US media: Singapore issued the “strictest” real estate control policy in history, and housing prices fell for the first time in three years

US media: Singapore issued the “strictest” real estate control policy in history, and housing prices fell for the first time in three years

After the “most stringent” real estate control policy took effect, Singapore’s housing prices fell for the first time in three years. According to Bloomberg, the estimated data released by the Urban Redevelopment Authority of Singapore in early July showed that private housing prices fell by 0.4% in the second quarter from the previous quarter, and rose by 3.3% in the first quarter. It was the first drop in Singapore home prices since the first quarter of 2020, suggesting the market is cooling under the latest property curbs. To curb rising house prices, the Singapore government doubled the stamp duty imposed on foreign buyers on April 27 this year to 60%, the highest rate among major markets. Meanwhile, Singapore has also raised taxes on buyers of second homes. In addition, before the regulation in April, the Singaporean government had already introduced cooling policies for the property market twice in December 2021 and September 2022.

The upward trend in property prices in Singapore can also be seen in the public housing market. According to Singapore’s “Lianhe Zaobao” report, Singapore’s Housing and Development Board released estimates on the 3rd that as of June 29, about 6,409 HDB flats changed hands in the second quarter of this year, a decrease of 4.6% from the same period last year. It was also the lowest quarter for resales since the third quarter of 2020. The Housing and Development Board stated that the Singapore government has introduced several sets of cooling measures since the end of 2021, including a 15-month wait for private owners to purchase non-subsidized resale HDB flats, and a reduction of the mortgage-to-valuation ratio ceiling from 85% to 80%. %. These measures have contributed to a slowdown in HDB resale price growth.

Ismail, president of Bona Property, a real estate economics company in Singapore, said: “Given the sluggish economic growth and some economists have pointed out that the economy may have a technical recession risk, the slowdown in housing price growth is good for the market, ensuring that prices will not far exceed the economic growth rate. Fundamentals.” Ismail said buyers remained largely price-sensitive amid cooling measures coupled with high mortgage rates. According to the transaction data of Bona Property, in the second quarter of 2023, the resale of HDB flats in non-mature towns accounted for 62% of the total. Huang Xiuying, director of Bona Property Research and Content, estimates that for the whole year, the resale volume of HDB flats is expected to remain at around 27,000 to 28,000 units. This year’s HDB resale prices may increase by 5% to 6%, which is a sharp slowdown from the double-digit growth in the past two years.

At the same time, the Singapore government has increased the supply of new private residential lots for six consecutive times to meet market demand. In the second half of this year, the number of units that can be built in the government’s land sales program is 26% higher than that in the first half of the year. The total supply for the year thus increased to 9,250 units, a 10-year high. Analysts believe that an increase in the supply of private housing lots can shorten waiting times and help moderate house price increases.

Sun Yanqing, vice-president of Chengyi Industry Research and Consulting Department, a real estate agency in Singapore, believes that the cooling measures are to prevent buyers from over-leveraging. The measures are likely to affect investors more than owner-occupiers, who typically own more than one property, and will be affected by higher stamp duty. In the overall property market, the mid-to-high-end market tends to have more investors and foreign buyers, so this part of the market may be more affected, while the mass market part has more first-time home buyers and is greatly affected by property market policies Small.

Sun Yanqing believes that the announcement of the property market may cause the market to have a “knee-jerk” reaction. It may see transaction volume slow down within 6 months, and prices may also stabilize and rise at a slower rate next year. As a result, Orange Property has revised its price growth forecast for Singapore’s private residential market next year from 6% to 9% to 0% to 3%. The number of condominiums purchased by permanent and non-permanent residents in Singapore has been on the rise over the past year. The number of apartments purchased by Singapore permanent residents in 2020 was 2,818 units, and as of the first half of December 2021, the number of apartments purchased that year had reached 4,375 units. Purchases by non-permanent residents and foreigners also jumped 45% over the same period.

With borders reopening after the pandemic, Orange Yi expects that more permanent residents and foreigners will return to Singapore, and they may contribute to higher demand for housing. But at the same time, government measures could slow demand from those buyers.