Cooling measures could calm ‘euphoria’ for Singapore flats, property experts say

Investor appetite for prime Singapore property is robust across all sectors. After cooling measures subdued the market for the past few years, house prices are rising again, and foreign investment is flowing in.

According to CBRE, property investment sales soared by 11.4 per cent in the second quarter, taking the investment tally to S$20.318 billion (HK$116.7 billion) for the first six months. The 32 collective deals signed during the period already exceed the 26 collective sales registered for the whole of 2017, and include 15 residential sites.

Desmond Sim, CBRE’s head of research, Singapore & Southeast Asia, credits a vibrant residential sector with driving the investment climate over the past six months. Notable, he says, “have been some positive stories behind the prime districts 9, 10 and 11”.

However, Colliers says the “euphoria” surrounding the residential rebound may be tempered by fresh property cooling measures – the higher additional buyer’s stamp duty and lower loan-to-value limit – announced by the Singapore government on July 5.

“The introduction of these measures a year into market recovery, after four years of decline, was aimed at calming the euphoria in the private residential sector,” says Tricia Song, head of research for Singapore at Colliers International.

Home prices had risen “by 3.9 per cent in Q1 2018, and another 3.4 per cent in Q2”, she adds. “The price growth – which is expected to taper in the quarters ahead – was largely driven by the brighter economic outlook, pent-up housing demand and more positive market sentiment.”