SINGAPORE (NewsRise) -- Singapore's private residential market arose from its slumber in February, even before the government decided to ease some of its property cooling measures in early March.
Data released by the Urban Redevelopment Authority on Wednesday showed developers in Singapore sold 977 private homes last month, more than two and half times the 382 units they sold in January and the 367 units transacted in December 2016.
The February 2017 figure was also sharply higher than the 303 units sold a year earlier, as home buyers returned to the market amid price cuts and various incentives offered by developers to clear inventory.
The top-selling project for the month was UOL Group Ltd.'s Clement Canopy in western Singapore, which moved 207 units at a median price of 1,343 Singapore dollars ($951) per square foot.
"Buyers are now ready to pick up units that are rightly priced," said Ismail Gafoor, CEO of PropNex Realty, a firm of real estate brokers. "Consumers have come to terms that prices in the mass market condominiums have generally bottomed out."
Singapore's housing market has been in a funk in recent years due to a series of cooling measures that the authorities began to introduce in 2009. According to an index compiled by the URA, private home prices fell 3% last year and are down around 11% from their peak in late 2013.
But sentiment has picked up, especially after the government's surprise decision last Friday to relax some of the measures it had implemented to rein in property prices.
PropNex's Ismail expects strong sales numbers in the coming months as developers prepare to launch more housing projects, with the March figure likely to come in above 1,500 units.
Most analysts, however, expect private home prices to continue dipping due to the large supply of apartments in the pipeline, which developers have to sell within a certain time frame to avoid paying additional taxes or levies.
For instance, developers who bought land from the government are required to pay an additional buyer's stamp duty of 10% or 15% on the land cost, if they do not build and sell all the units within five years.
Earlier this week, the CEO of CapitaLand Singapore Wen Khai Meng urged authorities to relax the time limit.
"My view is that the transaction volume has halved, so I think the government should give developers a longer time to sell the units," he said, referring to the much higher number of private homes sold by developers before the cooling measures began to bite.
Developers sold around 8,100 new units last year - about 10% more than the 7,400 units transacted in 2015. But, while sales have picked up, they are still well below the nearly 15,000 units sold in 2013 and 22,000 units that changed hands in 2012.
CapitaLand Singapore is a unit of CapitaLand Ltd, Southeast Asia's largest developer.
Private homes make up about 20% of residential housing in Singapore, with the majority of citizens staying in government-built Housing and Development Board (HDB) apartments. About 5.5 million people live on the 720 square kilometre island, which is smaller than New York or Hong Kong.
Singapore's move on Friday to ease some property cooling measures set off a rally in the stocks of real-estate developers.
One change was that home owners will now be able to sell their properties three years after the date of purchase without incurring an additional seller's stamp duty. The duty had previously applied to properties sold within the first four years of purchase.
However, other measures, including the more onerous buyer's stamp duty on Singaporeans buying second homes and foreigners buying property in the city-state, were retained.
"On balance, we believe these set of changes will be marginally supportive of still-declining home prices... With these latest sets of measures, we now adjust our forecast for physical prices to decline to 1% - 5% in 2017 versus our previous forecast for a 3% -7% decline," OCBC Investment Research wrote in a note to client.