New Home Sales Surge in Singapore

The end of government-imposed cooling measures for the Singapore residential real estate market has allowed for marked growth in new home sales, and some analysts believe a reinstatement …

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The end of government-imposed cooling measures for the Singapore residential real estate market has allowed for marked growth in new home sales, and some analysts believe a reinstatement of more measures may be on the horizon if the rapid sales rate continues. The Urban Redevelopment Authority reports new-home sales increased 29% for the month of February and all signs point to similar growth through March. Many purchasers are first-time homebuyers and second-time local investors, so the additional-residence stamp duty does not apply, which believe is also helping boost transaction volume. For more on this continue reading the following article from Property Wire.

A sharp rise in demand for new homes in Singapore in January continued last month with data from the Urban Redevelopment Authority showing that figures were up 29% month on month.

In February 2,413 new homes were sold, up from the 1,872 sold in January and almost three times more than December’s sales.
For February, the best selling projects were mostly located in the suburban areas. The top seller was Parc Rosewood with 380 units sold. Guillemard Edge, which is located in the city fringe, also performed well with sales of 275 units.

Home buyers are also snapping up executive condominium (EC) with 257 sold at Twin Waterfalls, 187 units at The Tampines Trilliant and 186 units at The Rainforest.

Including ECs, a total of 3,138 units were sold last month, up 51% compared to January and analysts said low interest rates are fuelling demand for private properties in Singapore.They also expect demand to hold up in March and said sales will remain healthy going forward and this could result in the government introducing more cooling measures.

‘After the December cooling measures, in January and February, you see that sales volume has in fact increased a lot more. And if it continues to be at a high level, say above 1,500 units per month excluding ECs, then it is very likely that the government will come up with more cooling measures,’ said Chua Chor Hoon, head of Asia Pacific research at DTZ.

Although analysts do not rule out further property cooling measures from the government, some said the likely impact this time will be muted.

‘It is not like a sudden surprise; after five rounds, it has come to a conclusion that whenever markets are strong, there is a serial tendency to impose more and more measures. That impact itself, the moment you expect it to happen, it is not a shocker. It will not have a great impact on the negative side,’ explained Alan Cheong, research head at Savills Singapore.

The majority of home buyers in the suburbs have been first time buyers or second home local investors. And as such, they are not affected by the additional buyer stamp duty.

Prices are not necessarily expected to go up. ‘Prices are likely to stay stable, because there is a huge amount of supply coming on. If you look at GLS (Government Land Sales), there have been quite a number of sites that have been sold already, and queuing up to be launched,’ said Ong Teck Hui, executive director and research head at Credo Real Estate.

‘With that in mind, I think the developer will not be able to up the pricing. So long as the demand remains buoyant, it will keep the prices stable. Because at that price level, they are able to move the units,’ he added.

This article was republished with permission from Property Wire.

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