The latest measures announced by the government to cool the real estate market have prompted property developers to sell fewer homes. However, they were modest when asked if they were delaying launches and cutting prices.
Market sources told The Business Times that developers lowered their target prices at some recent property launches, with some offering promotions such as vouchers and discounts.
The number of new homes sold by developers is also said to have declined since 13 January, when the government announced that it will increase the seller’s stamp duty (SSD) for private homes to as much as 16 percent and cut the loan-to-value (LTV) limit on housing loans to 60 percent for home buyers with outstanding housing loans.
Developers regularly review their launch and marketing strategies, said Wong Heang Fine, the new head of the Real Estate Developers Association of Singapore (Redas).
“It is not unusual for developers to change their marketing plans in response to the market. So I don’t think we see any unusual things happening in the market just because of the measures,” said Mr. Wong, after Redas’ annual Spring Festival luncheon.
Market-wide price cuts like those that happened in the previous recessions have “not taken place yet”, added Lim Ee Seng, Vice President of Redas and CEO of Frasers Centrepoint.
However, at least one developer admitted that home prices are set to tumble, saying that there will be a correction of about five to 10 percent for the rest of the year in private home prices and land prices.
“Some developers may see this as an opportunity to pick up some development sites at more reasonable price levels. This is actually a healthy situation, going forward. If not for the January 13 measures, one would have had to continue bidding for land at forward prices,” he added.