Muted home sales not a worry

Analysts say demand for HDB flats is strong and private home prices are holding up

Don’t blame it on the action in South Africa.

If the property market in Singapore appears to have been affected by the World Cup fever, it is only because it coincides with the usually slow June school holidays, the Eurozone crisis and a lacklustre stock market.

Sales of new private homes halved last month from the near-record level in April. This month looks to be a quieter one, say property experts.

All in, 1,078 new homes were sold last month, which is still a pretty good tally considering that it was only last December when developers sold 481 units.

On how the World Cup may not be the only cause of this month’s slowdown, DTZ South-east Asia research head Chua Chor Hoon said: ‘Market sentiment was already slowing, so since the World Cup started, many buyers have continued to stay on the sidelines.’

When the market was on the way up as in 2006, transaction activity remained high during the World Cup season, she said.

‘Conversely, in 1998 when the market was down due to the Asian financial crisis, transaction activity was low throughout June to December.’

There are no major launches to excite the market this month, though a few are being lined up.

The Housing Board resale market has also quietened slightly because of the school holidays and the World Cup, but generally demand for HDB flats is still very strong, said ERA Asia-Pacific associate director Eugene Lim.

Although the HDB has ramped up its supply of build-to-order flats, it takes a long time for the impact of increased supply to be felt, said Mr Lim.

It is still early days and the typical cash-over-valuation sum one hears in the market is still around $25,000 to $30,000, he added.

In the private homes market, prices continue to hold, experts said.

If the economy keeps growing, home prices are unlikely to fall this year, but increases will be kept in check by substantial upcoming land supply, Ms Chua said.

More moderate rises are expected for the rest of this year, compared with price rises of 5 per cent and more seen last year, she added.

Among the few new launches lined up for this month is the freehold Stevens Suites in Stevens Close. Yesterday, its developer EL Development held a private preview of the project.

It has only 32 units, which range from 657 sq ft for a 1+study unit to 1,981 sq ft for a four-bedroom penthouse.

It is priced between $1,680 and $2,050 per sq ft, said EL’s managing director Lim Yew Soon.

He did not think the World Cup season is as big a distraction to the property market as it is to the stock market.

Most developers put off launches this month because they feel that buyers will be distracted by the World Cup. But it is ‘more of a self-fulfilling prophecy’, he said.

Next month, Hong Leong Holdings plans to launch the 99-year leasehold The Scala, a 468-unit project in Serangoon Avenue 3.

Other projects lined up for launch this year include a 157-unit project in Thomson Road; the 103-unit The Waterline in Poh Huat Road West; the 172-unit Terrene @ Bukit Timah and the 361-unit Waterfront Gold in Bedok Reservoir, consultants said.

Source: Sunday Times, 20 Jun 2010