Singapore Home-Price Growth Slows as Curbs’ Effects Linger
Curbs introduced in mid-2018 have put a dent in home sales and prices in the past year.
(Bloomberg) -- Singapore private home prices rose just 0.5% in the final quarter of 2019, with the slowdown reflecting the lingering impact of government curbs more than a year after they were imposed.
The rise was slightly higher than the preliminary estimate of a 0.3% gain, data from the Urban Redevelopment Authority released Thursday showed, and compared with a 1.3% expansion in the previous quarter. For all of 2019, apartment prices on the island increased 2.7%, well below a jump of 7.9% in 2018.
Curbs introduced in mid-2018 have put a dent in home sales and prices over the past year. Another conundrum borne out of the curbs is a supply glut of around 32,000 units -- some completed, others under construction -- and slower price growth could make it hard to clear the backlog.
Property analysts and developers estimate that it could take up to four years to clear the overhang.
Sales of units in the private resale market have also been subdued, with total resale volumes for 2019 falling 31.2% to 8,949 units, compared to 13,009 units in 2018.
The lower demand could be due to stiffer competition from the many new projects that have been launched recently, said Christine Sun, head of research at OrangeTee & Tie Pte.
Property curbs have also impacted sales of larger units, typically those with three bedrooms and above, said Alan Cheong, a Singapore-based executive director of research and consultancy at Savills Plc.
For buyers who already own a first home and want to upgrade to a larger unit, the 12% additional buyer’s stamp duty means they have to fork out more cash. And that’s a high financial burden, said Cheong, adding the rule should be tweaked.
In other highlights:
- Vacancy rates of completed private home units fell to 5.5% at the end of 2019, from 6.1% in the previous quarter; there were 32,272 unsold private home units
- Office space prices fell 0.5% in the fourth quarter while rentals dropped by 3.2%. Retail space prices, meanwhile, rose 1.8% in the final quarter of last year, while retail rents rose 2.3%
To contact the reporter on this story: Faris Mokhtar in Singapore at fmokhtar1@bloomberg.net
To contact the editors responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net, Peter Vercoe
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