Sales of residential properties in Singapore rose by 28% from January to February this year, according to figures from the Urban Redevelopment Authority (URA). That’s thought to be partly due to some condo buildings opening to a receptive market. Two major projects accounted for over 60% of the city’s total sales for February – but Singapore’s market has been performing well recently and while February saw a blip, the market actually rose 1.7% year-on-year to February.
That’s a figure high enough to make investors and developers heave a sigh of relief, especially after the disastrously low sales the city saw in January, but it’s also low enough to reassure economists concerned that Singapore may be riding for a fall.
On January 15th this year, in the midst of a poor sales month for Singapore, the central bank released a statement saying that it didn’t believe Singapore was facing a bubble, and that the banking system and property markets were safe. But the rise in sales disguises some other changes: while prices rose slightly year-on-year volume is much lower, and the rise in sales January-February is partly a supply issue; very few properties, only 549, were released for sale by vendors in January, compared with 1,814 the same period last year.
Nicholas Mak, executive director and head of research at SLP International Property Consultants in Singapore, echoed the central bank’s sentiments, though. Speaking to the Bangkok Post on March 17, Mr. Mak said, ‘the market is showing signs of stability after the exceptionally low sales in January.’
In the final quarter of last year, Singapore property prices actually fell slightly for the first time in two years. In 2008 prices slipped sharply but began to rise almost immediately as the city attracted speculation and investment from across the region and worldwide, attracted by strong economic performance and security.
To combat speculation that threatened to create a bubble and price Singapore residents out of the market the government has instituted a raft of cooling measures to keep a lid on the market, and that effort shows no sign of letting up; like many Asian markets the Singapore market isn’t in need of stimulus so much as steering and its government is stepping in.
Ku Swee Yong, CEO of Century 21 Singapore, said that the market was continuing upward, in spite of January’s slip and the decline the city saw at the end of last year. ‘The mass market prices [are] still at above S$1,000 psf, and this month we also saw a transaction in Pasir Ris that is S$1,500 psf. In Bedok, again we are seeing S$1,600 psf transaction… this type of record setting type of prices probably would mean that the government would continue to keep the cooling measures in place.’
Some analysts see a trend in Singapore property, especially new builds: More affordable units are snapped up eagerly, then the higher-priced ones either sell slowly, or they don’t sell at all. Aggregate figures tend to disguise this process.