Are we in a bubble, and Is it ready to burst in 2021?

Property Bubble

 

Broadly, an asset is defined as an item or property of value that is expected to provide a future benefit. An asset bubble is formed when the price of an asset increases well beyond its intrinsic value that the asset is unable to sustain. Meaning that owners of that asset get much below the return on investment (ROI) than the money invested. 

An Asset bubble burst results in a massive drop in the value of the asset, wiping out the investments of individuals in those assets. Generally, an asset bubble burst like the ‘subprime mortgage crisis in the United States’ causes wiping out of the wealth of a large number of individuals, debt crisis, massive unemployment, and negative growth of the economy.  

But are we in a property bubble and is it ready to bubble?  Lets look into the crystal ball and see if we can find the answers. 

 

Singapore Property Analysis for Bubble Burst

We analyze how Singapore’s Private Property may or may not be in a bubble ready to burst. 

Price bubble in singapore
Price bubble in singapore

 

The first graph exhibits the price trend over the last 5 years, whereas the second graph exhibits the price trend over the past 25 Years. 

Since 2017, Singapore’s Private Property has not witnessed a major spike in price. According to Urban Development Authority, in 2018, the prices increased by 7.9%, in 2019 by 2.7%, in 2020 by 2.2%, and by 4% in the first half of 2021. Hence, the trend exhibits a steady growth instead of spikes, which can be witnessed over the period of 25 years in Singapore. 

The last time Singapore’s property market witnessed a downward trend was in 2013, and (as exhibited in the second graph) it was a period of slow deflation over 4 years (till 2017) instead of a rapid decline. Therefore, the trends do not forecast the making of an asset bubble. 

 

  • Nature of Property Prices

As the price of any commodity in the global market, the price of private property in Singapore is also cyclical in nature. Looking at the second graph again, the prices are gradually increasing in a cyclical nature. It is important to note that we are slightly higher than the all-time high in 2013. 

Also, in case the prices of the properties fall in the future, this would not necessarily indicate a bubble burst but just the prices following a cyclical trend. 

 

  • Rent Increment 

Remember when we said the asset becomes a bubble when it does not give the ROI to its owners. Rental income on landed properties is an essential source of ROI on the properties. The graph below shows that since 2020, the rents have been starting to grow, although at a slow pace. Hence, the ROI on landed properties may be able to sustain the price increase. 

Price bubble in singapore

 

  • Interest Rates

Price bubble in singapore

The graph above exhibits that Singapore is experiencing one of the lowest interest rates in history. The interest rate clocked at 0.44% for the second quarter of 2021. 

The outlook for the future interest rate remains lower on account of the existence of the Covid-19 pandemic. While the pandemic hampers growth in the economy through a lockdown and other measures, governments around the world reduce interest rates to alleviate the effect of the pandemic. With the existence of Covid, particularly the delta variant, the interest rate is expected to remain lower. 

A lower interest rate means mortgages are easily available, and hence, the demand remains strong. 

 

  • Property Availability

Price bubble in singapore

There is a very meager inventory of houses available in Singapore currently. As per the Urban Development Authority (URA), there are 47,097 sites of private property that are under construction or planned till 2025. This figure and the graph signal an alarming shortage of houses in Singapore in the foreseeable future. 

Moreover, the covid-19 also badly impacts the construction industry of the country. The construction costs are rising on account of the increased medical benefits of the workers, worker absenteeism, and strict rules of social distancing at the construction sites, etc. Therefore, it is safe to assume that the supply of houses will remain sluggish and thus supporting higher prices. 

 

  • Quality of Living Space

The Covid-19 pandemic has fueled the trend of the shift to better households due to the stay-at-home restrictions. Many residents prefer larger homes for work from home offices and staying at home for activities like exercising. 

According to the 2020 census, the average family size in Singapore has fallen to 3.2 people in 2020 from 3.5 people in 2010. At the same time, agreeing to the Populace Census 2020, more Singaporeans are choosing to live in private properties. In 2020, 16.0% of inhabitants lived in condominiums and other lofts, compared to as it were 11.5% of individuals in 2010. Another factor that leads to increased demand for housing. 

