Singapore Home Sales Reach Four-Month High as Supply Picks Up

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(Bloomberg) — Singapore home sales climbed to a four-month high, helped by a new project launch that highlighted residents’ pent-up demand after supply dwindled late last year.

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Sales of new privately owned apartments climbed to 391 in January, Urban Redevelopment Authority figures showed Wednesday. That’s more than double the previous month, when transactions fell to a 14-year-low of 170 as a supply crunch kept buyers at bay.

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Singapore’s property market has largely withstood the slowdowns afflicting countries including Canada and New Zealand, where rising interest rates and inflation have curtailed demand. In a sign of its confidence in the market, the government raised taxes for buyers of high-end properties in its annual budget Tuesday, just months after introducing earlier cooling measures. 

Last month’s sales were healthy despite high rates and curbs on mortgage borrowing implemented in September, said Christine Sun, senior vice president of research and analytics at OrangeTee & Tie. That underscores pent-up demand for housing units, especially in the suburbs where supply remains tight, she said. 

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Property prices climbed 8.6% last year, although the pace of gains eased to just 0.4% in the fourth quarter. Rents in the city-state also saw strong growth in 2022, soaring about 30%. They are expected to climb a further 10% to 15% this year.

“The uncertain economic outlook increases the appeal of residential properties as they are known to appreciate in the long term,” Tan Tee Khoon, Singapore country manager at PropertyGuru Group, wrote in a recent report. The easing of China’s Covid border restrictions will also keep interest in Singapore properties high, he said.

Singapore will raise the tax for buyers of higher-value properties to boost revenue, Finance Minister Lawrence Wong said in his budget speech. The changes will apply to all properties acquired from Wednesday.

The negative impact on the real estate market from the tax hikes is likely to be minimal, as buyers of high-end or luxury properties may not be as sensitive to these additional costs, according to Nicholas Mak, the Singapore-based head of research and consultancy at APAC Realty Ltd. unit ERA.