In October, new Singaporean private home sales subsided by 51.7 percent compared to past months
According to The Straits Times, sales of new private homes haven’t been selling as satisfactorily as previous months due to new restraints placed on options to purchase (OTPs) that were just re-established. After five months of house shopping frenzy, buyers have come to a break.
The Urban Redevelopment Authority (URA) said that only 642 units were sold in October, compared to September which set a two-year high record of 1,329 units.
As of September 28, the URA implemented new regulations on the re-issuing of OTPs to buyers. After an OTP has expired, developers are limited from supplying the buyer, of the same unit, more OTPs for the next 12 months. Developers are also restrained from giving upfront agreements to re-issue OTPs to clients. Formerly, the re-issuing of OTPs would’ve given buyers more time, for situations like selling their homes.
Such rules were imposed as it was believed that prices of private home sales have been inflated due to this practice. Moreover, this would promote cautious home purchasing behaviour, especially during this period of economic slowdown from COVID-19.
Christine Sun, head of research and consultancy at OrangeTee & Tie said, “as the property market is highly sentiment-driven, the pull-back in housing demand is unsurprising. Some buyers could be waiting on the sidelines, hoping that developers will moderate prices in response to sales decline.”
Nevertheless, Sun mentioned that from the forthcoming air travel bubble between Hong Kong and Singapore and the country’s gradual re-opening, Singapore’s real estate market might be able to attract Hong Kong buyers, as well as foreign clients.
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