Singapore home sales rose 84 percent last month the highest in more than three years as developers sold more apartments after a decline in August, a month considered inauspicious based on the Chinese lunar calendar.
Home sales in September climbed to 2,621 units from 1,427 units in the previous month, according to data released by the Urban Redevelopment Authority today. That’s the highest since July 2009, based on the data. Sales climbed 7.7 percent to 5,999 units in the three months ended Sept. 30 from the previous quarter, the data showed.
Sales climbed after developers slowed marketing their projects in August due to the “Hungry Ghost Month,” which is considered an unlucky time to buy according to Chinese tradition.
Singapore home prices reached a record high in the third quarter amid low interest rates, raising concerns of a housing bubble. The property market may get “bubbly” even with slow growth and the government won’t allow prices to outstrip gains in incomes, Finance Minister Tharman Shanmugaratnam said at conference in Hong Kong on Oct. 9.
“We are seeing pent up demand from August as developers have increased their project launches last month after holding back sales due to the Hungry Ghost Month,” said Nicholas Mak, Singapore-based executive director at SLP International Property Consultants. “I think we will see a decline in sales over the next couple of months after the measures.”
The Monetary Authority of Singapore or the central bank told banks on Oct. 5 to restrict home-loan maturities “to curb continued upward pressure on residential property prices,” in its latest attempt to avert a housing bubble. Homebuyers typically avoid buying properties in the seventh month of the lunar calendar, also known as the Hungry Ghost festival, which is usually in the month of August.
Sales last month were boosted by suburban projects. Eco Properties Pte sold 402 units of the 502 marketed last month in the east, while Hoi Hup Kovan Development Pte sold 369 units of 393 in its Kovan Regency project, the data showed.
“Ample global liquidity and low interest rates in recent years have contributed significantly to the strong demand for residential property,” Khaw Boon Wan, Singapore’s minister of National Development, said in Parliament today.
Gross domestic product fell an annualized 1.5 percent in the three months through September from the previous quarter, when it expanded a revised 0.2 percent, the Trade Ministry said Oct. 12.
The government in December imposed an additional stamp duty on foreigners and corporations buying property, and additional levies on permanent residents buying a second home and citizens purchasing a third residential property.
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.
The government last month said it plans to cap the number of homes that can be developed in suburban projects as it seeks to curb the increasing trend of so-called shoebox apartments.
The island-state’s private residential property price index rose 0.5 percent to 208 points in the three months ended Sept. 30, according to preliminary estimates released by the URA on Oct. 1.