April 1 (Bloomberg) -- Singapore home prices climbed at the slowest pace in three quarters after the government imposed more curbs such as higher stamp duties for housing transactions, a government report showed.
The island state’s private residential property price index rose 0.5 percent to a record 213.1 points in the three months ended March 31, easing from a 1.8 percent increase in the fourth quarter, according to preliminary estimates released by the Urban Redevelopment Authority today. The advance was the smallest since the second quarter last year.
“Measures have taken effect,” David Neubronner, national director at Jones Lang LaSalle’s residential project sales in Singapore, said in a phone interview. “It’s taken out the investors and that’s seen in the slowing prices and sales. Had it not been for the curbs, home sales in the quarter would have been much higher.”
Singapore’s home sales plunged 65 percent to a 14-month low in February after the government introduced its seventh round of property curbs to cool record prices. Sales dropped to 708 units in February from a revised 2,016 units in January, the authority said on March 15. The data for last month is expected in mid-April.
Apartment prices increased 0.4 percent in prime districts in the first quarter, down from a 0.7 percent gain in the previous three months, the data showed. Those in the suburbs climbed 1.7 percent, less than half of the 3.8 percent increase in the previous quarter, according to the statement today.
CapitaLand Ltd., Singapore’s biggest publicly traded developer, slid 0.3 percent to S$3.52 at the close of trading in Singapore. City Developments Ltd., the second largest, added 0.1 percent to S$11.34. The index tracking property stocks added 0.3 percent, led by commercial and industrial real estate companies and trusts.
Record home prices amid low interest rates raised concerns of a housing bubble and prompted the government to widen a four-year campaign to curb speculation in Asia’s second-most expensive housing market. Neubronner expects prices to remain “flat” this year.
A report by the National University of Singapore’s Institute of Real Estate Studies showed the NUS - Singapore Residential Property Index fell 1.4 percent in February from the previous month. Those in the central region declined 3.7 percent.
The measures in January included an increase in the stamp duty for homebuyers of between 5 percentage points and 7 percentage points, with permanent residents paying taxes when they buy their first home. Singaporeans will also have the levy starting with their second purchase.
Singapore also plans to raise taxes for luxury homeowners and investment properties. 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.
To contact the reporter on this story: Pooja Thakur in Singapore at email@example.com