Property prices in Singapore have lost some heat after the government introduced cooling measures, a study reveals.
Previously a property hotspot, prices in Singapore have rocketed in recent months.
Now, the Singapore Residential Price Index (SRPI) reveals that prices for apartments fell by 0.3% in December – after a 1.7% rise in November.
The biggest drop in asking prices was recorded in the Central Region with 1.3% month-on-month,
Prices for smaller housing units remain unchanged for the month.
The government brought in cooling measures for the seventh time since 2009, which included increasing taxes on foreigners and corporate buyers purchasing residential property to 15%.
There was also an increase in the seller’s stamp duty from 5% to 15% and a minimum cash deposit for second homes being raised to 25% of the purchase value.
Pressure on prices
However, critical analysts say the move means many potential buyers will simply buy smaller housing units.
The cooling measures are also expected to help narrow the price gap between new builds and resale homes with developers now offering discounts to help shift stock.
A spokesman for real estate firm DTZ said more private homes would be built this year with around 16,000 coming onto the market, compared to 11,000 last year.
He added: “This will put pressure on home prices but they won’t be falling sharply because developers have strong balance sheets. Demand from buyers will remain healthy because of low interest rates for mortgages and high employment.”
Singapore’s successful economy is also fuelling a housing crisis needed to tackle a lack of homes for a growing population.
The government has recently published a white paper laying out plans to increase housing supply between now and 2030.
700,000 new homes planned
The government has said: “We will have to plan comprehensively to meet the needs of the growing population.
“We have to ensure that Singaporeans will have access to affordable and quality housing which will have convenient access to amenities, transport and recreational spaces.
“The new housing will meet the needs of all sections of the population from young families and couples to the elderly across a range of locations.”
Initial plans look to develop more housing in the Central Region because people want easy access to their work places.
To achieve their ambitions, the Singapore government wants to set aside enough land to build 700,000 new homes and aims to build on pockets of land within established housing estates, especially if they are near to transport hubs.
The government expects Singapore’s population will rise to 6.9 million in 2030 – up from last year’s census count of 5.3 million.