Private Home Sales Jump In May

Source : Channel NewsAsia, 16 June 2008

There has been a sharp pick-up in the number of private home sales in May - more than 441 homes changed hands, about 56 per cent higher than the previous month.

Despite the spike, analysts said it is premature to talk about any strong rebound in the property sector.

Colliers International's director of research and advisory, Tay Huey Ying, said: "I wouldn't say that this set of May numbers give a positive indication that the market is moving. But I think looking at last six months' developer launches and sales volume, the market has reached a stable state, with launch volumes at 400-450 range, and sales volumes at 300-350 range.

"The fact that market can reach this consistently, despite prices remaining stubbornly firm, this means that the current price levels are well supported by homebuyers."

Analysts added that even though May numbers come as a pleasant surprise, this bump upwards is also typical of the yearly property cycle.

Propnex Realty CEO Mohamed Ismail said: "The number has picked up a fair quantity compared to April. Generally speaking, the second quarter usually does better than the first quarter. Things start to pick up, and in the month of April, May, June, July, one can expect (the) numbers to grow."

Ms Tay pointed out: "Monthly fluctuations in developer sale and launch volume (are) to be expected. But this set of May numbers... is indeed a very pleasant surprise."

About 61 per cent of homes sold in May were under S$1,000 per square foot, suggesting that purchasers are genuine homebuyers, rather than speculators.

Analysts said a large decline in prices is unlikely going forward, although a marginal dip of one to two per cent may be possible.

"This is, to an extent, a buyer's market. On the other hand, developers are not bringing the price down drastically. Many (are) holding prices because (the) fundamentals of economy and demand of such properties (are) still there. So I don't expect prices to slide down," said Mr Ismail.

Knight Frank and CB Richard Ellis also noted that prices have stayed firm, contrary to market expectations.

Although some analysts called this a buyer's market, they also noted that sellers are taking a more measured approach.

Colliers said developers are likely to stay off launching luxury and super luxury projects until there is a clearer sign of market recovery. - CNA/ac