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In his speech, the Prime Minister indicated that 150,000 new homes will be built on the site of the Paya Lebar Airbase, which covers approximately 800 hectares. This relocation, which is projected for 2030, has been in the works for some time and has now received the official confirmation the public has been waiting for. Not only will the relocation result in the creation of a new neighbourhood, but it will also change the Gross Plot Ratio (GPR) of surrounding districts.
The relocation of the airbase will also impact height restrictions on properties in surrounding areas. Once the airbase moves and developers can build higher, its anticipated development will soar and private developers could benefit from en-bloc projects.
What's more, the relocation will allow additional space for retail, eateries, and parks, which will further improve the appeal of the surrounding areas.
With the pandemic subsiding, work on Changi Airport's Terminal 5 and the Changi East Urban District can proceed. A proposed business hub, the Urban District will consist of hotels, apartments, office spaces and function areas. It will also expand beyond the current Changi Business Park to include waterfront access.
What will this do for surrounding homes? Nearby condos encircling the Tanah Merah MRT station, and along the Upper Changi Road, will likely attract workers involved in the Changi development.
The PM indicated work has once more picked up on the Tuas Mega Port, with three additional berths set to open by the end of the year. This project unites existing ports at Tanjong Pagar, Brani, Keppel and Pasir Panjang, with the vast emptied space repurposed as part of the Greater Southern Waterfront.
The PM's address pointed to the threat of instability resulting from tensions between Russia and Ukraine, and between Singapore and the USA. In general, the property market hasn't been impacted by the situation; in fact, it's even benefited as more and more foreign buyers relocate to Singapore as a place of safety.
It is increasingly clear, however, that sooner or later property will feel the effects. Following the US Federal Reserve's response to changing energy prices, which saw interest rates soar, Singaporean home loan rates have escalated. If sanctions on Russia see oil prices continue to climb, the Federal Reserve may reassess the situation and ease off a little on rate increases.
If trade barriers between China and the US are raised, Singapore's property may see the effects. Taxes will lead to increased business costs, and the Federal Reserve may need to take this into account if businesses feel the pressure.
The main concern for developers is construction costs. If fuel costs rise, construction expenses will follow suit, and businesses will face higher costs of transporting goods and workers to and from their sites.
The PM highlighted the new initiatives laid down by the Ministry of Manpower and the Ministry of Trade and Industry to both attract and keep foreign talent. Key to these initiatives is a redefinition of the work pass scheme.
Landlords are set to benefit from these changes. Singaporean property is notoriously expensive for foreigners, a trend we've noticed since the ABSD rate increase in December 2021, and so there may be improved rentability for condos. This change is likely to keep the property market - and particularly rentals - performing well.
With the focus on retaining top talent, Singapore can expect to see more long-term leases and a rise in property purchases.
It's no secret that property interest rates have been on the increase, with rates above two per cent becoming more and more common. While the government is responding by distributing vouchers and fee reductions, there's likely to be more use of the Central Provident Fund (CPF) among middle and lower-income families.
If these families struggle to pay their expenses, they may choose to service their home loans through the CPF rather than with cash. This situation will need to be watched closely, in order to prevent older Singaporeans from reaching their withdrawal limit, or CPF funds from making it difficult for families to relocate to new housing.
The Continuum Singapore at Thiam Siew Avenue is an upcoming new freehold residential development located in prime District 15 in Singapore’s east region. The development consists of almost 1000 apartments which range from studio to four bedrooms. The residences offer various amenities including swimming pools, gymnasiums, childcare centres, clubhouses, gardens and parks. In addition, residents can enjoy access to exclusive shopping malls and schools within walking distance.
Dunman Residences consists of luxury condominiums set amidst lush greenery. The project is situated along Dunman Road, near the District 15 area. The facility boasts an array of luxurious amenities and fully equipped recreational facilities. Residents can enjoy the serene ambience of the surroundings along with the convenience of being close to major shopping malls, schools, hospitals and public transportations systems.
While the National Day Rally address was cautious, it also presents the reality of the situation. The uncertainty of national and global environments may lead to rising property costs - and it's important that developers, landlords, tenants and buyers alike are aware of the potential consequences.