Singapore’s home sales surged to the highest in a year, showing that the government’s latest cooling measures have done little to curtail demand.
Purchases of new private apartments rose to 1,038 units in May, up 17% from a month earlier, figures from the Urban Redevelopment Authority showed Thursday. That’s the fifth month of gains.
Singapore’s housing market has remained buoyant even as other financial hubs from Manhattan to London struggle with slumping sales due to rising borrowing costs and stubborn inflation. In a bid to maintain affordability, authorities doubled stamp duties for foreign buyers to 60% — the highest among major markets — and raised them for second homebuyers in late April.
Domestic buyers drove the growth in transactions last month as foreigners were dissuaded by the new tax, said Christine Sun, senior vice president of research and analytics at OrangeTee & Tie. “New home sales will likely drop in June due to a lack of project launches,” she said.
Developments launched in May saw robust sales. The Reserve Residences — a joint venture by Far East Organization and Sino Group that’s located near Singapore’s prime districts — has sold about 71% of its 732 units. The 816-unit The Continuum has offloaded around 28% of its apartments.
Home prices in Singapore could rise as much as 5% in 2023 after gaining 3.2% in the first quarter, partly due to supply-demand dynamics, according to Bloomberg Intelligence.
Some foreign buyers remained undeterred by the tax hikes. The 275-unit Blossoms by the Park, which opened two days after the cooling measures, had four Chinese and five American buyers, according to Lim Yew Soon, a managing director of the project’s developer EL Development Pte. The Continuum had three foreign buyers from China, Myanmar and Thailand, according to the developer Hoi Hup Sunway Katong Pte.
A transition period for the higher stamp duty means the full effect won’t be evident until June, said Lee Sze Teck, senior director of research at Huttons Asia Pte. Americans may become the major foreign buyers of property in Singapore because they’re accorded the same treatment as locals, Lee added.
(Updates with comments from analysts in fourth and eighth paragraphs)
