Singapore's housing market rebound fuelled by local demand

Local buyers have been driving Singapore’s resurging residential property market, accounting for 77.6 percent of private home buyers during the first seven months of 2017, reported the Straits Times.

The figure is an improvement from last year’s 74.4 percent.

Urban Redevelopment Authority (URA) data showed that new and resale private homes sales jumped 56 percent to 10,565 units in the first seven months of the year from 6,785 units over the same period last year.

Colorful apartments in Singapore's Redhill neighborhood. (Ảnh: Trong Nguyen/Shutterstock)

“Private home transaction volume so far this year has reached one of the highest levels since 2013 when mortgage rules were tightened through the introduction of the Total Debt Servicing Ratio (TDSR) framework,” said ZACD Group executive director Nicholas Mak.

The rally, however, has been fuelled by locals instead of foreigners.

In fact, the proportion of foreigners including permanent residents (PRs) and non-PRs buying property fell to 22.4 percent from around 26 percent in 2016.

Singapore’s stringent stamp duties have dampened speculative overseas demand, with foreign buyers making up just six percent of acquisitions during the first half of the year, down from nine percent in 2013, showed Cushman & Wakefield data.

Christine Li, research director at Cushman & Wakefield, attributed the strong buying from locals to demand from HDB and Build-To-Order upgraders who are taking advantage of the low interest rate environment.

Demand is expected to increase further as more en bloc sales enter the market.

But while Ku Swee Yong, chief executive officer of International Property Advisor, acknowledged that home sales, especially that from new launches, have increased, he warned that “there is still pain in the market”.

“In the first quarter this year, 21 percent of resales of private non-landed homes were transacted at a loss.