Singapore private home prices increase despite cooling measures

Despite additional property curbs imposed by the government, Singapore's private home prices are still inching upwards, said a Bloomberg report on Monday, October 1. 

According to a flash estimate from the Urban Redevelopment Authority (URA), private residential prices increased 0.5 percent in the three months that ended September 30. 

That adds to a 9.1 percent gain in the year through June, and is the slowest increase the market has seen in five quarters. 

Apartment prices in prime districts increased 1.2 percent last quarter, as compared to a 0.9 percent gain in three months through June 30. In addition, unit prices in suburban areas rose 0.1 percent after a 3 percent climb in the previous quarter, said the report.

Photo: Connected to India
Photo: Connected to India

On the other hand, prices near prime areas slid 0.8 percent after gaining 5.6 percent in the June quarter.

After a steep rise in  home prices in the first six months of 2018, Singapore had taken measures cool the market. This is to avoid the risk of a sharp correction that could be destabilising to the country’s economy.

The rush of transactions was fueled by aggressive land bids from developers and so-called en-bloc transactions, in  which groups of owners have banded together to sell entire apartment buildings.

Individuals taking out their first housing loan face stricter borrowing limits under the new measures. This means they have to stump up more cash upfront. As for foreign purchasers of residential property, the additional buyer’s stamp duty was increased from 15 to 20 percent. For Singapore citizens, the extra charges will only apply from their second home purchase.

However, the rising prices in Singapore’s property market are not homogenous. For example, in the luxury precinct of Sentosa Cove, average prices are down almost 30 percent from their 2011 highs. This was a far more severe dip than in prime central London areas reeling from Brexit.