Singapore University: FMT306e Real Estate Market Drivers Analysis

This report provides an in-depth analysis of the five primary drivers of the Singapore real estate market, as outlined in the FMT306e assignment brief. The report examines the influence of government bodies, including statutory boards such as the Ministry of National Development and the Urban Redevelopment Authority, on policy and price regulation, emphasizing their role in consumer protection and land management. It then explores the critical role of developers in land acquisition, property development, and market pricing, highlighting the competitive landscape among major players like Capitaland and the importance of continuous property supply. The report further assesses the function of property agencies and agents as intermediaries, discussing their commission structures and the impact of government regulations on their activities. Banks are examined for their crucial role in financing real estate transactions and supporting both developers and buyers through loans. Finally, asset managers are discussed in the report. The report references relevant academic sources and provides examples to support its analysis of each driver's impact on the Singapore real estate market.

Running head: PROPERTY AND FACILITIES MANAGEMENT 1
Property and Facilities Management
Name
Institution

PROPERTY AND FACILITIES MANAGEMEN 2
Abstract
The content of the term paper comprises of the five drivers of the functioning of the real estate
market in Singapore.
The real estate market in Singapore is driven by five major groups of factors which ensures
continuity of the real estate market in the region. Such drivers include; government bodies,
developers, property agency and agents, banks and last asset managers.
1. Government bodies
Government bodies and agencies refers to the individuals or a group of people employed by
the government in order to represent the Singapore government and also to ensure that the set
and laid down policies governing the real estate market are adhered to by the properties and
facilities manager during real estate marketing. (Davy,2016).
Government bodies in Singapore shape the policy changes in real estate markets which can
significantly affect the pricing in the real estate market, price regulation by the government in
Singapore real estate market has been viewed by the local citizens and members of the public as
a mechanism set by the government in order to protect the consumers or customers who are
interested in the real estate property letting and management from exploitation by the managers
who are fond of charging high prices during letting and buying of properties in the real estate
markets. (Rose-Ackerman & Palifka, 2016).
Government bodies in Singapore has been considered to be playing a very important role in
consumer protection against exploitation by the managers or brokers in the real estate market.
these has been made possible by setting a standard across the real estate price depending g on the
value of the property in question. Such government bodies in Singapore has developed a better

PROPERTY AND FACILITIES MANAGEMEN 3
and more refined procedure to be used in monitoring the activities of the traders in the real estate
market and also design a disciplinary channel responsible for the conduct of the managers
conduct whereby in case of unprofessional conduct or activities to exploit the customers against
the set guidelines are dealt with. (Van Thiel, 2017).
Government body in Singapore that is responsible for the designing and monitoring business
activities in real estate market are divided into four statutory bodies namely the ministry of
national development, monetary authority in Singapore, building construction authority and
lastly the ministry of finance. The statutory government bodies in Singapore are classified
according to their services and functions they offer in the real estate market in ensuring
adherence to the set guidelines and trading requirements by the property managers in the real
exchange market. (Orford, 2017).
Building and construction authority is a statutory board whose role is to provide guidelines
and requirements for the construction works and also to ensure that the constructors follows the
set safety construction guidelines in their construction works.
Singapore land Authority which operates under the ministry of law are concerned with land
resources optimization. It oversees the government land sales, leases, management of state land
and also in maintaining the land information database thus ensuring the safety of the government
land and other construction and land related issues.
Housing development board under the MND and the public housing authority has a duty
cheap and reliable housing to the people of Singapore by planning housing development in towns
for the urban residents. (Groves, 2016).

