POSTED: 17 Feb 2014 13:12 | CNA


New private home sales in Singapore remained in the doldrums in January, as developers held back launches and lending restrictions depressed demand.

According to data from the Urban Redevelopment Authority (URA), developers sold just 565 new private homes last month, up from December’s four-year low of 259 units.

Last month’s figure was, however, well below the 2,028 units sold in January 2013.

Singapore’s residential property market has slowed since the middle of last year, following moves by authorities to cap the amount of money people can borrow.

Investors are also concerned about the upcoming supply of new units, and property analysts say private home prices could fall by as much as 15 percent this year.

In the final quarter of 2013, private home prices fell 0.9 per cent from the previous three months — the first decline in nearly two years.

Developers in Singapore sold around 15,000 new homes last year, some 30 per cent down from 2012.

Looking ahead, property consultants say they expect the weak sentiment to continue to weigh on sales in the near-term.

The month of January typically sees weaker home sales, with fewer launches during the festive season.

However, new private home sales last month were the lowest for the month of January since 2009 due to weak market sentiment.

Colin Tan, director and head of research & consultancy at Suntec Real Estate, said: “I think sentiment is quite weak now because of the uncertainty over interest rates. If interest rates are to shoot up, if you were to buy now, you may be affected in terms of mortgage payments. That is holding back the market.”

However, with more units launched, the figure was more than double when compared to December, when sales sank to a four-year low.

Developers launched 549 units in January (excluding ECs) compared to 118 units in December.

This is a 365 percent increase.

Stronger sales were supported by two best-selling projects – The Hillford at Upper Bukit Timah and The Panorama at Ang Mo Kio Avenue 2.

And going forward, some property consultants expect sales to pick up in February supported by upcoming major launches.

Alice Tan, associate director and head of consultancy & research at Knight Frank, said: “February could be a better month with upcoming projects potentially launched this month. These projects could yield a few hundred units of sales. Taking into consideration current property measures, I see that first quarter sales volumes could be around 20 to 30 per cent lower compared to fourth quarter last year. This quarter, sales could potentially range between 1,700 and 2,000 units in total.”

Property consultants at Savills forecast February sales to come in between 600 to 750.

In terms of prices, some analysts expect prices to ease slightly this year.

Property analysts at Knight Frank project that new home prices in the core central region may come down between 2 and 5 per cent, while mass market home prices are likely to fall by 5 percent.

Colin Tan said: “If you are a buyer looking for prices to drop, it probably may ease a little but not drop too much because there is a lot of liquidity and a lot of buyers waiting to come into the market.”

Alice Tan said: “Despite the weak sales performance for this month, I see that developers are not likely to moderate prices by a big margin, due to current land prices at which they’ve been securing the land. Developers are likely to adjust unit sizes so average prices are not going to see a big drop compared to last year.”

Looking ahead, some property consultants say new private home sales may come in between 10,500 to 12,000 for this year.

– CNA/xq/ch