Private Property Cooling Measures Talk

The recent ministerial remarks have intensified the talk on property cooling measures and it is believed that the government is now keeping a close check on the real estate market. It has become a matter of debate right since the Urban Redevelopment Authority estimates show a 2.1% rise in the price of private homes for the fourth quarter. This is believed to be the steepest quarterly increase after the second quarter of the year 2018 when a jump of 3.4% was recorded due to cooling measures that were applied in the month of July that year.

All this is happening despite the slow return of Singapore’s economy on track after the 6% shrink due to pandemic in the year 2020. In this phase, unemployment hit by 3.6% during the third quarter which is quite high as compared to the 2.3% of the previous year.
The strong sales of property at Normanton Park – one of the largest new condo launches of the year is also considered as another important factor for these cooling measures. Note that almost 1862 units were sold out of this park recently and they all were locked at a great price.

However, few experts in the real estate market believe that it is too early to implement such kind of measures in the market. If we talk about the previous round of measures that were applied in the year 2018, at that time, the market experienced four consecutive quarterly increments in the price which led to a total 9.1% higher as compared to the record high collective sales bids and the Government Land Sales bids.

On the other side, the prices for private homes went up by only 2.2% in the year 2020. The real estate professionals in Singapore believe that GLS land bids were powerful or inline with the expected prices. However, the number of bids is improving by a considerable range and the collective sales are nascent.

The research experts in the city believe that government will look for the market trends for few more quarters and monitor the price changes. But in the meanwhile, it is spreading a message that buyers must stay prudent. Moreover, the prices are not desired to move up before actual economic pickup.

The finance minister and the deputy prime minister on Monday said that Government is now paying close attention to real estate market trends. They are interested to ensure stability in the market. As the economic conditions at present at very uncertain, the government is not willing to see the property market running ahead of ongoing economic fundamentals.

The analysts in the real estate market report that prices of the private homes have fuelled due to low-interest rates, an increase in the buyer’s confidence, and the return of the former collective sale sellers. This trend may keep on accelerating the property prices in the year 2021 as well. Furthermore, in order to ensure that home purchase activities stay prudent, the government authorities are introducing new loan curbs for both foreign and local investors.

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