New home sales in Singapore have soared to a 36-month peak after demand collapsed in the summer.
Lower interest rates and hopes for a brighter economy spurred the surge in sales, says the government’s Urban Redevelopment Authority.
Sales were 84% up in September – with 2,621 sales against 1,427 the previous month.
September’s sales are the most since July 2009, when 2,772 apartments were sold, while the total year-to-date is 18,248 units, overtaking the previous full-year sales record of 16,369 set in 2011.
“Low interest rates remain the key demand driver making monthly instalments more affordable,” said Png Poh Soon, head of consultancy and research at Knight Frank Singapore,
Hungry Ghost Month
The high level of sales is explained in part by was developers holding back launches to avoid the unlucky Hungry Ghost Month, said Png Poh.
“With the recent announcements of further monetary expansion in both the US and the eurozone, we can expect the current low interest rate environment to persist,” National Development Minister Khaw Boon Wan. “This will continue to contribute to the strong demand for residential property, which could cause prices to rise beyond sustainable levels.”
House prices in Singapore that have increased with little interruption since the global downturn, despite attempts by the government to slow the market.
Record low interest rates, low unemployment and an influx of expats has driven prices up by around 56% since the market slumped in the second quarter of 2009.
Government wants to slow market
Khaw explained the government is keeping an eye on house prices threatened further action to slow the market may be required. Property demand is expected to remain strong in the next quarter despite lending restrictions, with purchases in this year likely to add up to around 22,000 apartments.
“The recent measures to curb loan periods may have some moderating effect but are not expected to damp demand significantly,” said Ong Teck Hui, of Singapore property consultancy Jones Lang LaSalle. “Buying interest remains positive despite the imposition of the measures.”
Meanwhile, in Bangkok, Thailand, rising land prices are pushing home prices beyond the reach of many would-be buyers.
The result is fewer new developments, shrinking supply and pushing prices even higher.
Many of the developments are single bedroom apartments unsuitable for families, who are fleeing the city for the suburbs, where larger properties are available.