https://www.todayonline.com/singapore/new-private-homes-could-cost-s2900-psf-2030-dbs-report?cid=emarsys-today_TODAY's morning briefing for May 17, 2018 (ACTIVE)_newsletter_17052018_today
Published16 MAY, 2018
UPDATED 17 MAY, 2018
New private homes could cost up to S$2,900 psf on average by 2030: DBS report
By
ANGELA TENG
SINGAPORE — Projecting the population here to hit 6.3 million to 6.5 million by 2030, a research report released by DBS on Wednesday (May 16) forecasts new private homes to cost between S$2,300 and S$2,900 per square foot (psf) by then – sharply higher than the current S$1,500 psf.
This means a compound annual growth rate of 1.5 per cent to 3.2 per cent over the next 12 years as growth in homeowners' incomes "keep pace" with the rise in private-property prices. The projection means an average unit of private property will cost from S$1.9 million to S$2.5 million by 2030.
The report, by property analysts Derek Tan and Rachel Tan, also projected the average size of new private units to shrink to 840 sq ft by 2030, 20 per cent smaller than the 1,083 sq ft average last year.
Other analysts, however, felt the price increases projected were too optimistic and that much depends on social and economic conditions in the run-up to 2030.
The DBS report expects annual volume of transactions for private homes to stay above the historical average for the next 12 years – reaching between 13,000 and 16,000 units until 2023, before tapering to an average of 12,000 to 13,500 units.
The demand could be even higher, said Mr Tan and Ms Tan, who did not take into account units that could be bought by foreigners. From 2001 to last year, the historical annual average stood at 12,000 units.
HDB upgraders will be a "key driver" for demand, and a "wildcard" would come from property-buying foreigners, who could boost the total number of transactions by up to 10 per cent, the DBS analysts said. New families will also contribute to demand for homes.