The recent slump in sales of new private homes could be a blessing in disguise, according to Singapore-based developer KOP Properties.
Transaction volumes in July fell a whopping 73 percent to just 481 units from the month before, revealed data from the Urban Redevelopment Authority (URA). This is the lowest sales volume since December 2009.
“I’m actually glad that sales went down because at least the government will not dampen it further,” said KOP’s Chief Executive Officer Leny Suparman, referring to the slew of market cooling measures.
Aside from proving that the regulations are effective, Suparman noted that it prevents the formation of a housing bubble, which is good for Singapore’s property market in the long run.
She is also optimistic that foreigners will continue to purchase luxury residential homes due to ample liquidity and the republic’s reputation as a safe haven compared to other Asian markets.
This despite stringent measures such as the Additional Buyer’s Stamp Duty (ABSD) which translates to a tax hike of up to 17 percent for foreign buyers.
Commenting on the outlook for property prices, Suparman said: “I don’t believe that prices will fall, maybe (for) the resale market. But in terms of new launches, I think Singapore developers still have holding power (and) there is no reason for them to reduce prices.”
At the same time, she sees property investing as a Singaporean pastime and real estate in the city-state will continue to be valuable given their scarcity.
“I think all these just further strengthen the fact that property is a sector that people want to put money on, including foreigners,” she added.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories email email@example.com