Singapore’s private home sales fell 25 percent in June, the most in six months, following the government’s efforts this year to curb gains in housing prices. The property index dropped to a three-week low.
The number of residential units sold last month dropped to 1,182 units in June from 1,575 in the previous month, according to the Urban Redevelopment Authority’s website. That’s the lowest since February.
The drop in housing sales may ease concern the government will impose more curbs after raising the down payment on second mortgages and introducing more taxes on residential transactions in January, according to Donald Han, Singapore-based managing director at Cushman & Wakefield.
“The cooling measures have taken some wind out of the market and some of these investors have started to look at other sectors, in particular industrials and offices,” Han said. “It also reinforces the fact that the activity front is starting to slow down so they shouldn’t put too much effort into trying to cool the market further. It could be an overkill if they take any more measures.”
Singapore’s economy shrank for the first time in three quarters as manufacturing slumped, adding to evidence the slowdowns in Europe and the U.S. are curbing growth in Asia. The island’s currency weakened from a record. Gross domestic product fell an annualized 7.8 percent in the second quarter from the previous three months, when it climbed a revised 27.2 percent, the trade ministry said yesterday. The median estimate of 13 economists surveyed by Bloomberg News was for no growth.
The index tracking property stocks in Singapore lost 0.6 percent to the lowest since June 23.
Singapore’s private home prices rose 1.9 percent in the second quarter, the smallest gain in two years, according to the Urban Redevelopment Authority’s data on July 1.
“This is further evidence that the cooling measures are having an effect,” said Nicholas Mak, executive director of SLP International Property Consultants in Singapore. “The cooling measures don’t take effect overnight, they take a couple of months to show effect.”
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