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Singapore private home sales plunge 68% on-month in June

The number of units sold by developers in June fell 68 per cent from the previous month to 482 units, according to data by the Urban Redevelopment Authority.

SINGAPORE: The private housing market returned to the doldrums in June after a burst of activity in the previous months, with developers scaling back new launches in the traditionally slow period.

Sales of private homes by developers fell 68 per cent in June from May, brought about by fewer launches and ongoing cooling measures.

Excluding executive condominiums, developers sold only 482 new units last month, according to the Urban Redevelopment Authority. This is a sharp decline from 1,488 units sold in May, and lower than 762 units sold in April.

Developers only launched 418 units last month, a sharp decline from the 1,819 units launched in May. Year-on-year, sales volume last month was some 75 per cent lower.

Observers say the drop in sales volume is expected as the month of June is a "typical lull period" due to the mid-year school vacation, and also the result of loan curbs such as the Total Debt Servicing Ratio which was implemented in late June last year.

Nicholas Mak, executive director for Research and Consultancy from SLP International Property Consultants, noted that the World Cup season has also "distracted homebuyers' attention from the property market".

However, analysts say the sharp decline from May is not a concern, as the sales volume still remains healthy. The number of units sold in June -- at 482 units -- is still "not too bad".

Chia Siew Chuin, director for Research and Advisory at Colliers International, said: "If we are looking at a market situation where there is good or rather modest economic growth, and there is a lack of cooling measures that curb buying, and we still see a very low volume of only a few hundred units, then that's probably an indication that there could be some inherent weaknesses in the market."

The lack of competitively-priced new launches is another reason why sales were lower last month. Alan Cheong, Savills Singapore's senior director for Research and Consultancy, said: “There are hardly any big launches in that sweet spot or price point that consumers or investors would come in, whereas in May, we had Commonwealth Towers which was launched at that pricing quantum investors would be willing to take the plunge for.”

Realistically-priced older projects proved to be more popular in June. The top performer last month is the 944-unit Coco Palms condominium located in Pasir Ris, which was first launched in May. It moved 55 units last month at a median price of S$1,014 per square foot (psf), close to the median price at its launch. 

The Panorama at Ang Mo Kio is in second place, with 49 units sold at a slightly lower median price of S$1,287 psf. New project The Crest located at Prince Charles Crescent took the third spot, selling 35 of the 132 units launched.

Looking ahead, property watchers say developers of upcoming launches have little flexibility to cut prices. Mr Cheong said: "Coco Palms had that flexibility because the land cost, even factoring the holding cost for so many years, is still pretty low. But for the other projects, they were all bid competitively in the open market. So there is not so much room for developers to lower (prices) before taking a loss."

Analysts say the sweet spot for prices is likely to be below S$1.2 million for homes in the city fringe and suburbs to attract interest from buyers.  

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