Oversea-Chinese Banking Corp., Singapore’s second-biggest lender, expects the country’s property market to improve amid the biggest economic contraction since 2012.
“The long-term prospect for the Singapore property market, both on the residential and commercial side, I think continues to be attractive,” Chief Executive Officer Samuel Tsien said in an interview at the Singapore Regional Business Forum on Monday.
Office rents on the island-state posted the first decrease in more than two years and residential prices have fallen for seven quarters in the longest run of declines since 2002. Property brokerage Cushman & Wakefield Inc. estimates as much as 4 million square feet of prime space will be added in 2016, while government data showed unsold private housing units rose 8 percent in the second quarter from the previous three months.
Home purchases dropped 42 percent in June from a month earlier to the lowest level this year as developers held back the sale of new projects. Demand has declined amid a worsening economy and property curbs including higher real-estate taxes and stamp duties. Singapore’s GDP fell an annualized 4.6 percent in the three months to June, underscoring the weakening outlook for Asian nations amid sluggish global growth.
“Right now, the interest is less robust, partly because of the general economic slowdown, partly because of certain measures that were taken,” Tsien said. “Long term, the demand will definitely be there.”