10 year high: Real estate price spike in Singapore
Last year, Singapore home prices rose to their highest level in more than a decade, boosting the island state’s government’s decision to impose “cooling” policies that will hopefully help the Singaporean property market’s stability.
According to estimates released by the Urban Redevelopment Authority on Friday, prices increased by 10.6% in 2021. This is the highest level since 2010, when they increased by 17.6%. In 2020, values increased by 2.2%. Meanwhile, prices rose 5% in the fourth quarter compared with the previous 3 months, matching the original projection.
The data highlights why the government stepped in in the middle of December, imposing restrictions on second-home purchasers and foreigners buying family homes, including higher stamp taxes. Home buyers took advantage of the low interest rates. They expect the prices to rise when the economy improves.
Considering Singapore’s worst recession in 2020, and numerous stop/start restrictions against Covid 19, the marketplace performed better than expected.
Homeowners and developers, according to BI experts, might adopt a wait-and-see strategy in the following months, delaying selling their properties at lower prices until interest rates go up significantly, decreasing their holding power.
The cooling measures may have a larger impact on sales, with average monthly new-home purchases falling by approximately 30% in the first quarter.
