Home buyers in Singapore rushed to acquire private residential properties hours before the latest property cooling measures took effect on Thursday night (5 July), reported TODAYonline.
Overall, about 1,000 private condo units were snapped up in less than five hours before the clock struck midnight at Park Colonial in Woodleigh, Riverfront Residences at Hougang and Stirling Residences in Queenstown after home builders launched their projects in advance due to the new property curbs.
“What happened that Thursday night was the fear of missing out,” said Desmond Sim, CBRE’s research head for Singapore and Southeast Asia.
According to real estate experts, the new property curbs have shocked the marked due to its severity and quick implementation just a few days after the Monetary Authority of Singapore (MAS) called for caution amidst a euphoria in the private housing market, but the red flags were already there.
“Economic growth is healthy in 2017, and also in the first quarter of 2018, but there are potential macroeconomic and external risks that are not to be ignored. The rising interest rates, the low inflation rate, political instability and the trade war,” said Associate Professor Sing Tien Foo, the Director of the National University of Singapore’s Institute of Real Estate Studies.
Moreover, Sim noted that land prices have significantly increased by 15 to 20 percent in 2017, driven by record bids for government land, with a Cuscaden Road site sold for $2,377 psf per plot ratio.
Another factor is the collective sales fever, with Colliers reporting in April that en bloc sales reached about $8.13 billion last year or the highest since 2007. For Q1 2018, the amount already hit $5.83 billion with 17 housing sites acquired via this method.
Rising land prices would lead to developers launching new projects at higher prices. In turn, this would push resale prices at existing developments in the area, and could result in an unsustainable escalation, added Cushman & Wakefield’s senior director of research, Christine Li.
Senior Content Producer, Christopher Chitty, edited this story