PROPERTY AND FACILITIES MANAGEMEN 4
Urban redevelopment Authority thus operating under the MND and the national land use
planning department is responsible for preparation of long term strategic and local plans for land
use in Singapore and helps in implementing such strategies.
2. Developers
Developers can be defined as a group of investor who are responsible for converting the raw
land thus the land which has not been used or the land left unattended to into the completed
property with an aim of reselling or leasing them to business person or the residents in case they
were residential apartments. Developers plays a key role in the real estate market since they are
the owners of the properties to be leased or sold in the market and also determines the prices of
their properties to the buyers thus the customers or the residents, they can either decide when to
or not to let their properties to the residents based on the prevailing real estate market price and
other external forces affecting the real estate market condition like the government policies.
(Edelstein & Liu, 2016, pg. 205).
Leasing and selling of property being the main role of the developers in the real estate market,
they often have to go through a range of activities in order to acquire land and other properties
like designing of the they have under the development, buying land from other seller, financing
the whole deal and also obtain and pay for the approval from the government agency and also
engage the construction company to do the building process in accordance to the set government
regulations and requirements base on the construction procedures. They have to ensure that the
construction process runs smoothly by insuring the risky activities that may arise in the course of
the construction process like accidents and injuries to the people working within the site, they
ensure safety of the workers within the construction site by providing safety clothes and
gumboots and elements to the workers. (Rouanet & Halbert,2016, pg. 1405).

PROPERTY AND FACILITIES MANAGEMEN 5
Developers has an obligation to buy land from the seller and government tenders to maintain
their land bank and also the pipeline of projects that they have under development thus enabling
them to avail land and properties to be auctioned in the real estate market so as to realize the
profit they made from a single project after completion. (Been, Ellen, Gedal, Glaeser & McCabe,
2016, pg. 28).
Prominent and recognized property developers in Singapore like the Centrepoint, capitaland
and fast east organization has been trying to compete with each other in property leasing and
letting work since they are the leading private developers in the real estate market. They define
and predicts their prices by comparing with other developers’ prices so as to meet the market
price standard of the property in order to maximize their profits.
Developers in the real estate market have the responsibility in ensuring continuous supply of
the properties in the market through leasing and renting of their developed properties and land to
the residents in case of a residential flats and business space to the city entrepreneurs based in
Singapore. They are expected to charge reasonable prices and rates on the property leased or
renting in accordance to the government guidelines on price evaluation to ensure that their
consumers or customers are protected against exploitation. (Dong & Sing, 2017, pg. 483).

PROPERTY AND FACILITIES MANAGEMEN 6
3. Property agency and agents
Property agency and agents can be defined as the people or businesses that arrange the selling
and renting of the properties on behalf of the developers or the owners of the property, they are
the intermediaries between the developers or owners of the and the buyers. Property agency and
agents plays an important role in the real estate market since they are the ones advertising the
properties and bargain on price on behalf of the developer. They try and match the interest of the
seller and that of the buyer of the property and thereafter are paid commission upon successful
selling of the property. (Mera & Renaud, 2016).
In Singapore, property agency and agents charges a flat rate commission of 1-2 % on the
seller of the private property, 1% on the buyer of the property of private property and also 1-2%
for the HBD flat transaction.
Property agency and agents in real estates are given the role of searching for the potential
buyer of the property who is willing to pay the exact quoted price by the seller giving positive
reviews and ratings on the product through advertising so as to lure many buyers to considered
that particular property and thereafter gets commissioned by both the seller and the buyer for
their intermediary job and for finding the best buyer for the product to the seller and for finding
the best property to the buyer. (Squires & Heurkens, 2016, pg. 575).
In Singapore, property agency and agency has been recorded to be fast growing business to
venture into by many locals living in Singapore since the agency work is considered more
profitable following to rising number of developers and private property owners who rents their

PROPERTY AND FACILITIES MANAGEMEN 7
properties or sells them to other users and also the rate of interest charged by the property agency
and agents on both the buyer and them seller which is considered more friendly in favor of the
agents and the property agency firms. (Baptista, Farmer, Hinterschweiger, Low, Tang & Uluc,
2016, pg. 123).
For a long time, the reputation of the property agency and agents were ruined by some of the
unprofessional agents who came into the agency business due to the high interest commissioned
by the agents thus making the government and concerned authorities in the real estate to design
some of the agency restrictions and requirements that one has to fulfil in order to be granted a
permission to operate as an agent or to start and run a property agency business. This action by
the local government of Singapore has negatively impact the agency activities in the real estate
market since most of the agents could not attain the entry pass mark from the mandatory entry
exam. (Ley, 2017, pg. 33).
The government introduced the estate agents act in 15th September 2010 and set up a statutory
board to help regulate the agents and agency business in the real estate market. The set up
statutory board is known as the Council for Estate Agency (CEA). Which has reduced the
number of agency and agents in the real estate market by 30%.
4. Banks
In real estate market, banks are considered and viewed to be more important to the developers
and buyers since it provides money for the transaction of the business. It is considered as the fuel
for driving the real estate market engine thus through provision of money. Banks provides

