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New private home sales down 58% in December on the back of cooling measures

COOLING MEASURES, YEAR-END LULL

Analysts mentioned the decline in sales may be partly attributed to a package of measures launched by the Government in December to chill the private residential and Housing Board (HDB) resale markets.

The measures included elevating Additional Buyer’s Stamp Duty (ABSD) charges, tightening the Total Debt Servicing Ratio (TDSR) threshold and reducing the Loan-to-Value (LTV) restrict for loans from HDB.

“The market caught a chill after the Government imposed cooling measures on Dec 16, 2021,” mentioned Huttons Asia senior director for analysis Lee Sze Teck.

“The year-end festivities, preparation for a new school term and overseas holidays via the vaccinated travel lanes played a role in the lower overall sales.”

OrangeTee & Tie’s senior vice chairman of analysis and analytics at OrangeTee & Tie Christine Sun had an identical sentiment. 

“New home sales declined on the back of a double whammy of fresh property cooling measures that took effect on Dec 16 and the year-end holiday season when sales activities typically slow down,” mentioned senior vice chairman of analysis and analytics at OrangeTee & Tie Christine Sun.

She famous, nonetheless, that the full influence of the new cooling measures is but to be seen, as a quantity of offers have been closed earlier than the property curbs kicked in.

“Moreover, the 137-unit Mori at Guillemard Road was launched before the cooling measures which may have driven sales higher. Therefore, January’s sales figure may provide a clearer picture of the full impact of the property curbs,” she added.

While sales have been down in December, the undeniable fact that the decline was not as steep as the drop in the quantity of items launched confirmed that there was nonetheless “underlying buying demand in the property market”, mentioned the head of ERA’s analysis and consultancy division Nicholas Mak.

Sales of new houses, excluding ECs, have been up by 31.4 per cent in 2021 in comparison with 2020, with 13,118 such properties bought, Ms Sun famous.

“This is the best performance in eight years,” she mentioned.

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