Real estate market feels the pinch: Singh
The Real Estate market is feeling the pinch with a spike in the price of residential properties and lands.
Property Expert founder Johnny Singh said residential properties have proven resilient in the face of rising interest rates and a surging cost of living.
While residential properties and lands have proved to be reliable investments, Ms Singh said their sale price in the market continues to thrive.
Property and land sales
He said property and land sales were strong in 2023 but it is squaring up with rise in inflation in 2024. “People have less money to spend so the eligibility for buyers to get loans has dropped,” Mr Singh said. “Secondly due to mass migration, the market is feeling the pinch,” he said.
Any country’s economic performance is gauged by the performance of the real estate sector whether it be commercial, residential, industrial, tourism or agricultural real estate.
Mr Singh outlined various reasons as to why the residential land price has spiked over the years in the country.
One of the major reasons he said was the slow creation of new residential lots. “The processing time for new developments by the government agencies is slow when it comes to approval timelines and sometimes with very high and expensive requirements.
“Delays often turn costly for developers due to ongoing bank interest costs due to slow pace.
“These costs are mostly passed to buyers which pushes lot prices in an upward direction making land price expensive and unaffordable. He said this was not only limited to luxury properties but for the local market as well.
“An example is 15 per cent VAT for a first home when he purchases a vacant lot from the developer and is unable to claim 15 per cent back. “After the 15 per cent vat kicked in, the price of land sold by developers has gone up 6 per cent. “Incentives such as VAT refund for first home buyers will get prices reduced by 15 per cent,” he said.