Resale private homes market could see transactions fall by 5-10% by Q4

It appears that Singapore’s resale property market is starting to feel the chill of the government’s latest cooling measures.

Industry players expect sales transaction to fall by some 5 to 10 per cent by the fourth quarter, while home prices could drop by 5 per cent on average over the same period.

The anti-speculative measures were implemented on August 30 to curb runaway private home prices, which have increased by 11 per cent in the first half of the year.

The Hungry Ghosts month, typically a lull period for the property market, is over. But sales have not picked up.

Analysts said developers are now mulling over new launches and buyers are also more cautious.

The fourth quarter could see resale transaction fall by some 5 to 10 per cent.

In the first seven months of 2010, about 10,000 units of homes changed hands in the resale market.

Colin Tan, director and head of Research & Consultancy at Chesterton Suntec International said: “Generally the resale market tends to follow the activity in the new launches. When the new launches are a little quiet, the activity in the resale market also quietens, partly because people need comparables.

“Sometimes a deal cannot be closed because there are no comparables. New launches usually give you that evidence where buyer and seller can arrive at a price. So when new launches are active, you also see similar activity levels in the resale market.”

Average home prices are also expected to rise at a slower pace, by up to 4 per cent in the third quarter. It could moderate to about 2 per cent in Q4.

Prices for high-end homes will come under more pressure as they are more directly affected by the cooling measures.

For instance, a prime resale unit in District 9, which used to fetch about $3,000 per square foot, will probably go for around $2,800 psf in the fourth quarter

Meanwhile, the mass market continues to see good take-up.

Some 250 units out of 300 units at NV Residences in Pasir Ris have been sold since it was launched earlier this month.

“Mass market will still do well because there is a real demand, people are buying homes. Overall transaction numbers would still remain healthy at the same levels as before and prices might take a slight increase of 3 per cent,” said Liang Thow Ming, executive director of Residential Sales with Credo Real Estate.

For the whole of the year, experts said total private home sales is expected to hover around 12,000 to 14,000 units.

They said property prices for the whole year are expected to increase around 15 and 25 per cent from last year.

Source : Channel NewsAsia – 14 Sep 2010

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