No immediate surge in new home sales despite easing of some curbs

The easing of some property cooling measures, particularly the seller's stamp duty (SSD), had a relatively muted impact on new home sales at the weekend.
The easing of some property cooling measures, particularly the seller's stamp duty (SSD), had a relatively muted impact on new home sales at the weekend.PHOTO: ST FILE

The easing of some property cooling measures, particularly the seller's stamp duty (SSD), had a relatively muted impact on new home sales at the weekend.

Property agents told The Straits Times there was no buying frenzy and that it was largely business as usual at many show-flats.

"It probably got people more interested to look around for units, but there was no sharp spike in sales. I don't think the changes to the measures were designed to do that," said Mr Dominic Lee, branch district director of PropNex Realty.

The sales at the two new projects out this year - The Clement Canopy in Clementi and Grandeur Park Residences in Tanah Merah - stuck to the general market trend, where units tend to move more slowly after their first weekend launch.

CEL Development said it sold 23 units at the weekend, taking total sales at the 720-unit Grandeur Park Residences to 462 as of Sunday.

The 505-unit The Clement Canopy shifted just 10 apartments at the weekend. Developer UOL Group told The Straits Times it has sold 240 out of the 350 units released.

 

Analysts said the tweaks to the SSD and total debt servicing ratio (TDSR), which took effect last Saturday, did not offer sufficient impetus to drive demand for homes.

The Government has shortened the SSD holding period for homes bought from last Saturday to three years instead of four, and cut rates for each tier by 4 percentage points.

It also waived the TDSR framework on mortgage equity withdrawal loans, where the ratio of the loans, including any existing loans, does not exceed half of the mortgaged property's value.

"Most of the TDSR is still in place, as are the additional buyer's stamp duty and the loan-to-value limits. These are the ones that will impact buying decisions," said Mr Desmond Sim, head of CBRE Research for Singapore and South-east Asia.

He added that prospective buyers may also be more prudent in view of a potential rate hike by the US Federal Reserve tomorrow.

This could push borrowing rates higher here, possibly suppressing investor demand for homes. However, it could also spur fence-sitters looking for a unit to live in to get the deal done sooner rather than later.

Industry players by and large do not expect the measures' relaxation to affect the market significantly.

"We are of the view that it has marginal impact because it is a very small adjustment to the SSD. It is a small step, but we think it is a step in the right direction," said CapitaLand Singapore chief executive Wen Khai Meng.

He was speaking at a media preview of the 124-unit Marine Blue, a freehold development in Marine Parade to be launched this weekend.

A version of this article appeared in the print edition of The Straits Times on March 14, 2017, with the headline 'No surge in new home sales despite easing of some curbs'. Print Edition | Subscribe