Condos selling in record numbers and at record prices. Teaser rates on mortgages of 1%. Resale home prices up 66% over the most recent four year period. Sixteen percent of housing units are being purchased by absentee owners. Developments with funny names: "The Foresta@Mount Faber" anyone?
This is not Las Vegas 2007. This is Singapore 2011, according to The Economist. In 2010, 17,645 housing units were sold, besting the records set in 1997 and 2007. One building was selling units for $4,717 per square foot. Speculators from around the Pacific Rim, especially mainland China, are heading to Singapore where property availability is greater, and, according to the article, pricing "is closer to fair value."
Singapore is taking steps to try to cool the market. Deposits on second homes are now 40% of the purchase price, and the costs of completing a sale within a year of purchase have increased. The government also has 25,000 units under construction. The strong Singaporean dollar is also a brake on prices. The result is housing price gains of only 1.9% for the second Quarter of 2011.
It's nice to see someone learning from the mistakes of the recent real estate bubble. Let's hope for their sake that it's not too little, too late.
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