For a country that made the top of Jones Lang LaSalle's hot list in 2007, investors are surely disappointed with Singapore's performance in the first half of 2008. Official figures were recently released and show the slowest growth in four years - just 0.4% in the first half of the year. However, sources are optimistic about the effect that two new casinos and a new finance center will have on property values in Singapore.



Soaring construction costs have hit the property market in Asia hard. Japan is suffering from the effects, as is Hong Kong. Singapore is not immune either - in mid August, the cost of construction was given as the reason for there being only one bid at a tender for a 99-year leasehold condominium site in the suburb of Tampines. This bid was also well below market expectations, which both expresses and compounds concerns about the property market in Singapore generally.

REITs in Singapore are also struggling at the moment, with many of the trusts considering mergers. Singapore is a young market for this non-standard form of property investment, and while there is generally seen to be a lot of potential, however debt management by some real estate investment trusts may need to be improved through extracting some of the players in the field. REITs are generally considered harbingers of the property market in Asia; when REITs are losing ground, it is usually viewed as a sign that the market in general is slowing down.

However, experts remain positive about the mid- and long-term prospects of Singapore's property market. This is mainly due to several large construction projects which are expected to boost the local economy, give a jump to figures for property sales in Singapore, and also bring in foreign dollars with foreign workers at the new facilities.

Two new gaming resorts are now under construction. These multi-billion dollar project are expected to have a multiplier effect on the property market, ruling out massive declines. The resorts will be employed a combined total of thousands of people. As the Singaporean workforce will not be large enough to cope with this, overseas workers will need to be brought in, creating demand for rental properties, according to a spokesman for Jones Lang LaSalle. This gives credit to the firm's positioning of the country at the top of its hot list, on the back of a 31% price surge in property values in Singapore last year.

The new Marina Bay financial center should also have a positive impact on the property market in the Asian country. The complex will include luxury apartments, and is reported as being an entire district, not merely a building. Colliers International believes that the Marina Bay Financial Center will "help prop things up". A spokesman also said that "The residential property market may have peaked. But Singapore's positive mid-term prospects on the back of completion of the two integrated resorts and the Marina Bat Financial Center will [have a positive impact]".

Demand is still high for rental properties in central areas, and there is still a good level of interest in residential projects, with some enjoying sell-out status even before completion. This downturn is generally viewed as a bump in the road and a normal correction, rather than the bursting of a bubble.