Private home sales fall in December
By Millet Enriquez | Posted: 16 January 2012 1259 hrs
SINGAPORE: Sales of new private homes in Singapore fell 63 per cent in December to 632 units, according to data released by the Urban Redevelopment Authority (URA).
That’s significantly lower than the 1,702 private homes sold in November.
Analysts said that’s the steepest monthly decline since 2009, when the government scrapped the Interest Absorption Scheme (IAS).
And sales volume could dip further as buyer’s sentiment remain cautious.
Units at The Palette in Pasir Ris were among the top sellers in December.
Amidst the lull of the holiday period and the latest round of property cooling measure, the project managed to book 61 units.
Analysts said private homes in suburban areas will continue to dominate sales volume in the coming months.
In 2011, a total of 11,272 units were launched in the area, with 10,404 units sold. They accounted for over 60 per cent of launches and sales volume last year, said Colliers International.
Donald Han, vice-chairman, Cushman & Wakefield, said: “We expect more launches particularly in outside the central region. Why? Because the government has a slew of Government Land Sales Programme over the last 18 months and majority of these Government land Sales Programme has to be translated into to new project launches by developers.”
All in, some 489 units were sold in the outlying areas in December.
In contrast, only 35 units were sold in the prime districts.
Meanwhile, a total of 108 units were sold in the city fringes.
As expected, the introduction of the Additional Buyer’s Stamp Duty (ABSD) has put off many buyers in the high-end home segment, particularly foreigners.
Colin Tan, head of Research and Consultancy, Chesterton Suntec International, said: “The sales are quite dismal and I think it’s reflective of the kind of shock that the market received. And I think given the current numbers, I think the weak sales volume will persist.”
Experts said sales volume could drop further to around 600 to 1,000 units in the next two months as buyers take a wait-and-see approach.
For 2012, analysts said demand for new homes could fall by 20 per cent while prices could drop 10 to 15 per cent.
Ku Swee Yong, CEO, International Property Advisor, said: “Developers could do several things. Other than incentives and discounts, developers could also increase the quality and specifications of the products they are building in order to maintain the prices.”
Prices will likely remain flat for the next few months. But as sales volumes drop, analysts said developers may consider cutting prices. And by March, developers could start competing for buyers.
Han said: “When the dust settles, I think the market activity will come back again in terms of property activity mainly because of the low interest rate environment that we have.
Overall, there were 16,027 private homes sold in 2011 – a slight dip from the 16,292 units sold in 2010.
Source : Channel NewsAsia – MediaCorp Pte Ltd Copyright