 

  • Market Outlook after the Pandemic

According to Oxford University, Singapore has an unprecedented 78.6% of the population fully vaccinated against Covid-19. The statistics and rising vaccination rates across the globe beg the question; what will the property outlook be after the covid-19 pandemic is considerably subdued? 

Without covid-19 restrictions, developers can accelerate the housing projects and invest in new ones as it would drastically reduce their costs associated with construction. Moreover, the end of the pandemic will signal a positive economic outlook for the country, and hence the developers will be encouraged to add more projects to their portfolio this increasing the supply side. 

The global trend to shift to better homes fueled by stay-at-home policies may also reverse when the need for large houses reduces and residents may prefer moving to smaller houses in order to reduce their monthly financial outflows. 

 

  • Government Regulations 

The government of Singapore have in the past implemented some ‘cooling down’ measures to reduce the demand for new houses. These include additional buyers’ stamp duty (additional charge for buyers of multiple homes), and Sellers Stamp Duty (regulating holding period), etc. Some financing regulations were also implemented over the past decade, like Loan to Value Ratio, Total debt servicing ratio, and mortgage servicing ratio. 

These measure led to a significant cooling in demand as it strictly hampers trading through measures like minimum occupation period (MOP) and restricts ownership of multiple properties.

It is crucial to note that these factors can lead to easing an asset bubble (in case we are in one), or it may also cause a drastic reduction in prices. 

But as a ‘possible’ event of this sorts, it is almost pre-empt.  We can only react accordingly should it happen again but until then, we have what we already Now know.   

 

Conclusion 

No one can know for sure if Singapore’s property is in an Asset Bubble. It is crucial to keep a keen eye on the fundamentals and forecast of the factors discussed in the article. However, in our opinion, most of the factors support a price increase in the foreseeable future.   

Like to stay Updated?

164 thoughts on “Are we in a bubble, and Is it ready to burst in 2021?

  1. 20bet

    Your article gave me a lot of inspiration, I hope you can explain your point of view in more detail, because I have some doubts, thank you.

  2. 20bet

    Your article gave me a lot of inspiration, I hope you can explain your point of view in more detail, because I have some doubts, thank you. 20bet

  3. watch Live Sex Porn

    May I just say what a comfort to uncover someone that truly understands what they are talking about over the internet.
    You actually realize how to bring a problem to light and make it important.
    More and more people need to look at this and understand this side of the story.
    I was surprised that you aren’t more popular since you definitely possess the gift.

  4. Decaptchaocr.ⅽom

    Fantastic beat ! I would like to apprentice while you amend your web
    site, how can i subscribe for a blog website?
    The account helped me a applicable deal. I have been a little bit familiar of this your broadcast provided vibrant clear idea

  5. 1023.africa

    Hey there I am so grateful I found your site,
    I really found you by accident, while I was searching on Bing for something else, Regardless I am here now and would just like to say thanks a lot for
    a incredible post and a all round thrilling blog (I also love
    the theme/design), I don’t have time to go through it all at the moment but I have saved it and also added in your RSS
    feeds, so when I have time I will be back to read more, Please do keep up the fantastic
    work.

  6. Ttlink.Com

    A motivating discussion is worth comment. I believe that you ought to publish more about
    this subject matter, it may not be a taboo matter
    but usually folks don’t discuss such subjects. To the next!

    Many thanks!!

  7. recaptcha Enterprise bypass

    My partner and I absߋlutely love ʏⲟur blog and find a ⅼot of youг post’ѕ to be juѕt what I’m ⅼooking for.
    Wouⅼd you offer guest writers t᧐ ѡrite content fߋr yoou personally?
    I wօuldn’t mind writing ɑ post or elaborating ᧐n many
    ߋf the subjects you write ϲoncerning һere.

    Agɑіn, awesome weblog!

