SINGAPORE (Reuters) – New home sales in Singapore jumped to the highest in a year, official data showed on Thursday, despite a hike in taxes a month earlier to try to cool the market and discourage foreign buying.
There were 1,038 new homes sold in May, up 17% from April, according to data from the Urban Redevelopment Authority (URA). The figures do not include resale transactions.
The increase comes despite April’s cooling measures, which saw higher property taxes imposed on Singaporeans and permanent residents who buy additional homes, as well as a jump to an eye-watering 60% for foreign buyers.
That saw new home purchases by foreign buyers in May plunge 47.8% from April, URA data showed.
The tax hike sought to reduce international demand after foreign buying reached about 7% of all property transactions in the first quarter of this year, from about 6% from 2017 to 2019.
New homes sales in Singapore can be volatile, with figures fluctuating depending on the number of new launches.
The number of units sold in May was lower than the 1,355 sold in the same month last year, the data showed. That number is expected to drop in June due to a lack of new home launches this month.
Singapore’s property market is bucking international trends, which saw a drop in prices from Canada to China and New Zealand.
The private residential property price index in the city-state rose 3.3% in the first quarter of this year, much higher than the 0.4% increase in the previous quarter.
The jump in the rate of new home sales in May was driven by local demand and therefore did not mean the cooling measures were not working, said Christine Sun, senior vice president of research & analytics at OrangeTee & Tie.
(Reporting by Chen Lin in Singapore; Editing by Xinghui Kok, Martin Petty)
