Singapore Builders Facing Maturity Wall as Home Prices Drop

Singapore’s real-estate firms are facing record debt maturities, just as home sales post their longest-ever losing streak, straining the finances of builders less prepared to weather the storm. 

Home values in the city state have dropped 9.4 percent from the peak in 2013 and the declines show no signs of abating. An index tracking private residential prices fell for the 11th quarter in the three months ended June 30 and the government on Thursday cut its 2016 economic growth forecasts. The smallest 50 real estate firms and trusts listed on the Singapore Exchange are in a weaker position to repay debt, with operating earnings dropping to 9.2 times interest expenses from 15.8 times five years ago.

DYI Comments:  The major reason for the fall off in housing prices in Singapore is due to a collapse in fertility rate.  I'm always amazed for this city state to see their fertility rate below one!  Simply amazing!  Singapore has been below replacement since the mid 1970's.  Their ageing Boom generation as they pass away real estate properties will come onto the market with fewer and fewer buyers as their population will be in decline.  Hence, lower RE prices.  This demographic is already firmly in place in Japan with RE prices declining since the 1990's.   

Country	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014
Singapore	1.16	1.22	1.23	1.24	1.04	1.05	1.06	1.07	1.08	1.09	1.1	1.11	0.78	0.79	0.8

Definition of Total fertility rate: This entry gives a figure for the average number of children that would be born per woman if all women lived to the end of their childbearing years and bore children according to a given fertility rate at each age. The total fertility rate (TFR) is a more direct measure of the level of fertility than the crude birth rate, since it refers to births per woman.

 This indicator shows the potential for population change in the country. 

A rate of two children per woman is considered the replacement rate for a population, resulting in relative stability in terms of total numbers. Rates above two children indicate populations growing in size and whose median age is declining. Higher rates may also indicate difficulties for families, in some situations, to feed and educate their children and for women to enter the labor force. 

Rates below two children indicate populations decreasing in size and growing older. Global fertility rates are in general decline and this trend is most pronounced in industrialized countries, especially Western Europe, where populations are projected to decline dramatically over the next 50 years.

DYI