Despite the support of the government, associations and banks, the challenges for the construction industry could continue at least for the rest of the year.
About 88 percent of developers recently surveyed by the National University of Singapore (NUS) said they were “very concerned” about the high labor costs over the next six months, up from 71 percent in the first quarter.
Around 58 percent fear increased building material costs compared to 45.8 percent in the first quarter.
It is the first time since NUS began collecting data that respondents expressed such grave concerns about construction costs, said Professor Sing Tien Foo, head of the Department of Real Estate at NUS Business School.
He noted that costs tend to be stable and added that “it will take time for border restrictions on migrant workers to be lifted. Until then, we will have to compete with other countries for labor”.
Ian Teo, president of the Micro Builders Association, Singapore, said it could take one to three years for things to get back to normal.
Trade associations and the government have increased support.
The measures include enabling foreign workers in the construction, shipyard and process industries to extend their expiring work permits for up to two years, even if they do not meet the extension criteria. Property developers received extensions for outstanding residential, commercial and industrial projects, banks relieved the construction sector.
However, the Department of Commerce and Industry estimates that the sector’s added value is now still 29 percent below pre-pandemic levels.
On the other hand, the demand for residential property and prices are expected to tick higher.
Around 54 percent of the developers surveyed by NUS in the second quarter expect further units to come onto the market in the next six months, 63 percent expect significantly higher prices for new product launches in the next six months.
Steven Tan, director of OrangeTee real estate agency, said demand for public and private real estate has increased and offers for new startups and resale homes will be posted the same day. “Due to home office requirements, buyers are more willing to spend on larger but older apartments.”
He added that total home prices could rise 6 to 9 percent this year, possibly due to resale volume.
As a result, the Building and Construction Authority expects building needs to be between $ 23 billion and $ 28 billion, up from a preliminary estimate of $ 21.3 billion last year.
Kang Wan Cherna