Demand for Singapore real estate will fall next year, according to a report from global accountancy firm PricewaterhouseCoopers, which said the market slipped four places in its 2014 ranking of property markets.
According to PwC's Emerging Trends in Real Estate Asia Pacific forecast, published in conjunction with the Urban Land Institute, concerns around oversupply in some Singapore property sectors have damped appetite.
"Singapore slipped off the top five spots for the first time since the publication first started in 2007," said Choo Eng Beng, real estate leader at PwC.
The decline may come as a surprise to many, given that the Southeast Asian capital is one of the most expensive real estate markets in the world. Low interest rates have spurred a massive rise in prices, and as a result regulators have introduced a swathe of market cooling measures since 2009.
Choo said contradicting factors were creating a mixed outlook for Singapore's real estate market.
"On the one hand, investing in real estate is getting more expensive due to the expected higher interest rates, compressed capitalization rates [which refer to the rate of return on a property based on its expected income] and tighter regulations. On the other hand some see room for better returns with low vacancy rates and potential for higher rentals," he said.
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The top five property markets in 2014 are Japan's Tokyo, China's Shanghai, Indonesia's Jakarta, Philippines' Manila and Australia's Sydney, PwC found.
PwC said a huge spike in demand for Japanese property had propelled Tokyo to the top spot, following a five-year absence from the top rankings. The sudden increase in popularity is due to the government's radical economic stimulus plan, which has resulted in a flurry of purchases in anticipation of higher prices, PwC said.