Private homes sales fall in August with 1,248 units sold

Demand for new private residential properties in Singapore continued to stay strong in the month of August, with sales staying above the 1,000 level.

Data released by the Urban Redevelopment Authority (URA) on Wednesday showed that 1,248 units were sold last month. That is 19.3 per cent lower than the 1,549 units sold in the previous month.

Still, the numbers beat market expectations – since August coincided with the Hungry Ghosts’ festival which is typically marked by slower sales.

Among the units sold, some 44 per cent of them are located in the city fringe and the outskirts.

The hottest development was “The Greenwich” at Yio Chu Kang and Seletar Road, which sold 207 units for a median price of S$1,095 per square foot

Analysts said they expect demand for private homes to soften in the months ahead, amid the cooling measures implemented by the government recently.

Dr Chua Yang Liang, head of Research (Southeast Asia) at Jones Lang LaSalle said: “If you look at the behaviour of the market when another policy was introduced in September last year, the market corrected about 35 per cent. So I reckon the initial reaction by the market is likely to be about the same quantum – about 30 to 35 per cent.”

“Going forward, you might see a further moderation in transaction volume.”

Analysts expect between 800 and 1,100 units to be sold each month for the rest of the year.

In terms of sectors, property watchers said mid- to high-end homes will fare better as they are less affected by the anti-speculative measures which were introduced on August 30.

As transaction volume slows, analysts said home prices will start to moderate as well. They expect average private property prices to rise by some 3 to 4 per cent in the third quarter, and by about 2 per cent in Q4.

All in, developers placed 1,326 units for sale in August, down 0.7 per cent from July.

And observers are expecting to see fewer launches in the short term. They estimated that 700 to 900 new units will be launched per month in Q4, with a take-up rate of between 50 and 70 per cent.

Donald Han, MD of Cushman & Wakefield said: “Most developers have got the holding power. They have over the last 12-18 months pre-sold quite a fair amount of stock, so they are in the position to hold. There probably would not be panic sell or an immediate need to adjust prices just to clear stock.”

According to URA, 11,381 units have already been sold in the first eight months of 2010.

And for the year as a whole, sales could hit more than 14,000 units.

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