The increase in interest rate scenario in United States may have negative implications on residential property demands in Singapore in 2019. On December 26th, 2018, this has been predicted by an expert executive working in a real estate investment and service firm. Knight Frank, a real estate agency’s report on residential properties in Singapore stated that the prices of properties have already hiked up a lot in the third quarter of the current year.
Chief of research for Singapore and Southeast Asia at CBRE, Desmond Sim said that demand for properties would continue to be at a slower pace even in 2019. This is mainly due to the interest rate hike by US Federal Reserve. He has also mentioned that the decision by Fed Reserve has caused worldwide slowdown in trade and is against the sentiments of business. The low demand for properties in Singapore is therefore not likely to cease any sooner. In fact, he has predicted that the demand can go down to 7,000 – 8,000 units in places of high demand where it usually goes till 20,000 units.
Once again, the interest rate hike is the dominant reason behind the scenario in Singapore. Cheap liquidity was used to encourage the residential property market. As a result, Singapore government had to intervene and take control of the situation. The government had to adopt several cooling measures to use so that price hike could be managed. Fortunately after those measures the rates of residential properties have started to slow down.
However the office property market in Asian City State might continue to do well and has high chances of not being affected at all. Technology and co-working spaces are very keen to take up space from them. Their progress has been spectacular even in a market of tremendous upheaval.