Singapore October home sales surge 18 per cent on new projects

Developers sold 765 units in October, though analysts see subdued activity for rest of year

PUBLISHED : Tuesday, 18 November, 2014, 5:23am
UPDATED : Tuesday, 18 November, 2014, 5:23am

Singapore home sales rose 18 per cent in October from the previous month as developers offered new projects amid declining prices, a government report showed.

Developers sold 765 units last month compared with 648 units in September, according to data released yesterday by the Urban Redevelopment Authority.

Among the developers that began putting up projects was MS Residential, which sold 334 of 400 units at its Marina One Residences in the city's central business district, according to the URA. Hong Realty (Private) Ltd sold 34 of 70 units at the Coco Palms condominium project, the data showed.

"It's a slight recovery because of a new project marketed in the new downtown," said Nicholas Mak, Singapore-based executive director at SLP International Property Consultants, referring to the Marina One development.

"I don't see a strong recovery. The rest of the year will be subdued for sales."

The government began introducing housing curbs in 2009 with some of the strictest measures implemented in 2013, including capping debt at 60 per cent of a borrower's income, higher stamp duties on home purchases and an increase in real estate taxes.

Home prices declined for a fourth consecutive quarter in the three months to September, a separate government report showed earlier this month.

Mortgage loan growth of 6.6 per cent in August and September was the slowest pace since May 2007, data from the Monetary Authority of Singapore showed.

Under the current loan framework, mortgages shouldn't push a borrower's total debt-servicing ratio above 60 per cent, the MAS said in June 2013.

Singapore's housing market may face "fire sales" with mortgage defaults as the curbs hurt home sales and prices, City Developments Ltd, the city-state's second-biggest developer, said.

An index tracking private residential prices fell 0.7 in the three months to September, bringing the slide in the past year to almost 4 per cent.

Still, Singapore home prices need to decline even further, Tharman Shanmugaratnam, Singapore's finance minister said last month.