03/01/2022
(Bloomberg) — Singapore home prices rose in the 4th quarter at the fastest pace in more than a decade, the latest marker of a surge that prompted the government to introduce cooling measures last month.
Private property values climbed 5% from the previous quarter, according to Urban Redevelopment Authority flash estimates released on Monday. That’s the highest quarterly growth since the second quarter of 2010 when prices jumped 5.3%. For 2021, prices increased by 10.6%, also the highest since 2010.
Singapore’s price spike underpins the government’s move to impose a fresh round of property curbs, which included raising additional stamp duties for second-home buyers and on foreigners purchasing private residences. If left unchecked, prices are likely to run ahead of economic fundamentals, the government cautioned at the time.
The rebound fed a property frenzy that generated S$32.9 billion in home sales in the first half of last year, double the amount in Manhattan over the same period, driven by demand from the ultra-rich flocking to the Southeast Asian business hub. Singapore’s central bank last month warned that household debt is higher than pre-pandemic levels, driven by property loans.
Buyers have been capitalising on low interest rates and expectations that prices will climb further as the economy recovers. An acceleration in the final quarter helped propel overall growth for the full year to 7.2%, the fastest since 2010.
The property cooling measures will test the market’s resilience. Singapore’s property market has held up well in the last two years despite suffering from the worst recession on record in 2020 and enduring several start-stop virus restrictions last year.
Previous forecasts said that the property curbs may be a short-term fix in a market with an insatiable appetite for homes. While the measures may damp prices and sales in the next quarter or two, they may rebound as early as the second half of this year.
(photo by Swapnil Bapat)