Singapore house prices fell at a faster pace last month, dropping 1.2 percent from the previous month as evidence builds that the government’s efforts to cool the property market are working.
The city-state’s residential property index fell to 159.1 points last month after declining a revised 0.9 percent in September, according to the National University of Singapore’s Residential Price Index. The measure tracking prices in the central region decreased 1.4 percent last month.
Record house prices amid low interest rates raised concerns of a housing bubble and prompted the city-state to introduce new taxes and higher minimum down payments since 2009 to curb speculation in Asia’s second-most expensive housing market.
House sales have been falling in the past four months after the government imposed new rules in June governing how financial institutions grant property loans to individuals.
“The latest statistics are a reflection of the current measures starting to bite the residential market,” said Alice Tan, head of consultancy and research at Knight Frank LLP in Singapore. “Price quantum is still the key consideration for many prospective homebuyers.”
Singapore and Hong Kong, ranked by Savills as the world’s most expensive housing market, have introduced measures to cool property prices. Singapore has linked borrowers’ maximum debt levels to their incomes, and raised stamp duties and capital gains taxes, while Hong Kong has increased minimum down payments six times in less than three years and in February doubled stamp duty for all properties worth more than HK$2 million (US$258,000).
Singapore’s house sales fell 19 percent last month to 1,009 units from a month earlier, according to data from the Urban Redevelopment Authority released on Nov. 15. From the previous year, sales dropped 48 percent, the data showed.
House prices in the city-state rose at the slowest pace in six quarters in the three months ended Sept. 30, according to figures released by the authority on Oct. 25.
House prices have jumped 40 percent since Singapore started introducing curbs four years ago. The gains led to Singapore being ranked the most expensive city to buy a luxury home in Asia after Hong Kong by Knight Frank in a wealth report in March.
Singapore’s private residential property price index rose 0.4 percent to a record 216.2 points in the three months ended Sept. 30, after climbing 1 percent in the second quarter, Urban Redevelopment Authority data last month showed. That was the smallest gain since the first quarter of last year, when the index dropped 0.1 percent.