Singapore Home Price Growth Slows as Curbs Take Effect
(Bloomberg) -- Singapore home price growth slowed last quarter, suggesting the market is cooling on the back of property curbs, higher taxes and economic headwinds from Russia's invasion of Ukraine.
Prices climbed 0.4% in the first quarter from the previous three months, when they jumped 5%, Urban Redevelopment Authority flash estimates showed Friday.
Home sales have also been subdued in the last couple of months, after Singapore authorities imposed measures to cool the housing boom and announced higher property taxes. The city-state joins the likes of Australia to see the property market slow after a robust past year as low interest rates fueled a buying frenzy.
“In light of the global uncertainties and cooling measures, some investors may have taken a temporary back seat to assess the likely outcome of these challenges and review their investment strategies,” said Singapore-based Christine Sun, senior vice president of research and analytics at OrangeTee & Tie.
Still, analysts including Sun have said that the curbs imposed in December may just be a short-term fix given resilient demand and a low supply of new homes.
Residential sales volume may pick up in the second quarter as more projects are slated to be launched, said Sun. More potential buyers may view properties following Singapore's relaxation of virus restrictions, including increasing the maximum capacity for social gatherings to 10, she added.
Price weakness could also lure home buyers to the market in the coming months, said Nicholas Mak, the Singapore-based head of research and consultancy at APAC Realty Ltd. unit ERA. “At the same time, some buyers may want to acquire properties and lock into the current home mortgage rate now before any further rate increases in the near future,” Mak added.
Mak and Sun expect property prices to increase as much as 3% this year.
Meanwhile, Sydney home prices fell for a second straight month and home lending eased, figures from Australia showed Friday. The nation's most populous city recorded a 0.2% drop in March, while prices in Melbourne slipped 0.1%, CoreLogic Inc. said.
©2022 Bloomberg L.P.
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