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Residential Investment Sales Plunge 63% In Q3

Overall property investment sales in Singapore declined from nearly $10 billion in the previous quarter to $6.5 billion in Q3 2018 following the introduction of new property cooling measures in July, according to a new report from Edmund Tie & Co.

“The fall in investment sales was largely led by the residential sector, with investment sales decreasing by 63.2 percent quarter-on-quarter to $2.2 billion, arising from a lackluster en bloc market.”

More: Property Investment Sales To Hit $46 Billion In 2018

The residential segment accounted for the largest percentage of property investment sales, but the 34.4 percent proportion is lower than the second quarter’s 61.2 percent.

On 6 July, the government increased the Additional Buyer’s Stamp Duty (ABSD) for companies. There is also a non-remittable ABSD of 5.0 percent for property developers, making them more cautious and hesitant in their land acquisitions. This dealt a blow to the collective sales market.

Nonetheless, there were still some en bloc deals transacted after the introduction of the new measures, among them Phoenix Heights in Bukit Panjang. The 99-year leasehold project changed hands for $33.1 million, which works out to $553.01 psf per plot ratio.

Moreover, sales of government residential sites edged up 1.7 percent to $1.7 billion in Q3 2018 on a quarterly basis. Edmund Tie noted that more sites with lower prices were sold in the third quarter compared to the quarter before, indicating a weaker risk appetite among property developers.

Looking ahead, Edmund Tie & Co expects residential investment sales to decline further as acquisition costs of en bloc sites have increased significantly due to new property curbs and the hike in development charges.

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