Is an easing of property cooling measures on the heels of May’s surging home sales?

Overall property prices have only fallen 9%.

The recent spike in home sales is a double-edged sword for investors, as analysts believe it makes easing of cooling measures increasingly unlikely.

According to a report by RHB, the recent healthy demand seen in some of the new and existing projects post price adjustments may make the government take a more cautious approach in withdrawal cooling measures.

Citing the Urban Redevelopment Authority’s property price index, RHB further notes that overall property prices have fallen by only 9% since peaking in 3Q13. In addition, current prices are are still 48% higher than the recent 2Q09’s Global Financial Crisis trough.

As such, RHB believes that any premature withdrawal of cooling measures could lead to a spurt in property prices.

Meanwhile, more high-end developments are seen offering discounts to move inventory. Key high-end projects expected to dangle discounts to lure in buyers include OUE Twin Peaks (15% discount/option for deferred payments) and Ardmore 3 (15% discount and 15% additional buyers stamp duty (ABSD) rebate).