[h=1]RENOVATION COMPANIES FACE DIFFICULTY BECAUSE OF GOVT'S SUDDEN CHANGE IN POLICIES[/h]
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30 Oct 2014 - 10:13am
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Local reports claim that renovation companies in Singapore are facing a 50 percent drop in business, compared to three or four years ago, during the property boom.
Over the past several months, the government introduced a flurry of policies to discourage speculative property purchases.
Last week, real estate statistics revealed by the Urban Redevelopment Authority showed that property prices have taken a dip, back to the levels of 2011 and 2012.
Another key indicator is that of the number of sales – according to CNBC, “In the third quarter of this year, the total number of units sold dropped by 43 percent on-quarter to the lowest since the fourth quarter of 2008.”
Local reports say that the property cooling measures have resulted in renovation companies having to compete for a smaller pool of property buyers.
Homeowners are said to be less willing to spend on opulent renovations, because it has become unaffordable.
The larger issue, however, that has not been addressed, is the macroeconomic state of the Singapore economy.
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The current cooling measures, come on top of a lack of regulations by the Singapore government prior to the current bubble, which led to home prices spiralling out of control.
The sudden introduction of a series of unabated cooling measures resulted in difficulties for not only renovation companies to adapt, but also for real estate agents and home sellers and buyers as well.
Earlier this week, it was revealed that the number of real estate salespersons have also dropped, impacted by the sudden measures.
At the same time, wages have remained stagnant. A report released by the Monetary Authority of Singapore earlier this week showed that the growth in wages have slowed down this quarter.
Prices are also expected to continue to increase until the second half of next year.
Singapore has been ranked the most expensive city in the world while Singaporeans’ purchasing power have continued to decline, and is the lowest among the developed countries.
The drop in renovation business, among other declines, would be more likely to be attributed to a lack of properly planned property policies, which allowed prices to shoot up over-dramatically and where the sudden correction has also taken people by surprise.
The sudden change in government policies have not allowed the property and real estate business to be able to adapt slowly, but have forced many out of business, or to change trade.
The low purchasing power among Singaporeans also means reduced spending which have affected renovation business.
The trend does not seem to be stopping either as Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam has also said that property prices have not seen a "meaningful correction" yet.
As the government continues to announce policy changes in an ad-hoc manner, this will only continue to affect more businesses, which would not have time to adequately adjust to the changes.
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30 Oct 2014 - 10:13am
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Local reports claim that renovation companies in Singapore are facing a 50 percent drop in business, compared to three or four years ago, during the property boom.
Over the past several months, the government introduced a flurry of policies to discourage speculative property purchases.
Last week, real estate statistics revealed by the Urban Redevelopment Authority showed that property prices have taken a dip, back to the levels of 2011 and 2012.
Another key indicator is that of the number of sales – according to CNBC, “In the third quarter of this year, the total number of units sold dropped by 43 percent on-quarter to the lowest since the fourth quarter of 2008.”
Local reports say that the property cooling measures have resulted in renovation companies having to compete for a smaller pool of property buyers.
Homeowners are said to be less willing to spend on opulent renovations, because it has become unaffordable.
The larger issue, however, that has not been addressed, is the macroeconomic state of the Singapore economy.
<ins id="aswift_1_expand" style="margin: 0px; padding: 0px; border: currentColor; width: 336px; height: 280px; display: inline-table; visibility: visible; position: relative; background-color: transparent; border-image: none;"><ins id="aswift_1_anchor" style="margin: 0px; padding: 0px; border: currentColor; width: 336px; height: 280px; display: block; visibility: visible; position: relative; background-color: transparent; border-image: none;"><iframe name="aswift_1" width="336" height="280" id="aswift_1" frameBorder="0" marginWidth="0" marginHeight="0" scrolling="no" vspace="0" hspace="0" allowfullscreen="true" style="left: 0px; top: 0px; position: absolute;" allowTransparency="true"></iframe></ins></ins>
The current cooling measures, come on top of a lack of regulations by the Singapore government prior to the current bubble, which led to home prices spiralling out of control.
The sudden introduction of a series of unabated cooling measures resulted in difficulties for not only renovation companies to adapt, but also for real estate agents and home sellers and buyers as well.
Earlier this week, it was revealed that the number of real estate salespersons have also dropped, impacted by the sudden measures.
At the same time, wages have remained stagnant. A report released by the Monetary Authority of Singapore earlier this week showed that the growth in wages have slowed down this quarter.
Prices are also expected to continue to increase until the second half of next year.
Singapore has been ranked the most expensive city in the world while Singaporeans’ purchasing power have continued to decline, and is the lowest among the developed countries.
The drop in renovation business, among other declines, would be more likely to be attributed to a lack of properly planned property policies, which allowed prices to shoot up over-dramatically and where the sudden correction has also taken people by surprise.
The sudden change in government policies have not allowed the property and real estate business to be able to adapt slowly, but have forced many out of business, or to change trade.
The low purchasing power among Singaporeans also means reduced spending which have affected renovation business.
The trend does not seem to be stopping either as Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam has also said that property prices have not seen a "meaningful correction" yet.
As the government continues to announce policy changes in an ad-hoc manner, this will only continue to affect more businesses, which would not have time to adequately adjust to the changes.
