Property recovery pushing up GDP growth in 2018

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Singapore – Despite a long gloomy period of stagnation since the peak in year 2013, our domestic housing market has been keeping a steady pace of recovery and is anticipated to provide the Singapore economy a major lift in the up and coming 2018. Likely to come in much stronger than expected while boosting the overall growth as a whole.

At almost the same time, a surge in our major electronics sector (export) were also seen and property segment will be lining the top 3 upward trends next year, based on the Survey of Professional Forecasters by Monetary Authority of Singapore (MAS). These latest survey results were distributed out on 23 November and collectively gathered by a group of 23 economists and analysts.

This positive outlook on the broader economy were seen coming from the recovery of the property market segment in several directions as there will be more potential construction project activities, a surge in bank mortgages as well as higher spending from those collective sales jackpot windfalls.

Thousands of home owners from successful collective sales process will be coming into the market steadily for another residential property in the next few months or so, thereby pushing up the local real estate transactions with a possible moderate movement in home prices.

Going forward, the construction sector will also likely recover from a 7.6 per cent decline in 2017 to a 1 per cent growth in 2018, riding on the success of a seemingly strong housing market recovery and with more collective sales process planned in the pipeline.

With this boost to the real estate scene, all private home loans will also be inevitably lifting the finance and insurance sector hand in hand. You could also witness the psychological phenomenon when these huge group of home winners with more ready cash on hand, possibly triggering a much greater consumer spending in 2018.

It is of course not without any substantial reasoning that it could possibly trickle down to different sectors as a slew of positive data presents the first ever uptick seen in 2017 after fifteen consecutive quarters of shrinking. Especially the most unexpected collective sales fever direction this year with 28 successful deals (up to date) awarded, compared to the pale of 3 such deals last year.

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Nonetheless, it may not come as good news if local housing market gets too buoyant and lively, said Credit Suisse economist Michael Wan.

Should the price rise too quickly and in unsustainable manner, the city state will most certainly step in to put a halt with the fear of rising inflation and wage pressures. Most of the economists and analyst surveyed believe and expect growth to trickle in at a stable and moderated pace of 3 per cent on full year augmentation.

So what is your take on this? Are your expectations in line with the projected figures? Do you think the recovery of property market will prop up the GDP even on the minimal?

If you have an opinion pertaining to this report, please kindly write in to us. Thank you!

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