Singapore’s property market struggles against cooling measures

Some developers in Singapore have introduced extra incentives for buyers to offset ABSD

Transaction volume in Singapore’s property market is expected to decline following the introduction of January’s cooling measures, according to a recent report by property advisory firm DTZ. The primary market may be less affected by the latest measures than buyers of public housing, due to the extra incentives and discounts offered by developers.

DTZ predicted that investment demand for prime properties could also decline this year due to the new property tax structure, and the removal of the property tax refund concessions for vacant properties that was announced during the 2013 budget.

The number of private home purchases rose in 2012, possibly as a result of extra incentives made by developers to offset the Additional Buyer’s Stamp Duty (ABSD) enforced by authorities. However, DTZ reported that the number of transactions only increased within the primary market sector.

A record number of launches were recorded by DTZ in 4Q2012, which provided greater choice for potential buyers.

Buying activity was stronger in 2012 than in 2011, according to DTZ, with the volume of private home sales rising by 5.9 percent year-on-year to a total of 33,174.

Non-landed private home sales in the S$1,000 (US$809) to S$1,500 (US$1,213) per sq ft price bracket saw the largest year-on-year increase of 30 percent. Highest selling projects within this price band included Watertown, Bartley Residences and eCO. Units within this price band made up 46 percent of total purchases, despite the introduction of October’s cooling measures.

According to the report, sales of units above S$2,000 (US$1,618) per sq ft declined by 20–25 percent year-on-year as foreign demand declined due to the imposition of ABSD.

Strong growth was registered quarter-on-quarter for the purchase of private homes that cost over S$4 million (US$3.2 million) per unit.

The volume of foreign purchases rose in 4Q2012 compared to the number of purchases made by Singaporeans. The gap between foreign and local purchases was strongest in the Core Central Region (CCR), where the number of purchases made by locals dropped. Chinese buyers overtook Malaysians in Q4 to become the top non-Singaporean buying group, according to DTZ.



Filed Under: NewsNews by CountrySingapore

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