall as much as 27 percent in 2013 after climbing to a record this year as six rounds of housing curbs by the government crimps demand, according to Jones Lang LaSalle.

Predictions are often incorrect. It does make sense to me that the repeated attempts by the Singapore government to cool the housing bubble will have an impact. But we will have to see what really happens. I do think Singapore is acting sensibly. If anything they waiting too long to take some of these actions (decreasing leverage is one of the best moves to make, which they have done).

The Singapore economy is forecast by the government to expand 1.5 percent to 2.5 percent in 2012, from 4.9 percent in 2011. The economy “slowed discernibly” in the past two quarters and will grow at below-potential levels for a second year in 2013, the Monetary Authority said Oct. 30.

You have to like government-speak (though even some investment predictions make such unclear statements) – “will grow at below-potential levels.”

The recent booming residential real estate market in Johor Bahru, Malaysia (a suburb of Singapore) is being fueled by Singapore’s wealth and the curbs in Singapore. The economic prospects for Johor Bahru are very positive. Still I think the Malaysian government should be adopting measures similar to Singapore’s. The best measure would be to reduce the leverage allowed. Require 20% down (even for condo units under construction). There is a huge supply of high rise condos to be delivered between 2014 and 2017 and those purchasers are putting very small amounts down. This is the type of situation that exacerbates bubbles.