Private home sales shrink 46%

Lull normal during year-end holiday season: Analysts

The number of new private homes sold in December about halved from the month earlier, but analysts attribute the drop to the year-end holiday season and say it is not necessarily an indication that the property market has peaked.

According to data released by the Urban Redevelopment Authority yesterday, 328 new private residential units were sold in December, down sharply from 611 units in November, or 46 per cent. Developers launched 492 units last month, down from 598.

“This is because the festive period of December is usually a lull period in the property sale market,” said Mr Nicholas Mak, director of research and consultancy at Knight Frank. “Coupled with the market uncertainties due to the stock market turbulence, there were no launches of major developments as developers held back many of their projects.”

“Foreign buyers also don’t do their buying towards the end of the year as they go on holiday,” said Mr Donald Han, managing director of property consultancy Cushman and Wakefield, adding that sales will most likely pick up after Chinese New Year in February.

“The numbers of units sold in both the RCR (rest of central region) and OCR (outside central region) have fallen, with RCR recording the biggest drop, said Mr Mak.

Sales in the core central region increased 37 per cent to 175 units in December but this spike was due to a bulk purchase of 97 units in Goodwood Residence by Kuwait Finance House, according to Jones Lang LaSalle’s head of research in South-east Asia, Dr Chua Yang Liang.

Discounting the bulk purchase, the adjusted number of 78 units sold is more reflective of the overall market, he said.

Despite the smaller number of units sold, prices have remained firm.

“The Marina collection saw 25 units sold at the median price of $2,734 per sq ft, which is a new record for Sentosa Cove projects,” said Mr Li Hiaw Ho, executive director of CBRE Research.

For all of last year, a record number of 14,826 new homes were sold, said Mr Li.

“The bulk of the volume, 13,362 units, or about 90 per cent, were sold in the first nine months of the year, before the market turned cautious in view of various factors”, such as the volatility in global stock markets, the impact of the United States sub-prime problems and escalating oil prices, said Mr Li.

Notwithstanding these factors, Mr Li thinks the property market sentiment is still good. “Although the mood in the fourth quarter of 2007 has persisted in January, it is likely that sales momentum will pick up as developers launch more projects to give more choices to potential buyers,” he said.

Some of the new projects to be launched include Marina Bay Suites and Martin Place Residences.

Source : Today – 16 Jan 2008

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