88% of the developers surveyed by NUS were “very concerned” about high labour costs over the next six months, and 58% were worried about building material costs.
More developers have expressed concern over the increasing construction costs, with about 88% indicating that they were “very concerned” about the high labour costs over the next six months, showed a recent survey by the National University of Singapore (NUS).
This is higher compared to the 71% registered in the first quarter of 2021, reported The Straits Times (ST).
About 58% said they were worried about the high building material costs, up from 45.8% in Q1 2021.
Professor Sing Tien Foo, head of the Department of Real Estate at NUS Business School, noted that this is the first time since NUS started collecting data that respondents indicated such a high level of concern on construction costs.
This comes as the costs are usually stable, he said, adding that it will take some “time before border restrictions are lifted for migrant workers”.
“By then, we will also need to compete with other countries for labour,” he said as quoted by ST.
Micro Builders Association, Singapore President Ian Teo believes it could take one to three years before things could return to normal.
About 54% of the survey respondents in Q2 expect more units to be launched over the next six months, while 63% sees prices of new launches climb higher.
OrangeTee Director Steven Tan said demand for private and public properties has been increasing, with listings for both new launches and resale flats being acquired on the same day.
“Buyers are more willing to spend on bigger but older flats due to work-from-home requirements,” he said as quoted by ST.
OrangeTee data showed that over 14,000 resale HDB flats were sold in the first half of 2021. Prices also grew 6% during that period, bringing it just 2% below the peak in Q2 2013.
OrangeTee expects total HDB resales for this year to hit 27,000 to 29,000 units, up from the 24,748 sold last year and the 23,714 shifted in 2019. Resale flat prices are also forecasted to increase by 9% to 11% for the whole of 2021.
In the private home market, a total of 8,449 units, including new launches and resale units, were transacted in Q2 2021, up 4.3% from Q1 2021.
Tan expects overall home prices to increase by 6% to 9% this year.
With this, the Building and Construction Authority (BCA) sees construction demand for this year to be worth $23 billion to $28 billion, which is higher compared to its preliminary estimate of $21.3 billion in 2020.
Cheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email: [email protected].