IS428 2016-17 Term1 Assign1 Gwendoline Tan Wan Xin
Abstract
With the introduction of cooling measures in the private residential property market, more property investors are turning into the commercial property market. However, as more people buy and develop commercial properties, the market is getting unfavorable in 2015. An analysis was conducted to identify possible issues in the market. This is important to prevent investors from leaving Singapore, as they continue to lose profits. The analysis shows that supply of property spaces is high but demand for it was low. Vacancy rates across all property types show no signs of decreasing. Although office spaces were cheaper, the vacancy rate remained similar as those in retail/shop spaces. Three policies were then, identified in an attempt to alleviate the situation in 2015.
Problem and Motivation
The Singapore Government has been introducing cooling measures in the private residential market to prevent a real estate bubble burst. As such, many property investors have changed their attention towards commercial property. With majority of investors rushing to invest in the commercial property market, its investment potential remains questionable. In a worst case scenario, property investors may decide to leave Singapore if they feel that they can’t make enough money. This becomes a problem for the government as Singapore relies on local/foreign investments to attract large corporations to its shore. In order to prevent this situation from occurring, it is important to closely analyse the commercial property market situation in 2015. This would allow the government to introduce new policies or make improvements now, so that property investors will continue to stay in Singapore.
The analysis will identify:
- existing/planned supply of private commercial property types
- distribution of sales/rental prices of commercial property types across different regions in Singapore
This analysis hopes to address ways to ensure that land areas in Singapore are used efficiently and that investors will continue to remain in Singapore, despite the economic gloom.
