Private home sales fall

Sales in May less than half that in April

The feverish property market lost some of its sizzle last month, as Europe’s debt crisis and the resulting retreat in global stock prices sent prospective home buyers scurrying to the sidelines, but analysts said underlying sentiment would likely remain firm, supported by Singapore’s strong economic fundamentals and steady demand.

Data released yesterday by the Urban Redevelopment Authority (URA) showed just 1,078 units of new private homes were sold last month, less than half the 2,208 units sold in April.

The slowdown did not surprise analysts, coming as the Singapore stock market fell by 7.5 per cent in May alone.

“In the first five months of 2010, developers sold a total of 7,666 private homes. Such a rapid pace of sales is not sustainable. All it takes is for some event to prick the confidence bubble and the sales volume will deflate,” said Mr Nicholas Mak, a real estate lecturer at Ngee Ann Polytechnic.

Despite the sharp month-on-month volume decline last month, analysts said the number of units stayed healthy at above the 1,000-unit mark since January. They added home prices would continue to rise, albeit at a slower rate.

“Based on the strength of the Singapore economic fundamentals, there are sufficient factors to exert upward pressure on private home prices for the rest of this year, but at a slower pace. For the whole of 2010, the average capital values of private residential properties could increase by 10 to 15 per cent.” Mr Mak said.

But for now, June is likely to continue to be a slow month amid uncertainty in Europe and as many people take time off to enjoy the World Cup.

Dr Chua Yang Liang, head of research of property consultancy Jones Lang LaSalle said: “”Both developers and buyers are expected to hold back their launches and purchases in June on the back of the heightened uncertainty arising from the euro zone debt crisis. As a result, the sales volume is expected to moderate a further 15 to 35 per cent to around 650 to 850 units.”

Data from URA showed a decline in transactions across all segments in May.

Homes located in the city fringe were most popular during the month with 451 transactions, but this pales in comparison with the 1,044 deals done in April.

Sales of new homes in the city dipped to 179 units last month from the 393 units sold the month before. Meanwhile, sales volume of homes in the suburban areas fell to 448 units from 771 units in April.

Developers placed a total of 1,134 units for sale last month, significantly lower than the 2,085 units launched in April.

Source: Today, 16 Jun 2010