Singapore August home sales fall to lowest this year on curbs

September 15, 2014 2:31 PM SGT
SINGAPORE (Sept 15): Singapore home sales declined to the lowest level this year in August as developers offered fewer projects amid cooling demand from long-standing property curbs.
Developers sold 432 units last month compared with a revised 509 units in July, according to data released today by the Urban Redevelopment Authority. That’s the lowest since December when 259 units were sold.
The government began introducing housing market curbs in 2009 with some of the strictest measures implemented in 2013, including a cap on debt at 60% of a borrower’s income, higher stamp duties on home purchases and an increase in real estate taxes. Singapore’s central bank said in July that it’s too early to ease property restrictions, a view that some economists support to protect borrowers from an impending rise in interest rates.
“The outlook remains subdued, mainly due to the measures introduced by the government,” said Alice Tan, head of consultancy and research at Knight Frank LLP in Singapore. “In general, we are seeing a wait-and-see attitude by buyers.”
Among the biggest sellers last month was Pinehill Investments, which marketed 54 units and sold 40 at its Panorama project. Coral Edge Development Pte sold 28 units at the Waterwoods project.
Under the current new loan framework, mortgages shouldn’t push a borrower’s total debt-servicing ratio above 60% and those that do will be considered imprudent, the Monetary Authority of Singapore said in June 2013.
The government’s housing measures as well as curbs on foreign workers may prompt Singapore home prices to fall 20% through 2016, Bank of America Corp.’s Merrill Lynch said in a report earlier this month.