    Ηere іѕ my website … recaptcha Enterprise bypass

  8. ラブドール リアル

    高級 ラブドール DollLover27 –ハイカットブラジルスタイルのツーピース– Part4あなたのより良い半分はあなたにセックスドールを購入することを許可しますパイパードールシリコーンフィービー神話が調査されています–すごい!中国の主流の大人の強いダッチワイフブランド2021

  9. https://forgrantedmedia.com/

    That is the fitting blog for anybody who wants to find out about this topic. You understand so much its almost exhausting to argue with you (not that I really would need…HaHa). You definitely put a new spin on a topic thats been written about for years. Great stuff, just great!

  10. Warung138

    I have learn some good stuff here. Definitely price bookmarking for revisiting. I surprise how so much attempt you put to create this type of excellent informative site.

  11. Fungame777

    Hi! This is my first comment here so I just wanted to give a quick shout out and say I really enjoy reading through your posts. Can you suggest any other blogs/websites/forums that deal with the same subjects? Many thanks!

  12. Slotbom77

    I want to point out my admiration for your kindness supporting those people that must have assistance with this important idea. Your special dedication to passing the solution across had become remarkably helpful and have all the time helped ladies much like me to get to their desired goals. Your entire invaluable hints and tips indicates a whole lot a person like me and still more to my colleagues. Thanks a lot; from each one of us.

  13. KKSLOT777

    Hey would you mind letting me know which webhost you’re using? I’ve loaded your blog in 3 completely different web browsers and I must say this blog loads a lot faster then most. Can you suggest a good web hosting provider at a reasonable price? Thanks a lot, I appreciate it!

  14. ppu-prof_hax

    Забота о резиденции – это забота о приятности. Утепление фасадов – это не только модный облик, но и обеспечение теплового комфорта в вашем удобном уголке. Мы, наша команда профессионалов, предлагаем вам превратить ваш дом в идеальное место для жизни.
    Наши дизайнерские решения – это не просто утепление, это творческое воплощение с каждым шагом. Мы разрабатываем совершенному сочетанию между красотой и практичностью, чтобы ваше жилище превратилось не только пригодным для жизни, но и очаровательным.
    И самое главное – доступные расценки! Мы полагаем, что профессиональные услуги не должны быть дорогим удовольствием. [url=https://ppu-prof.ru/]Стоимость метра утепления фасада[/url] начинается всего начиная с 1250 рублей за квадрат.
    Инновационные технологии и материалы высокого стандарта позволяют нам создавать термомодернизацию, которая гарантирует долгий срок службы и надежность. Позабудьте о проблеме холодных стен и избегайте дополнительных расходов на отопление – наше утепление станет вашим надежной преградой перед холодом.
    Подробнее на [url=https://ppu-prof.ru/]https://www.ppu-prof.ru[/url]
    Не откладывайте на потом заботу о счастье в вашем уголке. Обращайтесь к квалифицированным специалистам, и ваше жилище превратится настоящим архитектурным искусством, которое согреет вас не только теплом. Вместе мы создадим комфортабельное жилье, где вам будет по-настоящему комфортно!

  15. ppu-prof_hax

    Забота о недвижимости – это забота о вашем комфорте. Теплоизоляция стен – это не только стильный внешний вид, но и обеспечение сохранения тепла в вашем уголке уюта. Профессионалы, наши мастера, предлагаем вам превратить ваш дом в идеальный уголок для проживания.
    Наши улучшения – это не просто теплоизоляция, это творческий процесс с каждым элементом. Мы придерживаемся гармонии между внешним видом и практической ценностью, чтобы ваш дом стал не только пригодным для жизни, но и прекрасным.
    И самое существенное – удовлетворительная стоимость! Мы полагаем, что профессиональные услуги не должны быть сверхдорогими. [url=https://ppu-prof.ru/]Стоимость метра утепления фасада[/url] начинается всего начиная с 1250 руб/м².
    Использование современных материалов и технологий позволяют нам создавать теплоизоляцию, которая долго служит и надежна. Забудьте о холодных стенах и дополнительных расходах на отопление – наше утепление станет вашим надежным барьером от холода.
    Подробнее на [url=https://ppu-prof.ru/]ppu-prof.ru/[/url]
    Не откладывайте на потом заботу о удовольствии в вашем доме. Обращайтесь к специалистам, и ваш дом превратится настоящим произведением искусства, которое подарит вам тепло и уют. Вместе мы создадим обители, где вам будет по-настоящему комфортно!

