Private homes sales last month hit a low

YOU might have noticed that there are fewer ads for home launches.

Perhaps you have also overheard that some condominiums in a prime area just went for a price you could only dream of a year back.

Yesterday, official data bore out the coffee-shop talk that has been making the rounds.

Reflecting weak consumer confidence, private homes sold and launched last month plunged to their lowest since June last year, when the Urban Redevelopment Authority (URA) started providing the figures monthly.

Only 112 new homes were sold, down by a steep 70 per cent from last month’s 376 units.

The number of new units launched dropped by about 80 per cent to 159 units compared to last month’s 767 units.

“The financial turmoil has created a great amount of volatility in the markets and buyers now are extremely cautious, refraining from committing in such volatile times,” said Credo Real Estate managing director Karamjit Singh.

Just look at the attendance at showflats. The number of visitors has fallen significantly compared to the same period last year, said HSR Property Group chief executive Patrick Liew.

The impact is evident in the high-end residential market. Only four units changed hands, with the highest price going to a unit in Orchard Scotts at $2,407 per square foot (psf).

In the resale market, two units of The Sail @ Marina Bay, a luxurious project that commanded an average of $1,750 psf this time last year, were sold last month for under $1,000 psf. One went for $926 psf and the other, at $986 psf, according to the Singapore Institute of Surveyors and Valuers database, which is updated whenever a successful transaction is recorded.

In these volatile times, foreign investors – who often target Singapore’s luxury property segment – seem to be standing on the sidelines.

“Some of my foreign clients feel it is not a good time to buy a local property now; they expect prices to drop further in the next six to nine months,” said Mr Lionel Ng, associate president of Dennis Wee Group.

Developers, too, have scaled back.

Chesterton Suntec International’s consultancy and research head Colin Tan pointed out that there have been fewer advertisments on property launches.

“Those that needed to launch their projects have already done so, and for developers that are undecided, they have decided to hold back their launches because of weak sentiments,” he said.

PropNex spokesman Adam Tan said recent news of retrenchments and possible wage freezes have spooked consumers into cutting back on big-ticket items, including property.

But the URA data suggest that the market for lower-range private homes remains rather active, as about 80 per cent of the 112 homes sold transacted at below $1,000 psf.

For example, eight units of The Peak @ Balmeg – located along Pasir Panjang Road – were sold at a median price of $988 psf.

HSR’s Mr Liew feels the mass market will remain resilient amid the downturn, although he foresees next year’s private homes sales falling by 10 to 15 per cent compared to this year.

“The sluggish sales momentum is likely to remain for the rest of the year, as macro factors such as economic recession and retrenchment will erode consumer confidence,” said CBRE Research executive director Li Hiaw Ho.

“It may well be that the fourth quarter will see a total sales volume of around 500 units, a level that was last seen in Q1 2003.”

Source : Today – 18 Nov 2008

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