Private Home Sales At New Low

Source : The Straits Times, Jan 16, 2009

December sales of 131 new units cap the worst year since 1990

JUST 131 new private homes were sold last month, down from 193 in November, capping the worst year for new sales in Singapore since 1990.

There were only 4,287 homes sold last year - a striking plunge from the boom year of 2007 when a record 14,811 private home units changed hands.

ST PHOTO: STEVEN LEE

At least it beat the low in 1990, when just 2,526 new private units were sold.

Developers have caught the miserable mood of the market and launched only 157 units of new private homes in December, according to Urban Redevelopment Authority (URA) data yesterday.

That was even lower than the 174 units in October, when buyers and sellers were in shock from the deepening global crisis.

Total launches last year were at a four-year low of 6,114 units, down 56 per cent from a record 14,016 in 2007, according to Colliers International.

Resale deals also fell, from 20,985 units in 2007 to between 7,400 and 7,600 homes. Sub-sale deals fell from 4,863 units in 2007 to between 1,600 and 1,650 units last year, according to CBRE Research estimates.

Yet despite the dreadful sales numbers, property prices held their own.

'Developers generally withhold project launches to monitor the market situation, instead of resorting to drastic measures to reduce prices,' said Knight Frank's director of research and consultancy, Mr Nicholas Mak.

But with economic conditions subdued, home-seekers are increasingly realistic, looking now at functionality before frills, he said.

The URA price index, on the rise since the second quarter of 2004, reversed direction only from the third quarter last year when it declined 2.4 per cent.

Jones Lang LaSalle's head of research for South-east Asia, Dr Chua Yang Liang, expects it to contract further by another 5 to 7 per cent this quarter on the back of weak take-up, after an estimated 5.7 per cent fall in the fourth quarter.

Buying interest should pick up when prices fall further, experts said.

'Should more projects be attractively re-priced in 2009, the number of units launched and take-up can expect to sustain or marginally improve, as there is some latent demand from bargain hunters,' said Mr Mak.

CBRE Research executive director Li Hiaw Ho added: 'The continued moderation of prices should kick-start some level of activity to the market.' Sales of new homes this year are likely to improve to around 5,000 to 6,000 units, he said.

But it will take some time to happen. There may be even fewer launches this month as developers are expected to continue to hold back in anticipation of goodies in next Thursday's Budget, said Colliers International's director for research and advisory, Ms Tay Huey Ying.

Many prospective buyers are preparing for Chinese New Year so sales this month may hit a new low, said Ms Tay.

Indeed, the entire first quarter or even the first half will likely witness slow sales due to the economy and banks tightening credit, property consultants said.

Last month's top-seller was the 104-unit Newton Edge in Makeway Avenue, which sold 43 units at a median price of $1,200 per square foot.

Mr Li attributed the favourable interest to the affordable range of $500,000 to $900,000 for a majority of the units, which are 440 sq ft to 915 sq ft in size.

'The units are a bit squeezy but you are paying less than a million for a property in Newton,' said an industry player.