From iTODAY:New private residential home sales hits 2012 low

Wong Wei Han | 18 Dec, 2012 6:00 AM

SINGAPORE – Sales of new private residential homes saw a steep decline last month, hit by a combination of the dampening effect of property market cooling measures and developers delaying the launch of new projects.

Figures from the Urban Redevelopment Authority showed only 1,087 private homes were sold last month, down 44.2 per cent from October’s 1,948 units to mark the lowest monthly transaction volume so far this year.

“It is no doubt that we are seeing some slow down of new home purchases mainly because developers are holding on to the new launches till after the festive seasons The market slows down as Singaporeans travel during this period,” said PropNex Realty CEO Mohamed Ismail.

Developers launched 773 units last month, also the lowest monthly amount so far this year and a 52.7 per cent on-month decline from the 1,633 units launched in October.

While the last two months of the year are traditionally quiet for the property market, the 36 per cent on-year drop in last month’s sales suggests the decline was not purely seasonal.

The sharp decline reflects the impact of tighter property loan rules introduced in October, said Jones Lang LaSalle’s National Director of Research and Consultancy Ong Teck Hui.

“The 773 private homes launched for sale in November is way below the average monthly launch of 1,987 units for the first 10 months of the year … Developers are holding back launches in view of demand uncertainties arising from the measures,” said Mr Ong.

Despite the impact of cooling measures and the slowing economy on demand, analysts believe the fundamentals of the market remain strong. “The low sales numbers for November does not detract from the fact that had there been a substantial number of new launches, demand would have followed suit,” said Savills Research Head Alan Cheong.

“Although 1,087 units were sold in the month, only 773 units were launched, representing a sales to launch ratio of 1.4. For the month of October, this ratio was 1.19.”

Looking ahead, “the new private residential market is expected to rebound in the first quarter of 2013, especially as developers line up some exciting hot buys in the beginning of the year,” said Mr Mohamed Ismail.

But others are less bullish, citing the dampening effect of economic uncertainties.

“While the market entered 2012 with more positive sentiments leading to a sales rebound, we are approaching 2013 with … a more challenging economic environment. One would be less confident in expecting a similar rebound,” said Jones Lang LaSalle.

Tighter property loan rules

A cap of 35 years was imposed on new property loan tenures in October as the latest of a string cooling measures, with the government responding to growing concerns of price hikes and the threat of housing bubble developing in a low interest rate environment.