Property investors tapping bigger market

Marketing agents are already starting to use the White Paper in their sales pitches while developers believe that the population policy will help their business and the real estate industry in general.

But experts warn that there could be a number of market cycles between now and 2030, when the 6.9 million figure could be reached, so prudence and a long-term perspective are essential.

They suggest looking for property in good locations and in business areas, so the property can be easily leased even if there is a large supply of homes competing for tenants in the future.

ERA Realty key executive officer Eugene Lim said that in the light of the sort of population growth suggested in the White Paper, "it is a given that property prices then will be higher than (they are) today".

"Prices might not escalate immediately but with limited land and an increasing population, prices should go up, it just depends on how much," he added.

International Property Advisor chief executive Ku Swee Yong said that if the population grew to 6.9 million by 2030, investors with a long-term perspective of more than 10 years should buy immediately, regardless of the recently hiked additional buyer's stamp duty (ABSD).

"They should buy and hoard freehold properties in districts 9, 10 and 11 because these will become a smaller proportion of the housing stock in the future."

The Jan 12 fresh curbs levy on Singaporeans buying their second home an ABSD of 7 per cent, from none previously.

There is already some movement. While investors initially retreated from the ABSD sting and tighter loan limits, more are now "optimistic" and could be enticed to relook the market.

ERA's Mr Lim said that some buyers have already started to look for value deals in the resale market where sellers are now more willing to negotiate on the back of the curbs.

But Mr Ku said there needs to be more certainty from the population paper before any decision on buying is made.

Mr Chris Koh, director of Chris International, said that the Government's plans to grow the population is essentially ensuring that housing demand remains strong.

With such low interest rates, both investors and upgraders can consider buying a home now, he suggested.

"The risk, however, could be if another more drastic set of measures get introduced," he noted.

Potential home buyers seem more cautious.

Accountant Terence Chan, 41, told The Straits Times that while he is looking for an investment home, he is not convinced that now is the best time to buy.

"Everything is still up in the air, whether it's the population plans or how the recent measures are impacting prices," he said.

"I am not comfortable with making a decision now because it still seems I have to pay more with the ABSD and loan limits. I might wait for some of the measures to be removed first."