Private Home Launches At Record Low

Source : TODAY, Friday, January 16, 2009

THE grey clouds hovering over the private property market here have gotten even darker.

Islandwide launches of new private homes last month slumped to a record low since the Urban Redevelopment Authority (URA) started releasing the monthly data in June 2007. Developers placed just 157 units for sale last month, down nearly60 per cent from November. And out of these, they managed to sell 131 units.

“Looking at the numbers for the period from October to December, they have been quite consistently low,” said Mr Donald Han, managing director of Cushman and Wakefield. “It is reflective of a subdued market suffering from the cold winds of the financial market.”

For the whole of last year, 4,370 private homes were sold, less than a third of 2007’s 14,811 units.

Mr Colin Tan, research director from Chesterton Suntec International, said: “It tells you one thing, the market is unhealthy. While it is easy to blame the festive period for a dip in sales, it is so low that there is nothing normal about it. Sales of new units have been so low for the past three months that you cannot even excuse it as a blip.”

Based on the latest URA data, it is evident that some developers have been reducing prices to lure buyers.

A total of eight units of the luxurious Ritz Carlton Residences, located at Cairnhill Road, were sold at a median price of $3,086 per square foot. This represents a 40-per-cent discount from the median selling price of three units at $5,088 psf in Dec 2007.

Mr Tan said: “Prices will be coming down, but how it unfolds could be decided by the banks.” He warned that if unemployment rises, more homes might be seized by banks to be sold off to recoup losses, putting more downward pressure on prices.