Bloomberg News

Singapore Home Sales Post Biggest Quarterly Drop in 2 1/2 Years

July 16, 2012

Singapore home sales posted their biggest drop in 2 ½ years in the second quarter as prices rebounded to a record, a government report showed.

The island state’s private residential property sales declined 17 percent to 5,572 units in the three months ended June 30 from the previous quarter, according to data released by the Urban Redevelopment Authority today. That’s the biggest quarterly decrease since the three months ended December 2009. Home sales have climbed to 12,254 units this year through June 30, according to data from the authority.

Singapore has been attempting to rein in prices since 2009, when it barred interest-only loans for some housing projects and stopped allowing developers to absorb interest payments for apartments still being built. The government last week said it is prepared to enhance measures aimed at ensuring a “stable and sustainable” housing market, even as gains in home prices slowed this year.

“Sales have been unnaturally high from January to May,” said Nicholas Mak, executive director at SLP International Property Consultants, a real estate consulting company. “It’s good news that the sales have come off a little as it might now take some pressure off on additional government measures, now that prices have stabilized and sales are down to more sustainable levels.”

More measures were introduced in December. Foreigners and corporate entities have to pay an additional 10 percent stamp duty. The extra levy is 3 percent for permanent residents purchasing a second home and for citizens buying their third residential property.

Government Curbs

The government earlier imposed a 1 percent duty on the first S$180,000 ($142,000) of the property price, 2 percent on the next S$180,000 and 3 percent for the remainder. In January 2011, the government also raised down-payment requirements for second mortgages and extended the period homeowners must hold their properties to avoid a sales transaction tax to fend off speculators.

Prices of non-landed private residential properties increased by 0.6 percent in the Core Central Region in the quarter compared with a decrease of 0.6 percent in the three months to March 31, a separate government report showed earlier this month. Prices in Outside Central Region climbed at a slower pace of 0.4 percent in the quarter, compared with a gain of 1.1 percent in the previous quarter.

Home sales in June fell 20 percent to 1,371 units from a month ago, according to today’s report. Private housing sales slid to their lowest this year from the 2012 peak of 2,496 units in April, according to the data.

Private home price growth slowed to 0.3 percent in the first half compared with a 6 percent increase for the whole of 2011, the Ministry of National Development said in a statement on its website last week.

To contact the reporter on this story: Pooja Thakur in Singapore at pthakur@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net


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