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Singapore has emerged as the world’s third-best market to invest in residential property, according to a new report by Savills.
In its new World Residential Investability Ranking, Savills ranked Singapore below the United States and the United Arab Emirates and above the United Kingdom based on market recovery and economic growth.
Notably, Savills ranked 14 leading countries and their cities and resort locations that have consistently attracted investor interest in recent years.
While it lists the US as number one, the firm said that local considerations also have to be taken into account.
“There is a world of difference within the USA between top tech cities and languishing rustbelt ones,” shared Yolande Barnes, director of Savills world research. The firm tips San Francisco among the very best of their selected residential markets.
It listed the UAE second for residential investment potential, as the country’s domestic wealth creation as well as increasing demographic and regional demand continue to grow.
Singapore and the UK clinched the third and fourth place respectively, based on growth prospects and economic performance, alongside a growing population.
Meanwhile, China took the 11th spot while Hong Kong settled in the 12th place. Savills believe that current pricing in these locations are cyclically high and offer poorer value for short to medium term investors.
“These are still big and investible markets, but we’d expect to see rental growth and yield movement before they once again top our investability list,” Barnes said.
“It is vital that investors understand the long-term demographic, economic and supply-side drivers of demand – and, therefore, sustainable value – when making investment decisions. These can be different at a national and local level,” added Barnes.
“When a growing population, growing affluence and limited housing or land supply converge, we would anticipate real house price growth. The absence of one or more of these variables can stall a housing market and the absence of two or more can send property values downward.”
Source: PropertyGuru 8th September 2015