Private home sales fuelled by local demand
Private home transaction volume one of the highest since 2013
Homes sales have rebounded to levels not seen since 2013 in what is the clearest sign yet that the residential property market is emerging from its lengthy slump.
The rally that has marked the first seven months of the year is being fuelled by local rather than foreign demand, analysts say.
There were 10,565 new and resale private homes sold in the seven months to July 31, up a striking 56 per cent on the 6,785 transacted in the same period last year, according to URA data.
"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," Mr Nicholas Mak, ZACD Group executive director noted.
But what is significant is the proportion of Singaporeans buying. They comprised 77.6 per cent of private home buyers in the first seven months, up from 74.4 per cent a year earlier, he added.
Sales to foreigners, including Singaporean Permanent Residents (PR) and non-PRs, also increased in that period, but the proportion of foreigners buying dropped to 22.4 per cent from about 26 per cent in 2016.
The number of new and resale private homes sold in the seven months to July 31. This is up 56 per cent up on the 6,785 transacted in the same period last year.
Stringent stamp duties have helped damp speculative overseas demand, with foreign buyers accounting for just 6 per cent of purchases in the first half this year compared with 9 per cent in 2013, data from Cushman & Wakefield showed.
Malaysians comprised 21 per cent of foreign buyers in the first half, from 26 per cent in 2013, while the Indonesian proportion slid to 6 per cent from 17 per cent due to the strengthening of the Singdollar against the Malaysian ringgit and the Indonesian rupiah in recent years.
Cushman & Wakefield research director Christine Li also noted that strong buying from locals was in part due to demand from Built-to-Order and HDB upgraders taking advantage of still low interest rates.
Demand could pick up further as more collective sales hit the market.
International Property Advisor chief executive Ku Swee Yong acknowledged that home sales, particularly that from new launches, have picked up, but cautioned that "there is still pain in the market".
"In the first quarter this year, 21 per cent of resales of private non-landed homes were transacted at a loss."