Sales of new private residential homes in February fell 46 per cent compared with the previous months.
This is according to figures released by the Urban Redevelopment Authority.
And industry watchers said this is the slowest sales since last August when the URA first released the data.
About 170 new private apartments were sold in February, compared with 316 units in January.
Donald Han, Managing Director of Cushman & Wakefield, said: “The market has gone through a period of slumber because of the current global economic turmoil. The stock market hasn’t been performing too well in the last 3 to 4 months.
“But that said, I think there’s still a lot of cash liquidity out there in the market place waiting for the right time to jump in and to do the purchase.”
While buyers hold back their purchases, developers too are waiting.
The data also showed supply falling 13 per cent on month in February, with a total of 343 units launched.
But more projects are expected in the next two quarters.
While sales volumes have dropped, prices don’t seem to have followed suit.
Dr Chua Yang Liang, Head of Research & Consultancy, Jones Lang LaSalle, said: “If you are looking purely at the low median that we’ve recorded of transactions in the various districts, prices have contracted between 0.7 and 5 per cent – that’s marginal contraction.
“While the sub-prime debacle has affected demand, price has remained stable, I think there is a strong underlying demand and that’s coming from occupiers, en bloc residents seeking alternative homes as well as foreigners who are now looking at buying instead of renting. ”
Meantime, CB Richard Ellis expects the total number of new homes sold this quarter to be around 700 to 800 units.
It added that the only other times when the local residential market experienced such low sales volume were during the SARS period in 2003 and the Asian Financial Crisis around 1998.
Analysts said Singapore hasn’t been hit badly by the US sub-prime crisis, but it has somewhat affected buying confidence and credit availability.
For now, they are not overly concerned about the contraction in the property market, but they said that it’s crucial to monitor the impact of the sub-prime crisis in the next three to six months. – CNA/vm
Source : Channel NewsAsia – 17 Mar 2008