Source : TODAY, 16 Aug 2007
The subprime crisis half a world away — coupled with the Hungry Ghost Festival in Asia — may mean a quieter month for property agents in Singapore.
August — traditionally a slower month because of superstitious house-buyers — will be hit by the double whammy of poor purchasing sentiment that’s spilling over from the US because of the subprime saga, said analysts.
Developers are likely to delay launching condo projects as they wait for the jittery stock markets to settle, said Mr Nicholas Mak, Knight Frank’s director of consultancy and research.
This was also what happened during the February/March stock market correction, he noted. “The market correction in February did not present any systemic risk, but this time round with the subprime issue popping up now and then, it appears the market is more volatile, and that can make developers more cautious.
“If you look at the number of property advertisements that usually appear mid-week for launches on the weekends, it now appears to be very quiet,” he pointed out.
Already, Singapore property mogul Kwek Leng Beng is reportedly seeing some foreign investors deferring their purchases on concerns over the subprime mortgage woes.
This cooling down period comes after a month of stellar private home sales in July.
The latest Urban Redevelopment Authority (URA) figures on the sale of new private homes showed 1,378 units, or almost 20 per cent more units, were sold in July compared to that of a month earlier.
Overall, the median price achieved for a unit in July was $1,609 per square foot (psf), a 22.2 per cent increase from the previous month’s $1,317psf.
The figures, released yesterday, are the second update since the URA first started unveiling more comprehensive data last month to inject more transparency to the market.
Most interestingly, it showed that the number of units sold above $4,000 psf soared by more than 356 per cent to a new record of 72 units, compared to just 16 units in June.
“This is a significant milestone in the evolution of Singapore’s private residential market given that before June 2007, units that were sold above $4000 psf were almost non-existent in Singapore,” said Mr Mak.
The super-luxurious Scotts Square development alone posted 150 sales, of which 64 were sold at between $4,000 psf and $4,499 psf, with the remaining 86 units sold between $3,500 psf and $3999 psf.
The Marq On Paterson Hill scored $4,044 psf in June and $4943 psf in July - the highest median price achieved in the two consecutive months.
Other properties in the $4,000 psf-club includes The Orchard Residences and Cliveden at Grange.
Said Colin Tan, head of research, Chesterton International: “The prices were on the whole better, and the volumes were also better. It’s consistent with the trend of the last quarter and it reflects the fact that Singapore is doing quite well selling itself a place to invest.”
Overall, private home prices have risen some 13 per cent in the first six months of this year.
“In this current up-cycle, I think there has been more investment buying rather than speculative buying. Because we do not hear of so many stories of people buying properties, and then maybe flipping it within a week,” he added.
And while the number of new private homes transactions may slow down this month, analysts don’t expect prices to go down as well.
“It will probably show up as lower sales volumes rather than lower prices,” said Mr Tan.
“The gestation period of property development in general is about two years, so prices will be a little sticky coming down. Developers are not likely to rush to lower prices at the slightest problem.”
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