Following the recent property downtrend exacerbated by the TDSR ruling and the many rounds of cooling measures, private home purchases in Singapore fell to just over 2,000 units in Q1 2014. This is the first time since 2009 that it has dropped below 3,000 units. And I don’t see any improvement in the short to medium term unless some of the cooling measures are withdrawn.
DTZ South-east Asia chief operating officer Ong Choon Fah said that given the high home ownership rate among Singaporeans, “there is no real push factor for them to buy right now”. DTZ’s analysis of URA caveats data as at 15 April revealed that private home purchases by Singaporeans dropped from 73 percent in Q4 and Q1 2013 to 70 percent in Q1 2014. Singaporeans accounted for 2,076 private homes transacted in the first quarter. This is the lowest level since the additional buyer’s stamp duty (ABSD) was introduced in Q4 2011.
The drop was mitigated by external demand as purchases by permanent residents (PRs) saw their share increase to a record 19 per cent – the highest level since Q1 1995. However, I do not expect the government to come up with fresh cooling measures given the rather weak property market sentiment. In absolute terms purchases by foreigners and PRs were also at their lowest levels since Q1 2009.
So it is status quo at the moment with sellers holding out for prices to go back up and buyers waiting for more bad news. As agents we try to bridge this gap as much as we can and taper the expectations for both sellers and buyers so that both parties are happy with the transaction.