Wait-and-see over new property rules

More people are sitting on the sidelines but prices unlikely to head south any time soon

Last Wednesday, one mass market condominium project in Pasir Ris attracted 160 buyers on its preview.

Many property experts are surprised because the Government had just announced measures aimed at cooling the market on Aug 30.

The market has since largely settled into a stalemate, as buyers wait for prices to fall while sellers refuse to budge.

Property experts say robust sales at the 642-unit NV Residences in Pasir Ris Grove have not affected the general mood in the market.

‘Most people are still in the wait-and- see mode,’ said ERA Asia Pacific associate director Eugene Lim. ‘NV Residences is near the MRT station and keen buyers got the first cut. This was the initial response, which is usually good,’ he said.

‘We’ll have to see how quickly the rest of the project sells.’

Experts feel buyers were likely drawn to the project’s affordable price. Also, marketing agents had started drumming up interest in the project some time back.

ECG Property chief executive Eric Cheng said: ‘We can’t judge the market by one launch. There are other projects that are not performing as well. I believe market sentiment has been affected by the measures and developers will have to be realistic.’

Property experts say sales volume will drop as more prefer to sit on the sidelines. They are not sure if prices will drop but if they do, it will not be any time soon.

Mr Cheng’s advice is: ‘If you’re not in need of a property immediately, you can wait a while. We feel that prices will stabilise or fall slightly by 3 per cent to 7 per cent.’

‘I think the HDB resale market prices will correct first,’ said Mr Colin Tan, Chesterton Suntec International’s research and consultancy director.

‘If we bar investment monies from flowing into this HDB segment, prices may start to correct, especially if these hot monies have been mainly responsible for the rise in resale flat prices.’

However, liquidity is still very strong at the moment, said Mr Tan.

‘It is a global problem and it is not easy to tackle… We may have slowed down the price increases, but prices are still rising.’

Another expert said: ‘We will have to wait till the end of the year to see if there is a price correction in the HDB market.’

But certainly, ‘sellers can no longer ask for high COVs unless their flats are very special. For example, if they were very nicely renovated’, said ERA’s Mr Lim.

An experienced industry source who declined to be named said: ‘Things won’t likely change very much in the next few months.

‘I think people will still buy and prices may still rise. We will have to wait till perhaps early next year when supply kicks in, in both the HDB and private markets.’

The Government will offer more than 16,000 new build-to-order flats this year and up to 22,000 next year. It is also pushing out a record amount of land for sale in the second half of this year.

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