Singapore new private home sales doubled in March, fuelling concerns on cooling measures

Singapore home sales rebounded in March, fueling concerns that authorities may impose new measures to cool the market.

Purchases of new private apartments doubled to 1,296 last month from 645 units in February, Urban Redevelopment Authority data showed on Thursday.

The jump adds to signs that Singapore’s residential market is heating up as the economy begins to recover from the pandemic-induced recession. Authorities have warned that low-interest rates can distort asset prices and the property market shouldn’t run ahead of economic fundamentals.

“Yes, there could be more risk of new curbs,” said Christine Sun, senior vice president of research and analytics at OrangeTee & Tie. Demand is rising as buyers anticipate prices will climb further in tandem with the economic recovery, Sun said, adding that many are also taking advantage of low rates to upgrade their dwellings.

Still, Sun added that last month’s strong sales were largely driven by the luxury segment, where buyers don’t usually have affordability issues. “The authorities may be more concerned if prices are largely driven by the mass-market segment,” she said.

Other nations are grappling with similar issues. New Zealand is removing tax incentives for property investors, while Canada faces growing calls to rein in the market.

Home prices in Singapore grew 2.9% last quarter, according to preliminary data -- the most since the second quarter of 2018, right before authorities last imposed cooling measures. Prices of public housing flats and luxury homes have also risen, with some breaking records along the way. Sales of private used homes have reached the highest level in almost a decade.