By Wong Siew Ying | POSTED: 15 Aug 2013 1:12 PM | CNA

SINGAPORE: Sales of new private homes in Singapore plunged in July.

Figures from the Urban Redevelopment Authority show that just 481 units of new homes were sold last month, down 73 percent from June. 1,806 units were sold in June.

This is the lowest sales volume since December 2009.

New private home sales in July came in below market expectation as the total debt servicing ratio (TDSR) framework implemented in June has hit a lot harder that expected.

Ong Teck Hui, national director of research and consultancy at Jones Lang LaSalle, said: “The TDSR makes loan assessment more difficult, so you can’t close the deals as fast as before. It has also impacted several groups of buyers, especially those that are already highly leveraged, those who are dependent on proxy borrowers and guarantors arrangements, and also those with variable income.”

In fact, analysts said TDSR has been more “devastating” on sales volume compared to the cooling measures introduced in January.

The five new projects launched in July had a take-up rate of just 23 per cent, while the take up rate of new launches was 57 per cent in February, following the slew of cooling measures.

The top-selling project during the month was Vue 8 Residence in Pasir Ris, which moved 63 units, followed by Bartley Ridge at Mount Vernon Road with 25 units sold.

Including executive condominiums (ECs), 593 new homes were sold in July, down from 2,119 units transacted in the previous month.

The best-selling EC project was Forestville at Woodlands, which sold 78 new units.

Developers launched a total of 557 new units last month, compared to 2,421 units placed for sale in June.

Alice Tan, associate director and head of consultancy and research at Knight Frank, said: “It actually demonstrates that the market is exercising caution from developers and the home buyers side. The price quantum becomes a very important consideration right now.

“Going forward, as caution continues to prevail in the market, if sales volume continues to remain slow, there could be some downward pressure in terms of prices for the private residential market in in the next few quarters ahead.”

Market watchers project that home prices could fall by some three to five per cent on average if buying sentiment remains poor.

Some analysts expect sales to pick up slightly in August, at 500 to 700 units. That is likely to be driven by strong demand for the 337-unit development, The Tembusu, located near Kovan MRT station.

Looking ahead, OrangeTee said transaction volume is likely to rebound in September and October, when more new projects will be launched.

Christine Li, head of research and consultancy at OrangeTee said: “Projects that are located next to MRT stations will still be a draw among buyers and investors. A good number of highly anticipated projects are slated to be launched in the second half and we expect fairly good take-up rates for them if they are attractively priced.”

For 2013, market watchers expect between 15,000 and 18,000 units of new private homes to be sold, down from 22,000 units in 2012.

– CNA/xq/ac