  16. Leta

    Simply want to say your article is as surprising. The clarity in your
    post is just excellent and i can assume you are an expert on this subject.
    Fine with your permission allow me to grab your RSS feed to keep up to date with forthcoming post.

    Thanks a million and please continue the rewarding work.

  17. investiciono zlato

    Its like you read my mind! You seem to know a lot about this, like you wrote the book in it or something. I think that you could do with some pics to drive the message home a little bit, but other than that, this is magnificent blog. A fantastic read. I will certainly be back.

  18. Suivre Téléphone

    Maintenant, la technologie de positionnement est largement utilisée. De nombreuses voitures et téléphones portables ont des fonctions de positionnement, et il existe également de nombreuses applications de positionnement. Lorsque votre téléphone est perdu, vous pouvez utiliser ces outils pour lancer rapidement des demandes de localisation. Comprendre comment localiser l’emplacement du téléphone, comment localiser le téléphone après sa perte?

  19. Suivre Téléphone

    Tant qu’il y a un réseau, l’enregistrement en temps réel à distance peut être effectué sans installation matérielle spéciale.

  20. Plisse_mus

    Уважаемые Гости!
    Предлагаем вам новое понятие в мире стилистики интерьера – шторы плиссе. Если вы рассчитываете к совершенству в каждом стороне вашего домашнего, то эти завесы окажутся выдающимся решением для вас.
    Что делает шторы плиссе таковыми особыми? Они сочетают в себе в себе выгоду, функциональность и полезность. Благодаря особой постройке, последним материалам, шторы плиссе идеально гармонизируются с для любого другого пространства, будь то хата, спальная комната, кухонное пространство или секретарское поле.
    Закажите [url=https://tulpan-pmr.ru]плиссе на окна[/url] – отразите уют и красочность в вашем жилище!
    Чем манят шторы плиссе для вас? Во-первых, их особенный бренд, который прибавляет к привлекательность и изысканность вашему декору. Вы можете выбирать из разнообразных структур, оттенков и процедур, чтобы подчеркнуть самобытность вашего дома.
    Кроме того, шторы плиссе предлагают полный ассортимент эксплуатационных возможностей. Они могут контролировать степень сияния в помещении, оберегать от солнечных лучей, предоставлять закрытость и формировать уютную среду в вашем доме.
    Мы ресурс: [url=https://tulpan-pmr.ru]http://www.tulpan-pmr.ru[/url]
    Наша фирма поможем вам выбрать шторы плиссе, которые безупречно гармонизируются с для вашего дизайна!

  21. private investigation services

    Heya! I’m at work surfing around your blog from my new apple iphone! Just wanted to say I love reading through your blog and look forward to all your posts! Keep up the superb work!

  22. hire a hacker uk

    Fantastic site. Lots of useful info here. I am sending it to some pals ans also sharing in delicious. And certainly, thank you for your effort!

  23. Seo-Ul-vek

    Мы команда SEO-экспертов, занимающихся продвижением вашего сайта в поисковых системах.
    Наша команда преуспели в своей деятельности и желаем поделиться с вами нашими знаниями и навыками.
    Какие преимущества вы получите:
    • [url=https://seo-prodvizhenie-ulyanovsk1.ru/]поисковая оптимизация seo[/url]
    • Исчерпывающая оценка вашего сайта и разработка индивидуальной стратегии продвижения.
    • Оптимизация контента и технических аспектов вашего сайта для максимальной эффективности.
    • Ежедневный анализ данных и мониторинг вашего онлайн-присутствия для постоянного улучшения его эффективности.
    Подробнее [url=https://seo-prodvizhenie-ulyanovsk1.ru/]https://seo-prodvizhenie-ulyanovsk1.ru/[/url]
    Результаты наших клиентов уже видны: увеличение трафика, улучшение позиций в поисковых системах и, конечно же, рост прибыли. У нас вы можете получить бесплатную консультацию, для обсуждения ваших потребностей и разработки стратегии продвижения, соответствующей вашим целям и финансовым возможностям.
    Не упустите шанс улучшить свой бизнес в онлайн-мире. Свяжитесь с нами немедленно.

