Singapore new home sales hit 15-year low as high prices, interest rates cool market

Just 6,671 units were sold by developers last year, figures released by the Urban Redevelopment Authority showed on Monday. December sales dropped to 135, less than a fifth of what was sold a month earlier.

The annual figure is the lowest since 2008, and is another sign of a cooling market that has so far avoided the worst of a global housing downturn, but is increasingly being dragged down by real estate purchasing curbs and a slowing economy.

External demand has been hit after the government doubled housing purchase taxes for foreigners to 60 per cent last April. Citigroup Inc. expects developers’ margins from residential projects to decline further this year, partly due to a sizeable pipeline of about 44 projects.

Appetite for new homes will be tested further in January, with at least six launches slated for this month, according to real estate agency Huttons Group.

The slowdown in sales is dragging developers’ shares. City Developments Ltd., Singapore’s largest listed property firm, saw a 19 per cent drop last year, outpacing a fall in the country’s benchmark equity index.

Singapore home prices fall for 1st time in 3 years as red-hot pace slows

The URA said earlier this month that overall transaction volumes in the private residential market – which also includes resale deals – hit the lowest level last year since 2016.

The transaction slowdown has yet to significantly weigh on prices, with local demand bolstering the value of private residential complexes in districts that typically lack such offerings. Home prices rose 6.7 per cent last year, according to preliminary official estimates.

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Singapore government doubles residential property tax for foreigners to 60 per cent

Singapore government doubles residential property tax for foreigners to 60 per cent

That means there is still “a chance that the government might impose new curbs to ensure a ‘stable and sustainable’ market if prices run ahead of economic fundamentals,” said Foong.

Analysts are divided on price trends.

Morgan Stanley is predicting a 3 per cent drop, while Citigroup expects a 4-5 per cent gain this year. Bloomberg Intelligence sees prices moving sideways with some downside risk.