SINGAPORE: Sales of private home by developers in Singapore jumped nearly 50 percent in September from a year earlier, aided by low interest rates and price slips, but analysts saw few signs of a recovery in the property market.
Developers sold 509 units last month up from 341 units in September 2015, data compiled by the Urban Redevelopment Authority (URA) showed on Monday. The number of units sold was up 8.8 percent from 468 units sold in August. (For more details, click on www.ura.gov.sg)
But analysts doubts the jump indicates a turnaround as a slowdown in the trade-reliant economy is likely to hurt property demand.
“People are starting to think about the current situation: whether Singapore is ahead of a recessionary environment, so whether layoffs could affect affordability of new homes,” said Christine Li, head of Singapore research for Cushman and Wakefield.
Li said investors’ demand is “volatile” when the economy faces uncertainty.
“It’s purely sentiment-driven. It is not supported by underlying fundamentals such as rental markets,” she said.
The benchmark three-month Singapore interbank offered rate (SIBOR), used to set interest rates on mortgages, fell to 0.87 percent earlier this month, the lowest since July 2015.
In January this year, the rate was above 1.25 percent, its highest since October 2008, the global financial crisis.
Singapore’s economy unexpectedly shrank in the third quarter from the previous three months, raising expectations that the central bank may ease its policy more.
In the third quarter, private home prices fell at the fastest pace in seven years, a URA flash estimate showed earlier this month.
BY: Jongwoo Cheon
(Editing by Richard Borsuk)
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