Singapore April Residential Sales Decline 51% From Record

Singapore’s April home sales dropped 51 percent from a record in March as developers marketed fewer projects as residential prices posted the smallest gain in three quarters.

Home sales fell to 1,375 units in April, according to data from the Urban Redevelopment Authority released today. Sales in March rose to a record 2,793 units.

The island-state’s private residential property price index rose 0.6 percent in the three months ended March, the slowest pace in three quarters, according to data by the authority. Government measures in January, the seventh round of curbs in about four years, included an increase in the stamp duties for homebuyers by 5 percentage points to 7 percentage points.

“Developers couldn’t sustain the pace of launches they had in March, so we are seeing fewer sales in April,” said Alan Cheong, senior director of research and consultancy at broker Savills (Singapore) Pte. “The month of May will probably see the same pace of launches as April. We may see a pickup from the start of the third quarter.”

Home sales rose to a record in March, rebounding from a 14-month low in February and the highest since the government started releasing the information in June 2007, the data showed.

The curbs in January also included higher taxes on permanent residents when they buy their first home, and for Singaporeans starting with their second purchase.

Singapore will offer five residential sites in May which can yield about 2,725 homes, according to a government statement today.

More Taxes

Home sales reached 22,699 units in 2012, based on the government data that dates back to 1996.

Singapore also plans to raise taxes for luxury homeowners and residential properties that are rented out. The higher tax will apply to the top 1 percent of homeowners who live in their own residences, or 12,000 properties, Singapore Finance Minister Tharman Shanmugaratnam said in his budget speech on Feb. 25.

The government tightened loan-to-value limits for buyers seeking a second mortgage, referring to the amount they are allowed to borrow relative to the value of their properties. The cash down-payment will rise to 25 percent from 10 percent starting from the second loan, it said.

Singapore has been attempting to rein in prices since 2009, when the government barred interest-only loans for some housing projects and stopped allowing developers to absorb interest payments for apartments still being built.

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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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