Ghost Month Won't Spook Buyers

Source : The Sunday Times, August 23, 2009

Developers go ahead with launches, hoping buying fervour will overcome superstition

Strong buying momentum in the property market is expected to hold up a traditionally slow month of sales in August as the Hungry Ghost Month - the seventh month of the lunar calendar - kicked in last Thursday.

For non-superstitious home buyers, the good news is developers seem to be going full steam ahead with launches.

The property market typically goes into a lull during this period, which ends on Sept 18 this year, as many Chinese consider it inauspicious to make housing commitments, move house or start renovation work at this time.

But practicality often overrides superstition, especially when buyers are presented with attractive options.

Property consultant Nicholas Mak, who is also a Ngee Ann Polytechnic real estate lecturer, said developers would likely want to 'capitalise on the buying momentum and current positive sentiment' and push the projects out.

One keenly watched upcoming launch is NTUC Choice Homes' Trevista, located at the junction of Toa Payoh Lorong 2 and Lorong 3.

The developer told The Sunday Times that the launch will go ahead next weekend, and market watchers are anticipating crowds to swamp the showflat despite the Hungry Ghost festival.

This is primarily due to the popular location of the 590-unit leasehold condominium.

Mr Mak noted that it has been more than 10 years since a condominium was launched in Toa Payoh. 'I won't be surprised if there is a long queue. If it is attractively priced, buyers will bite, regardless of superstition,' he said.

Trevista's marketing agents ERA Asia-Pacific and CB Richard Ellis (CBRE) say the indicative price has not been disclosed by the developer, but Mr Mak reckons it might be priced in the $900 to $1,000 psf range, similar to city-fringe property prices.

The project of three 39-storey blocks will offer the interest absorption scheme, where buyers can postpone the bulk of payment until completion, which is expected to be late 2012.

Elsewhere, in Balestier, estate agents have started marketing special previews for freehold condominium Prestige Heights, developed by the Fragrance Group.

The 18-storey condominium will offer 154 units and is said to be priced from $1,100 psf.

The seventh month weighed heavily on August sales figures last year - only 325 private homes were sold by developers - but this was also coupled with the impact of the global financial crisis.

It is expected to have far less impact this year.

While analysts are predicting that this month is unlikely to match July's stunning figure of 2,767 private units sold, sales will still be healthy, they said.

CBRE executive director of residential Joseph Tan estimates that 1,500 units will be sold this month.

This number includes units that are sold from projects that are currently being marketed as well as new projects that will be launched over the rest of the month.

This number also takes into account that some transactions will spill into September, especially for projects that are launched this week.

The 1,500 level is healthy, considering that since market sentiment improved in March, the monthly sales from March to June ranged between 1,200 and 1,800 units, said Mr Tan.

ERA's associate director, Mr Eugene Lim, observed that the profile of buyers has been changing over the years.

'Things literally came to a standstill five to 10 years ago during the seventh month, but buyers now are younger and are less superstitious,' he said.

But Mr Mak feels the Hungry Ghost Month will still have an impact to a certain extent.

'There are some buyers who will still be reluctant to make big commitments,' he said.

One certainty, he added, is that the period is unlikely to affect prices as developers will not revise prices downwards given the current optimistic sentiment in the property market.

CBRE's Mr Tan said there will be 12 to 15 projects launched during the lunar seventh month this year, including re-launches.

'Generally, if it is a good product, at any time of the year, it will be able to sell,' he said.