Second Minister for National Development Desmond Lee gave a speech at the REDAS 60th Anniversary Dinner, and we know property lovers are already picking over it for clues. To save you some time, we’ve condensed some of the key highlights:
Singapore’s property market is stable, but faces downside risks in the near future
Minister Desmond Lee said that the market is “not overly exuberant, but growing at a more sustainable pace“. Compared to 1H 2018, private housing prices are “moving more in line with economic fundamentals“, and land bids over the past year are more cautious.
Current stability is partly due to cooling measures imposed in 2018, and the Minister added that Singapore cannot take a hands-off approach to the property market; he said that left to itself, the market can go through large swings that harm genuine home buyers and home owners.
Minister Lee also warned that, while the market is currently stable, the global economy is projected to see a “modest pace of growth next year” due to trade tensions; this could weigh on the property market.
In addition, the government expects more supply of private housing units to come on stream. The Minister said that: “Developers should pace out the launches steadily, to match the demand from buyers.” You can read more about a potential supply overhang in our previous article.
Regarding the concern that global economic uncertainty can actually attract foreign buyers (a view I’ve maintained some time), Minister Lee said that the share of foreign transactions is still stable and low at this time – they account for just five to six per cent of total transactions over the past three quarters; but the government will continue to “watch this very closely“.
Further developments on the Underground Masterplan
Minister Lee said the Singapore skyline will continue to change, and that we’re not done building despite how small we may think the city is. Besides long term plans like the Greater Southern Waterfront and Jurong Innovation District, Singapore continues to work on the Underground Masterplan.
(The Underground Masterplan is currently shown for Marina Bay, Juring Innovation District, and Punggol Digital District. As the name implies, further building takes place underground to maximise space. You can read more about the plans at URA Centre in Maxwell Road).
Fighting climate change
Minister Lee said that the threat posed by climate change is urgent and pressing. Within the Built Environment sector, there will be emphasis on carbon emissions mitigation. This means a sustainable property sector, with green buildings being a priority, and pushing for “more Net Zero or Super Low energy buildings”.
The Minister also said we’d require more engineering solutions to address the impact of climate change. This means a need for news skills, such as coastal defence tech (sea walls, pump stations, and land reclamation to protect Singapore from rising sea levels).
Collaboration all along the value chain
Minister Lee noted that in 2017, “partners from across the entire building value chain from front to end came together, for the very first time, to lay out the plan and direction for the sector’s integration and transformation.”
This included collaboration between developers, architects, engineers, etc., along with input from downstream players like the eventual facility managers, security, landscaping, and others. This includes even some organisations that may be competitors. This is part of an aspiration to create a “digital spine”, which runs through the entire value chain – from conceptualisation and design, through to maintenance.
99.co Plain English explainer: We all work together, we’ll have fewer problems. In the old days, your condo designers didn’t really care about downstream issues like maintenance; they sometimes built condos that look great, but cost too much to maintain later. It wasn’t their problem after you bought it. With the new system, condos and other buildings are designed with input and consideration from downstream players, like facilities managers, so the long term costs are manageable; not just the cost of construction.
With the same collaboration, we can also resolve issues such as environmentally unfriendly buildings, security issues, and other factors. It’s a more holistic approach to designing and building our homes, unlike the old system where each party worked in silos, and mostly cared about its own objectives.
The BuildSG Transformation Fund and BETA initiatives
To support innovation in our Built Environment, the government has set up the BuildSG Transformation Fund (BTF) and Built Environment Technology Alliance (BETA). Both the organisation and the fund promote further research and innovation into built environment technologies, and to fast track the adoption of this new tech by the market.
While this is mostly of interest to the people building your condos, it does impact you as a home buyer – the resulting tech can range from cost-lowering construction and maintenance methods, to Internet of Things (IoT) driven smarthome solutions.
Energising precincts with BIDs
Minister Lee said that “through the pilot Business Improvement District (BID) programme, we have seen many good initiatives across different areas – it involves developers, businesses, community and the agencies all working together – that enliven and strengthen the activities and identity of our precincts.”
He pointed out the examples of Kampong Glam, Tanjong Pagar, and the Singapore River. You can read more about BID programmes on the URA website; but to summarise, these are area improvements that go beyond construction. For example, if all the businesses in a particular district come together to run an arts festival, fund end-of-day community parties, etc. it will help to make the area more energetic.
Finally, we need to keep strengthening our safety nets
Minister Lee said that “Even as we transform our city, we are also hard at work at transforming and strengthening our social safety nets, because the social challenges can only get harder in the years to come.
Supporting our vulnerable, enabling people with disability to live fulfilling lives, housing the homeless, giving ex-offenders a second chance, guiding at-risk young people back onto the right track.
Like the built environment and real estate sectors, an important ingredient to better integrating and weaving our social safety nets is trust and partnerships.”
While buildings and the technology behind them are important, what makes Singapore a great place to live (and yes, buy property) is the society that inhabits it. In the end, a great property market also means a country where communities are vibrant, and people get along.
What are your thoughts on the speech? Voice your thoughts in our comments section or on our Facebook community page.
Looking for a property? Find the home of your dreams today on Singapore’s largest property portal 99.co! You can also access a wide range of tools to calculate your down payments and loan repayments, to make an informed purchase.