Singapore Private Home Sales Rebound From Two-Year Low on Suburban Demand

Singapore’s January private home sales rebounded from their lowest in two years, boosted by purchases in the suburban areas of the island state as some developers offered incentives after government curbs.

Private home sales rose to 1,872 units last month from 632 units in December, the highest since November 2010, according to data from the Urban Redevelopment Authority.

Housing transactions plunged in December after the government imposed new taxes on house purchases. 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.

“We maintain our view that the underlying Singaporean buyers’ demand market is likely to continue to support the mass market in 2012,” Chua Yang Liang, head of research for Southeast Asia at Jones Lang LaSalle Inc., said in an e-mailed statement today. “With some developers absorbing part of the additional stamp duty, this has effectively mitigated the impact of the recent government policy.”

Foreigners and corporate entities have to pay an additional 10 percent stamp duty following the 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 government earlier imposed a 1 percent duty on the first S$180,000 ($142,879) of the property price, 2 percent on the next S$180,000 and 3 percent for the remainder.

Fourth-quarter home prices posted their smallest gain in 2 1/2 years, a separate government report showed last month.

Watertown Sales

The Watertown development in the northeastern suburb of Punggol contributed to more than half of the sales last month, with 992 units, according to the government data.

Sales were also boosted by the Hillier development in the west-central area of Hillview Rise. Both projects are being built by Far East Organization, the city-state’s biggest closely held developer, which teamed up with Fraser & Neave Ltd. and Sekisui House Ltd. (1928) for Watertown.

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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