The Straits Times | Mar 16, 2013
The effects of the Chinese New Year last month and the cooling measures helped send sales of new private homes plunging to levels not seen for more than a year.
Only 708 units were sold last month, 65 per cent down from January's sales of 2,016. If executive condominiums are included, 917 new homes were sold.
The last time such anaemic figures were seen was in December 2011, when only 632 new homes found buyers.
The culprit then was the additional buyer's stamp duty, which had just been imposed. This time, experts are pointing to unease over cooling measures and the Chinese New Year falling in an already short month.
Developers had delayed launches until after the festivities. Only 261 new units were released last month - the lowest figure since January 2009.
But the string of new projects lined up for this month and the positive sales response so far means that March sales will see a recovery.
Launches include suburban projects like 332-unit Sennett Residence in Potong Pasir, The Trilinq in Clementi with 755 units, Urban Vista - a project of 582 homes in Tanah Merah - and the 912-unit D'nest in Pasir Ris which sold about 350 units yesterday.
"The drop in February's new home sales is due to the cooling measures in January as potential home owners were likely to take a wait-and-see attitude," noted PropNex Realty chief executive Mohamed Ismail.
CBRE's executive director of residential Joseph Tan said new home sales in March could be double last month's volume. "The total sales volume in 2013 is expected to fall from the historic high of 22,000 units in 2012, and whether there is any price correction remains to be seen."
With the dust settling and developers starting to launch projects again, this month and coming months will be the real litmus test for market demand and the effectiveness of cooling measures, said Ms Chia Siew Chuin, Colliers International's director of research and advisory services.
The Government will continue watching the market and policy risks remain, she added.
ERA Realty key executive officer Eugene Lim noted that the economy remains stable with low unemployment and interest rates.
Buyers might be encouraged to enter the market as more projects are launched and developers roll out promotions to cushion the impact of the cooling measures, he added. The sweeteners include partial absorption of the stamp duty and price discounts.
In the absence of more severe cooling measures, private home sales - excluding exec condos - could vary between 3,000 and 5,000 units a quarter, said Mr Nicholas Mak, head of research at SLP International.
This can be considered to be fairly healthy in this market.
Last month's top-selling projects include d'Leedon - with 166 sales at a median price of $1,540 per sq ft - and Q Bay Residences in Tampines, which found buyers for 74 units at $1,041 psf.
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