Knight Frank's latest residentaial report states that the Singapore Government relaxed the Sellers’ Stamp Duty (SSD) holding period with effect from 11 March 2017, unwinding, for the first time, the host of cooling measures applied since September 2009. The SSD was first introduced in February 2010, and subsequently revised twice – in August 2010 and January 2011 – to increase the level of deterrence. The recent change in policy is not likely to trigger an increase in shortterm speculation in the residential market, since the SSD rate of 12% for properties sold within 1 year remains relatively onerous. The change was nonetheless welcome by the market – it serves as a mitigation of risk in the medium-term for potential investors. This change in supply-side policy is more a pre-emptive one, giving investors some room for flexibility in the market in the event the market turns south.

New launches in the quarter saw stellar performance, continuing the strong show of primary market sales since mid-2016. This was in contrast to the sentiments and mood towards the end of 2015, where developers had to moderate their price expectations in order to achieve better sales. At present, we are observing a market that appreciates the value proposition of a good quality, well-designed product. 

The three-month Singapore interbank offered rate (Sibor) has increased further to 0.939% in March 2017, from 0.924% in December 2016. The three local banks have, however, stepped up the competition for a piece of the home loan market, coming up with attractive packages offering effective rates as low as 0.6% to 0.7% annually. However, with upward pressure on interest rates expected to continue in step with US interest rates, most banks have stopped offering various fixed-rate mortgage plans since end-December.

The banking industry’s average property loan-to-value ratio was at its lowest since Q3 2014- 49.0% as at Q1 2017, based on preliminary Q1 2017 numbers from the MAS. This has declined from 51.3% a year ago. A November 2016 MAS report said that the risk profile of housing loans has improved, with only a negligible share of housing loans in negative equity 

"Private Residential Home Prices Continued to Fall for the 14th consecutive quarter"

According to URA’s 1st Quarter 2017 real estate statistics, residential home prices are still on decline, having fallen on a quarter-on-quarter (q-o-q) basis for the 14th consecutive quarter since Q3 2013. The 0.4% q-o-q fall in Q1 2017 brings the total decline from the peak to 11.6%. The Landed segment saw a steeper fall of 1.8%, while the Non-Landed segment prices held firm during the quarter.

Of the Non-Landed market segments, prices in the Core Central region (CCR) fell by 0.4% in the quarter. Prices in the rest of Central Region saw an increase of 0.3%, while Outside Central Region improved by 0.1%, as they were supported by strong volumes and prices of new sales transactions in the area.

"Highly anticipated Q1 2017 project launches saw stellar sales performance"

A total of 2,962 private residential units were sold by developers in Q1 2017, as compared to an average of 1,980 per quarter since Q3 2013 to Q4 2016. This is also the highest quarterly new sales volume since Q2 2013. 

Three highly-anticipated private non-landed residential projects were launched in the quarter – Park Place Residences at PLQ and Grandeur Park Residences (launched March 2017), and The Clement Canopy (launched February 2017), which have since achieved stellar sales rates of 100%, 67%, and 95% of total units launched respectively.

Of notable mention was Park Place Residences at PLQ, which sold all 217 of 429 units launched within a few hours on the opening day itself, while achieving a median price of $1,805 per square foot (psf). Grandeur Park Residences and The Clement Canopy achieved median prices of $1,406 psf and $1,343 psf respectively during their month of launch. 

Other developments that continued to achieve sales above 50 units in the quarter include Parc Riviera (sold 363 units) and The Santorini (101 units). 

To downlaod the full Knight Frank Singapore Residential Market q1 2017 Report click the link below.