More Private Residential Units Launched, Sold In August

Source : Channel NewsAsia, 17 September 2007

Despite the market turmoil in recent months over the US housing credit crisis, property developers are still seeing strong demand for new residential units.

Numbers out from the Urban Redevelopment Authority (URA) on Monday showed that property developers not only launched more units in August than in July, but they have also made more sales.

Nonetheless, market watchers said sentiment has been weighed down by the US sub-prime mortgage crisis.

Out of 1,874 residential units that were launched by developers during August, about 1,720 – or more than 91 percent – were snapped up.

This was higher than the 1,378 units sold in July.

Colin Tan, director of Chesterton International, said: "Actually, from June to July to August, it's always been increasing, but for August, we realised it is due to two projects - The Soleil at Sinaran and The Parc Condominium at West Coast Walk. That did very well."

The two projects alone accounted for more than 1,000 units sold or 61 percent of the total for the month.

The month-long Hungry Ghost Festival, which began in the later part of August, did not bring down the number of buyers. Developers said that was because most of them were foreigners.

But a bigger concern was how the sub-prime crisis would affect the industry.

Mr Tan said: "Partly because of the sub-prime, sentiment has generally been affected. There has been a slowdown in activity. It's not worrying. It hasn't come to a standstill, but it has come down to more sane levels. Prior to the sub-prime, we were actually really up to our necks with work."

Property consultant CB Richard Ellis estimated that the total number of new home sales for the third quarter would be around 4,000 units – about 20 percent lower than the 5,129 units sold in the previous three months.

It said the drop may be due to the more cautious mood of home buyers.

Meanwhile, Knight Frank said the lower volume could be seen as a slight market correction or a breather for the market, which has been experiencing exceptional sales levels. - CNA/so