In April, private home sales in Singapore increased by 80%. According to OrengeTee & Tie, Singaporeans made up 84% of homebuyers of Blossoms by the Park, and 90% of buyers at Tembusu Grand.
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“The stellar sales at Blossoms by the Park were a surprise, as almost 75% of the project was sold within its launch month despite the new cooling measures,” stated Christine Sun, senior vice president of research and analytics at OrangeTee & Tie.
“The cooling measures may not stop local buyers, especially first-timers unaffected by the increased ABSD,” she added.
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“Some buyers expect prices to rise further since more buyers may enter the market when interest rates moderate and most Singaporeans are gainfully employed. Moreover, home prices have continued to rise even after each round of ABSD adjustments, based on historical trends.”
According to ERA key executive officer Eugene Lim, the private residential market in Singapore is mostly supported by domestic demand. Foreign demand only “rarely influences the dynamics of the overall market.”
To illustrate this point, only eight foreigners bought a unit at Blossoms by the Park.
“The cooling measures will lead to fewer purchases by foreigners but the impact on overall transaction volume is expected to be minimal. Almost 95% of buyers are either Singaporeans or permanent residents,” Lee said.
Recently, Singapore doubled the ABSD for foreigners buying residential property in Singapore.
“Feedback from our luxury home sales team indicates that while the number of viewings among foreigners generally remains steady, such investors are less forthcoming about buying right now, particularly for big-ticket homes, following the latest ABSD hike,” stated PropNex Head of Research and Content Wong Siew Ying.
“It is still early days yet, but we think the ABSD rate hike appears to be taking effect in crimping foreign investment demand.”
Developers may push back some launches to the second half of the year while waiting for foreign purchases to moderate, especially for properties located in prime areas.
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