Strong gains in the Singapore stock market in the first half of this year have generated a resurgence of confidence in the property market.
Prices for private homes are now about 10 to 20 per cent higher than at the beginning of the first quarter of the year, with prices for some developments rising as much as 30 per cent. The number of sales has also risen dramatically, with developers reporting a total 7,374 units sold in the first half of the year, representing a 68 per cent increase on the total number of units sold last year.
'The recent purchase appetite in the market is likely the result of pent-up and latent demand from those who have missed the opportunity to buy a property when markets soared and peaked in 2007,' says Jacqueline Wong, head of residential at Jones Lang Lasalle, Singapore. The return of interest, she explains, is coming from buyers who are looking for value buys and properties in the mass market (non-prime areas, 99 year leasehold) and mid-tier market up to S$1,900 (HK$10,573) per sqft.
One of the most popular condominium developments on the market at the moment is City Development's Hundred Trees. At the end of last month 160 units were sold at a weekend preview, with average prices of S$910 per sqft.
Reacting to concerns that the rise in property prices and sales numbers may lead to a bubble if it is not matched by the economy strengthening as a whole, the government introduced new measures last month aimed at stabilising the rise, ensuring that buyers would be able to purchase only what they could genuinely afford, and reducing short-term speculative buying.
These measures included scrapping the popular Interest Absorption Scheme (IAS), which enables buyers to have the interest on their home loans paid by the developer until after new developments have been completed, and abolishing interest only housing loans.