  24. bulantogel

    Thank you, I’ve recently been looking for information approximately this subject for a long time and yours is the best I’ve found out till now. However, what concerning the bottom line? Are you certain in regards to the source?

  25. cell phone hackers for hire

    Excellent post. I was checking constantly this blog and I’m impressed! Extremely helpful info specially the last part 🙂 I care for such info much. I was seeking this particular information for a very long time. Thank you and good luck.

  26. Vytvorit osobní úcet

    I don’t think the title of your article matches the content lol. Just kidding, mainly because I had some doubts after reading the article.

  27. Fitspresso

    Nice read, I just passed this onto a colleague who was doing some research on that. And he just bought me lunch since I found it for him smile So let me rephrase that: Thank you for lunch! “But O the truth, the truth. The many eyes That look on it The diverse things they see.” by George Meredith.

  28. Kerassentials review

    Hey there! This post could not be written any better! Reading this post reminds me of my previous room mate! He always kept chatting about this. I will forward this post to him. Pretty sure he will have a good read. Many thanks for sharing!

  29. Amiclear

    Definitely, what a magnificent blog and revealing posts, I definitely will bookmark your website.All the Best!

  30. Fitspresso review

    I will right away grab your rss as I can’t find your email subscription link or newsletter service. Do you’ve any? Please let me know in order that I could subscribe. Thanks.

  31. Ernestnaw

    The UK offers a vibrant tapestry of production and cultural pursuits across miscellaneous realms. In sports, iconic events like Wimbledon and the Six Nations Championship captivate audiences, showcasing top-tier talent and fierce competition. Football, particularly the Premier Fellowship, commands national obsession with clubs like Manchester Burgh and Liverpool dominating headlines. The activity escalates during turn over windows, sparking speculations and discussions nearby passive signings and managerial changes, keeping fans busy year-round.

    British music continues to make waves globally, thanks to acclaimed artists like Adele, Ed Sheeran, and Dua Lipa. The UK hosts famous music festivals like Glastonbury, serving as platforms for the purpose diverse musical expressions. Meanwhile, idiot box series originating from the UK, such as “Doctor Who” and “The Coronet,” get a kick global acclaim, while fact TV formats like “Love Key” fascinate vast audiences https://topnewsuk.uk/wolves-promotion-securing-captain-ince-enshrined.html. This combine of music and goggle-box showcases the boondocks’s originative prowess and storytelling knack, resonating with audiences worldwide.

    Cultural celebrations swarm in the UK, from the Edinburgh Fete Border to the vibrant Notting Hill Carnival, highlighting the polity’s the money divergence and artistic heritage. The media closely follows notoriety elegance, with imperial events commonly capturing widespread attention and generating headlines. In the meantime, the persistent impact of Brexit continues to shape heterogeneous aspects of memoirs, including trade, tour, and cultural exchanges within the UK and beyond. Amidst all this, the UK remains an novelty core, fostering technological advancements and imaginative trends, strikingly in cities like London and Manchester, contributing to the country’s high-powered and ever-evolving cultural landscape.

  32. Red Boost Review

    Whats up this is somewhat of off topic but I was wanting to know if blogs use WYSIWYG editors or if you have to manually code with HTML. I’m starting a blog soon but have no coding know-how so I wanted to get advice from someone with experience. Any help would be greatly appreciated!

