Singapore’s home prices surge to the highest in more than a decade as the ultra wealthy flock to Southeast Asia’s business hub

Singapore home prices rose in the fourth 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 per cent 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 per cent. For 2021, prices increased by 10.6 per cent, 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 (US$24 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.

“Looking at price surge in the fourth quarter, it explains why the government introduced the property curbs because they had already seen the data and saw this coming,” Nicholas Mak, the Singapore-based head of research and consultancy at APAC Realty’s unit ERA. “If they had not acted earlier, people would have been speculating that cooling measures are on the cards.”

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 per cent, the fastest since 2010.