Private property market cools

Number of caveats lodged in May down

It’s official – Singapore’s private residential property market cooled significantly last month, going by the number of caveats lodged.

Only 1,979 caveats were lodged, down 41 per cent from April, according to latest figures from the Singapore Institute of Surveyors and Valuers (SISV). District 4 saw the biggest drop in caveat numbers, down 76 per cent. The residential district includes the Sentosa, Keppel Bay and Telok Blangah areas.

This was followed by Districts 1 and 2, covering Marina Bay and Shenton Way, falling about 75 per cent.

Caveat numbers across all districts in Singapore fell in May from the month before, ranging from 57 per cent for the Orchard area to a 24 per cent drop for District 5 spanning West Coast and Pasir Panjang.

Property analysts told MediaCorp the key reasons for May’s steep fall in volumes were buyers waiting for prices to decline and fewer new launches by developers.

Coupled with World Cup fever this month, observers expect caveats for these next two months to remain constant at up to 2,400 units per month – translating to a roughly 21-per-cent decline in caveats compared with 3,053 in March.

Mr Chris Koh, director of Dennis Wee Group, said: “Genuine buyers and investors who want to buy a home would have bought it last year before the start of the property boom. So, now it’s mostly investors waiting for cheaper home prices.”

Despite the caution in the property market, Sentosa Cove was in the news recently after a bungalow was bought by a Chinese national for a record $36 million, or around $2,400 per square foot.

But Mr Mohamed Ismail, chief executive of PropNex, does not expect cooling sales volumes to hit demand for Sentosa Cove properties.

“Foreign investors keen to buy landed property currently can only get Sentosa Cove. As such, demand is there,” he said.

According to PropNex, prices of landed properties on Sentosa currently average $2,000 per square foot but due to the World Cup, investors can expect prices to fall slightly to $1,800 to $2,000 per square foot.

Despite China possibly tightening its monetary policy in coming months and the Eurozone debt crisis, Mr Mohamed Ismail does not expect foreign investors’ appetite for residential property to be dampened.

“Many China nationals believe Singapore’s property will rise in the long run,” he said.

Mr Koh of Dennis Wee Group also believes there will be buying support for properties, given limited land supply in Singapore and projected good economic growth in the next few years.

Source: Today, 22 Jun 2010