Singapore private home sales down 15% on-month in August

The private housing market remained in the doldrums in August, with sales of homes falling 15 per cent from the previous month as developers continued to scale back new launches.

Excluding executive condominiums (ECs), developers sold 432 new units last month, down from the 509 units sold in July, data from the Urban Redevelopment Authority showed on Monday (Sep 15). Including ECs, 490 new units were sold in August, down from 560 units in July.

The lacklustre sales came as developers continued scaling back new launches, with just 351 units launched in August, down from the 441 units launched in the previous month.

Observers said August had been a slow month as it coincided with the Hungry Ghost Month and was weighed down by cooling measures. No new projects were launched last month as developers kept to clearing old stock.

However, Savills Singapore’s senior director for research and consultancy, Mr Alan Cheong, said there is more to why many did not want to buy. “Buyers are waiting for prices to come down, but the developers are resisting lowering prices because land prices have been so high in the first place when they bid for land in 2012 and 2013.”

“At the same time, the decision-making process is longer because the buyer is now offered more choices. And they might not be in a rush,” added CBRE’s head of research, Mr Desmond Sim. “They are just taking their time, weighing the plus and minus of the projects’ attributes.”

HOW SOME PROJECTS PERFORMED

The top performer last month was The Panorama, a 698-unit project launched earlier this year. It sold 40 units at a lower median price of almost S$1,249 per square foot.

The Waterwoods EC was second, selling 28 units at a median price of S$813 per square foot. City Developments’ latest project Coco Palm was next, with 23 units sold at a median price of about S$1,046 per square foot.

Said Mr Sim: “Some of the previous launches have been selling well because of certain attributes. For example, they are located in prime areas with very established amenities, or near good schools, or basically with good price points. At the end of the day, if you price it nicely and the product is good, people will buy.”

OUTLOOK FOR PRIVATE RESIDENTIAL MARKET

Sales numbers for new private homes have been stagnating since the spike in May, when buyers snapped up 1,488 units. Excluding ECs, developers launched 1,819 units in May.

However, property watchers said the market may soon see a revival in activity, as developers take the opportunity to launch projects before the year-end holiday period. The Highline Residences is already opened for sale, while luxury project Marina One is expected to launch next month.

PropNex’s CEO Mr Mohd Ismail expects the spotlight to be on the “more affordable” mass and mid-tier market segments. He said: “The outlook for the private residential market will continue to be dismal for the rest of 2014 so long as the cooling measures and the Total Debt Servicing Ratio framework remain in their current form.

“New private home sales volume for the whole of 2014 is likely to be about 8,000 to 9,000 units in all.”

Source : Channel NewsAsia – 15 Sep 2014

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