Singapore May Set Rules To Cool Housing Market
Singapore may introduce additional measures to cool the housing market after private home sales reached a record in the first quarter as more “shoebox” apartments were sold, property services company Jones Lang LaSalle and brokerages including Nomura Holdings said.
Home sales climbed to 6,682 units in the three months ended March 31, the highest quarterly figure since 1996 when the Urban Redevelopment Authority began reporting the data. Prices rose 1.2 percent for the mass market in the same period, preliminary estimates from the authority showed earlier this month.
Singapore has been attempting to rein in prices since 2009, when the government barred interest-only loans for some housing projects and stopped allowing developers to absorb interest payments for apartments still being built. Analysts at Jones Lang, CLSA Asia Pacific Markets, Nomura and Bank of America’s Merrill Lynch unit all expect the government to introduce further measures to curb price increases.
The volume and price increases “suggest that there could be some policy measures,” Chua Yang Liang, head of research for Southeast Asia at Jones Lang’s Singapore unit, said. “The policy risk is high. If they do implement, they could do it in four to six weeks as they are quite quick to react.”
Sales have risen as developers offer smaller units, according to CBRE Group. The median size of apartments declined 24 percent to 667 square feet in the quarter ended March from the previous three months while the median price slid 18 percent to 786,340 Singapore dollars ($630,000), it said.
Foreigners and corporate entities must pay an extra 10 percent stamp duty following measures introduced in December. The extra levy is 3 percent for permanent residents purchasing a second home and for citizens buying their third residential property.
The next round of cooling measures will be targeted at curbing investment demand from Singaporeans, CLSA, a unit of Credit Agricole, said in a report dated April 17.