October private home sales at 811, lowest since January
By Ryan Huang, Channel NewsAsia | Posted: 16 November 2009 1336 hrs

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SINGAPORE: Sales of private residential units in Singapore dipped below 1,000 units for the first time in nine months in October.

According to the data out on Monday, 811 homes were sold in October. This is the second lowest monthly sales this year - but largely in line with market forecasts.

Lincoln Suites was one of the new projects launched in October, creating much buzz in the market. Eight-two per cent of its units were snapped up within four days of its soft launch.

Overall, however, developers appeared to be holding back - launching only about 500 units during October. This was less than half the number launched in September. It is the second lowest number launched since January, which recorded 204 units.

Analysts said they were cautious following government measures in mid-September to curb speculation.

The measures involved the removal of Interest Absorption Schemes and Interest Only Loans, making it more expensive for speculators to borrow money and preventing them from deferring their loan repayments.

Real estate services firm Colliers International believes that home buyers' appetite for new homes appeared to be relatively less affected by the cooling measures.

The firm said there are signs of strong underlying demand, as the Core Central Region (CCR) recorded the highest number of sales. The region, which comprises Postal Districts 9, 10 and 11, the Downtown Core and Sentosa, typically attracts speculators.

Chua Chor Hoon, senior director, Research, DTZ Debenham Tie Leung (SEA) said: "Firstly, I think it is the pent up demand that spilled over from last year, so there was a bit a of a frenzy this year as they saw prices going up. So a lot of people, who had held back, actually came back into the market.

"Of course, we have investors and some speculators, so we do see quite a bit of this pent up demand has been soaked up. And secondly, prices have already started to move up in the last two quarters, hence, there is some buy resistance to the higher price levels."

Private home sales are on a downtrend since peaking in July. However, some analysts noted that the overall sales volume is still healthy.

Colin Tan, director, Research & Consultancy, Chesterton Suntec International, said: "The October results were in line because we were bound to come down from the highs in July and the earlier months, because those were really good numbers and could not be sustained.

"Overall, over 800 units is actually very good. If you compare, let's say over the last three to five years ago ... the average was about 600. So 800 is actually performing above the normal average rate."

Analysts also see the current low interest rates driving more sales of property. Investors in the equity market are also starting to turn to other asset classes like property.

Going forward, most market watchers expect sales to be sustained at the current levels for the rest of the year.

Mr Tan said: "I expect more sales towards the end of the year because with the impending land sales that the government is intending to push out in the first four months of next year, I think for developers they recognise that there is this small window of opportunity to push out the units.

"With more launches, maybe hopefully there will be competition and prices may come down gradually."

13,905 private residential units have been sold so far this year - within sight of the record high 14,811 units sold in 2007.

- CNA/sc