Sales of new private residential homes in Singapore look set to plateau this quarter.
According to the Urban Redevelopment Authority (URA), 593 units were sold in November, up by about 5% from the previous month. Market watchers said they expect overall prices to rise by 5-8% for the last quarter of this year. This will bring the full year price increase to between 27% and 30%.
Based on the latest figures, analysts said they expect the number of units sold this quarter to fall below 2,000, compared to 5,129 in the second quarter and 3,450 on the third quarter.
Analysts said the withdrawal of the deferred payment scheme took some wind out of the market, but strong economic fundamentals meant the mass market segment will see strong interest well into 2008.
"I think we'll probably be in a region of about 5-8%, in terms of the increase (in price) for the fourth quarter. That brings the overall close to about 30% and I think that's still respectable, considering that the main movement of the market came about during the first 7 months of this year," said Donald Han, Managing Director of Cushman & Wakefield.
In November, 80% of the units sold were in the mid-tier or mass market segments. This follows from October, when there was a more than 50% drop in the the number of units sold in the core central region.
However, prices held up despite another bout of bad news over the US housing mortgage crisis last month.
The Ritz-Carlton Residences, for example, sold 2 units out of 3 put up for sale at S$4,515 per square foot.
Consultants said developers are turning to untapped overseas markets like South Korea and the Middle East.
Han said: "There's been also potential focus on targeting the Russian market. There are a lot of high net worth individuals coming from Moscow looking to buy properties in Singapore.
"These are all non-traditional areas that developers are targeting on, and some have already embarked on this, other than targeting on the usual suspects of foreign investors from Indonesia or Hong Kong."
About 15,000 units are expected to be sold for the whole year, or 34% more than in 2006.
Analysts are forecasting property prices to go up by 10-15% next year. - CNA /ls
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