SINGAPORE- IshwinderKaur and her husband spent more than two years looking to buy their first home in Singapore, hoping property prices would dip during the hunt.
The couple finally bought their apartment in December after prices rose in all but one quarter last year, even as the city state posted its worst recession during the COVID-19 pandemic.
“We got really worried because we saw that people were snapping up homes left, right and center,” said Kaur.
House prices rose again in the first quarter, with the private home market up 3.3 percent, its steepest rise in nearly three years, fueling expectations the government is likely to intervene soon to calm the market.
Driven by low interest rates, confidence in property’s long-term safety and a fear of missing out, the boom is putting buyers increasingly at odds with the government, which has been warning that purchasers should exercise caution.
Authorities in Singapore, where real estate is a safe haven investment for wealthy foreigners, keep close tabs on property prices to ensure housing remains affordable for locals and stays in step with economic fundamentals.
They began advising prudence late last year, with Senior Minister TharmanShanmugaratnam warning again in April that home buyers should exercise caution given the risk of rising interest rates. Instead, some buyers are trying to get ahead of any intervention, further driving up sales.
“Considering that only property value seems to be growing steadily, and extra stamp duties may kick in soon to cool the market, it is better to invest in a new house at this time,” said sales engineer Faye Zhou, who is looking for a condominium.
Government tools to cool the market include boosting stamp duties on foreign buyers and investors with multiple homes, or increasing the proportion of downpayments. It can also increase land supply through tenders.
Private home prices fell 11.6 percent from a 2013 peak over a span of 15 quarters after the government took steps to curb a housing market boom as Singapore emerged from the global financial crisis. – Reuters
