Two en bloc redevelopment sales worth $353 million were completed in the third quarter, way lower than the $3.8 billion registered during the previous quarter, data shows.
Singapore’s latest round of property cooling measures proved effective in cooling its red-hot collective sales market.
In fact, only two en bloc redevelopment sales worth $353 million were completed in the third quarter, way lower than the $3.8 billion worth of transactions registered during the previous quarter, reported Bloomberg citing data compiled by Cushman & Wakefield.
This sent real estate investment sales plummeting 42 percent to $6.5 billion in Q3.
“The collective sales market was decimated after the recent cooling measures,” said Christine Li, Cushman & Wakefield’s head of research for Singapore.
The introduction of the additional curbs saw private home prices climb at the slowest pace in five quarters. The government made the move to cool the property market in July following a steep hike in prices during the first six months of 2018.
The rebound in prices after a four-year slump stoked aggressive land bids among developers, which led to an explosion of collective sales. Under the new rules, the Additional Buyer’s Stamp Duty was raised to 30 percent for developers – making it costlier for them to redevelop older properties.
Meanwhile, industrial and commercial property helped prop up real estate investment sales. Industrial property deals soared 73 percent to $1.2 billion in Q3, while office sales jumped 54 percent to $2.1 billion.
“Clearly these two sectors emerged as winners from the recent fallout in the residential sector,” said Li, who expects both industrial and commercial property to continue to attract interest in the near-term as developers seek diversification and liquidity remains high.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email email@example.com