Singapore’s recent price surge and fewer new homes for sale this year is somewhat deterring the government’s efforts to calm the market.
The market turnaround from 2019 is the direct result of resilient demand, delayed construction works and supply shortage. Indirect causes include Covid-19 induced labor shortages; home buyer’’s longer waiting time, and increased costs for developers staring down at inflation and higher taxes. In 2021, property prices surged the most in over a decade.
Singapore had 14,087 unsold units under construction in 1st quarter 2022, down from an overhang of 30,162 units in 2020; and the lowest available inventory since 2006, according to research data Cushman & Wakefield Plc. Even with government plans to release more land sales this year, the supply crunch will still hold out for a while, because everything (construction and such) takes time.
Analysts estimate the launch of possibly 7,000 to 8,000 new private apartments this year.
For comparison, the average launch numbers was 10,750 new units annually between 2012 and 2021.
Thus another new round of property cooling measures took effect from 16 Dec 2021.
Singapore Property Cooling Measures effective 16 December 2021
· Additional Buyer’s Stamp Duty (ABSD) rates will be raised
· Total Debt Servicing Ratio (TDSR) threshold will be tightened.
· LTV will tighten limit for loans from HDB from 90% to 85%.
· Government will increase public and private housing supply to cater to demand.
Singapore residential market is regarded as a safe-haven because of its political stability, and developed legal and financial services. For many, private property remains an instrument for wealth growth and preservation.