Image source: Logan Property (Stirling Residences)
The government’s latest property curbs that took effect on Friday (6 July) is expected to reduce new private home sales by 15 percent to 20 percent year-on-year for the whole of 2018, reported Singapore Business Review.
According to Colliers International, the overall tally is forecasted to hit 8,500 to 9,000 units compared to 10,566 units sold last year and the 3,434 units sold between January to May this year.
The property consultancy noted that the two prior rounds of property cooling measures had a significant impact on the primary residential market.
For instance, new home sales declined 65 percent to 712 units in February 2013 following the curbs introduced in the prior month. Similarly, transaction volume fell 73 percent to 482 units in July of the same year due to rules imposed in June.
Colliers explained that the ninth round of property cooling measures will have a substantial impact as the higher Additional Buyer’s Stamp Duty (ABSD) for those not buying their first home will soften investment demand from both locals and foreigners. The lower Loan-to-Value (LTV) limits, which also hits first-time home buyers, will negatively affect the appetite for homes given the bigger cash outlay buyers need to produce.
“We expect new home sales to decline significantly in the initial few months as the market takes stock of the potential implications,” noted the property consultancy, adding that property developers are likely to defer their launches and re-strategise because of the fresh property cooling measures.
“That said, the flurry of last minute deals done – estimated at 1,000 units from three project launches – The Stirling Residences, Park Colonial and Riverfront Residences – on the evening of July 05 to beat the ABSD deadline indicated that there is both liquidity and pent-up demand for units in the market.”
Senior Content Producer, Christopher Chitty, edited this story