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SINGAPORE: Refurbishment businesses have been affected by the slow property market in Singapore. According to the Renovation and Decoration Advisory Centre (RADAC), which represents about 80 industry players, some firms have seen business drop by up to 50 per cent compared to three or four years ago when the property market was booming.

Homeowners seem to have a smaller appetite for lavish renovation works as well, with industry players saying homeowners in Singapore are now more selective about the kind of renovation works to undertake.

Affordability is the key issue, with property cooling measures like the Additional Buyer's Stamp Duty and loan restrictions taking a heavier toll on finances. Such measures have already softened the property market considerably.

Slower home sales naturally mean there is a shrinking pool of homeowners who want to customise a unit to their own unique tastes. It also means renovators have to fight harder to win the attention of customers.

Some contractors who have been struggling against the competition have had to close down. "With this consolidation of marketplace, there are companies who have folded up, because they find that their income is not able to match their ongoing expenses, despite how modest their expenses can be," said Edward Tan, executive director of RADAC.

Making conditions even tougher - especially for small, family-run renovation contractors - is the tight labour market in Singapore. "With the problem of getting labour and increased costs, contractors may think that their service level may not be good enough," added Mr Tan. "And because they have been around for so long, they may want to retire."

ADAPTING TO MARKET CHANGES

For those battling on, adapting to changes has been key. Renovation matchmaking website Kluje, which is linked to around 500 industry players, said refurbishment outfits are responding to changing tastes.

Kluje's co-founder and chief operations officer, Andrew Esmonde-White, noted that homeowners are taking up smaller renovation packages costing below S$10,000, and keeping away from lavish refurbishment projects costing S$100,000 and above. "So they will actually look at cheaper options on the tiling and maybe not even replace the tiles if they are actually really good. Then it is just general painting, they won't go for any structural changes to save money," he added.

Kluje expects this trend to continue, with contractors who are able to modify their operations more likely to thrive if the slowdown in the renovation sector persists.

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Renovation contractors hit by slow property market in Singapore

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