Private home sales hit the brakes as curbs cool demand

The number of private property transactions in the first six months of this year has slowed, after cooling measures were introduced in December last year.

A total of 13,311 units were sold between January and June this year, which is about one-third of the 37,433 units sold in the whole of last year.

However, the half-year figure for this year is still higher than half of the 22,543 units sold in 2020, and the 19,442 units sold in 2019, before the Covid-19 pandemic.

National Development Minister Desmond Lee on Tuesday provided the figures in a written parliamentary reply to Mr Gan Thiam Poh (Ang Mo Kio GRC), who had sought a breakdown of private residential properties bought by locals and foreigners for each of the past three years.

Property analysts attributed the fall in demand to property cooling measures introduced last December which raised the additional buyer's stamp duty (ABSD) for foreigners buying any residential property from 20 per cent to 30 per cent.

ABSD rates were also raised from 12 per cent to 17 per cent for citizens buying their second residential property, and from 15 per cent to 25 per cent for those buying their third and subsequent ones.

PropNex Realty head of research and content Wong Siew Ying said the Russia-Ukraine conflict greatly impacted market sentiment in the first half of this year, as it worsened global supply disruptions and exacerbated inflationary pressures.

Developers launched 2,569 new private homes in the first half of this year, a 58 per cent decline from the 6,072 units put on the market in the same period last year, according to Urban Redevelopment Authority data, she noted.

"The fewer launches, coupled with the dwindling unsold stock, have crimped sales volume," she said.

The rising prices of private homes islandwide, coupled with interest rate hikes, may have deterred some potential buyers as well, said OrangeTee & Tie senior vice-president of research and analytics Christine Sun.

While overall sales are on track to exceed 2020's transactions, it is unlikely to surpass last year's numbers, which reached a nine-year high, analysts said.

Cushman & Wakefield head of research Wong Xian Yang said the combination of strong economic recovery, a low interest rate environment, pent-up demand for homes and buyers' confidence in the long-term prospects of Singapore's property market drove sales volume and price growth last year to multi-year highs.

In the first half of this year, Singaporeans accounted for 80.2 per cent of the transactions, a slight decrease from the 82.7 per cent for the whole of last year.

The proportion of permanent residents who bought property increased from 13.7 per cent in the whole of last year to 16 per cent in the first six months of this year, while that of foreigners increased from 3 per cent to 3.3 per cent.

On Monday, Mr Lee also addressed the issue of bulk purchases, in a written parliamentary reply to Mr Yip Hon Weng (Yio Chu Kang), who had asked if benefits from purchasing property in bulk, such as discounts, will negate or cushion the impact of the ABSD.

Mr Lee said such purchases are unlikely to have significant impact as units involved in multiple-unit purchases accounted for about 1 per cent of private property units sold this year.

Several of such bulk purchases have made headlines this year.

In June, reports said a Chinese national bought 20 units at CanningHill Piers, a condominium beside the Singapore River, for more than $85 million.