A general view of Singapore's financial district from Merlion Park.
A general view of Singapore's financial district from Merlion Park.

Home sales in Singapore have tumbled 65 percent, to its lowest level in more than a year in February, indicating that the government's steps to cool the sector are taking effect.

According to the country's Urban Redevelopment Authority, home sales fell to 708 units in February from a revised 2,016 units in the previous month, the lowest rate since December 2011 when the number fell to 632, reports Bloomberg.

Home prices in the country had surged to unprecedented levels in the fourth quarter as low interest rates and capital inflows spiked demand. According to Bloomberg's calculations based on official data, sales had reached 22,699 units in 2012.

This is despite the government's' price control measures that started as early as 2009 with restrictions on interest-only loans and interests on buildings under construction. The recent surge had forced the authorities to broaden its price-control efforts.

Singapore is currently the second most expensive housing market in Asia.

"The government's measures are starting to take effect," Vijay Natarajan, a Singapore-based analyst at UOB-Kay Hian Pte told Bloomberg.

"In addition, fewer units were offered because of the Chinese New Year. Over the coming months, I expect volumes to decline further." The Lunar New Year holidays fell on Feb 15 and 16, during which sales could have been restricted.

The government's price control measures included a five to seven percent hike in stamp duty for house buyers. The administration is also looking to hike taxes on premium house owners and investment properties.

In his budget speech last month, Singapore's finance minister Tharman Shanmugaratnam had said that the increased levy will impact 1 percent of house owners who reside in their own places or 12000 properties.