  33. Geraldbus

    In the bustling unbelievable of music and sports, staying in the hoop with the latest news and developments is vital inasmuch as fans and enthusiasts alike. Our blog provides a abbreviated nevertheless captivating stage where you can inquire ravishing updates from these dynamic realms – https://warm-romaine-h8t3zl.mystrikingly.com/blog/billetterie-la-plateforme-de-revente-officielle-ouverte-a-l-achat-le-24. Slack off on’s delve into what makes our blog a must-visit target exchange for those enthusiastic give music and sports.

    When it comes to music, we’ve got you covered with the freshest releases, artist spotlights, and closed affair coverage. Lay eyes on new albums and singles across various genres, ensuring you’re eternally in air with the latest beats. Tour the resourceful journeys and influences of emerging talents and established artists to the core our insightful artist highlights. From loving performances to total music festivals, our physical incident coverage brings you front-row access to the most electrifying music experiences worldwide. Duck into the music business’s trends and technologies with our behind-the-scenes insights, present a deeper settlement of this active field.

    On the sports demeanour, relive the excitement of important games, tournaments, and championships by our comprehensive deception highlights and wizard commentary. Learn upon the remarkable stories behind your favorite athletes, from their hit the deck to stardom to their moments of joy and challenge. Stay in the know give player transfers, trades, and team strategies with our convenient updates on shift news. Whether it’s the Super Bowl, the Have Cup, or the Olympics, our blog delivers winsome previews and recaps of the most significant sporting events, capturing the enthusiasm and theatrics that define these spectacles.

    What sets our blog aside from is our commitment to providing comprehensive, prompt, and appealing content. Whether you’re a music aficionado or a sports maniac, our blog caters to separate interests within these vibrant realms. Our team ensures that you’re each time up-to-date with the latest scuttlebutt and stories, presented in an engaging and illuminating style. Solder together our community of like-minded individuals, split your thoughts, and affiliate with gazabo enthusiasts as we revel the charm of euphony and the excite of competition. Slow tuned for captivating felicity that informs, entertains, and inspires you on your music and sports overseas!

  34. MorrisLoaro

    Postpone updated on the latest music and events in the UK with our broad news coverage. From critical concerts and festivals to emerging artists and underground gigs, we’ve got you covered with all the happenings in the vibrant UK music scene. https://newstoplondon.uk/kisstory-festival-2024-bristol-looks-forward-to-the-music-event-of-the-year.html – Discern stylish interviews, behind-the-scenes stories, and reviews of the hottest shows across the country.

    Explore mixed genres and cultural influences shaping the British music landscape. Whether you’re into rock, explode, electronic, or greek, there’s something also in behalf of everyone to enjoy. Deal off down upcoming album releases, visit dates, and special performances by your favorite musicians. Check in the grasp and on no account nymphet a leave with our curated settling on of news and updates from the stomach of the UK’s music industry.

    In as well to music, we emphasize you statement relating to exciting events happening wholly the UK. From art exhibitions and theater productions to film screenings and community festivals, our coverage extends beyond just music. Delve into the fortune tapestry of cultural events that up the UK a focus of creativity and entertainment. Whether you’re a district looking for things to do or a caller planning your itinerary, our tidings sustain on solemnize you learned and inspired wide the best events happening on all sides the country.

  35. Rickyhop

    best canadian pharmacy online [url=http://canadaph24.pro/#]Prescription Drugs from Canada[/url] canada pharmacy online legit

  36. Davidabaph

    cost propecia online [url=https://finasteride.store/#]propecia cheap[/url] cost propecia without a prescription

  37. Davidabaph

    Misoprostol 200 mg buy online [url=https://cytotec.club/#]purchase cytotec[/url] buy cytotec in usa

  38. Davidabaph

    buy cipro online without prescription [url=https://ciprofloxacin.tech/#]cipro pharmacy[/url] ciprofloxacin

Leave a Reply

Your email address will not be published. Required fields are marked *

Join our Mailing list!

Get alerts and newsletter from Kaihub by email after entering your email address below. 

Open chat
1
Hi, Can we help?
Open chat
1
Hi, Can we help?