October home sales slow down

Only 355 private homes sold in the first nine days of the month

OCTOBER appears to have been a much quieter month in the private property market than recent months.

Just over 350 private homes were sold in the first nine days of the month - the only solid figures available so far.

Property consultants say the pace of buying did not appear to have picked up for the rest of the month. They say the market seems to be pausing for breath as buyers resist higher prices.

Savills Singapore said caveats lodged from Oct 1 to 9 - the only available October caveats - show 355 residential units were sold, including just 40 units of new homes and 52 sub-sale units.

In comparison, 787 units were sold in the first nine days of September, including 276 new homes and 102 sub-sale units, it said.

In the first nine months of this year, new private home sales hit a recession-defying 12,828 units, resales touched 10,185 units, while sub-sales totalled 2,780 units.

The quiet market reflects price rises over the past six months, property experts said. The Urban Redevelopment Authority's quarterly price index registered a 15.8 per cent rise - the largest in 28 years - in the July to September period.

Market watchers say mass market prices have now risen to previous peak levels.

Mid-tier prices are about 10 per cent to 15 per cent off those peaks while high-end prices are still about 25 per cent below.

Home prices have generally stabilised, and are likely to rise moderately in line with economic recovery, said DTZ head of South-east Asia research Chua Chor Hoon.

'In the past six months, the market had raced ahead of economic fundamentals. The high sales volume was not sustainable so what we are seeing now is a return to more sustainable levels,' she said.

Considering that the 10-year average for new home sales is 8,200 units, last year's 4,264 units was very weak, she said.

Sales of new homes this year are likely to be similar to 2007's record of 14,811, but next year's sales should drop back to close to the average, said Ms Chua.

The Government's mid-September measures to calm the property market also caused buyers to think twice, especially with prices rising, experts said.

By then, the market was already starting to slow a little, after surging furiously for several months, said Knight Frank chairman Tan Tiong Cheng.

'At the end of last month and the start of this month, after the Government removed the interest absorption scheme, buyers were concerned about the impact of the move and what's next,' said PropNex's chief executive Mohamed Ismail. 'But for us, resales have picked up.'

The market for new launches, however, appears quieter as there were no major suburban launches this month - the star performers this year.

'October is quieter compared with the previous months. Generally, launches have moved from the mass market ones to the mid- to higher-end projects, which entail larger price quantums. So some buyers may need a longer time to consider and commit,' said Savills' residential director Phylicia Ang.

This month's few big launches include Lincoln Suites, next to United Square mall. The project's developers - Koh Brothers, Heeton Holdings, KSH Holdings and Lian Beng Group - say they have sold 51 of 56 units released in a soft launch earlier this month.

Most of the units sold were studio units as well as the one- to two-bedders. The condo will be launched today.

In the first nine days of the month, only nine new units in districts 9, 10 and 11 were sold, compared with 144 in the same period last month, caveats showed.

The rest of the year may be relatively quiet, though buying might step up in the first quarter of next year, experts said.

Source: Straits Times, 31 Oct 2009