PROPERTY AND FACILITIES MANAGEMEN 8
money into the real estate market through loans and funding of some of the real estate market
activities like auctioneering in case of default in payment. (Duca & Ling, 2018).
Banks do funds the property developer’s projects, for instance, when a developer acquires a
piece of land and wishes to construct a residential flat on that particular piece of land, bank will
come in to finance the hole construction process by funding the project in that upon completion
and leasing of the flats to the residents, the developer will be expected to pay back the funds to
the banks with an interest earned hence banks are the backbone of the real estate market since
every transaction in terms of money requires banks intervention. (Antoniades, 2018).
On other hand, a buyer may seek loan from bank to enable him purchase the property due to
lack of enough cash to personally pay for the expenses associated with the acquisition of the new
property. The buyer ill therefore gets a loan fund from the local banks in which he will be
required to repay in installments with the interest earned. From both ends, banks play a major
role in real estate market thus following the transaction demand for money which is rapidly
increasing in the real estate market as a result of increase in developers who are interested in
investing in the real estate market. (Hartmann, 2015, pg. 79).
The top local banks in Singapore which are preferred by most of the developer in terms of the
interest charged on loans and reliability includes DBS, UOB and OCBC and other active foreign
banks like HSBC and Citibank which have partnered with local developers and entrepreneurs in
funding their projects like construction activities and other transaction demand for money in the
real estate market.
Banks activities in funding developers and other investors in the real estate market in
Singapore has positively impacted the development and expansion of the real estate markets has

PROPERTY AND FACILITIES MANAGEMEN 9
many of interest developers are able to obtain loan funds to enable them finance their proposed
projects like buying of land, financing their construction activities and also paying for their
insurance cover incase uncertainty in the proposed project. (Vojtech, Kay & Driscoll, 2018, pg.
17).
5. Asset managers
Assets managers play an important role in the real estate market since they cultivate the
market value of a particular asset so that the property owner can either choose to continue
investing on that particular asset or divert his investing resources to more valuable projects thus
according to the valuation done by the asset manager. Asset manager has responsibility of
identifying the possible risks related to the asset and defining the best possible solution for the
associated risk which can either advising the developer or an investor to withdraw from investing
on that particular property or to continue with that property in the real estate market.
(Danisewicz, McGowan, Onali & Schaeck, 2018, pg 99).
Asset manager in the real estate market is always concerned with maximizing the value of
the property for investment purposes. The decision of the asset manager in the real estate market
ill influence the developer or investor’s choice to continue investing with the same property due
its market value report or to totally shift their investing taste by investing g on other properties
which are more valuable in the real estate market. (Ding, Fung & Jia, 2017, pg 107).
Following the asset managers report on the value of the property in the real estate market,
developers and investors will shift their investing plan on another valuable asset in case the

PROPERTY AND FACILITIES MANAGEMEN 10
report provided negatively valuate the property and here the shifting recommendation is provided
by the asset manager. These has made the asset managers to be part of the drivers of the real
estate markets since their report relating certain property will determine the future of that
particular property in the real estate market following investors preference in investing in more
valuable property. (Bowitz & Ibenholt, 2009, pg 7).
Maximizing investment return for instance, reducing the expenditures, mitigating liability
and risk are some of the values of the property an asset manager looks for hence they provide
their report and recommendations to the investor based on such values thus on poor evaluation of
a property or failure to provide full asset evaluation report negatively affects the investors
decision on their continued investing on such properties in the real estate market or change of the
investment property which also affects the operation and activities real estate market as a whole.
Conclusion
With these five players in the real estate market drives the functioning of the property
market, the government will provide land for development, developers buying those provided
land hence transforms them into property, agents coming in to aid in marketing and banks
responsible for provision of the funds to the buyers and asset manager providing the value of the
property to the investor.

PROPERTY AND FACILITIES MANAGEMEN 11
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