Private home sales slowed in first half of 2022 as cooling measures tamped down demand

A total of 13,311 units were sold between January and June this year. ST PHOTO: LIM YAOHUI

SINGAPORE – The number of private property transactions in the first six months of this year has slowed after cooling measures were introduced in December last year.

A total of 13,311 units were sold between January and June this year, which is about one-third that of the 37,433 units sold in the whole of last year.

However, the half-year figure for 2022 is still higher than half of the 22,543 units sold in 2020, and the 19,442 units sold in 2019 before the Covid-19 pandemic.

National Development Minister Desmond Lee on Tuesday provided the figures in a written parliamentary reply to Mr Gan Thiam Poh (Ang Mo Kio GRC), who had sought a breakdown of private residential properties bought by locals and foreigners for each of the past three years.

Property analysts attributed the fall in demand this year to property cooling measures introduced last December, which raised the additional buyer’s stamp duty (ABSD) for foreigners buying any residential property from 20 per cent to 30 per cent.

ABSD rates were also raised from 12 per cent to 17 per cent for citizens buying their second residential property, and from 15 per cent to 25 per cent for those buying their third and subsequent ones.

PropNex Realty head of research and content Wong Siew Ying said the Russia-Ukraine conflict greatly impacted market sentiment in the first half of the year, as it worsened global supply disruptions and exacerbated inflationary pressures.

Developers launched 2,569 new private homes in the first half of 2022, a 58 per cent decline from the 6,072 units put on the market in the same period in 2021, according to data from the Urban Redevelopment Authority, she noted.

“The fewer launches, coupled with the dwindling unsold stock, have crimped sales volume,” she said.

The rising prices of private homes islandwide, coupled with interest rate hikes, may have deterred some potential buyers as well, said OrangeTee & Tie senior vice-president of research and analytics Christine Sun.

While overall sales are on track to exceed 2020’s transactions, it is unlikely to surpass last year’s numbers which reached a nine-year high, analysts said.

Cushman & Wakefield head of research Wong Xian Yang said the combination of strong economic recovery, a low interest rate environment, pent-up demand for homes and buyers’ confidence in the long-term prospects of Singapore’s property market drove sales volume and price growth in 2021 to multi-year highs.

But in the second half of this year, transaction volume could moderate further as interest rates continue to rise and home buyers turn cautious amid the uncertain global macroeconomic situation, said CBRE’s head of research for South-east Asia, Ms Tricia Song.

In the first half of 2022, Singaporeans accounted for 80.2 per cent of the transactions, a slight decrease from the 82.7 per cent for the whole of last year.

In the same period, the proportion of permanent residents who bought property increased from 13.7 per cent last year to 16 per cent in the first six months of this year, while that of foreigners increased from 3 per cent to 3.3 per cent.

The proportion of foreigners who bought private property is still lower than 5.2 per cent in 2019.

On Monday, Mr Lee also addressed the issue of bulk purchases, in a written parliamentary reply to Mr Yip Hon Weng (Yio Chu Kang) who had asked if benefits from purchasing property in bulk, such as bulk purchase discounts, will negate or cushion the impact of the ABSD.

Mr Lee said such purchases are unlikely to have a significant impact on the property market as units involved in multiple-unit purchases accounted for about 1 per cent of private property units sold this year.

Multiple-unit purchases of more than two units stood at about 0.2 per cent.

Several of such bulk purchases have made headlines this year. In June, reports said a Chinese national bought 20 units at CanningHill Piers, a condominium beside the Singapore River, for more than $85 million.

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