FOR nine months over an unfolding global credit crunch, developers here held back from pushing out condominiums and houses into the market. Homebuyers found little variety in the showrooms.
But when the supply gate was unlatched in June, interest poured back in — especially into the mass-market segment — resulting in a bumper month for sales despite the recent stock market and economic gloom.
In June, 801 private residential units were sold out of 1,069 launched, according to monthly data released yesterday by the Urban Redevelopment Authority (URA). The two figures are the highest since August 2007. They also represent a surge from May, when only 476 units were launched and 453 sold.
“Developers are trying to launch their projects before the lunar seventh month. That is traditionally a very slow period for the whole market,” explained Colliers International’s research director Tay Huey Ying.
Superstitious buyers generally stay away during what is known as the Hungry Ghost Month, which starts on Aug 1.
Ms Tay said the dearth of launches before Jube had led to “pent-up demand”, which was boosted further by “realistic” prices. As the United States subprime mortgage woes weighed on buying sentiment, developers have had to ditch their “aggressive pricing strategy”, she said.
For instance, the recently-launched Dakota Residences along Geylang River reportedly drew an average price of $970 per square foot (psf), which is below the range of $1,000-$1,100 that co-developer Ho Bee Investment had expected mid-last year (2007).
Such suburban projects accounted for the bulk of launches in June. About 44 per cent of the new launches came from the Rest of Central Region, followed by 33 per cent in the Outside Central Region.
The luxury sector is seeing fewer launches, said Knight Frank’s consultancy and research director Nicholas Mak, because most of these high-end buyers are investors, not owner-occupiers. And investor sentiment is weak right now, he explained. In contrast, mass-market homebuyers are in the market for a live-in place.
June did not clock any transactions above $4,000 psf, the level generally viewed by analysts as indicative of exuberant demand. The highest price last month was $3,653 psf for a unit in Nassim Park Residences.
Asked if the fresh worries in the US financial industry would hurt property demand here in the weeks ahead, Mr Mak said July’s data should still be healthy.
August, however, may see sales volumes dip – if the worries persisted -- followed by slight price contractions in the second half of the year.
“I think homebuyers will find economic problems scarier than the Ghost Month,” said Mr Mak.
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