112 new private homes sold as sales dip to lows last seen in 2003 Sars period
A MERE 112 new private homes were sold by developers last month, the lowest figure since monthly data was made public amid the boom in June last year.
The October figure is sharply down from 376 units sold in September, according to the data released yesterday by the Urban Redevelopment Authority.
Developers launched just 159 units last month, down from 767 units in September and a 12-month average of 559 units.
Analysts suggest last month's very thin sales are comparable to the first quarter of 2003 when the Sars outbreak crippled economic activity. Developers sold just 427 units of new private homes then.
In the first three quarters of this year, sales of private homes slumped to 3,890 units, a far cry from 14,811 for all of last year.
'The fall in the number of units launched was largely due to an obvious weakening in economic conditions, and Singapore's entry into a technical recession,' said Knight Frank's director of research and consultancy Nicholas Mak.
'In October, all major stock markets globally suffered their worst performance in decades. Singapore was not spared. In the face of such massive losses in the bourses, both sellers and homebuyers retreated to the sidelines, resulting in the low launch and sales volume.'
Things were so bad last month that some projects - among them a 59-unit landed project Watten Residences - recorded no sales at all.
Since monthly data was made available, last month was the first with not a single sale of a non-landed private residential unit at above $2,500 per sq ft (psf), Mr Mak said. In the high-end market, two condo units were sold at $2,306 psf and $2,407 psf.
There were a few quirks in the figures. For instance, a mass market condo, Lakeshore in Jurong West, sold for a relatively high $1,038 psf, said Savills Singapore's director of marketing and business development, Mr Ku Swee Yong.
Two posh 99-year leasehold bungalows at Sandy Island at Sentosa Cove were sold for a high $2,033 psf and a possible record price of $2,169 psf, or above $13 million each.
CBRE Research executive director Li Hiaw Ho said such deals last month seemed to show prices have remained fairly stable in the past two months.
'However, it is very likely that the persistent thin volume will have a downward effect on prices.'
Overall, the only project that did well was a 12-unit cluster housing development, Jewel, near Serangoon New Town, which caught the market in time. All 12 units were sold from $286 psf to $342 psf, or $1.3 million to $1.4 million each.
Over 60 per cent of the 159 units launched were landed properties, marking the first time that landed supply has exceeded non-landed supply but demand was far weaker, said Jones Lang LaSalle.
'In this current market, pricing is a great determinant of demand,' said its local director and head of research for South-east Asia, Dr Chua Yang Liang.
Chesterton Suntec International's head of research and consultancy, Mr Colin Tan, said: 'The stand-off is continuing as there are still many unrealistic sellers out there taking their cues from the quarterly price index.'
The index, which has showed only a small drop, seemed to suggest the market is still in fairly good shape.
'If the correct market signals are not given, the stand-off between buyers and sellers will likely continue with prices edging down very slowly,' he said.
'At the end of the day, sellers may not sell until they are forced to. This will occur when there is panic selling... The sharp correction will affect confidence.'
Property consultants are expecting the sluggish sales momentum to last the rest of the year and possibly through to Chinese New Year in late January given economic and job market uncertainties.
'It may well be that the fourth quarter will see a total sales volume of around 500 units, a level that was last seen in the first quarter of 2003,' said CBRE's Mr Li.
Savills' Mr Ku believes that transaction levels of new homes will remain roughly around 150 to 200 units for the next six months, with possibly 500 to 700 sub-sales and resale deals per month.
'The average number of monthly transactions for the last 10 years is about 1,300 per month, so we should be seeing lower than average transaction volumes.'
HIT BY STOCK MARKET BLUES
'In the face of such massive losses in the bourses, both sellers and homebuyers retreated to the sidelines, resulting in the low launch and sales volume.'
Knight Frank's director of research and consultancy Nicholas Mak
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