Singaporean Property Market Outlook - November, 2013
The Singaporean government's efforts to cool the property market seem to be working, as shown by the city-state's home sales dropping 48 percent, compared to the previous year, 2012.
Data released from the Urban Redevelopment Authority on Nov.
15, 2013 shows that home sales dropped 1.
2 percent in October from the previous month, which clearly indicates a success of the measures taken in order to cool property prices.
What prompted the government's concern for the property market in the first place was the unique combination of low interest rates and record home prices, which anticipated a housing bubble.
The subsequent cooling measures taken included raising stamp duties and capital gain taxes, linking borrowers' incomes to maximum debt levels, as well as instating higher minimum down payments.
As a result, for the first time since 2009, the Resale Price Index decreased by 0.
9% over three months, which is better than forecast.
In the Outside Central Region prices have increased by 2.
2% and rentals of residential property have increased by 0.
2%, a minor decline from the previous 0.
3% reported in the second quarter.
Similarly, in the Core Central Region values declined by 0.
3% in the third quarter of 2013, and in the Rest of Central Region prices decreased by 0.
9%, which represents the first decrease reported in the region since the first quarter of 2012.
These figures show that while home prices are still rising, the growth is definitely slower, which has forced developers to launch fewer new projects.
Compared to the second quarter of 2013, when the number of properties sold was 4,358, in the second quarter the number of properties sold does not surpass the 2,500 mark.
However, the seeming success of the measures imposed by the government does not imply that they have been favorably accepted by the public.
According to the Q3 Property Sentiment Survey (a Singaporean quarterly benchmark for property affordability), Singaporeans generally agree with the efforts of curbing home price rises, but more than half are of the opinion that the measures imposed up to July 2013 had little impact in what concerns property affordability.
This can be explained by the sentiment of many, that despite government measures have changed the market outlook, they have not affected the overall price, but the demand volume.
In other words, the citizens of Singapore feel that, while the price growth rate has decreased subsequent to the cooling measures, properties are still priced above what most of them are willing to pay for.
Data released from the Urban Redevelopment Authority on Nov.
15, 2013 shows that home sales dropped 1.
2 percent in October from the previous month, which clearly indicates a success of the measures taken in order to cool property prices.
What prompted the government's concern for the property market in the first place was the unique combination of low interest rates and record home prices, which anticipated a housing bubble.
The subsequent cooling measures taken included raising stamp duties and capital gain taxes, linking borrowers' incomes to maximum debt levels, as well as instating higher minimum down payments.
As a result, for the first time since 2009, the Resale Price Index decreased by 0.
9% over three months, which is better than forecast.
In the Outside Central Region prices have increased by 2.
2% and rentals of residential property have increased by 0.
2%, a minor decline from the previous 0.
3% reported in the second quarter.
Similarly, in the Core Central Region values declined by 0.
3% in the third quarter of 2013, and in the Rest of Central Region prices decreased by 0.
9%, which represents the first decrease reported in the region since the first quarter of 2012.
These figures show that while home prices are still rising, the growth is definitely slower, which has forced developers to launch fewer new projects.
Compared to the second quarter of 2013, when the number of properties sold was 4,358, in the second quarter the number of properties sold does not surpass the 2,500 mark.
However, the seeming success of the measures imposed by the government does not imply that they have been favorably accepted by the public.
According to the Q3 Property Sentiment Survey (a Singaporean quarterly benchmark for property affordability), Singaporeans generally agree with the efforts of curbing home price rises, but more than half are of the opinion that the measures imposed up to July 2013 had little impact in what concerns property affordability.
This can be explained by the sentiment of many, that despite government measures have changed the market outlook, they have not affected the overall price, but the demand volume.
In other words, the citizens of Singapore feel that, while the price growth rate has decreased subsequent to the cooling measures, properties are still priced above what most of them are willing to pay for.
