SLOW DOWN OF PRIVATE HOME SALES IN SEPTEMBER 2010.

The Sail @ Marina Bay

Reports of private home sales slowing in September 2010 by May Wong from Channel News Asia:

The number of private residential homes sold last month fell 28 per cent on-month to 911 units.

This is the second lowest monthly sales so far this year, behind June’s 847 units.

Property watchers said this comes as no surprise, given the cooling measures introduced by the government on August 30.

The Urban Redevelopment Authority (URA) said the bulk of units sold – 601 units – were in suburban areas or those outside the central region.

URA said a total of 1,058 units was launched in September.

NV Residences, a 642-unit project in Pasir Ris, was the most popular condominium last month. It sold 347 units at a median price of S$859 per square foot.

That surprised some property observers, as the condominium was one of the first few launched right after the government announced its latest cooling measures.

Some of these measures include reducing the maximum bank loan amount for existing home owners who want to buy a second property, and doubling the minimum cash payment from 5 per cent to 10 per cent of the home’s valuation.

Tay Huey Ying, director for Research & Advisory at Colliers International, said: “Most of us actually expect the cooling measures to have the greatest impact on the mass market segment.

“To have NV Residences performing so well in spite of the cooling measures, I think that is a rather encouraging situation. We do expect developers’ launch volume to stay ahead of sale volume, mainly because it would be in the interest of developers to push out projects before further price pressure.”

However, many observers said the government should be pleased to see the measures showing impact.
Donald Han, who is regional managing director of Cushman & Wakefield, said: “Those who were already trying to cross the fence would stay on the fence, waiting for clearer signals, in particular, the element of speculators who were fairly rampant in the past. I think in this market where you have government cooling measures, it prevented these particular set of buyers from taking position.

“The demand remains fairly strong. The underlying reasons for that is obviously the huge liquidity that we are seeing in the marketplace, plus the fact that it is being backed by a very low interest rate environment.”

For the rest of the year, property observers expect between 800 and 1,000 units to be sold every month. That is because the fourth quarter is traditionally a slower period and they said that the government cooling measures would have taken full effect by then. For the whole of 2010, analysts expect a total of over 14,000 units to be sold.

Ms Tay said: “That is actually a very robust figure and we do not foresee that number being sustained into 2011. “A healthier range would likely hover around 9,000 to 10,000 units a year, mainly because prices have already burst a historical peak and buyers’ resistance have already started to set in, and on top of that, with the latest round of cooling measures, which would affect marginal investors, I think this will have the impact of moderating sales volume moving forward.”

Property experts said the private residential prices will increase between 13 and 17 per cent for the whole of this year.

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