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Singapore's home sales jumped to a seven-month high in April, underscoring why authorities introduced fresh measures to cool the market during the month, according to a report by BusinessWorld.
Purchases of new private apartments rose to 887 units, figures from the Urban Redevelopment Authority showed on Monday. The 80% increase from a month earlier came as more projects were launched.
Surging home prices and rents are becoming a headache for Singapore’s government as it tries to mollify citizens and remain competitive as a financial hub. Authorities raised taxes on property purchases in late April, mainly targeting foreign and second-home buyers in a bid to maintain affordability.
While there could be a knee-jerk reaction, the measures should have little impact on purchases between S$1.8 million ($1.3 million) and S$4 million, said Tan Tee Khoon, Singapore country manager at PropertyGuru.
“Demand remains from the upgraders as households have a stronger liquidity position due to intergenerational wealth transfers,” Tan said. The risk of further curbs down the road may prompt some property seekers to bring forward their purchases, he added.
Last month saw the launch of developments including the 638-unit Tembusu Grand. The 275-unit Blossoms by the Park, which opened two days after the cooling measures, sold about 75% of its apartments on the first day. Eight went to foreigners — four Chinese and four American buyers, said Lim Yew Soon, a managing director of the project’s developer EL Development Pte.
Inflows of money from abroad have helped Singapore’s property sector remain buoyant even as soaring interest rates cool markets elsewhere. Last month’s increase in stamp duties included doubling the rate for foreign buyers to 60%, the highest among major markets.
There are signs that momentum in the market continued into this month. Sales at newly launched residential project The Continuum have been encouraging, according to property brokers. At agency PropNex, which served about half of the units sold on launch day, about 10% of the buyers were permanent residents, and the rest were Singapore citizens. There were no foreign buyers.