Singapore’s March home sales rose to a record as more developers started marketing new residential projects, raising concerns the government will introduce more cooling measures to tame property prices.
Home sales rose to 2,793 units in March, rebounding from a 14-month low in February and the highest since the Urban Redevelopment Authority started releasing the information in June 2007, according to data released today. Sales in February slumped to 712 units, the data showed.
Prices climbed to a record in the first quarter, according to government data on April 1. The latest 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.
“Its definitely the pent up demand,” said Nicholas Mak, the Singapore-based executive director at SLP International Property Consultants. “There is also concern that the government could introduce more cooling measures” after the March home sales data, he said, adding that he expects sales to decline in April.
The island-state’s private residential property price index rose 0.5 percent in the three months ended March 31, the slowest pace in three quarters, according to preliminary estimates released by the authority.
D’Nest, a condominium project in the city’s northeast, sold 699 of 800 units it put up for sale, while buyers bought 238 units at Sennett Residence, and 348 at Urban Vista in the east, according to the government data.
“The buyers have come back with a vengeance,” said David Neubronner, national director at broker Jones Lang LaSalle Inc.’s residential project sales in Singapore. “If sales continue at this pace, there is a very high likelihood of an eighth round of measures.”
Sales slumped in February as the city’s businesses were shut on Feb. 11 and 12 for the Chinese New Year holiday, limiting sales opportunities over an extended weekend. 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.
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 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. He said in a Feb. 28 interview the property market is still “in a wrong part of the cycle.”
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.
Earlier steps taken to ease the city’s property market included imposing additional taxes on foreigners and companies buying properties, and moving to curb the trend of so-called shoebox apartments. In October, it restricted home-loan maturities to 35 years and required tighter loan-to-value limits for loans exceeding 30 years.