Singapore Home Sales Exceed Two-Year High as Curbs May Loom

Singapore home sales rose to the highest in more than two years in January, with buyers rushing in amid speculation that the government may take steps to cool the market.

Sales of new private apartments soared to 1,609 last month from 1,217 in December, Urban Redevelopment Authority data showed Monday. That’s the most since July 2018 when 1,724 units were sold and the most recent cooling measures were imposed.

Singapore’s property market has made a rapid recovery after the pandemic sent the economy into its worst recession, fueling speculation that authorities could intervene to calm the sector. Government ministers warned last month that they don’t want the market to run ahead of economic fundamentals.

Singapore Home Sales Exceed Two-Year High as Curbs May Loom

Low interest rates are among the factors driving demand, according to DBS Group Holdings Ltd. With home prices rising 2.2% last year, further increases in excess of 5% could tip the market into “bubble territory,” DBS analysts said last month.

Speculation for impending property curbs nudged on-the-fence buyers wary that their purchasing eligibility or borrowing limits could be affected if steps are introduced, said Christine Sun, senior vice president of research and analytics at OrangeTee & Tie.

“Some long-term investors sprang into action as they anticipate that it may be harder to own a second or third property if new cooling measures were implemented,” Sun said.

Steps taken in July 2018 included raising duties on purchases of additional properties and tightening limits on home loans.

Even without any extra curbs, Sun added, “buyers may still be in a better position to ink a unit sooner rather than later as prices of homes are likely to rise further since the global economy is expected to pick up this year.”

Singapore’s economy is projected to rebound as the city keeps coronavirus infections at bay and rolls out vaccinations. Earlier Monday, the government maintained its projection for economic growth in a range of 4% to 6% this year.

©2021 Bloomberg L.P.

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