The number of private homes sold by developers in Singapore fell more than 80 percent in December from a year earlier, with the property industry bracing itself for a tough 2014 as a series of government measures to cool the market start to bite.
With developers putting few big new projects on the market and potential buyers hampered by rules restricting how much they can borrow, only 259 units were sold last month in the Southeast Asian city state, compared with 1,410 a year earlier, according to figures from the Urban Redevelopment Authority.
Governments across Asia have been trying to cool their property markets following three years of strong price rises triggered by low interest rates brought about by quantitative easing in developed countries.
Signs are emerging that those efforts are starting to make a significant impact, with figures last week showing property sales in Hong Kong hitting a 17-year low.
In Singapore, where private property prices have risen by around 50 percent since 2009, analysts said they expect home sales to remain muted for most of this year.
“Assuming that the current cooling measures and lending rules are in place, the total number of new developer sales are expected to be at least 30 percent lower compared to last year’s developer sales,” said Alice Tan, head of consultancy and research at Knight Frank Singapore.
Since 2009, the government has introduced eight rounds of cooling measures intended to prevent a property bubble from forming.
In June last year, new rules came in to ensure that a property buyer’s monthly payments do not exceed 60 percent of his or her income, a move aimed at making sure home owners are not caught out when interest rates start to rise.
Earlier this month, figures showed private home prices fell in the fourth quarter of 2013, the first decline in almost two years.
Private homes in Singapore house around 20 percent of the city-state’s 5.3 million population, with the rest living in government-built housing.